Exhibit 10.17
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CREDIT AGREEMENT
among
THERMA-WAVE, INC.,
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
________________________________
Dated as of May 16, 1997
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit........................... 1
1.01 Commitments.......................................... 1
1.02 Minimum Borrowing Amounts, etc....................... 3
1.03 Notice of Borrowing.................................. 3
1.04 Disbursement of Funds................................ 4
1.05 Notes................................................ 5
1.06 Conversions.......................................... 5
1.07 Pro Rata Borrowings.................................. 6
1.08 Interest............................................. 6
1.09 Interest Periods..................................... 7
1.10 Increased Costs, Illegality, etc..................... 8
1.11 Compensation......................................... 10
1.12 Change of Lending Office............................. 11
1.13 Replacement of Banks................................. 11
SECTION 2. Letters of Credit.................................... 12
2.01 Letters of Credit.................................... 12
2.02 Letter of Credit Requests; Notices of Issuance....... 14
2.03 Agreement to Repay Letter of Credit Payments......... 14
2.04 Letter of Credit Participations...................... 15
2.05 Increased Costs...................................... 17
SECTION 3. Fees; Commitments.................................... 18
3.01 Fees................................................. 18
3.02 Voluntary Termination or Reduction of Total
Revolving Loan Commitment Unutilized ............... 19
3.03 Mandatory Reduction of
Revolving Loan Commitments........................... 20
SECTION 4. Payments............................................. 22
4.01 Voluntary Prepayments................................ 22
4.02 Mandatory Prepayments................................ 23
4.03 Method and Place of Payment.......................... 23
4.04 Net Payments......................................... 24
(i)
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SECTION 5. Conditions Precedent................................ 26
5.01 Execution of Agreement; Notes....................... 26
5.02 No Default; Representations and Warranties.......... 26
5.03 Officer's Certificate............................... 26
5.04 Opinions of Counsel................................. 26
5.05 Corporate Proceedings............................... 27
5.06 Adverse Change, etc................................. 27
5.07 Litigation.......................................... 27
5.08 Approvals........................................... 27
5.09 Consummation of the Transaction..................... 28
5.10 Security Documents.................................. 30
5.11 Subsidiary Guaranty................................. 31
5.12 Existing Indebtedness, etc.......................... 31
5.13 Plans; Collective Existing
Indebtedness Agreements; Shareholders' Agreements;
Bargaining Agreements; Management Agreements;
Employment Agreements; Tax Allocation Agreements;
Material Contracts................................. 31
5.14 Solvency Opinion; Evidence of Insurance............. 32
5.15 Pro Forma Balance Sheet............................. 33
5.16 Projections......................................... 33
5.17 Payment of Fees..................................... 33
5.18 Notice of Borrowing; Letter of Credit Request....... 33
SECTION 6. Representations, Warranties and Agreements.......... 34
6.01 Corporate Status.................................... 34
6.02 Corporate Power and Authority....................... 34
6.03 No Violation........................................ 34
6.04 Litigation.......................................... 35
6.05 Use of Proceeds; Margin Regulations................. 35
6.06 Governmental Approvals.............................. 35
6.07 Investment Company Act.............................. 35
6.08 Public Utility Holding Company Act.................. 35
6.09 True and Complete Disclosure........................ 36
6.10 Financial Condition; Financial Statements........... 36
6.11 Security Interests.................................. 37
6.12 Transaction......................................... 37
6.13 Compliance with ERISA............................... 38
6.14 Capitalization...................................... 39
6.15 Subsidiaries........................................ 39
6.16 Intellectual Property............................... 40
6.17 Compliance with Statutes, etc....................... 40
(ii)
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6.18 Environmental Matters....................................... 40
6.19 Properties.................................................. 41
6.20 Labor Relations............................................. 41
6.21 Tax Returns and Payments.................................... 41
6.22 Existing Indebtedness....................................... 42
SECTION 7. Affirmative Covenants....................................... 42
7.01 Information Covenants....................................... 42
7.02 Books, Records and Inspections.............................. 45
7.03 Insurance................................................... 46
7.04 Payment of Taxes............................................ 46
7.05 Corporate Franchises........................................ 46
7.06 Compliance with Statutes, etc............................... 46
7.07 Compliance with Environmental Laws.......................... 47
7.08 ERISA....................................................... 47
7.09 Good Repair................................................. 48
7.10 End of Fiscal Years; Fiscal Quarters........................ 48
7.11 Additional Security; Further Assurances..................... 48
7.12 Register.................................................... 49
7.13 Foreign Subsidiaries Security............................... 50
SECTION 8. Negative Covenants.......................................... 51
8.01 Changes in Business......................................... 51
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc...... 51
8.03 Liens....................................................... 55
8.04 Indebtedness................................................ 57
8.05 Advances, Investments and Loans............................. 59
8.06 Dividends, etc.............................................. 62
8.07 Transactions with Affiliates................................ 63
8.08 Capital Expenditures........................................ 64
8.09 Minimum Consolidated EBITDA................................. 65
8.10 Interest Coverage Ratio..................................... 67
8.11 Leverage Ratio.............................................. 67
8.12 Limitation on Voluntary Indebtedness; Modifications of
Certificate of Payments and Modifications Incorporation,
By-Laws and Certain Other Agreements; of Issuance of
Capital Stock; etc......................................... 69
8.13 Limitation on Certain Restrictions on Subsidiaries.......... 70
8.14 Limitation on the Creation of Subsidiaries.................. 70
(iii)
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SECTION 9. Events of Default................................... 71
9.01 Payments............................................ 71
9.02 Representations, etc................................ 71
9.03 Covenants........................................... 71
9.04 Default Under Other Agreements...................... 71
9.05 Bankruptcy, etc..................................... 72
9.06 ERISA............................................... 72
9.07 Security Documents.................................. 73
9.08 Subsidiary Guaranty................................. 73
9.09 Judgments........................................... 73
9.10 Ownership........................................... 73
SECTION 10. Definitions........................................... 74
SECTION 11. The Agent........................................... 96
11.01 Appointment......................................... 96
11.02 Delegation of Duties................................ 97
11.03 Exculpatory Provisions.............................. 97
11.04 Reliance by Agent................................... 97
11.05 Notice of Default................................... 98
11.06 Non-reliance on Agent and Other Banks............... 98
11.07 Indemnification..................................... 99
11.08 Agent in its Individual Capacity.................... 99
11.09 Holders............................................. 99
11.10 Resignation of the Agent; Successor Agent........... 100
SECTION 12. Miscellaneous....................................... 100
12.01 Payment of Expenses, etc............................ 100
12.02 Right of Setoff; Collateral Matters................. 101
12.03 Notices............................................. 102
12.04 Benefit of Agreement................................ 102
12.05 No Waiver; Remedies Cumulative...................... 104
12.06 Payments Pro Rata................................... 104
12.07 Calculations; Computations.......................... 105
12.08 Governing Law; Submission to Jurisdiction; Venue.... 105
12.09 Counterparts........................................ 106
12.10 Effectiveness....................................... 106
12.11 Headings Descriptive................................ 107
12.12 Amendment or Waiver; etc............................ 107
12.13 Surviva............................................. 108
12.14 Domicile of Loans................................... 108
(iv)
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12.15 Confidentiality............................................. 108
12.16 Waiver of Jury Trial........................................ 109
ANNEX I List of Banks and Commitments
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Projections
ANNEX V Subsidiaries
ANNEX VI Existing Indebtedness
ANNEX VII Insurance
ANNEX VIII Existing Liens
ANNEX IX Existing Investments
ANNEX X Patent Matters
EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B-1 -- Form of Revolving Note
EXHIBIT B-2 -- Form of Swingline Note
EXHIBIT C -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT D -- Form of Opinion of Xxxxxxxx & Xxxxx
EXHIBIT E -- Form of Officers' Certificate
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Form of Security Agreement
EXHIBIT H -- Form of Subsidiary Guaranty
EXHIBIT I -- Form of Subordination Provisions
EXHIBIT J -- Form of Assignment and Assumption Agreement
EXHIBIT K -- Form of Intercompany Note
EXHIBIT L -- Form of Shareholder Subordinated Note
(v)
CREDIT AGREEMENT, dated as of May 16, 1997, among THERMA-WAVE, INC., a
Delaware corporation (the "Borrower"), the lenders from time to time party
hereto (each, a "Bank" and, collectively, the "Banks"), and BANKERS TRUST
COMPANY, as Agent (in such capacity, the "Agent"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
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WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available the credit facilities provided
for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (a) Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees, at any time and from time to time
after the Effective Date and prior to the Final Maturity Date, to make a
revolving loan or loans (each, a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower, which Revolving Loans (i) shall be
denominated in U.S. Dollars, (ii) except as hereinafter provided, may, at the
option of the Borrower, be incurred and maintained as and/or converted into Base
Rate Loans or Eurodollar Loans, provided, that (x) all Revolving Loans made as
part of the same Borrowing shall, unless otherwise specifically provided herein,
consist of Revolving Loans of the same Type and (y) unless the Agent has
determined that the Syndication Date has occurred (at which time this clause (y)
shall no longer be applicable), no Revolving Loans to be maintained as
Eurodollar Loans may be incurred prior to the 90th day after the Effective Date,
(iii) may be repaid and reborrowed in accordance with the provisions hereof and
(iv) shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when combined with (I) the aggregate principal amount of
all other then outstanding Revolving Loans made by such Bank and (II) such
Bank's Percentage of the Swingline Loans then outstanding and the Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, Revolving Loans or
Swingline Loans) at such time, equals the Revolving Loan Commitment, if any, of
such Bank at such time.
(b) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to time
after the
Effective Date and prior to the Swingline Expiry Date, a revolving loan or loans
to the Borrower (each, a "Swingline Loan" and, collectively, the "Swingline
Loans"), which Swingline Loans (i) shall be made and maintained as Base Rate
Loans, (ii) shall be denominated in U.S. Dollars, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not exceed in
aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, Revolving Loans
or Swingline Loans) at such time, an amount equal to the Total Revolving Loan
Commitment then in effect and (v) shall not exceed in aggregate principal amount
at any time outstanding the Maximum Swingline Amount. BTCo shall not be
obligated to make any Swingline Loans at a time when a Bank Default exists
unless BTCo has entered into arrangements satisfactory to it and the Borrower to
eliminate BTCo's risk with respect to the Defaulting Bank's or Banks'
participation in such Swingline Loans, including by cash collateralizing such
Defaulting Bank's or Banks' Percentage of the outstanding Swingline Loans. BTCo
will not make a Swingline Loan after it has received written notice from the
Borrower or the Required Banks stating that a Default or an Event of Default
exists until such time as BTCo shall have received a written notice of (i)
rescission of such notice from the party or parties originally delivering the
same or (ii) a waiver of such Default or Event of Default from the Required
Banks.
(c) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks that its outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (provided that each such notice shall be deemed to
have been automatically given upon the occurrence of a Default or an Event of
Default under Section 9.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 9), in which case a Borrowing of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Banks pro rata based on each Bank's Percentage, and the proceeds thereof shall
be applied directly to repay BTCo for such outstanding Swingline Loans. Each
Bank hereby irrevocably agrees to make Base Rate Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5 are then satisfied, (iii) whether a Default or
an Event of Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing and (v) any reduction in the Total Revolving Loan Commitment
after any such Swingline Loans were made. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code in respect of the Borrower), each Bank (other than
BTCo) hereby agrees that it shall forthwith purchase from BTCo (without recourse
or warranty) such assignment of the outstanding Swingline Loans as shall be
necessary to cause the Banks to share in such
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Swingline Loans ratably based upon their respective Percentages, provided that
all interest payable on the Swingline Loans shall be for the account of BTCo
until the date the respective assignment is purchased and, to the extent
attributable to the purchased assignment, shall be payable to the Bank
purchasing same from and after such date of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount of
each Borrowing shall not be less than the applicable Minimum Borrowing Amount.
More than one Borrowing may be incurred on any day, provided, that at no time
shall there be outstanding more than eight Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur
Revolving Loans hereunder (excluding Borrowings of Revolving Loans incurred
pursuant to a Mandatory Borrowing), it shall give the Agent at its Notice
Office, prior to 11:00 A.M. (New York time), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Base Rate Loans to be made hereunder. Each such notice (each, a "Notice of
Borrowing") shall, except as provided in Section 1.10, be irrevocable, and, in
the case of each written notice and each confirmation of telephonic notice,
shall be in the form of Exhibit A-1, appropriately completed to specify (i) the
aggregate principal amount of the Revolving Loans to be made pursuant to such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day) and
(iii) whether the respective Borrowing shall consist of Base Rate Loans or, to
the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Agent shall promptly
give each Bank written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing, of such Bank's proportionate share thereof
and of the other matters covered by the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give BTCo not later than 12:00 Noon (New York time) on the
day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made hereunder. Each
such notice shall be irrevocable and shall specify in each case (x) the date of
such Borrowing (which shall be a Business Day) and (y) the aggregate principal
amount of the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the Letter of
Credit Issuer (in the case
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of Letters of Credit), as the case may be, may prior to receipt of written
confirmation act without liability upon the basis of such telephonic notice,
believed by the Agent, BTCo or the Letter of Credit Issuer, as the case may be,
in good faith to be from an Authorized Officer of the Borrower. In each such
case, the Borrower hereby waives the right to dispute the Agent's, BTCo's or the
Letter of Credit Issuer's record of the terms of such telephonic notice.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 2:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than
12:00 Noon (New York time) on the date specified in Section 1.01(c)), each Bank
will make available its pro rata share, if any, of each Borrowing requested to
be made on such date (or in the case of Swingline Loans, BTCo shall make
available the full amount thereof) in the manner provided below. All amounts
shall be made available to the Agent in U.S. Dollars and immediately available
funds at the Payment Office and the Agent promptly will make available to the
Borrower by depositing to its account at the Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Agent its portion of the Borrowing or
Borrowings to be made on such date, the Agent may assume that such Bank has made
such amount available to the Agent on such date of Borrowing, and the Agent, in
reliance upon such assumption, may (in its sole discretion and without any
obligation to do so) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made available same to the Borrower, the Agent shall be
entitled to recover such corresponding amount from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (x)
if paid by such Bank, the overnight Federal Funds Rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Bank as a result of any default by such Bank
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, all the Loans made to it by each Bank shall be evidenced (i) if
Revolving Loans, by a promissory note substantially in the form of Exhibit B-1
with blanks appropri-
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ately completed in conformity herewith (each, a "Revolving Note" and,
collectively, the "Revolving Notes") and (ii) if Swingline Loans, by a
promissory note substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Revolving
Loan Commitment of such Bank (or, if issued after the termination of such
Revolving Loan Commitment, be in a stated principal amount equal to the
outstanding Revolving Loans of such Bank at such time) and be payable in the
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Final Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo and be dated the Effective Date,
(iii) be in a stated principal amount equal to the Maximum Swingline Amount and
be payable in the principal amount of the Swingline Loans evidenced thereby,
(iv) mature on the Swingline Expiry Date, (v) bear interest as provided in
Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 4.01, and mandatory
repayment as provided in Section 4.02, and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert on any
Business Day occurring on or after the earlier of (x) the Syndication Date and
(y) the 90th day after the Effective Date, all or a portion at least equal to
the applicable Minimum Borrowing Amount of the outstanding principal amount of
Revolving Loans made pursuant to one or more Borrowings of one or more Types of
Revolving Loans into a Borrowing or Borrowings of another Type of Revolving
Loan; provided, that (i) except as otherwise provided in Section 1.10(b), no
partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no payment
Default, or no Event of Default, is in existence on the date of the conversion,
and (iii) Borrowings of Eurodollar
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Loans resulting from this Section 1.06 shall be limited in number as provided in
Section 1.02. Each such conversion shall be effected by the Borrower by giving
the Agent at its Notice Office, prior to 11:00 A.M. (New York time), at least
three Business Days' (or one Business Day's in the case of a conversion into
Base Rate Loans) prior written notice (or telephonic notice promptly confirmed
in writing) (each a "Notice of Conversion") specifying the Revolving Loans to be
so converted, the Borrowing(s) pursuant to which the Revolving Loans were made
and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Agent shall give each Bank prompt
notice of any such proposed conversion affecting any of its Revolving Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans shall be
made by the Banks pro rata on the basis of their Revolving Loan Commitments. It
is understood that no Bank shall be responsible for any default by any other
Bank of its obligation to make Revolving Loans hereunder and that each Bank
shall be obligated to make the Revolving Loans to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its commitments
hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until the earlier of
(i) the maturity (whether by acceleration or otherwise) of such Base Rate Loan
and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
Section 1.06, at a rate per annum which shall at all times be the Applicable
Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all
times be the Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the greater of (x) the rate which is 2% in excess of the rate then borne by
such Loans and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans from time to time. Interest which accrues under
this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the date
of any prepayment or repayment thereof (on the amount prepaid or repaid), (y)
the date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable (on the amount converted) and (z) the last
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day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month
intervals after the first day of such Interest Period and (iii) in respect of
each Loan, at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any Borrowing
of Eurodollar Loans for any Interest Period, shall promptly notify the Borrower
and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower shall have the right to elect by
giving the Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three or six month
period or, to the extent approved by all of the Banks, a twelve month period.
Notwithstanding anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall have the same
Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
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(v) no Interest Period may be elected if it would extend beyond the
Final Maturity Date; and
(vi) no Interest Period may be elected at any time when a payment
Default, or an Event of Default, is then in existence.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to elect
by virtue of the application of clause (vi) above, a new Interest Period to be
applicable to the respective Borrowing of Eurodollar Loans as provided above,
the Borrower shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such current
Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Agent or (y) in the case of clauses (ii) and
(iii) below, any Bank, shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar 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 net income taxes or similar charges) because of (x) any
change since the date of this Agreement 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 required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (y) other circumstances
affecting such Bank, the interbank Eurodollar market or the position of
such Bank in such market; or
(iii) at any time since the date of this Agreement, that the making
or continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law but with which
such Bank customarily complies even though
-8-
the failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above) shall (x) on such date and (y) as promptly as practicable (and in any
event within five Business Days) after the date on which such event no longer
exists give notice (by telephone confirmed in writing) to the Borrower and
(except in the case of clause (i)) to the Agent of such determination (which
notice the Agent shall promptly transmit to each of the other Banks).
Thereafter, (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Agent notifies the Borrower and the
Banks that the circumstances giving rise to such notice by the Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower agrees to pay to such Bank, upon written demand therefor (accompanied
by the written notice referred to below), such additional amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing the basis for the calculation thereof,
submitted to the Borrower by such Bank shall, absent manifest error, be final
and conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Agent, require the affected Bank to convert each
such Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); provided, that if more
than one Bank is affected at any time, then all affected Banks must be treated
the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by the National Association of Insurance Commissioners
("NAIC") or any governmental
-9-
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank or any corporation
controlling such Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of the NAIC or any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's or such other corporation's capital or assets as a
consequence of such Bank's Revolving Loan Commitment or obligations hereunder to
a level below that which such Bank or such other corporation could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Bank's or such other corporation's policies with respect to
capital adequacy), then from time to time, upon written demand by such Bank
(with a copy to the Agent), accompanied by the notice referred to in the last
sentence of this clause (c), the Borrower agrees to pay to such Bank such
additional amount or amounts as will compensate such Bank or such other
corporation for such reduction. Each Bank, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 1.10(c), will
give prompt written notice thereof to the Borrower, which notice shall set forth
the basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice.
1.11 Compensation. The Borrower agrees to compensate each Bank,
promptly upon its written request (which request shall set forth the basis for
requesting such compensation and shall be made through the Agent), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Bank to fund its Eurodollar Loans
but excluding loss of anticipated profit with respect to any Eurodollar Loans)
which such Bank may sustain: (i) if for any reason (other than a default by such
Bank or the Agent) a Borrowing of Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion (whether or
not withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any prepayment or repayment made pursuant to
Section 4.01 or 4.02 or as a result of an acceleration of the Loans pursuant to
Section 9) or conversion of any Eurodollar Loans occurs on a date which is not
the last day of an Interest Period applicable thereto; (iii) if any prepayment
of any Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or (y) an election made pursuant to Section 1.10(b).
Calculation of all amounts payable to a Bank under this Section 1.11 shall be
made as though that Bank had actually funded its relevant Eurodollar Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of that Loan, having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Bank to a domestic office of that Bank
in the United States of America; provided, however, that each Bank may fund each
of its Eurodollar Loans in any manner it sees fit and the foregoing assumption
shall be utilized
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only for the calculation of amounts payable under this Section 1.11. It is
further understood and agreed that if any prepayment of Eurodollar Loans
pursuant to Section 4.01 or any conversion of Eurodollar Loans pursuant to
Section 1.06 in either case occurs on a date which is not the last day of an
Interest Period applicable thereto, such prepayment or conversion shall be
accompanied by any amounts owing to any Bank pursuant to this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event; provided, that such designation is made on such
terms that, in the sole judgment of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in excess of those being generally charged by the other Banks or (z) in the case
of a refusal by a Bank to consent to a proposed change, waiver, discharge or
termination with respect to this Agreement which has been approved by the
Required Banks as provided in Section 12.12(b), the Borrower shall have the
right, if no payment Default, or no Event of Default, then exists, to replace
such Bank (the "Replaced Bank") with one or more other Eligible Transferee or
Transferees reasonably acceptable to the Agent, none of whom shall constitute a
Defaulting Bank at the time of such replacement (collectively, the "Replacement
Bank"), provided that (i) at the time of any replacement pursuant to this
Section 1.13, the Replacement Bank shall enter into one or more Assignment and
Assumption Agreements pursuant to Section 12.04(b) (and with all fees payable
pursuant to said Section 12.04(b) to be paid by the Replacement Bank) pursuant
to which the Replacement Bank shall acquire the Revolving Loan Commitment and
outstanding Revolving Loans of, and in each case participations in Letters of
Credit by, the Replaced Bank and, in connection therewith, shall pay to (x) the
Replaced Bank in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding
Revolving Loans of the Replaced Bank, (B) an amount equal to all Unpaid Drawings
that have been funded by (and not reimbursed to) such Replaced Bank, together
with all then unpaid interest with respect thereto at such time and (C) an
amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced
Bank pursuant to Section 3.01, (y) the Letter of Credit Issuer an amount equal
to such Replaced Bank's Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) with respect to any Letter of Credit to the extent
such amount was not theretofore
-11-
funded by such Replaced Bank and (z) BTCo an amount equal to such Replaced
Bank's Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Bank, and (ii) all obligations (including,
without limitation, all such amounts, if any, due and owing under Section 1.11)
of the Borrower due and owing to the Replaced Bank (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution of
the respective Assignment and Assumption Agreements, the payment of amounts
referred to in clauses (i) and (ii) above, recordation of the assignment on the
Register by the Agent pursuant to Section 7.12 and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of the appropriate Revolving
Note or Revolving Notes executed by the Borrower, (x) the Replacement Bank shall
become a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Bank and (y) Annex I shall be
deemed modified to reflect the changed Revolving Loan Commitments resulting from
the assignment from the Replaced Bank to the Replacement Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request the Letter of Credit
Issuer at any time and from time to time on or after the Effective Date and
prior to the Final Maturity Date to issue, for the account of the Borrower and
in support of, (x) trade obligations of the Borrower or any of its Subsidiaries
that arise in the ordinary course of business and are in respect of general
corporate purposes of the Borrower or its Subsidiaries, as the case may be,
and/or (y) on a standby basis, L/C Supportable Indebtedness, and subject to and
upon the terms and conditions herein set forth, the Letter of Credit Issuer
agrees to issue from time to time, irrevocable letters of credit in such form as
may be approved by the Letter of Credit Issuer (each such letter of credit, a
"Letter of Credit" and, collectively, the "Letters of Credit"). Notwithstanding
the foregoing, the Letter of Credit Issuer shall not be under any obligation to
issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to the Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over the Letter of Credit Issuer shall prohibit, or
request that the Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Letter of Credit Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the
Letter of Credit Issuer is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost
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or expense which was not applicable, in effect or known to the Letter of
Credit Issuer as of the date hereof and which the Letter of Credit Issuer
in good xxxxx xxxxx material to it; or
(ii) the Letter of Credit Issuer shall have received notice from the
Required Banks prior to the issuance of such Letter of Credit of the type
described in clause (vi) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $10,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans and Swingline Loans then outstanding, the Total
Revolving Loan Commitment at such time; (ii) (x) each standby Letter of Credit
shall have an expiry date occurring not later than one year after such standby
Letter of Credit's date of issuance, provided, that any standby Letter of Credit
may be automatically extendable for periods of up to one year so long as such
standby Letter of Credit provides that the Letter of Credit Issuer retains an
option, satisfactory to the Letter of Credit Issuer, to terminate such standby
Letter of Credit within a specified period of time prior to each scheduled
extension date and (y) each trade Letter of Credit shall have an expiry date
occurring not later than 180 days after such trade Letter of Credit's date of
issuance; (iii) (x) no standby Letter of Credit shall have an expiry date
occurring later than the Business Day next preceding the Final Maturity Date and
(y) no trade Letter of Credit shall have an expiry date occurring later than 30
days prior to the Final Maturity Date; (iv) each Letter of Credit shall be
denominated in U.S. Dollars and payable on a sight basis; (v) the initial Stated
Amount of each Letter of Credit shall not be less than $100,000 or such lesser
amount as is acceptable to the Letter of Credit Issuer; and (vi) the Letter of
Credit Issuer will not issue any Letter of Credit after it has received written
notice from the Borrower or the Required Banks stating that a Default or an
Event of Default exists until such time as the Letter of Credit Issuer shall
have received a written notice of (i) rescission of such notice from the party
or parties originally delivering the same or (ii) a waiver of such Default or
Event of Default by the Required Banks.
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, the Letter of Credit Issuer shall not be required to issue any Letter of
Credit unless the Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate the Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Bank or Banks, including by cash collateralizing such Defaulting Bank's or
Banks' Percentage of the Letter of Credit Outstandings.
2.02 Letter of Credit Requests; Notices of Issuance. (a) Whenever the
Borrower desires that a Letter of Credit be issued, it shall give the Agent and
the Letter of Credit Issuer written notice (or telephonic notice confirmed in
writing) thereof prior to
-13-
12:00 Noon (New York time) at least five Business Days (or such shorter period
as may be acceptable to the Letter of Credit Issuer) prior to the proposed date
of issuance (which shall be a Business Day) which written notice shall be in the
form of Exhibit A-2 (each such notice, a "Letter of Credit Request"). Each
Letter of Credit Request shall include any other documents as the Letter of
Credit Issuer customarily requires in connection therewith.
(b) The Letter of Credit Issuer shall, promptly after the date of
each issuance of or amendment or modification to a Letter of Credit, give the
Agent, each Bank and the Borrower written notice of the issuance of or amendment
or modification to such Letter of Credit, accompanied by a copy to the Agent of
such Letter of Credit or Letters of Credit or such amendment or modification.
2.03 Agreement to Repay Letter of Credit Payments. (a) The Borrower
hereby agrees to reimburse the Letter of Credit Issuer, by making payment to the
Agent in immediately available funds at the Payment Office, for any payment or
disbursement made by the Letter of Credit Issuer under any Letter of Credit
issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid
Drawing") no later than one Business Day following the date of such payment or
disbursement, with interest on the amount so paid or disbursed by the Letter of
Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New York time)
on the date of such payment or disbursement, from and including the date paid or
disbursed to but not including the date the Letter of Credit Issuer is
reimbursed therefor at a rate per annum which shall be the Applicable Base Rate
Margin plus the Base Rate as in effect from time to time (plus an additional 2%
per annum if not reimbursed by the third Business Day after the date of such
payment or disbursement), such interest also to be payable on demand. The Letter
of Credit Issuer shall provide the Borrower prompt notice of any payment or
disbursement made by it under any Letter of Credit, although the failure of, or
delay in, giving any such notice shall not release or diminish the obligations
of the Borrower under this Section 2.03(a) or under any other Section of this
Agreement.
(b) The Borrower's obligation under this Section 2.03 to reimburse
the Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower or any of its Subsidiaries may have or have had against the
Letter of Credit Issuer, the Agent or any Bank, including, without limitation,
any defense based upon the failure of any drawing under a Letter of Credit to
substantially conform to the terms of the Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of such
drawing; provided, however, that the Borrower shall not be obligated to
reimburse the Letter of Credit Issuer for any wrongful payment made by the
Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence as determined by a
court of competent jurisdiction on the part of the Letter of Credit Issuer.
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2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank,
and each such Bank (each, a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from the Letter of Credit Issuer,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's Percentage, in such Letter of Credit, each
substitute Letter of Credit, each drawing made thereunder and the obligations of
the Borrower under this Agreement with respect thereto (although Letter of
Credit Fees shall be payable directly to the Agent for the account of the Banks
as provided in Section 3.01(b) and the Participants shall have no right to
receive any portion of any Facing Fees) and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments of the
Banks pursuant to Section 1.13 or 12.04(b) or otherwise, it is hereby agreed
that, with respect to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the participations pursuant to this
Section 2.04 to reflect the new Percentages of the assigning and assignee Banks.
(b) In determining whether to pay under any Letter of Credit, the
Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Letter of Credit Issuer
under or in connection with any Letter of Credit if taken or omitted in the
absence of gross negligence or willful misconduct as determined by a court of
competent jurisdiction, shall not create for the Letter of Credit Issuer any
resulting liability.
(c) In the event that the Letter of Credit Issuer makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Letter of Credit Issuer pursuant to Section 2.03(a), the
Letter of Credit Issuer shall promptly notify the Agent, and the Agent shall
promptly notify each Participant of such failure, and each Participant shall
promptly and unconditionally pay to the Agent for the account of the Letter of
Credit Issuer, the amount of such Participant's Percentage of such payment in
U.S. Dollars and in same day funds; provided, however, that no Participant shall
be obligated to pay to the Agent its Percentage of such unreimbursed amount for
any wrongful payment made by the Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of the Letter of Credit Issuer as determined by a court
of competent jurisdiction. If the Agent so notifies any Participant required to
fund a payment under a Letter of Credit prior to 11:00 A.M. (New York time) on
any Business Day, such Participant shall make available to the Agent for the
account of the Letter of Credit Issuer such Participant's Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Percentage of the amount of
such payment available to the Agent for the account of the Letter of Credit
Issuer, such Participant agrees to pay to the Agent for the account of the
Letter of Credit Issuer, forthwith on demand such
-15-
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Agent for the account of the Letter of Credit
Issuer at the overnight Federal Funds Rate. The failure of any Participant to
make available to the Agent for the account of the Letter of Credit Issuer its
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Agent for the
account of the Letter of Credit Issuer its Percentage of any payment under any
such Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to the Agent for the account of the Letter of Credit Issuer such
other Participant's Percentage of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
the Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, the Letter of Credit Issuer shall promptly pay to the Agent
and the Agent shall promptly pay to each Participant which has paid its
Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to
such Participant's Percentage of the principal amount thereof and interest
thereon accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the Agent
for the account of the Letter of Credit Issuer with respect to Letters of Credit
shall be irrevocable and not subject to counterclaim, set-off or other defense
or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, the Letter of Credit Issuer, any Bank, or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower or any of its Subsidiaries and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
-16-
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If after the date hereof, the adoption or
effectiveness of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by the Letter
of Credit Issuer or such Participant's participation therein, or (ii) impose on
the Letter of Credit Issuer or any Participant any other conditions affecting
this Agreement, any Letter of Credit or such Participant's participation
therein; and the result of any of the foregoing is to increase the cost to the
Letter of Credit Issuer or such Participant of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by the Letter of Credit Issuer or such Participant
hereunder, then, upon written demand to the Borrower by the Letter of Credit
Issuer or such Participant (a copy of which notice shall be sent by the Letter
of Credit Issuer or such Participant to the Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the Borrower
shall pay to the Letter of Credit Issuer or such Participant such additional
amount or amounts as will compensate the Letter of Credit Issuer or such
Participant for such increased cost or reduction. A certificate submitted to the
Borrower by the Letter of Credit Issuer or such Participant, as the case may be
(a copy of which certificate shall be sent by the Letter of Credit Issuer or
such Participant to the Agent), setting forth the basis for the determination of
such additional amount or amounts necessary to compensate the Letter of Credit
Issuer or such Participant as aforesaid shall be final and conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 2.05 upon subsequent receipt of
such certificate.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower shall pay to the Agent for distribution
to each Non-Defaulting Bank a commitment fee (the "Commitment Fee") for the
period from the Effective Date to but not including the Final Maturity Date (or
such earlier date as the Total Revolving Loan Commitment has been terminated),
computed at a rate for each day equal to 1/2 of 1% per annum of the daily
average Unutilized Revolving Loan Commitment of such Non-Defaulting Bank,
provided, however, if during any Quarterly Payment Period the daily average
Revolving Outstandings during such period was less than one-half of the
-17-
amount of the Total Revolving Loan Commitment during such period, then the
foregoing percentage in respect of such period shall instead be 3/4 of 1%.
Accrued Commitment Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the Final Maturity Date (or such earlier date upon
which the Total Revolving Loan Commitment has been terminated).
(b) The Borrower shall pay to the Agent for the account of the Banks
pro rata on the basis of their Percentages, a fee in respect of each Letter of
Credit (the "Letter of Credit Fee") computed at a rate per annum equal to the
Applicable Eurodollar Margin then in effect on the daily Stated Amount of such
Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(c) The Borrower shall pay to the Agent for the account of the Letter
of Credit Issuer a fee in respect of each Letter of Credit (the "Facing Fee")
computed at the rate of 1/4 of 1% per annum on the daily Stated Amount of such
Letter of Credit; provided, that in no event shall the annual Facing Fee with
respect to each Letter of Credit be less than $500; it being agreed that, on the
date of issuance of any Letter of Credit and on each anniversary thereof prior
to the termination of such Letter of Credit, if $500 will exceed the amount of
Facing Fees that will accrue with respect to such Letter of Credit for the
immediately succeeding 12-month period, the full $500 shall be payable on the
date of issuance of such Letter of Credit and on each such anniversary thereof
prior to the termination of such Letter of Credit. Except as provided in the
immediately preceding sentence, accrued Facing Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower hereby agrees to pay directly to the Letter of
Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit such amount as shall at the time of such issuance, payment or
amendment be the administrative charge which the Letter of Credit Issuer is
customarily charging for issuances of, payments under or amendments of, letters
of credit issued by it.
(e) The Borrower shall pay to the Agent, for its own account, such
fees as may be agreed to from time to time between the Borrower and the Agent,
when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
Loan Commitment. (a) Upon at least two Business Days' prior written notice (or
tele-
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phonic notice promptly confirmed in writing) to the Agent at its Notice Office
(which notice the Agent shall promptly transmit to each of the Banks), the
Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Loan Commitment; provided that
(x) any such termination or partial reduction shall apply to proportionately and
permanently reduce the Revolving Loan Commitment of each of the Banks and (y)
any partial reduction pursuant to this Section 3.02(a) shall be in the amount of
at least $1,000,000.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to terminate the entire Revolving Loan
Commitment of such Bank, so long as all Revolving Loans, together with accrued
and unpaid interest, Fees and all other amounts, due and owing to such Bank are
repaid concurrently with the effectiveness of such termination pursuant to
Section 4.01(b) and the Borrower shall pay to the Agent at such time an amount
in cash and/or Cash Equivalents equal to such Bank's Percentage of the
outstanding Letters of Credit (which cash and/or Cash Equivalents shall be held
by the Agent as security for the obligations of the Borrower hereunder in
respect of the outstanding Letters of Credit pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Agent, which shall permit certain investments in Cash Equivalents reasonably
satisfactory to the Agent until the proceeds are applied to the secured
obligations) (at which time Annex I shall be deemed modified to reflect such
changed amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to indemnifications
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05,
4.04, 12.01 and 12.06), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Revolving Loan Commitments. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety on May 30, 1997 unless the Effective Date has occurred
on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Effective Date on which the
Borrower or any of its Subsidiaries receives Proceeds from any Asset Sale, the
Total Revolving Loan Commitment shall be permanently reduced by an amount equal
to 100% of the Net Proceeds from such Asset Sale, provided that with respect to
no more than $500,000 in the aggregate of such Net Proceeds in any fiscal year
of the Borrower, such Net Proceeds shall not give rise to a reduction to the
Total Revolving Loan Commitment on such date to the extent that no Default or
Event of Default then exists and the Borrower delivers a certificate to the
Agent on or prior to such date stating that such Net Proceeds shall be used to
-19-
purchase assets used or to be used in the businesses permitted pursuant to
Section 8.01 (including, without limitation (but only to the extent permitted by
Section 8.02), the purchase of the capital stock of a Person engaged in such
businesses) within one year following the date of receipt of such Net Proceeds
from such Asset Sale (which certificate shall set forth the estimates of the
proceeds to be so expended), and provided further, that (1) if all or any
portion of such Net Proceeds are not so used (or contractually committed to be
used) within such one year period, the Total Revolving Loan Commitment shall be
permanently reduced on the last day of such period by an amount equal to such
remaining portion and (2) if all or any portion of such Net Proceeds are not so
used within such one year period referred to in clause (1) above because such
amount is contractually committed to be used and subsequent to such date such
contract is terminated or expires without such portion being so used, the Total
Revolving Loan Commitment shall be permanently reduced on the date of such
termination or expiration by an amount equal to such remaining portion.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Effective Date on which the
Borrower or any of its Subsidiaries receives any cash proceeds from any
incurrence of Indebtedness (other than Indebtedness permitted to be incurred
pursuant to Section 8.04 as in effect on the Effective Date) by the Borrower or
any of its Subsidiaries, the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to 100% of the cash proceeds (net of all
underwriting discounts, fees and commissions and other costs and expenses
associated therewith) of the respective incurrence of Indebtedness.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Effective Date on which the
Borrower or any of its Subsidiaries receives any cash proceeds from any sale or
issuance of preferred or common equity of (or cash capital contributions to) the
Borrower or any of its Subsidiaries (other than proceeds received (i) on the
Effective Date in connection with the Equity Financing, (ii) from (x) the
issuance by the Borrower of options to purchase Common Stock to management,
directors and employees of the Borrower and its Subsidiaries and (y) the
issuance by the Borrower of Common Stock (including as a result of the exercise
of any options with regard thereto) to management, directors and employees of
the Borrower and its Subsidiaries) or (iii) from equity contributions to any
Subsidiary of the Borrower to the extent made by the Borrower or any other
Subsidiary of the Borrower), the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to 50% of such cash proceeds (net of all
underwriting discounts, fees and commissions and other costs and expenses
associated therewith) of the respective equity issuance or capital contribution.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, within 10 days following each date on or after the
Effective Date on which the Borrower or any of its Subsidiaries receives any
cash proceeds from any Recovery Event, the Total Revolving Loan Commitment shall
be permanently reduced by
-20-
an amount equal to 100% of such cash proceeds of such Recovery Event (net of all
costs, expenses and taxes incurred in connection with such Recovery Event),
provided that so long as no Default or Event of Default then exists, and such
proceeds do not exceed $5,000,000, such proceeds shall not give rise to a
reduction to the Total Revolving Loan Commitment on such date to the extent that
the Borrower has delivered a certificate to the Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties or
assets in respect of which such proceeds were paid within one year following the
date of receipt of such proceeds (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that (i) if
the amount of such proceeds exceeds $5,000,000, then the Total Revolving Loan
Commitment shall be reduced by the entire amount of such proceeds and not just
the portion in excess of $5,000,000 as provided above in this Section 3.03(e),
(ii) if all or any portion of such proceeds are not so used (or contractually
committed to be used) within such one year period, the Total Revolving Loan
Commitment shall be permanently reduced on the last day of such period by an
amount equal to such remaining portion and (iii) if all or any portion of such
proceeds are not so used within such one year period referred to in clause (ii)
above because such amount is contractually committed to be used and subsequent
to such date such contract is terminated or expires without such portion being
so used, the Total Revolving Loan Commitment shall be permanently reduced on the
date of such termination or expiration by an amount equal to such remaining
portion.
(f) The Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety on the earlier of (i)
the date on which a Change of Control Event occurs and (ii) the Final Maturity
Date.
(g) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 3.03 shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Loans made to it, in whole or in part, without premium or penalty,
except as otherwise provided in this Agreement, from time to time on the
following terms and conditions: (i) the Borrower shall give the Agent at its
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay such Loans, whether such Loans are Revolving
Loans or Swingline Loans, the amount of such prepayment and (in the case of
Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice
shall be given by the Borrower prior to 11:00 A.M. (New York time) (x) at least
one Business Day prior to the date of such prepayment in the case of Revolving
Loans maintained as Base Rate Loans, (y) on the date of such prepayment in the
case of Swingline Loans and (z) at least three Business Days prior to the date
of such prepayment in the case
-21-
of Eurodollar Loans, which notice shall, except in the case of Swingline Loans,
promptly be transmitted by the Agent to each of the Banks; (ii) each prepayment
shall be in an aggregate principal amount of (A) at least $1,000,000 in the case
of Eurodollar Loans and (B) at least $500,000 in the case of Base Rate Loans (or
$100,000 in the case of Swingline Loans); provided, that no partial prepayment
of Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Eurodollar Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount applicable thereto; and
(iii) each prepayment in respect of any Revolving Loans made pursuant to a
Borrowing shall be applied pro rata among such Revolving Loans; provided, that
at the Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01(a), such prepayment shall not be applied to any
Revolving Loans of a Defaulting Bank.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks) to repay all Revolving Loans of such
Bank, together with accrued and unpaid interest, Fees and all other amounts due
and owing to such Bank in accordance with said Section 12.12(b), so long as (A)
in the case of the repayment of Revolving Loans of any Bank pursuant to this
clause (b), the Revolving Loan Commitment of such Bank is terminated
concurrently with such repayment pursuant to Section 3.02(b) (at which time
Annex I shall be deemed modified to reflect the changed Revolving Loan
Commitments) and (B) in the case of the repayment of Revolving Loans of any
Bank, the consents required by Section 12.12(b) in connection with the repayment
pursuant to this clause (b) shall have been obtained.
4.02 Mandatory Prepayments. (a) If on any date the sum of (i) the
aggregate outstanding principal amount of Revolving Loans and Swingline Loans
(after giving effect to all other repayments thereof on such date) plus (ii) the
Letter of Credit Outstandings on such date exceeds the Total Revolving Loan
Commitment as then in effect, the Borrower shall repay on such date the
principal of Swingline Loans, and if no Swingline Loans are or remain
outstanding, Revolving Loans, in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of Letter of Credit Outstandings exceeds
the Total Revolving Loan Commitment as then in effect, the Borrower agrees to
pay to the Agent on such date an amount in cash and/or Cash Equivalents equal to
such excess (up to the aggregate amount of Letter of Credit Outstandings at such
time) and the Agent shall hold such payment as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the Agent (which shall
permit certain investments in Cash Equivalents reasonably satisfactory to the
Agent until the proceeds are applied to the secured obligations).
-22-
(b) With respect to each repayment of Revolving Loans required by
Section 4.02(a), the Borrower may designate the Types of Revolving Loans which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing(s)
pursuant to which made; provided, that (i) Eurodollar Loans may be designated
for repayment pursuant to Section 4.02(a) only on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans with Interest Periods
ending on such date of required prepayment and all Base Rate Loans have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount, such Borrowing
shall be immediately converted into Base Rate Loans; and (i) each repayment of
any Revolving Loans made pursuant to a Borrowing shall be applied pro rata among
such Revolving Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Agent shall, subject to the above, make
such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11.
(c) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date, (ii) all then outstanding Revolving Loans shall be
repaid in full on the Final Maturity Date and (iii) all then outstanding Loans
shall be repaid in full on the date on which a Change of Control Event occurs.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the Agent
for the ratable account of the Banks entitled thereto, not later than 12:00 Noon
(New York time) on the date when due and shall be made in immediately available
funds and in U.S. Dollars at the Payment Office, it being understood that
written, telex or facsimile transmission notice by the Borrower to the Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 12:00
Noon (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
-23-
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income or net profits of such Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located and for any withholding of taxes as such
Bank shall determine are payable by, or withheld from, such Bank in respect of
such amounts so paid to or on behalf of such Bank pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Bank
pursuant to this sentence. The Borrower will furnish to the Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Effective Date, or in the case of a Bank that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 12.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit C (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section
-24-
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form or
Certificate in which case such Bank shall not be required to deliver any such
Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything
to the contrary contained in Section 4.04(a), but subject to Section 12.04(b)
and the immediately succeeding sentence, (x) the Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Bank which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such Bank
has not provided to the Borrower the Internal Revenue Service Forms required to
be provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case
of a payment, other than interest, to a Bank described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 12.04(b), the Borrower agrees to pay additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of income or similar Taxes.
SECTION 5. Conditions Precedent. The occurrence of the Effective
Date pursuant to Section 12.10 and the obligation of each Bank to make each Loan
to the Borrower hereunder, and the obligation of the Letter of Credit Issuer to
issue each Letter of Credit hereunder, is subject, at the time of each such
Credit Event (except as otherwise hereinafter indicated), to the satisfaction of
the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Effective
Date, (i) this Agreement shall have been executed and delivered as provided in
Section 12.10 and (ii) there shall have been delivered to the Agent for the
account of each Bank the appropriate Revolving Note and to BTCo the Swingline
Note, in each case executed by the Borrower and in the amount, maturity and as
otherwise provided herein.
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5.02 No Default; Representations and Warranties. At the time of each
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
5.03 Officer's Certificate. On the Effective Date, the Agent shall
have received a certificate dated such date signed by an appropriate officer of
the Borrower stating that all of the applicable conditions set forth in Sections
5.02, 5.07, 5.08 and 5.09 have been satisfied as of such date.
5.04 Opinions of Counsel. On the Effective Date, the Agent shall have
received (i) an opinion, addressed to the Agent and each of the Banks and dated
the Effective Date, from Xxxxxxxx & Xxxxx, counsel to the Credit Parties, which
opinion shall cover the matters contained in Exhibit D and such other matters
incident to the transactions contemplated herein as the Agent may reasonably
request and (ii) a reliance letter, addressed to the Agent and each of the Banks
and dated the Effective Date, from Weil, Gotshal & Xxxxxx with respect to the
legal opinion delivered by Weil, Gotshal & Xxxxxx pursuant to the
Recapitalization Documents.
5.05 Corporate Proceedings. (a) On the Effective Date, the Agent
shall have received from each Credit Party a certificate, dated the Effective
Date, signed by the chairman, a vice chairman, the president or any vice-
president of such Credit Party, and attested to by the secretary or any
assistant secretary of such Credit Party, in the form of Exhibit E with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate and all of the foregoing (including each such
Certificate of Incorporation and By-Laws) shall be reasonably satisfactory to
the Agent.
(b) On the Effective Date, all corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Documents shall be reasonably satisfactory in form
and substance to the Agent, and the Agent shall have received all information
and copies of all certificates, documents and papers, including good standing
certificates, bring-down certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Agent reasonably may
have requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental authorities.
5.06 Adverse Change, etc. On or prior to the Effective Date, nothing
shall have occurred since March 31, 1996 (and neither the Banks nor the Agent
shall have
-26-
become aware of any facts or conditions not previously known) which the Required
Banks or the Agent shall determine (a) has, or could reasonably be expected to
have, a material adverse effect on the rights or remedies of the Banks or the
Agent, or on the ability of any Credit Party to perform its obligations to them
hereunder or under any other Credit Document or (b) has, or could reasonably be
expected to have, a Material Adverse Effect (other than any change generally
affecting the industry in which the Borrower operates and not just the Borrower
in particular).
5.07 Litigation. On the Effective Date, there shall be no actions,
suits or proceedings pending or threatened (a) with respect to this Agreement or
any other Document or the Transaction or (b) which the Agent or the Required
Banks shall determine could reasonably be expected to (i) have a Material
Adverse Effect or (ii) have a material adverse effect on the Transaction, or the
rights or remedies of the Banks or the Agent hereunder or under any other Credit
Document or on the ability of any Credit Party to perform its respective
obligations to the Banks or the Agent hereunder or under any other Credit
Document.
5.08 Approvals. On or prior to the Effective Date, all necessary
governmental (domestic and foreign) and third party approvals in connection with
the Transaction and the transactions contemplated by the Documents and otherwise
referred to herein or therein shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired without any action being taken
by any competent authority which restrains, prevents or imposes materially
adverse conditions upon the consummation of the Transaction or the transactions
contemplated by the Documents and otherwise referred to herein. Additionally,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon the
consummation of the Transaction or the making of Loans.
5.09 Consummation of the Transaction. (a) On or prior to the
Effective Date, the Recapitalization shall have been consummated in accordance
with the Recapitalization Documents and all applicable laws, and each of the
conditions precedent to the consummation of the Recapitalization as set forth in
the Recapitalization Documents shall have been satisfied and not waived except
with the consent of the Agent and the Required Banks to the reasonable
satisfaction of the Agent and the Required Banks.
(b) (i) On or prior to the Effective Date, the total commitments in
respect of the Indebtedness to be Refinanced shall have been terminated, all
loans with respect thereto shall have been repaid in full, together with
interest thereon, all letters of credit issued thereunder shall have been
terminated and all other amounts due and owing pursuant to the Indebtedness to
be Refinanced shall have been repaid in full and all documents in respect of the
Indebtedness to be Refinanced and all guarantees with respect thereto shall
-27-
have been terminated (except as to indemnification provisions which may survive
to the extent provided therein) and be of no further force and effect.
(ii) On or prior to the Effective Date, the creditors in respect of
the Indebtedness to be Refinanced shall have terminated and released all
security interests and Liens on the assets owned by the Borrower and its
Subsidiaries. The Agent shall have received such releases of security interests
in and Liens on the assets owned by the Borrower and its Subsidiaries as may
have been requested by the Agent, which releases shall be in form and substance
reasonably satisfactory to the Agent. Without limiting the foregoing, there
shall have been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where a
financing statement (Form UCC-1 or the appropriate equivalent) was filed with
respect to the Borrower or any of its Subsidiaries in connection with the
security interests created with respect to the Indebtedness to be Refinanced and
the documentation related thereto, (ii) termination or reassignment of any
security interest in, or Lien on, any patents, trademarks, copyrights, or
similar interests of the Borrower or any of its Subsidiaries on which filings
have been made, (iii) terminations of all mortgages, leasehold mortgages, deeds
of trust and leasehold deeds of trust created with respect to property of the
Borrower or any of its Subsidiaries, in each case, to secure the obligations in
respect of the Indebtedness to be Refinanced, all of which shall be in form and
substance reasonably satisfactory to the Agent, and (iv) all collateral owned by
the Borrower or any of its Subsidiaries in the possession of any of the
creditors in respect of the Indebtedness to be Refinanced or any collateral
agent or trustee under any related security document shall have been returned to
the Borrower or such Subsidiary.
(c) On or prior to the Effective Date, the Borrower shall have
received gross cash proceeds of $115,000,000 from the issuance of a like
principal amount of the Senior Notes (it being understood that such cash
proceeds shall include all amounts directly applied to finance the Transaction
and pay related fees and expenses incurred in connection therewith), and the
Banks shall have received true and correct copies of all Senior Note Documents
(certified as such by an appropriate officer of the Borrower), and all of the
terms and conditions of such Senior Note Documents (including, without
limitation, amortization, maturities, interest rates, absence of security,
covenants, default, remedies, sinking fund provisions and other provisions) and
the purchasers thereof shall be satisfactory to the Agent and the Required
Banks. All of the Senior Note Documents shall have been duly executed and
delivered by the parties thereto, shall be in full force and effect and each of
the conditions precedent to the obligations of the parties to effectuate the
issuance of the Senior Notes as set forth in the Senior Note Documents shall
have been satisfied and not waived except with the consent of the Agent and the
Required Banks to the reasonable satisfaction of the Agent and the Required
Banks, and the Senior Notes shall have been issued in accordance with the Senior
Note Documents and all applicable laws, rules and regulations.
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(d) On or prior to the Effective Date, (i) the Borrower shall have
received gross cash proceeds of at least $20,000,000 from the Equity Financing
and (ii) the Borrower shall have issued the Seller Stock having a value of
$15,000,000 as part of the Equity Financing (and with the value of the Seller
Preferred Stock not to exceed $13,800,000).
(e) On or prior to the Effective Date, (x) the Borrower shall have
used the net cash proceeds received by it pursuant to each of the Equity
Financing and the issuance of the Senior Notes to make payments owing in
connection with the Transaction, (y) after giving effect to the payments made
pursuant to preceding clause (x), the Borrower and its Subsidiaries shall have
at least $13,000,000 of cash on hand and (z) the Agent shall have received
evidence in form, scope and substance reasonably satisfactory to it that the
matters set forth in this Section 5.09 have been satisfied on such date.
(f) On or prior to the Effective Date, there shall have been
delivered to the Banks true and correct copies of all Documents entered into in
connection with the Recapitalization (including, without limitation, all of the
Recapitalization Documents, the Equity Financing Documents and the Refinancing
Documents), and all of the terms and conditions of such Documents, as well as
the structure of the Recapitalization and the ownership interests in the
Borrower after giving effect to the Recapitalization, shall be in form and
substance reasonably satisfactory to the Agent and the Required Banks.
5.10 Security Documents. (a) On the Effective Date, each Credit
Party shall have duly authorized, executed and delivered a Pledge Agreement in
the form of Exhibit F (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Pledge Agreement") and shall
have delivered to the Collateral Agent, as pledgee thereunder, all of the
Pledged Securities referred to therein, endorsed in blank in the case of
promissory notes or accompanied by executed and undated stock powers in the case
of capital stock, and the Pledge Agreement shall be in full force and effect.
(b) On the Effective Date, each Credit Party shall have duly
authorized, executed and delivered a Security Agreement in the form of Exhibit G
(as modified, amended or supplemented from time to time in accordance with the
terms thereof and hereof, the "Security Agreement") covering all of the Security
Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1) or
appropriate local equivalent in appropriate form for filing under the UCC
or appropriate local equivalent of each jurisdiction as may be necessary to
perfect the security interests purported to be created by the Security
Agreement;
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(B) certified copies of Requests for Information or Copies (Form UCC-
11), or equivalent reports, each of a recent date listing all effective
financing statements that name the Borrower or any of its Domestic
Subsidiaries or a division or operating unit of any such Person as debtor
and that are filed in the jurisdictions referred to in clause (A) above,
together with copies of such financing statements that name the Borrower or
any of its Domestic Subsidiaries as debtor (none of which shall cover the
Collateral except (x) those with respect to which appropriate termination
statements executed by the secured lender thereunder have been delivered to
the Agent and (y) to the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by the Security Agreement have been
taken;
and the Security Agreement shall be in full force and effect.
5.11 Subsidiary Guaranty. On the Effective Date, each Subsidiary
Guarantor, if any, shall have duly authorized, executed and delivered a
Subsidiary Guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in full force
and effect.
5.12 Existing Indebtedness, etc. On the Effective Date and after
giving effect to the Transaction, neither the Borrower nor any of its
Subsidiaries shall have any preferred stock or Indebtedness outstanding except
for the Seller Preferred Stock and for Indebtedness permitted under Section
8.04. On and as of the Effective Date, all of the Existing Indebtedness shall
remain outstanding after giving effect to the Transaction and the other
transactions contemplated hereby without any default or events of default
existing thereunder or arising as a result of the Transaction and the other
transactions contemplated hereby (except to the extent amended or waived by the
parties thereto on terms and conditions reasonably satisfactory to the Agent and
the Required Banks). On and as of the Effective Date, the Agent and the
Required Banks shall be satisfied with the amount of and the terms and
conditions of all Existing Indebtedness.
5.13 Plans; Collective Bargaining Agreements; Existing Indebtedness
Agreements; Shareholders' Agreements; Management Agreements; Employment
Agreements; Tax Allocation Agreements; Material Contracts. On or prior to the
Effective
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Date, there shall have been delivered to the Banks copies, certified
as true and correct by an appropriate officer of the Borrower of:
(a) any Plans of the Borrower or any of its Subsidiaries after giving
effect to the consummation of the Transaction and for each such Plan (i)
that is a "single-employer plan" (as defined in Section 4001(a)(15) of
ERISA) the most recently completed actuarial valuation prepared therefor by
such Plan's regular enrolled actuary and the Schedule B, "Actuarial
Information" to the IRS Form 5500 (Annual Report) most recently filed with
the Internal Revenue Service and (ii) that is a "multi-employer plan" (as
defined in Section 4001(a)(3) of ERISA), each of the documents referred to
in clause (i) either in the possession of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate or reasonably available thereto from
the sponsor or trustees of such Plan;
(b) any collective bargaining agreements or any other similar
agreement or arrangement covering the employees of the Borrower or any of
its Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Collective Bargaining
Agreements");
(c) all agreements evidencing or relating to the Existing Indebtedness
that are to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Existing Indebtedness Agreements");
(d) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital stock,
and any agreements entered into by shareholders relating to any such entity
with respect to their capital stock, in each case that are to remain in
effect after giving effect to the consummation of the Transaction
(collectively, the "Shareholders' Agreements");
(e) any material agreements (or the forms thereof) with members of, or
with respect to, the management of the Borrower or any of its Subsidiaries
that are to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Management Agreements");
(f) any employment agreements entered into by the Borrower or any of
its Subsidiaries (collectively, the "Employment Agreements");
(g) any tax sharing or tax allocation agreements entered into by the
Borrower or any of its Subsidiaries (collectively, the "Tax Allocation
Agreements"); and
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(h) all material contracts and licenses of the Borrower or any of its
Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Material Contracts");
all of which Plans, Collective Bargaining Agreements, Existing Indebtedness
Agreements, Shareholders' Agreements, Management Agreements, Employment
Agreements, Tax Allocation Agreements and Material Contracts shall be in form
and substance reasonably satisfactory to the Agent and the Required Banks and
shall be in full force and effect on the Effective Date.
5.14 Solvency Opinion; Evidence of Insurance. On the Effective Date,
the Agent shall have received:
(a) a solvency opinion in form and substance reasonably satisfactory
to the Agent and the Required Banks from Xxxxxx, Xxxxxx & Co., Inc.,
addressed to the Agent and each of the Banks and dated the Effective Date
and supporting the conclusions, that, after giving effect to the
Transaction and the incurrence of all financings contemplated herein, the
Borrower and its Subsidiaries (on a consolidated basis) are not insolvent
and will not be rendered insolvent by the indebtedness incurred in
connection herewith, will not be left with unreasonably small capital
with which to engage in their respective businesses and will not have
incurred debts beyond their ability to pay such debts as they mature and
become due; and
(b) evidence of insurance complying with the requirements of Section
7.03 for the business and properties of the Borrower and its Subsidiaries,
in scope, form and substance reasonably satisfactory to the Agent and the
Required Banks and naming the Collateral Agent as an additional insured
and/or loss payee, and stating that such insurance shall not be cancelled
or revised without at least 30 days prior written notice by the insurer to
the Collateral Agent.
5.15 Pro Forma Balance Sheet. On or prior to the Effective Date,
there shall have been delivered to the Agent, an unaudited pro forma
consolidated balance sheet of the Borrower and its Subsidiaries after giving
effect to the Transaction and prepared in accordance with GAAP, together with a
related funds flow statement, which pro forma balance sheet and funds flow
statement shall be reasonably satisfactory in form and substance to the Agent
and the Required Banks.
5.16 Projections. On or prior to the Effective Date, the Banks shall
have received the financial projections (the "Projections") set forth on Annex
IV, which include the projected results of the Borrower and its Subsidiaries for
the five fiscal years ended after the Effective Date.
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5.17 Payment of Fees. On the Effective Date, all costs, fees and
expenses, and all other compensation contemplated by this Agreement, due to the
Agent or the Banks (including, without limitation, legal fees and expenses)
shall have been paid to the extent due.
5.18 Notice of Borrowing; Letter of Credit Request. Prior to the
incurrence of any Loan, the Agent shall have received a Notice of Borrowing
satisfying the requirements of Section 1.03. Prior to the issuance of any
Letter of Credit, the Agent and the Letter of Credit Issuer shall have received
a Letter of Credit Request satisfying the requirements of Section 2.02.
The occurrence of the Effective Date and the acceptance of the
benefits of each other Credit Event shall constitute a representation and
warranty by each Credit Party to each of the Banks that all of the applicable
conditions specified above exist as of the date of such Credit Event. All of
the certificates, legal opinions and other documents and papers referred to in
this Section 5, unless otherwise specified, shall be delivered to the Agent at
its Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and shall be
satisfactory in form and substance to the Agent and the Required Banks.
SECTION 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in the Letters of Credit provided for herein, the Borrower
makes the following representations, warranties and agreements with the Banks in
each case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement, the making of the Loans and the
issuance of the Letters of Credit (with the occurrence of the Effective Date and
each other Credit Event being deemed to constitute a representation and warranty
that the matters specified in this Section 6 are true and correct in all
material respects on and as of the Effective Date and the date of each such
other Credit Event, unless stated to relate to a specific earlier date in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date):
6.01 Corporate Status. Each of the Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing (to the extent such concept is relevant in such jurisdiction) under the
laws of the jurisdiction of its organization, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified and where the failure to be so qualified would
have a Material Adverse Effect.
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6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of each
Document to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
6.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party nor compliance by any
Credit Party with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein, (i) will contravene any applicable
provision of any law, statute, rule or regulation, or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement or any
other material agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of the Borrower or any of its
Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower or any of its Subsidiaries, threatened,
with respect to the Borrower or any of its Subsidiaries (i) that could
reasonably be expected to have a Material Adverse Effect or (ii) that could
reasonably be expected to have a material adverse effect on the rights or
remedies of the Banks or on the ability of any Credit Party to perform its
respective obligations to the Banks hereunder and under the other Credit
Documents to which it is, or will be, a party. Additionally, there does not
exist any judgment, order or injunction prohibiting or imposing material adverse
conditions upon the occurrence of any Credit Event.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of the
Loans shall be utilized only for the general corporate and working capital
purposes of the Borrower and its Subsidiaries.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, nor the occurrence of any other Credit Event, will violate the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System and no
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part of the proceeds of any Loan or the use of any Letter of Credit will be used
to purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any Document.
6.07 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to the Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any such Persons in writing to the Agent or 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.
6.10 Financial Condition; Financial Statements. (a) On and as of the
Effective Date, on a pro forma basis after giving effect to the Transaction and
to all Indebtedness incurred and to be incurred (including, without limitation,
the Loans) and Liens created, and to be created, by each Credit Party in
connection therewith, with respect to each of the Borrower and its Subsidiaries
(on a consolidated basis) and of the Borrower (on a stand-alone basis) (x) the
sum of the assets, at a fair valuation, of each of the Borrower and its
Subsidiaries (on a consolidated basis) and of the Borrower (on a stand-alone
basis) will exceed its debts, (y) it has not incurred nor intended to, nor
believes that it will, incur debts beyond its ability to pay such debts as such
debts mature and (z) it will have sufficient capital with which to conduct its
business. For purposes of this Section 6.10, "debt" means any liability on a
claim, and "claim" means (i) right to payment whether or not such a right
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is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) The consolidated balance sheets of the Borrower and its
Subsidiaries at March 31, 1996 and at January 5, 1997 and the related statements
of operations and cash flows and changes in shareholders' equity of the Borrower
and its Subsidiaries for the fiscal year or nine-month period, as the case may
be, ended as of said dates, copies of which have heretofore been furnished to
each Bank, present fairly in all material respects the consolidated financial
position of the Borrower and its Subsidiaries at the dates of said statements
and the results of operations and cash flows for the periods covered thereby.
All such financial statements have been prepared in accordance with GAAP
consistently applied except to the extent provided in the notes to said
financial statements and subject, in the case of the January 5, 1997 statements,
to normal year-end audit adjustments and the absence of footnotes.
(c) Since March 31, 1996, nothing has occurred that has had or could
reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described in
Section 6.10(b) and the Indebtedness incurred under this Agreement and under the
Senior Notes, (i) there were as of the Effective Date, no liabilities or
obligations (excluding current obligations incurred in the ordinary course of
business) with respect to the Borrower or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due), and (ii) the Borrower does not know of any basis for the assertion
against the Borrower or any of its Subsidiaries of any such liability or
obligation which, in the case of clause (i) or (ii) either individually or in
the aggregate, is, or would be reasonably likely to have, a Material Adverse
Effect.
(e) The Projections are based on good faith estimates and assumptions
made by the management of the Borrower, and on the Effective Date such
management believed that the Projections were reasonable and attainable, it
being recognized by the Banks, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections probably will differ from the projected
results and that the differences may be material. There is no fact known to the
Borrower or any of its Subsidiaries which would have a Material Adverse Effect,
which has not been disclosed herein or in such other documents, certificates and
statements furnished to the Banks for use in connection with the transactions
contemplated hereby.
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6.11 Security Interests. On and after the Effective Date, each of the
Security Documents creates (or after the execution and delivery thereof will
create), as security for the Obligations, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto, superior
to and prior to the rights of all third Persons, and subject to no other Liens
(except that the Security Agreement Collateral, the Mortgaged Properties and the
collateral covered by the Additional Security Documents may be subject to
Permitted Liens relating thereto), in favor of the Collateral Agent. No filings
or recordings are required in order to perfect the security interests created
under any Security Document except for filings or recordings required in
connection with any such Security Document which shall have been made on or
prior to the Effective Date as contemplated by Section 5.10(b) or on or prior to
the execution and delivery thereof as contemplated by Sections 7.11, 7.13 and
8.14.
6.12 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in all material respects in accordance
with the terms of the Documents and all applicable laws. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate the Transaction have been obtained, given, filed or taken or waived
and are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained) except where the failure to obtain, give,
file, or take would not reasonably be expected to have a Material Adverse
Effect. All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Transaction. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Transaction or the performance by the
Borrower and its Subsidiaries of their obligations under the Documents and all
applicable laws.
6.13 Compliance with ERISA. (a) Each Plan is in substantial
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for a waiver of the minimum funding standard or an extension of any
amortization period within the meaning of Section 412 of the Code; all
contributions required to be made with respect to a Plan and a Foreign Pension
Plan have been timely made; neither the Borrower nor any Subsidiary of the
Borrower nor any ERISA Affiliate has incurred any material liability to or on
account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code or reasonably expects to incur any material liability
(including any indirect, contingent or secondary liability) under any of the
foregoing Sections with respect to any Plan (other than liabilities of any ERISA
Affiliate which could not, by operation of law or otherwise, become a liability
of the Borrower or
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any of its Subsidiaries); no proceedings have been instituted to terminate, or
to appoint a trustee to administer, any Plan; no condition exists which presents
a material risk to the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; using actuarial assumptions and
computation methods consistent with subpart 1 of subtitle E of Title IV of
ERISA, the aggregate liabilities of the Borrower and its Subsidiaries and its
ERISA Affiliates to all Plans which are multiemployer plans (as defined in
Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as
of the close of the most recent fiscal year of each such Plan ended prior to the
date of the most recent Credit Event, would not result in a Material Adverse
Effect; no lien imposed under the Code or ERISA on the assets of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and the Borrower and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to which could reasonably be expected to have a
Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Borrower nor any of its Subsidiaries has incurred any material obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan which is funded, determined as of the end of the
most recently ended fiscal year of the Borrower on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan, and for each Foreign Pension Plan which
is not funded, the obligations of such Foreign Pension Plan are properly
accrued.
6.14 Capitalization. On the Effective Date and after giving effect to
the Transaction, the authorized capital stock of the Borrower shall consist of
(i) 20,000,000 shares of Class A Common Stock, $0.01 par value per share (the
"Class A Common Stock"), (ii) 2,000,000 shares of Class L Common Stock, $0.01
par value per share (the "Class L Common Stock"), (iii) 4,000,000 shares of
Class B Common Stock, $0.01 par value per share (the "Class B Common Stock"),
and (iv) 1,000,000 shares of Series A Convertible Preferred Stock, $0.01 par
value per share (the "Seller Preferred Stock"), of which 749,856 shares have
been issued. All such outstanding shares have been duly and validly issued, are
fully paid and nonassessable. The Borrower does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock
except for the Seller Preferred Stock and
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options to purchase Class A Common Stock and Class B Common Stock issued or to
be issued to management and other employees of the Borrower and its
Subsidiaries.
6.15 Subsidiaries. On and as of the Effective Date and after giving
effect to the consummation of the Transaction, the Borrower has no Subsidiaries
other than those Subsidiaries listed on Annex V. Annex V correctly sets forth,
as of the Effective Date and after giving effect to the Transaction, the
percentage ownership (direct and indirect) of the Borrower in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof. All outstanding shares of capital stock of each Subsidiary of the
Borrower have been duly and validly issued, are fully paid and nonassessable and
have been issued free of preemptive rights. No Subsidiary of the Borrower has
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any right to subscribe for or to purchase, or any options
or warrants for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights. Therma-Wave Domestic Sales Corp. has no operations and has no
significant assets or liabilities.
6.16 Intellectual Property. Except as disclosed on Annex X, each of
the Borrower and each of its Subsidiaries owns or holds a valid license to use
all the material patents, trademarks, permits, service marks, trade names,
technology, know-how and formulas or other rights with respect to the foregoing,
free from restrictions that are materially adverse to the use thereof, that are
used in the operation of the business of the Borrower and each of its
Subsidiaries as presently conducted.
6.17 Compliance with Statutes, etc. The Borrower and its Subsidiaries
are in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable Environmental Laws with
respect to any Real Property or governing its business and the requirements of
any permits issued under such Environmental Laws with respect to any such Real
Property or the operations of the Borrower or any of its Subsidiaries), except
such non-compliance as is not likely to, individually or in the aggregate, have
a Material Adverse Effect.
6.18 Environmental Matters. (a) The Borrower and its Subsidiaries
have complied with, and on the date of each Credit Event are in compliance with,
all applicable Environmental Laws and the requirements of any permits issued
under such Environmental Laws. There are no pending or, to the best knowledge
of the Borrower, past or threatened Environmental Claims against the Borrower or
any of its Subsidiaries or any Real Property owned or operated by the Borrower
or any of its Subsidiaries. There are no facts, circumstances, conditions or
occurrences concerning the business or operations of the Borrower or any of its
Subsidiaries or any Real Property at any time owned or operated by the Bor-
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rower or any of its Subsidiaries or, to the best knowledge of the Borrower, on
any property adjoining or in the vicinity of any such Real Property that would
reasonably be expected (i) to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries or any such currently owned or operated
Real Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by the Borrower or any of its Subsidiaries where such generation, use,
treatment or storage has violated or would reasonably be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property owned or operated by the Borrower or any of its
Subsidiaries. There are not now any underground storage tanks located on any
Real Property owned or operated by the Borrower or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 6.18, the
representations made in this Section 6.18 shall only be untrue if the aggregate
effect of all restrictions, failures, noncompliance, Environmental Claims,
Releases and presence of underground storage tanks, in each case of the types
described above, would reasonably be expected to have a Material Adverse Effect.
6.19 Properties. All Real Property owned or leased by the Borrower or
any of its Domestic Subsidiaries as of the Effective Date and after giving
effect to the Transaction, and the nature of the interest therein, is correctly
set forth in Annex III. The Borrower and its Subsidiaries have good and
marketable title to, or a validly subsisting leasehold interest in, all material
properties owned or leased by it, including all Real Property reflected in Annex
III or in the financial statements referred to in Section 6.10(b), free and
clear of all Liens, other than Permitted Liens.
6.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries, (ii) no strike, labor dispute, slowdown or stoppage pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against the Borrower or any of its Subsidiaries and (iii)
to the best knowledge of the Borrower, no union representation question existing
with respect to the employees of the Borrower or any of its Subsidi-
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aries and, to the best knowledge of the Borrower, no union organizing activities
are taking place, except (with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate) such as is not
reasonably likely to have a Material Adverse Effect.
6.21 Tax Returns and Payments. All Federal, state, foreign and other
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of the Borrower and/or any of its Subsidiaries have been timely filed with the
appropriate taxing authority. The Returns accurately reflect all liability for
taxes of the Borrower and its Subsidiaries for the periods covered thereby. The
Borrower and each of its Subsidiaries have paid all taxes payable by them other
than immaterial taxes and other taxes which are not yet due and payable, and
other than those contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP. Except
as disclosed in the financial statements referred to in Section 6.10(b), there
is no material action, suit, proceeding, investigation, audit, or claim now
pending or, to the knowledge of the Borrower, threatened by any authority
regarding any taxes relating to the Borrower or any of its Subsidiaries. As of
the Effective Date, neither the Borrower nor any of its Subsidiaries has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Borrower or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Borrower or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Borrower nor any of its
Subsidiaries have provided, with respect to themselves or property held by them,
any consent under Section 341 of the Code. Neither the Borrower nor any of its
Subsidiaries has incurred, or will incur, any material tax liability in
connection with the Transaction and the other transactions contemplated hereby.
6.22 Existing Indebtedness. Annex VI sets forth a true and complete
list of all Indebtedness of the Borrower and its Subsidiaries as of the
Effective Date and which is to remain outstanding after giving effect to the
Transaction (excluding the Loans, the Letters of Credit and the Senior Notes,
the "Existing Indebtedness"), in each case showing the aggregate principal
amount thereof and the name of the respective borrower and any other entity
which directly or indirectly guaranteed such debt.
SECTION 7. Affirmative Covenants. The Borrower hereby covenants and
agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Revolving Loan Commitment has
terminated, no Letters of Credit (other than Letters of Credit, together with
all Fees that have accrued and will accrue thereon through the stated
termination date of such Letters of Credit, which have been supported in a
manner satisfactory to the Letter of Credit Issuer in its sole and absolute
discretion) or Notes are outstanding and the Loans and Unpaid Drawings, together
with interest, Fees and
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all other Obligations (other than any indemnities described in Section 12.13
hereof which are not then due and payable) incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month of the Borrower, the consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income and retained earnings and of cash flows
for such fiscal month and for the elapsed portion of the fiscal year ended
with the last day of such fiscal month, in each case setting forth
comparative figures for the corresponding month in the prior fiscal year
and comparative budgeted figures for such fiscal month, all of which shall
be certified by the chief financial officer or other Authorized Officer of
the Borrower, subject to normal year-end audit adjustments and the absence
of footnote disclosure.
(b) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and of cash
flows for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly accounting
period, all of which shall be in reasonable detail and certified by the
chief financial officer or other Authorized Officer of the Borrower that
they fairly present in all material respects the financial condition of the
Borrower and its Subsidiaries as of the dates indicated and the results of
their operations and changes in their cash flows for the periods indicated,
subject to normal year-end audit adjustments and the absence of footnote
disclosure.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for such fiscal year, in each case setting forth comparative figures
for the preceding fiscal year and comparative budgeted figures for such
fiscal year, and, in the case of all such financial statements (but
excluding such comparative budgeted figures), certified by such independent
certified public accountants of recognized national standing as shall be
reasonably acceptable to the Agent, in each case to the effect that such
statements fairly present in all material respects the financial condition
of the Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and cash flows, together with a certificate of
such accounting firm stating that in the course of its regular audit of the
business of the Borrower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, no Default or Event
of Default which has occurred and is continuing has come to their attention
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insofar as such Default or Event of Default relates to financial and
accounting matters or, if such a Default or an Event of Default has come to
their attention a statement as to the nature thereof.
(d) Budgets, etc. Not more than 60 days after the commencement of
each fiscal year of the Borrower, budgets of the Borrower and its
Subsidiaries in reasonable detail for each of the four fiscal quarters of
such fiscal year as customarily prepared by management for its internal use
setting forth, with appropriate discussion, the principal assumptions upon
which such budgets are based. Together with each delivery of financial
statements pursuant to Sections 7.01(b) and (c), a comparison of the
current year to date financial results (other than in respect of the
balance sheets included therein) against the budgets required to be
submitted pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(b) and (c), a
certificate of the chief financial officer or other Authorized Officer of
the Borrower to the effect that no Default or Event of Default exists or,
if any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate shall set forth the calculations required
to establish whether the Borrower and its Subsidiaries were in compliance
with the provisions of Sections 8.04(e), 8.05 and 8.08 through and
including 8.11, as at the end of such fiscal quarter or year, as the case
may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within five Business Days (or 10 Business Days in the case of clause (y)
below) after any Senior Officer of the Borrower or any of its Subsidiaries
obtains knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or an Event of Default, which notice shall specify
the nature thereof, the period of existence thereof and what action the
Borrower proposes to take with respect thereto and shall state that such
notice is a "notice of default" and (y) the commencement of, or threat of,
or any significant development in, any litigation or governmental
proceeding pending against the Borrower or any of its Subsidiaries which is
likely to have a Material Adverse Effect, or a material adverse effect on
the ability of any Credit Party to perform its respective obligations
hereunder or under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of each
report or "management letter" submitted to the Borrower or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of the Borrower or any
of its Subsidiaries.
(h) Environmental Matters. Promptly after obtaining knowledge of any
of the following, written notice of:
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(i) any pending or threatened material Environmental Claim
against the Borrower or any of its Subsidiaries or any Real Property
owned or operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that (x) results
in material noncompliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (y) could reasonably be
anticipated to form the basis of a material Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject to
any material restrictions on the ownership, occupancy, use or
transferability by the Borrower or its Subsidiary, as the case may be,
of its interest in such Real Property under any Environmental Law; and
(iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries where the Borrower or any of its Subsidiaries is or is
reasonably expected to be responsible for the cost of such action or
where the taking of such action could reasonably be expected to
materially interfere with the operations of the Borrower or any of its
Subsidiaries at such Real Property.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and the Borrower's response thereto. In addition, the Borrower agrees to
provide the Banks with copies of all material written communications by the
Borrower or any of its Subsidiaries with any Person, government or
governmental agency relating to any of the matters set forth in clauses
(i)-(iv) above, and such detailed reports relating to any of the matters
set forth in clauses (i)-(iv) above as may reasonably be requested by the
Agent or the Required Banks.
(i) Other Information. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by the Borrower
or any of its Subsidiaries and copies of all financial statements, proxy
statements, notices and reports as the Borrower or any of its Subsidiaries
shall generally send to analysts or the holders of their capital stock or
the holders of the Senior Notes in their capacity as such holders (to the
extent not theretofore delivered to the Banks pursuant to this Agreement)
and, with reasonable promptness, such other infor-
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mation or documents (financial or otherwise) as the Agent on its own behalf
or on behalf of any Bank may reasonably request from time to time.
7.02 Books, Records and Inspections. The Borrower will, and will cause
each of its Subsidiaries to, permit, upon notice to the chief financial officer
or other Authorized Officer of the Borrower, (x) officers and designated
representatives of the Agent or any Bank to visit and inspect any of the
properties or assets of the Borrower and any of its Subsidiaries in whomsoever's
possession, and to examine the books of account of the Borrower and any of its
Subsidiaries and discuss the affairs, finances and accounts of the Borrower and
of any of its Subsidiaries with, and be advised as to the same by, their
officers and independent accountants, all at such reasonable times and intervals
and to such reasonable extent as the Agent or any Bank may desire and (y) the
Agent, at the request of the Required Banks, to conduct, at the Borrower's
expense, an audit of the accounts receivable and/or inventories of the Borrower
and its Subsidiaries at such times (but no more frequently than once a year
unless an Event of Default has occurred and is continuing) as the Required Banks
shall reasonably require.
7.03 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times from and after the Effective Date maintain in full
force and effect insurance with reputable and solvent insurance carriers in such
amounts, covering such risks and liabilities and with such deductibles or self-
insured retentions as are in accordance with normal industry practice. At any
time that insurance at the levels described in Annex VII is not being maintained
by the Borrower and its Subsidiaries, the Borrower will notify the Banks in
writing thereof and, if thereafter notified by the Agent to do so, the Borrower
will obtain insurance at such levels to the extent then generally available (but
in any event within deductible or self-insured retention limitations set forth
in the preceding sentence) or otherwise as are acceptable to the Agent. The
Borrower will furnish to the Agent on the Effective Date and on each date as the
Agent or the Required Banks may reasonably request, a summary of the insurance
carried in respect of the Borrower and its Subsidiaries and the assets of the
Borrower and its Subsidiaries together with certificates of insurance and other
evidence of such insurance, if any, naming the Collateral Agent as an additional
insured and/or loss payee.
7.04 Payment of Taxes. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims for sums that have become due
and payable which, if unpaid, might become a Lien not otherwise permitted under
Section 8.03(a) or charge upon any properties of the Borrower or any of its
Subsidiaries; provided, that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
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7.05 Corporate Franchises. The Borrower will do, and will cause each
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises and authority to do business; provided, however, that any transaction
permitted by Section 8.02 will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls) other than
such non-compliance as would not have a Material Adverse Effect or a material
adverse effect on the ability of any Credit Party to perform its obligations
under any Credit Document to which it is a party.
7.07 Compliance with Environmental Laws. (a) The Borrower will pay,
and will cause each of its Subsidiaries to pay, all costs and expenses incurred
by it in keeping in compliance with all Environmental Laws, and will keep or
cause to be kept all Real Properties owned or operated by the Borrower or any of
its Subsidiaries free and clear of any Liens imposed pursuant to such
Environmental Laws; and (b) neither the Borrower nor any of its Subsidiaries
will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous Materials
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property, unless the failure to comply with the
requirements specified in clause (a) or (b) above, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
If the Borrower or any of its Subsidiaries, or any tenant or occupant of any
Real Property, cause or permit any intentional or unintentional act or omission
resulting in the presence or Release of any Hazardous Material (except in
compliance with applicable Environmental Laws), the Borrower agrees to
undertake, and/or to cause any of its Subsidiaries, tenants or occupants to
undertake, at their sole expense, any clean up, removal, remedial or other
action required pursuant to Environmental Laws to remove and clean up any
Hazardous Materials from any Real Property except where the failure to do so
would not be reasonably expected to have a Material Adverse Effect; provided
that neither the Borrower nor any of its Subsidiaries shall be required to
comply with any such order or directive which is being contested in good faith
and by proper proceedings so long as it has maintained adequate reserves with
respect to such compliance to the extent required in accordance with GAAP.
7.08 ERISA. As soon as possible and, in any event, within 10 days
after the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following events to
the extent that one or more of such events is reasonably likely to result in a
material liability to the Borrower or any
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Subsidiary of the Borrower, the Borrower will deliver to each of the Banks a
certificate of the chief financial officer or other Authorized Officer of the
Borrower setting forth details as to such occurrence and the action, if any,
which the Borrower, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Borrower, such Subsidiary, such ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred, that an accumulated funding deficiency has been
incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any amortization period
under Section 412 of the Code with respect to a Plan; that a contribution
required to be made to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code; that proceedings may be or have
been instituted to terminate or appoint a trustee to administer a Plan; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409, 502(i) or 502(l) of ERISA; or that the Borrower or
any Subsidiary of the Borrower has or may incur any liability under any employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA). At the request of any Bank, the Borrower will deliver to
such Bank a complete copy of the annual report (Form 5500) of each Plan required
to be filed with the Internal Revenue Service. In addition, at the request of
any Bank, copies of annual reports and any notices received by the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan
or Foreign Pension Plan shall be delivered to such Bank no later than 10 days
after the date of any such request.
7.09 Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, normal wear and
tear and damage by casualty excepted, and, subject to Section 8.08, that from
time to time there are made in such properties and equipment all needful and
proper repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
7.10 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on the Sunday on or immediately following
March 31 of each year and (ii) each of its,
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and each of its Subsidiaries', fiscal quarters to end on dates which are
consistent with a fiscal year ending as provided in preceding clause (i).
7.11 Additional Security; Further Assurances. (a) The Borrower will,
and will cause each of its Domestic Subsidiaries (and to the extent Section 7.13
is operative, each of its Foreign Subsidiaries) to, grant to the Collateral
Agent security interests and mortgages in such assets and properties of the
Borrower and its Subsidiaries as are not covered by the initial Security
Documents, and as may be requested from time to time by the Agent or the
Required Banks (collectively, the "Additional Security Documents"). All such
security interests and mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Agent and shall constitute
valid and enforceable perfected security interests and mortgages superior to and
prior to the rights of all third Persons and subject to no other Liens except
for Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require. Furthermore, the Borrower shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Agent to assure themselves that
this Section 7.11 has been complied with.
(c) If the Agent or the Required Banks determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of the Borrower and its Subsidiaries constituting Collateral, the
Borrower shall provide to the Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989 and which shall be in
form and substance satisfactory to the Agent.
(d) The Borrower agrees that each action required above by this
Section 7.11 shall be completed as soon as possible, but in no event later than
90 days after such action is either requested to be taken by the Agent or the
Required Banks or required to be taken by the Borrower and its Subsidiaries
pursuant to the terms of this Section 7.11; provided that in no event shall the
Borrower be required to take any action, other than
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using its reasonable efforts, to obtain consents from third parties with respect
to its compliance with this Section 7.11.
7.12 Register. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 7.12, to maintain a
register (the "Register") on which it will record the Revolving Loan Commitments
from time to time of each of the Banks, the Loans made by each of the Banks and
each repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordations shall
not affect the Borrower's obligations in respect of such Loans. With respect to
any Bank, the transfer of the Revolving Loan Commitment of such Bank and the
rights to the principal of, and interest on, any Revolving Loan made pursuant to
such Revolving Loan Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Revolving Loan Commitment and Revolving Loans and prior to such recordation
all amounts owing to the transferor with respect to such Revolving Loan
Commitment and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving Loan
Commitment and Revolving Loans shall be recorded by the Agent on the Register
only upon the acceptance by the Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 12.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the Agent
for acceptance and registration of assignment or transfer of all or part of a
Revolving Loan Commitment, or as soon thereafter as practicable, the assigning
or transferor Bank shall surrender its Revolving Note, and thereupon one or more
new Revolving Notes in the same aggregate principal amount shall be issued to
the assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 7.12.
7.13 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Agent and the Required Banks does not
within 30 days after a request from the Agent or the Required Banks deliver
evidence, in form and substance mutually satisfactory to the Agent and the
Borrower, with respect to any Foreign Subsidiary which has not already had all
of its stock pledged pursuant to the Pledge Agreement that (i) a pledge (x) of
66-2/3% or more of the total combined voting power of all classes of capital
stock of such Foreign Subsidiary entitled to vote, and (y) of any promissory
note issued by such Foreign Subsidiary to the Borrower or any of its Domestic
Subsidiaries, (ii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement and (iii) the
entering into by such Foreign Subsidiary of a guaranty in substantially the form
of the Subsidiary Guaranty, in any such case could reasonably be expected to
cause (I) the undistributed earnings of such Foreign Subsidiary as determined
for Federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary's United
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States parent for Federal income tax purposes or (II) other material adverse
federal income tax consequences to the Credit Parties, then in the case of a
failure to deliver the evidence described in clause (i) above, that portion of
such Foreign Subsidiary's outstanding capital stock or any promissory notes so
issued by such Foreign Subsidiary, in each case not theretofore pledged pursuant
to the Pledge Agreement shall be pledged to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Pledge Agreement (or another pledge
agreement in substantially similar form, if needed), and in the case of a
failure to deliver the evidence described in clause (ii) above, such Foreign
Subsidiary shall execute and deliver the Security Agreement (or another security
agreement in substantially similar form, if needed), granting the Secured
Creditors a security interest in all of such Foreign Subsidiary's assets and
securing the Obligations of the Borrower under the Credit Documents and under
any Interest Rate Protection Agreement or Other Hedging Agreement and, in the
event the Subsidiary Guaranty shall have been executed by such Foreign
Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the
case of a failure to deliver the evidence described in clause (iii) above, such
Foreign Subsidiary shall execute and deliver the Subsidiary Guaranty (or another
guaranty in substantially similar form, if needed), guaranteeing the Obligations
of the Borrower under the Credit Documents and under any Interest Rate
Protection Agreement or Other Hedging Agreement, in each case to the extent that
the entering into such Security Agreement or Subsidiary Guaranty is permitted by
the laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 7.13 to be in form and substance reasonably
satisfactory to the Agent and the Required Banks.
SECTION 8. Negative Covenants. The Borrower hereby covenants and
agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Revolving Loan Commitment has
terminated, no Letters of Credit (other than Letters of Credit, together with
all Fees that have accrued and will accrue thereon through the stated
termination date of such Letters of Credit, which have been supported in a
manner satisfactory to the Letter of Credit Issuer in its sole and absolute
discretion) or Notes are outstanding and the Loans and Unpaid Drawings, together
with interest, Fees and all other Obligations (other than any indemnities
described in Section 12.13 hereof which are not then due and payable) incurred
hereunder, are paid in full:
8.01 Changes in Business. The Borrower and its Subsidiaries will not
engage in any business other than the business engaged in by the Borrower and
its Subsidiaries as of the Effective Date and activities directly related
thereto, and similar or related businesses. Notwithstanding anything to the
contrary contained in this Agreement, Therma-Wave Domestic Sales Corp. shall not
engage in any business activities (other than in connection with its
dissolution) and shall not have any significant assets or liabilities.
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8.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets (other than inventory in the ordinary course of
business), or enter into any partnerships, joint ventures or sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person (or agree to do any of the foregoing at any future
time), except that the following shall be permitted:
(a) the Borrower and its Subsidiaries may lease as lessee or lessor
or license as licensee or licensor real or personal property in the
ordinary course of business and otherwise in compliance with this
Agreement, so long as any such lease or license by the Borrower or any of
its Subsidiaries in its capacity as lessor or licensor, as the case may be,
does not prohibit the granting of a Lien by the Borrower or any of its
Subsidiaries pursuant to the Mortgages in the real property covered by such
lease or pursuant to the Security Agreement in the personal property
covered by such lease or license, as the case may be;
(b) Capital Expenditures by the Borrower and its Subsidiaries to the
extent not in violation of Section 8.08;
(c) the advances, investments and loans permitted pursuant to Section
8.05;
(d) the Borrower and its Subsidiaries may sell or discount, in each
case without recourse, accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection
thereof;
(e) the Borrower and its Subsidiaries may sell or exchange specific
items of equipment, so long as the purpose of each such sale or exchange is
to acquire (and results within 180 days of such sale or exchange in the
acquisition of) replacement items of equipment which are, in the reasonable
business judgment of the Borrower and its Subsidiaries, the functional
equivalent of the item of equipment so sold or exchanged;
(f) the Borrower and its Subsidiaries may, in the ordinary course of
business, license, as licensee or licensor, patents, trademarks, copyrights
and know-how to or from third Persons and to one another so long as any
such license by the Borrower or any of its Subsidiaries in its capacity as
licensor is permitted to be assigned pursuant to the Security Agreement (to
the extent that a security interest in such patents, trademarks, copyrights
and know-how is granted thereunder) and
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does not otherwise prohibit the granting of a Lien by the Borrower or any
of its Subsidiaries pursuant to the Security Agreement in the intellectual
property covered by such license;
(g) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any Wholly-
Owned Foreign Subsidiary so long as (i) such Wholly-Owned Foreign
Subsidiary is the surviving corporation of any such merger, dissolution or
liquidation and (ii) in each case at least 65% of the total combined voting
power of all classes of capital stock of all first-tier Foreign
Subsidiaries are pledged pursuant to the Pledge Agreement;
(h) the assets of any Foreign Subsidiary may be transferred to the
Borrower or any of its Wholly-Owned Domestic Subsidiaries, and any Foreign
Subsidiary may be merged with and into, or be dissolved or liquidated into,
the Borrower or any of its Wholly-Owned Domestic Subsidiaries so long as
the Borrower or such Wholly-Owned Domestic Subsidiary is the surviving
corporation of any such merger, dissolution or liquidation;
(i) the Borrower and its Subsidiaries may sell or otherwise transfer
inventory to their respective Subsidiaries for resale by such Subsidiaries,
and Subsidiaries of the Borrower may sell or otherwise transfer inventory
to the Borrower for resale by the Borrower, so long as the security
interest granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Security Agreement in the inventory so
transferred (or the proceeds thereof, in the case of a transfer to a
Foreign Subsidiary) shall remain in full force and effect and perfected (to
at least the same extent as in effect immediately prior to such transfer);
(j) each of the Borrower and its Subsidiaries may sell assets,
provided that (x) the aggregate sale proceeds from all assets subject to
such sales pursuant to this clause (j) shall not exceed $500,000 in any
fiscal year of the Borrower, (y) any such asset sale is for at least 80% in
cash and at fair market value (as determined in good faith by the Board of
Directors or senior management of the Borrower) and (z) the Net Proceeds
therefrom are either applied to reduce the Total Revolving Loan Commitment
as provided in Section 3.03(b) or reinvested to the extent permitted by
Section 3.03(b);
(k) each of the Borrower and its Subsidiaries may sell other assets,
provided that the aggregate sale proceeds from all assets subject to such
sales pursuant to this clause (k) shall not exceed $100,000 in any fiscal
year of the Borrower;
(l) any Domestic Subsidiary of the Borrower may transfer assets
(other than inventory) to the Borrower or to any other Wholly-Owned
Domestic Subsidiary of the Borrower so long as the security interests
granted to the Collateral Agent for
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the benefit of the Secured Creditors pursuant to the Security Documents in
the assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to
such transfer);
(m) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into, or be dissolved or liquidated into, the Borrower so long as
(i) the Borrower is the surviving corporation of such merger, dissolution
or liquidation and (ii) the security interests granted to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Security
Documents in the assets of such Wholly-Owned Domestic Subsidiary shall
remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such merger);
(n) any Domestic Subsidiary of the Borrower may merge with and into,
or be dissolved or liquidated into, any Wholly-Owned Domestic Subsidiary of
the Borrower so long as (i) such Wholly-Owned Domestic Subsidiary of the
Borrower is the surviving corporation of such merger, dissolution or
liquidation and (ii) the security interests granted to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security Documents
in the assets of such Domestic Subsidiary shall remain in full force and
effect and perfected (to at least the same extent as in effect immediately
prior to such merger, dissolution or liquidation);
(o) the Borrower and its Subsidiaries may, in the ordinary course of
business, sell, transfer or otherwise dispose of assets (including, without
limitation, patents, trademarks, copyrights and know-how) which, in the
reasonable judgment of the Borrower or such Subsidiary, are determined to
be uneconomical, negligible or obsolete in the conduct of its business; and
(p) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower and its Wholly-Owned Subsidiaries may
acquire the assets or the capital stock of any Person (any such acquisition
permitted by this clause (p), a "Permitted Acquisition"), provided, that
(i) such Person (or the assets so acquired) was, immediately prior to such
acquisition, engaged (or used) primarily in the businesses permitted
pursuant to Section 8.01, (ii) if such acquisition is structured as a stock
acquisition, then either (A) the Person so acquired becomes a Wholly-Owned
Subsidiary of the Borrower or (B) such Person is merged with and into the
Borrower or a Wholly-Owned Subsidiary of the Borrower (with the Borrower or
such Wholly-Owned Subsidiary, as the case may be, being the surviving
corporation of such merger), and in any case, all of the provisions of
Section 8.14 have been complied with in respect of such Person, (iii) any
Liens or Indebtedness assumed or issued in connection with such acquisition
are otherwise permitted under Section 8.03 or 8.04, as the case may be,
(iv) the only consideration paid in connection with such Permitted
Acquisition consists of cash, Common Stock, Qualified Preferred Stock
and/or Qualified PIK Debt Securities, provided that Qualified PIK
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Debt Securities may only be issued to the extent that same is justified as
being incurred under the "Consolidated Fixed Charge Coverage Ratio" set
forth in Section 4.12 of the Senior Note Indenture, (v) any such Permitted
Acquisition shall not be consummated unless the Leverage Ratio (determined
before giving effect to such Permitted Acquisition) and the Pro Forma
Leverage Ratio (determined after giving effect to such Permitted
Acquisition) on the date of such Permitted Acquisition are each less than
or equal to 4.00:1.00, (vi) no Permitted Acquisition may be consummated
prior to the Borrower's fiscal year ending closest to March 31, 1998, (vii)
the aggregate amount expended (including the fair market value of all
Common Stock, the aggregate liquidation preference of all Qualified
Preferred Stock and the aggregate face amount of all Qualified PIK Debt
Securities issued) in connection with all such Permitted Acquisitions shall
not exceed $5,000,000.
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or disposed of as permitted by this Section 8.02 (and such Collateral is
permitted to be released from the Liens created by the respective Security
Document), such Collateral in each case shall be sold or otherwise disposed of
free and clear of the Liens created by the Security Documents and the Agent
shall take such actions (including, without limitation, directing the Collateral
Agent to take such actions) as are appropriate in connection therewith.
8.03 Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries) or assign any right to receive income,
except for the following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) are being contested in good faith by appropriate
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proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Effective Date which are listed, and the
property subject thereto described, in Annex VIII, without giving effect to
any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
(f) Liens incurred or deposits made (x) in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money) and (y) to secure
the performance of leases of Real Property, to the extent incurred or made
in the ordinary course of business consistent with past practices;
(g) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Borrower or
any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) any interest or title of a licensor, lessor or sublessor under any
lease permitted by this Agreement;
(k) Permitted Encumbrances;
(l) Liens arising pursuant to purchase money mortgages, Capital Leases
or security interests securing Indebtedness representing the purchase price
(or financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Effective Date, provided that (i)
any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien does not exceed
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100%, nor is less than 70%, of the lesser of the fair market value or the
purchase price of the property being purchased at the time of the
incurrence of such Indebtedness and (iii) the Indebtedness secured thereby
is permitted to be incurred pursuant to Section 8.04(e);
(m) Liens securing Indebtedness of Foreign Subsidiaries permitted to
be incurred pursuant to Section 8.04(k), so long as any such Lien attaches
only to the assets of the respective Foreign Subsidiary that has incurred
such Indebtedness;
(n) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 8.04(j) and (ii) such Liens are
not incurred in connection with or in anticipation of such Permitted
Acquisition and do not attach to any other asset of the Borrower or any of
its Subsidiaries; and
(o) additional Liens incurred by the Borrower and its Subsidiaries so
long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed $25,000.
8.04 Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Annex VI, without giving effect to any subsequent extension,
renewal or refinancing thereof;
(c) Indebtedness of the Borrower incurred under the Senior Notes and
the other Senior Note Documents in an aggregate principal amount not to
exceed $115,000,000 (as reduced by any repayments or prepayments of
principal thereof);
(d) Indebtedness under Interest Rate Protection Agreements entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations;
(e) Capitalized Lease Obligations and Indebtedness of the Borrower and
its Subsidiaries incurred pursuant to purchase money Liens, provided, that
(x) all such Capitalized Lease Obligations are permitted under Section 8.08
and (y) the sum of (i) the aggregate Capitalized Lease Obligations plus
(ii) the aggregate
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principal amount of such purchase money Indebtedness outstanding at any
time (A) during the period (taken as one accounting period) from the
Effective Date and ending on the last day of the Borrower's fiscal year
ending closest to March 31, 1998, shall not exceed $1,000,000 and (B)
during any fiscal year of the Borrower thereafter shall not exceed the
amount set forth opposite such fiscal year as set forth below:
Fiscal Year
Ending Closest To Amount
----------------- ------
March 31, 1999 $1,250,000
March 31, 2000 $1,500,000
March 31, 2001 $1,750,000
March 31, 2002 $2,000,000
March 31, 2003 $2,250,000
(f) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g);
(g) Indebtedness under Other Hedging Agreements providing protection
against fluctuations in currency values in connection with the Borrower's
or any of its Subsidiaries' operations so long as management of the
Borrower or such Subsidiary, as the case may be, has determined that the
entering into of such Other Hedging Agreements are bona fide hedging
activities;
(h) Indebtedness consisting of guaranties (x) by the Borrower of
Indebtedness, leases and other obligations permitted to be incurred by
Wholly-Owned Domestic Subsidiaries, (y) by Domestic Subsidiaries of
Indebtedness, leases and other obligations permitted to be incurred by the
Borrower or other Wholly-Owned Domestic Subsidiaries and (z) by Foreign
Subsidiaries of Indebtedness, leases and other obligations permitted to be
incurred by other Wholly-Owned Foreign Subsidiaries, provided that no
Subsidiary shall be permitted to enter into any such guaranties to the
extent that such Subsidiary would be required to guaranty the Senior Notes
pursuant to the Senior Note Indenture as a result thereof;
(i) Indebtedness of the Borrower under the Shareholder Subordinated
Notes in an aggregate principal amount not to exceed $2,000,000;
(j) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness), provided that (i) such
Indebtedness was not incurred in connection with or in anticipation of such
Permitted Acquisition, (ii) such Indebtedness does not constitute debt for
borrowed money (other than debt for bor-
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rowed money incurred in connection with industrial revenue or industrial
development bond financings), it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (j), and
(iii) at the time of such Permitted Acquisition such Indebtedness does not
exceed 10% of the total value of the assets of the Subsidiary so acquired,
or of the asset so acquired, as the case may be;
(k) Indebtedness of Foreign Subsidiaries under lines of credit
extended by third Persons to any such Foreign Subsidiary the proceeds of
which Indebtedness are used for such Foreign Subsidiary's working capital
purposes, provided that the aggregate principal amount of all such
Indebtedness outstanding at any time for all Foreign Subsidiaries shall not
exceed $1,000,000;
(l) Indebtedness of the Borrower incurred under Qualified PIK Debt
Securities in connection with a Permitted Acquisition but only to the
extent that such Qualified PIK Debt Securities are permitted to be incurred
at such time pursuant to Section 8.02(p), provided that the aggregate
outstanding principal amount thereof shall not exceed at any time
$5,000,000 plus the amount of interest on such Qualified PIK Debt
Securities paid in kind or through accretion; and
(m) additional Indebtedness of the Borrower and its Subsidiaries not
otherwise permitted hereunder not exceeding $1,000,000 in aggregate
principal amount at any time outstanding.
8.05 Advances, Investments and Loans. The Borrower will not, and will
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person, or
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or hold any cash, Cash Equivalents or Foreign Cash
Equivalents, except:
(a) the Borrower and its Subsidiaries may invest in cash and Cash
Equivalents, and Foreign Subsidiaries may invest in Foreign Cash
Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms of the
Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obliga-
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tions of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(d) Interest Rate Protection Agreements entered into in compliance
with Section 8.04(d) shall be permitted;
(e) the Borrower may acquire and hold obligations of one or more
officers or other employees of the Borrower or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
Common Stock or options to purchase shares of Common Stock so long as no
cash is paid by the Borrower or any of its Subsidiaries in connection with
the acquisition of any such obligations;
(f) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases shall be permitted;
(g) the Borrower and its Subsidiaries may make intercompany loans and
advances between or among one another ("Intercompany Loans"), provided,
that (w) at no time shall the aggregate outstanding principal amount of
Intercompany Loans made pursuant to this clause (g) by the Borrower and its
Domestic Subsidiaries to Foreign Subsidiaries, when added to the amount of
contributions, capitalizations and forgiveness theretofore made pursuant to
Section 8.05(j), exceed $2,500,000 (determined without regard to any write-
downs or write-offs of such loans and advances), (x) each Intercompany Loan
made by a Foreign Subsidiary to the Borrower or a Domestic Subsidiary shall
contain the subordination provisions set forth on Exhibit I, (y) each
Intercompany Loan shall be evidenced by an Intercompany Note and (z) each
such Intercompany Note (other than (1) Intercompany Notes issued by Foreign
Subsidiaries to the Borrower or Domestic Subsidiaries and (2) Intercompany
Notes held by Foreign Subsidiaries (except, in either case, to the extent
otherwise required to be pledged pursuant to Section 7.13)) shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries for moving and travel
expenses and other similar expenses, in each case incurred in the ordinary
course of business, in an aggregate outstanding principal amount not to
exceed $500,000 at any time (determined without regard to any write-down or
write-offs of such loans and advances) shall be permitted;
(i) Other Hedging Agreements may be entered into in compliance with
Section 8.04(g);
(j) the Borrower and its Domestic Subsidiaries may make cash capital
contributions to Foreign Subsidiaries, and may capitalize or forgive any
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Indebtedness owed to them by a Foreign Subsidiary and outstanding under
clause (g) of this Section 8.05, provided that the aggregate amount of such
contributions, capitalizations and forgiveness made pursuant to this clause
(j), shall not exceed an amount equal to the lesser of (x) $1,000,000 or
(y) when added to the aggregate outstanding principal amount of
Intercompany Loans made to Foreign Subsidiaries under clause (g) of this
Section 8.05, $2,500,000 (in either case determined without regard to any
write-downs or write-offs thereof);
(k) the Borrower and its Domestic Subsidiaries may make and hold
investments in their respective Foreign Subsidiaries to the extent that
such investments arise from the sale of inventory in the ordinary course of
business by the Borrower or such Domestic Subsidiary to such Foreign
Subsidiaries for resale by such Foreign Subsidiaries (including any such
investments resulting from the extension of the payment terms with respect
to such sales);
(l) the Borrower and its Subsidiaries may hold additional investments
in their respective Subsidiaries to the extent that such investments
reflect an increase in the value of such Subsidiaries;
(m) the Borrower and its Subsidiaries may make transfers of assets to
their respective Subsidiaries in accordance with Section 8.02(g), (h), (i)
and (l);
(n) advances, loans and investments in existence on the Effective Date
and listed on Annex IX shall be permitted, without giving effect to any
additions thereto or replacements thereof (except those additions or
replacements which are existing obligations as of the Effective Date),
provided that those loans outstanding to Subsidiaries on the Effective Date
may be repaid and reborrowed so long as the aggregate outstanding principal
amount of all such loans does not exceed that aggregate principal amount
outstanding on the Existing Date;
(o) the Borrower and its Subsidiaries may acquire and hold debt and/or
equity securities as partial consideration for a sale of assets pursuant to
Section 8.02(j), (k) or (o) to the extent permitted by any such Section;
(p) the Borrower may make loans to certain members of management of
the Borrower at the times, and in the amounts, necessary for such members
to pay certain tax liabilities incurred by them in connection with the
Recapitalization, provided that the aggregate amount of all such loans made
pursuant to this clause (p) shall not exceed $1,500,000;
(q) Permitted Acquisitions shall be permitted;
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(r) the Borrower may contribute cash to one or more of its Wholly-
Owned Domestic Subsidiaries formed after the Effective Date in accordance
with Section 8.14 so long as the aggregate amount of all such cash so
contributed to all such Wholly-Owned Domestic Subsidiaries does exceed
$500,000; and
(s) in addition to investments permitted by clauses (a) through (r)
above, so long as no Default or Event of Default then exists or would
result therefrom, the Borrower and its Subsidiaries may make additional
loans, advances and investments to or in a Person so long as the aggregate
amount of all such loans, advances or investments does not exceed $500,000
(determined without regard to any write-downs or write-offs thereof and net
of cash repayments of principal in the case of loans and cash equity
returns (whether as a dividend or redemption) in the case of equity
investments), provided that neither the Borrower nor any of its
Subsidiaries may make or own any investment in Margin Stock.
8.06 Dividends, etc. The Borrower will not, and will not permit any
of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock of the Borrower) or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock, now or hereafter outstanding (or any warrants
for or options or stock appreciation rights in respect of any of such shares),
or set aside any funds for any of the foregoing purposes, and the Borrower will
not permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of the Borrower or
any other Subsidiary, as the case may be, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued by such Person with
respect to its capital stock) (all of the foregoing "Dividends"), except that:
(i) the Recapitalization shall be permitted;
(ii) any Subsidiary of the Borrower may pay Dividends to the
Borrower or any Wholly-Owned Subsidiary of the Borrower; and
(iii) the Borrower may redeem or purchase shares of Common Stock or
options to purchase Common Stock held by former employees of the Borrower
or any of its Subsidiaries following the termination of their employment,
provided that (x) the only consideration paid by the Borrower in respect of
such redemptions and/or purchases shall be cash, Shareholder Subordinated
Notes and/or cancellation of Indebtedness owing to the Borrower from such
employees, (y) the sum of (1) the aggregate amount of cash paid by the
Borrower in respect of all such redemptions and/or purchases plus (2) the
aggregate amount of all principal and interest payments made on Shareholder
Subordinated Notes shall not exceed (A) $250,000 in any fiscal year of the
Borrower ending on or prior to its fiscal year ending
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closest to March 31, 2000 and (B) $1,000,000 in any fiscal year of the
Borrower thereafter, provided that each such amount shall be increased by
an amount (not to exceed (I) $250,000 in the case of any fiscal year of the
Borrower ending on or prior to its fiscal year ending closest to March 31,
2000 or (II) $1,000,000 in the case of any fiscal year of the Borrower
thereafter, in either case for purposes of this clause (iii)) equal to the
cash proceeds received by the Borrower after the Effective Date from the
sale or issuance of Common Stock to management of the Borrower or any of
its Subsidiaries and (z) at the time of any payment permitted to be made
pursuant to this Section 8.06, no Default or Event of Default shall then
exist or result therefrom; and
(iv) the Borrower may pay regularly scheduled Dividends on the
Qualified Preferred Stock pursuant to the terms thereof solely through the
issuance of additional shares of such Qualified Preferred Stock, provided
that in lieu of issuing additional shares of such Qualified Preferred Stock
as Dividends, the Borrower may increase the liquidation preference of the
shares of Qualified Preferred Stock in respect of which such Dividends have
accrued.
8.07 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an Affiliate;
provided, that the following shall in any event be permitted: (i) the
Transaction; (ii) the payment on the Effective Date of one time fees to Xxxx
Capital and/or any Related Party in an aggregate amount (for all such Related
Parties taken together) not to exceed $1,800,000 (plus reasonable out-of-pocket
expenses incurred by Xxxx Capital and all such Related Parties in providing
services to the Borrower); (iii) the payment, on a quarterly basis, of
management fees to Xxxx Capital and/or Related Parties in an aggregate amount
(for all such Persons taken together) not to exceed $250,000 in any fiscal
quarter of the Borrower, provided, that if during any fiscal quarter of the
Borrower a Default or an Event of Default exists, then only one-half of such fee
for such fiscal quarter may be paid and the remaining one-half of such fee may
continue to accrue (without interest) and only may be paid at such time as all
Defaults and Events of Default have been cured or waived; (iv) the payment by
the Borrower, in connection with any acquisition, divestiture or financing
transaction that is consummated, of a transaction fee to Xxxx Capital and/or any
Related Party in an aggregate amount (for all such Persons taken together) not
to exceed 1% of the aggregate value of any such transaction; and (v) the
entering into, and performance with the terms and provisions, of the Development
Agreements.
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8.08 Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(i) during the period from the Effective Date through and including the last day
of the Borrower's fiscal year ending closest to March 31, 1998, the Borrower and
its Subsidiaries may make Capital Expenditures in an aggregate amount not to
exceed $3,000,000 and (ii) during any fiscal year of the Borrower thereafter,
the Borrower and its Subsidiaries may make Capital Expenditures in an aggregate
amount not to exceed $4,000,000; provided, however, that if Consolidated EBITDA
for the Test Period ending on the last day of any fiscal year of the Borrower
(commencing with the Test Period ending on the last day of the Borrower's fiscal
year ending closest to March 31, 1999) equals or exceeds $35,000,000, then,
except as set forth below, the aggregate amount of Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries in the immediately
succeeding fiscal year shall be $6,000,000. Notwithstanding the proviso in the
immediately preceding sentence, if during any fiscal year of the Borrower in
which the aggregate permitted Capital Expenditure amount has been increased to
$6,000,000, Consolidated EBITDA for any Test Period ending during such fiscal
year is less than $35,000,000, then the aggregate amount of Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries during such fiscal
year shall be reduced to $4,000,000 until such time, if any, as Consolidated
EBITDA for any subsequent Test Period ending in such fiscal year equals or
exceeds $35,000,000; it being understood and agreed, however, to the extent that
the Borrower and its Subsidiaries have theretofore spent more than $4,000,000 of
Capital Expenditures in such fiscal year (but only to the extent that such
excess was spent at a time when the permitted Capital Expenditure amount was
increased to $6,000,000), no Default or Event of Default will occur as a result
thereof.
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year of the Borrower (before giving
effect to any increase in such amount pursuant to this clause (b)) is greater
than the amount of such Capital Expenditures made by the Borrower and its
Subsidiaries during such fiscal year, the lesser of (x) such excess and (y) 25%
of such permitted amount (such lesser amount, the "Rollover Amount") may be
carried forward and utilized to make Capital Expenditures in the immediately
succeeding fiscal year of the Borrower, provided that no amounts once carried
forward pursuant to this Section 8.08(b) may be carried to any fiscal year of
the Borrower thereafter and such Rollover Amount may only be utilized after the
Borrower and its Subsidiaries have utilized in full the permitted Capital
Expenditure amount for such fiscal year as set forth in clause (a) above
(without giving effect to any increase in such amount by operation of this
clause (b)). In the event that any portion of the Rollover Amount for any
fiscal year of the Borrower represents unutilized Capital Expenditure capacity
in a fiscal year in which the permitted Capital Expenditure amount is
$6,000,000, such portion of such Rollover Amount only may be utilized in such
immediately succeeding fiscal year of the Borrower (in addition to the
requirements of the proviso to the immediately preceding sentence) to
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the extent that, and for so long as, the aggregate permitted Capital Expenditure
amount in such fiscal year is $6,000,000.
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) in connection with any
Permitted Acquisition.
(d) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the proceeds of Asset
Sales to the extent such proceeds are not required to be applied to reduce the
Total Revolving Loan Commitment pursuant to Section 3.03(b).
(e) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the insurance proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are to replace or restore any properties or
assets in respect of which such proceeds were paid within one year following the
date of the receipt of such insurance proceeds to the extent such insurance
proceeds are not required to be applied to reduce the Total Revolving Loan
Commitment pursuant to Section 3.03(e).
8.09 Minimum Consolidated EBITDA. (a) The Borrower will not permit
Consolidated EBITDA (i) for the Borrower's fiscal quarter ending closest to June
30, 1997 to be less than $2,500,000 and (ii) for any Test Period ending on the
last day of a fiscal quarter of the Borrower set forth below to be less than the
amount set forth opposite such fiscal quarter below:
Fiscal Quarter
Ending Closest To Amount
----------------- ------
September 30, 1997 $5,000,000
December 31, 1997 $5,000,000
March 31, 1998 $5,000,000
June 30, 1998 $5,000,000
September 30, 1998 $5,000,000
December 31, 1998 $5,000,000
March 31, 1999 $5,000,000
June 30, 1999 $5,000,000
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September 30, 1999 $ 5,000,000
December 31, 1999 $ 5,000,000
March 31, 2000 $ 5,000,000
June 30, 2000 $10,000,000
September 30, 2000 $15,000,000
December 31, 2000 $15,000,000
March 31, 2001 $15,000,000
June 30, 2001 $15,750,000
September 30, 2001 $16,500,000
December 31, 2001 $16,500,000
March 31, 2002 $16,500,000
June 30, 2002 $16,500,000
(b) The Borrower will not permit Consolidated EBITDA for the period
from April 6, 1997 to the last day of a fiscal quarter of the Borrower set forth
below (in each case taken as one accounting period) to be less than the amount
set forth opposite such fiscal quarter below:
Fiscal Quarter
Ending Closest To Amount
----------------- ------
June 30, 1997 $ 2,500,000
September 30, 1997 $ 5,000,000
December 31, 1997 $ 7,500,000
March 31, 1998 $10,000,000
June 30, 1998 $13,000,000
September 30, 1998 $16,000,000
December 31, 1998 $19,000,000
March 31, 1999 $22,000,000
June 30, 1999 $28,250,000
September 30, 1999 $34,500,000
December 31, 1999 $40,750,000
March 31, 2000 $47,000,000
8.10 Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio for any Test Period ending on the last day of a fiscal
quarter of the Borrower set forth below to be less than the ratio set forth
opposite such fiscal quarter below:
Fiscal Quarter
Ending Closest To Ratio
----------------- -----
June 30, 2000 1.45:1.00
September 30, 2000 1.55:1.00
December 31, 2000 1.65:1.00
March 31, 2001 1.75:1.00
June 30, 2001 1.85:1.00
September 30, 2001 1.95:1.00
December 31, 2001 2.05:1.00
March 31, 2002 2.25:1.00
June 30, 2002 2.25:1.00
8.11 Leverage Ratio. The Borrower will not permit the Leverage Ratio
at any time during a period set forth below to be more than the ratio set forth
opposite such period below:
Period Ratio
------ -----
The first day of the Borrower's fiscal quarter ending closest
to June 30, 2000 through but not including the last day of
such fiscal quarter. 5.75:1.00
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The last day of the Borrower's fiscal quarter
ending closest to June 30, 2000 through but
not including the last day of the Borrower's fiscal
quarter ending closest to September 30, 2000 5.75:1.00
The last day of the Borrower's fiscal quarter
ending closest to September 30, 2000 through
but not including the last day of the Borrower's
fiscal quarter ending closest to December 31, 2000 5.25:1.00
The last day of the Borrower's fiscal quarter ending
closest to December 31, 2000 through but not including
the last day of the Borrower's fiscal quarter ending
closest to March 31, 2001 4.75:1.00
The last day of the Borrower's fiscal quarter ending
closest to March 31, 2001 through but not including
the last day of the Borrower's fiscal quarter ending
closest to June 30, 2001 4.25:1.00
The last day of the Borrower's fiscal quarter ending
closest to June 30, 2001 through but not including
the last day of the Borrower's fiscal quarter ending
closest to September 30, 2001 4.25:1.00
The last day of the Borrower's fiscal quarter ending
closest to September 30, 2001 through but not
including the last day of the Borrower's fiscal quarter
ending closest to December 31, 2001 4.00:1.00
The last day of the Borrower's fiscal quarter ending
closest to December 31, 2001 through but not including
the last day of the Borrower's fiscal quarter ending
closest to March 31, 2002 3.75:1.00
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Thereafter 3.50:1.00
8.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Issuance of Capital Stock; etc. The Borrower will not, and
will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Senior Note;
(ii) make (or give any notice in respect of) any prepayment or
redemption of any Senior Note as a result of any asset sale, change of
control or similar event (including, without limitation, by way of
depositing with the trustee with respect thereto or any other Person money
or securities before due for the purpose of paying when due any Senior
Note), provided that so long as no Default or Event of Default then exists,
the Borrower may use the net cash proceeds received by it from an initial
registered public offering of Common Stock to mandatorily prepay
outstanding Senior Notes in accordance with the terms thereof but only to
the extent that such net cash proceeds are not required to reduce the Total
Revolving Commitment pursuant to Section 3.03(d);
(iii) make (or give any notice in respect of) any payment, prepayment,
redemption or acquisition for value of (including, without limitation, by
way of depositing with the trustee with respect thereto or any other Person
money or securities before due for the purpose of paying when due) (x) any
Shareholder Subordinated Note (whether in respect of principal, interest or
otherwise) except as otherwise permitted by Section 8.06(iii) or (y) any
Qualified PIK Debt Securities (whether in respect of principal, interest or
otherwise) except for the payment of interest thereon through the issuance
of additional Qualified PIK Debt Securities rather than in cash;
(iv) amend or modify, or permit the amendment or modification of, any
provision of any Senior Note Document or any Shareholder Subordinated Note
(other than any amendment or modification to any Shareholder Subordinated
Note which extends the maturity date thereof or reduces the interest rate
thereon, in each case so long as no consideration is paid by the Borrower
or any of its Subsidiaries in connection therewith);
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(v) amend, modify or change in any way adverse to the interests of
the Banks, any Management Agreement, any Tax Allocation Agreement, its
Certificate of Incorporation (including, without limitation, by the filing
or modification of any certificate of designation) or By-Laws, or any
agreement entered into by it with respect to its capital stock (including
any Shareholders' Agreement) or enter into any new agreement with respect
to its capital stock, in each case, which would be adverse to the interests
of the Banks; and
(vi) issue any class of capital stock other than (x) non-redeemable
common stock and (y) in the case of the Borrower, (A) the issuance on the
Effective Date of the Seller Preferred Stock and (B) the issuance of
Qualified Preferred Stock in connection with a Permitted Acquisition.
8.13 Limitation on Certain Restrictions on Subsidiaries. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (b) make loans or advances to the Borrower or any of the Borrower'
Subsidiaries or (c) transfer any of its properties or assets to the Borrower or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) this Agreement and the other
Credit Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower, (iv) customary provisions restricting assignment of
any licensing agreement entered into by the Borrower or any Subsidiary of the
Borrower in the ordinary course of business, (v) the Note Documents, (vi) the
Existing Indebtedness Agreements, and (vii) customary provisions restricting the
transfer of assets subject to Liens permitted under Section 8.03(l).
8.14 Limitation on the Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary; provided that, the Borrower and its Wholly-
Owned Subsidiaries shall be permitted to establish or create (x) Subsidiaries as
a result of investments made pursuant to Section 8.05(s) and (y) Wholly-Owned
Subsidiaries so long as, in each case, (i) at least 30 days' prior written
notice thereof (or such shorter period of time as is acceptable to the Agent) is
given to the Agent, (ii) the capital stock of each such new Subsidiary is
pledged pursuant to, and to the extent required by, this Agreement and the
Pledge Agreement and the certificates, if any, representing such stock, together
with stock powers duly executed in blank, are delivered to the Collateral Agent,
(iii) each such new Subsidiary (other than a Foreign Subsidiary except to the
extent otherwise required pursuant to Section 7.13) executes a counter-part of
the Subsidiary Guaranty, the Pledge Agreement and the Security Agreement, and
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(iv) to the extent requested by the Agent or the Required Banks, takes all
actions required pursuant to Section 7.11. In addition, each new Subsidiary that
is required to execute any Credit Document shall execute and deliver, or cause
to be executed and delivered, all other relevant documentation of the type
described in Section 5 as such new Subsidiary would have had to deliver if such
new Subsidiary were a Credit Party on the Effective Date.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when due
of any principal of the Loans or (ii) default, and such default shall continue
for three or more days, in the payment when due of any Unpaid Drawing, any
interest on the Loans or any Fees or any other amounts owing hereunder or under
any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
made by the Borrower or any other Credit Party herein or in any other Credit
Document or in any statement or certificate delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.11, 7.13 or 8, or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Section
9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement and
such default shall continue unremedied for a period of at least 30 days after
notice to the defaulting party by the Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) The Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which Indebtedness was created or (ii) default in
the observance or performance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause any such Indebtedness to become due prior to its
stated maturity; or (b) any Indebtedness (other than the Obligations) of the
Borrower or any of its Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid other than by a regularly scheduled required
prepayment or as a mandatory prepayment (unless such required prepayment or
mandatory prepayment results from a default thereunder or an event of the type
that constitutes an Event of Default), prior to the stated maturity thereof;
provided, that it shall not constitute an Event of Default pursuant to clause
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(a) or (b) of this Section 9.04 unless the principal amount of any one issue of
such Indebtedness, or the aggregate amount of all such Indebtedness referred to
in clauses (a) and (b) above, exceeds $1,500,000 at any one time; or
9.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries; or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries; or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur a
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971,
4975 or 4980 of the Code, or the Borrower or any Subsidiary of the Borrower has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) which provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or employee pension benefit plans (as defined in
Section 3(2) of ERISA) or Foreign Pension Plans; (b) there shall result from any
such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and (c)
which lien, security
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interest or liability which arises from such event or events will have a
Material Adverse Effect; or
9.07 Security Documents. (a) Except in each case to the extent
resulting from the failure of the Collateral Agent to retain possession of the
applicable Pledged Securities, any Security Document shall cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby in favor of the Collateral
Agent, or (b) any Credit Party shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and such default shall continue
beyond any cure or grace period specifically applicable thereto pursuant to the
terms of such Security Document; or
9.08 Subsidiary Guaranty. The Subsidiary Guaranty or any provision
thereof shall cease to be in full force and effect, or any Subsidiary Guarantor
or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or
disaffirm such Subsidiary Guarantor's obligations under the Subsidiary Guaranty
or any Subsidiary Guarantor shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to the Subsidiary Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving a liability (not paid
or not fully covered by insurance) in excess of $1,500,000 for all such
judgments and decrees and all such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 60 days from the
entry thereof; or
9.10 Ownership. A Change of Control Event shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against any Subsidiary Guarantor or the Borrower, except as
otherwise specifically provided for in this Agreement (provided, that if an
Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Revolving Loan
Commitment terminated, whereupon the Revolving Loan Commitment of each Bank
shall forthwith terminate immediately and any Commitment Fees shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans and all
Obligations owing hereunder (including Unpaid Drawings) to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; (iii) enforce, as Collateral
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Agent (or direct the Collateral Agent to enforce), any or all of the Liens and
security interests created pursuant to the Security Documents; (iv) terminate
any Letter of Credit which may be terminated in accordance with its terms; and
(v) direct the Borrower to pay (and the Borrower hereby agrees upon receipt of
such notice, or upon the occurrence of any Event of Default specified in Section
9.05, to pay) to the Collateral Agent at the Payment Office such additional
amounts of cash, to be held as security for the Borrower's reimbursement
obligations in respect of Letters of Credit then outstanding, equal to the
aggregate Stated Amount of all Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquired Entity or Business" shall have the meaning set forth in the
definition of "Consolidated Net Income."
"Additional Security Documents" shall have the meaning provided in
Section 7.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Agent for determining the current annual assessment payable by
BTCo to the Federal Deposit Insurance Corporation for insuring three month
certificates of deposit.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 5% or more
of the securities having ordinary voting power
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for the election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Agent appointed pursuant to
Section 11.10.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Applicable Base Rate Margin" shall mean a percentage per annum equal
to 1.75%.
"Applicable Eurodollar Margin" shall mean a percentage per annum equal
to 3.00%.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of the Borrower or
such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business and (ii) sales of assets
pursuant to Sections 8.02 (a), (d), (e), (f), (i), (k) and (o).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit J (appropriately
completed).
"Authorized Officer" shall mean the Chief Executive Officer, the
President, the Chief Financial Officer, the Treasurer, the Controller or the
Secretary or any other senior officer of the Borrower designated as such in
writing to the Agent by the Borrower, in each case to the extent reasonably
acceptable to the Agent.
"Xxxx Capital" shall mean Xxxx Capital, Inc., a Delaware corporation.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.04(c) or (ii) a Bank
having notified the Agent and/or the Borrower that it does not intend to comply
with the obligations under Section 1.01(a), 1.01(c) or 2.04(c), in the case of
either clause (i) or (ii) above as a result of the
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appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate and (y) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean and include (i) the borrowing of Swingline
Loans from BTCo on a given date and (ii) the borrowing of one Type of Revolving
Loan from all of the Banks on a given date (or resulting from conversions on a
given date), having in the case of Eurodollar Loans the same Interest Period;
provided, that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, without
duplication, all expenditures by such Person which should be capitalized in
accordance with GAAP, including, without duplication, all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with GAAP)
and the amount of all Capitalized Lease Obligations incurred by such Person.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
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"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided, that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) U.S. dollar denominated
time deposits, certificates of deposit and bankers acceptances of (x) any Bank
or (y) any bank whose short-term commercial paper rating from Standard & Poor's
Ratings Service ("S&P") is at least A-1 or the equivalent thereof or from
Xxxxx'x Investors Service Inc. ("Xxxxx'x") is at least P-1 or the equivalent
thereof (any such bank or Bank, an "Approved Bank"), in each case with
maturities of not more than twelve months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within twelve months
after the date of acquisition, (iv) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within twelve months from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or Moody's and (v)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above.
"Change of Control Event" shall mean (a) Xxxx Capital and its Related
Parties shall cease to own on a fully diluted basis in the aggregate at least
51% of the economic and voting interest in the Borrower's capital stock or (b) a
"change of control", "change of ownership" or similar event shall occur as
provided in the Senior Note Indenture or in the Seller Preferred Stock.
"Class A Common Stock" shall have the meaning provided in Section
6.14.
"Class B Common Stock" shall have the meaning provided in Section
6.14.
"Class L Common Stock" shall have the meaning provided in Section
6.14.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any
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subsequent provisions of the Code amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.13(b).
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Common Stock" shall mean, collectively, the Class A Common Stock, the
Class B Common Stock and the Class L Common Stock.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Borrower and its Subsidiaries determined on a consolidated basis at such time,
provided, that for purposes of this definition, the amount of Indebtedness in
respect of Interest Rate Protection Agreements shall be at any time the
unrealized net loss portion, if any, of the Borrower and/or its Subsidiaries
thereunder on a marked-to-market basis determined no more than one month prior
to such time.
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income for such period, before (i) total interest expense (inclusive of
amortization of deferred financing fees, premiums on Interest Rate Protection
Agreements and any other original issue discount) of the Borrower and its
Subsidiaries determined on a consolidated basis, (ii) the write-off of inventory
step-up and in-process research and development costs in accordance with
purchase accounting, (iii) any non-cash charges deducted in determining
Consolidated Net Income for such period and related to the issuance by the
Borrower or any of its Subsidiaries of stock, warrants or options to management
(or any exercise of any such warrants or options), (iv) provisions for taxes
based on income and foreign withholding taxes, (v) giving effect to any
extraordinary gains or losses but with giving effect to gains or losses from
sales of assets sold in the ordinary course of business and (vi) any non-cash
charges related to the write-up of samples in accordance with purchase
accounting.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by adding thereto the amount of all depreciation
expense and amortization expense that were deducted in determining Consolidated
EBIT for such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of the Bor-
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rower and its Subsidiaries determined on a consolidated basis for such period
with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under Interest Rate Protection
Agreements, in each case net of total cash interest income of the Borrower and
its Subsidiaries for such period, but excluding, however, amortization of any
payments made to obtain any Interest Rate Protection Agreement and deferred
financing costs and any interest expense on deferred compensation arrangements
to the extent included in total interest expense.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss), after provision for taxes, of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period but
excluding any unrealized losses and gains for such period resulting from marked-
to-market of Other Hedging Agreements; provided that (x) for purposes of
determining compliance with Sections 8.02(p) and 8.11 there shall be included
(to the extent not already included) in determining Consolidated Net Income for
any period the net income (or loss) of any Person, business, property or asset
acquired during such period pursuant to Section 8.02(p) and not subsequently
sold or otherwise disposed of by the Borrower or one of its Subsidiaries during
such period (each such Person, business, property or asset acquired and not
subsequently disposed of during such period, an "Acquired Entity or Business"),
in each case based on the actual net income (or loss) of such Acquired Entity or
Business for the entire period (including the portion thereof occurring prior to
such acquisition) and (y) for purposes of calculating Consolidated Net Income
for any period, Consolidated Net Income shall be adjusted for factually
supportable and identifiable pro forma cost savings for such period determined
in accordance with GAAP and concurred in by the Borrower's independent
accountants that are directly attributable to the acquisition of an Acquired
Entity or Business pursuant to a Permitted Acquisition.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in each
case in
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the ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiary Guaranty and each Security Document.
"Credit Event" shall mean (i) the occurrence of the Effective Date and
(ii) the making of a Loan (other than a Revolving Loan made pursuant to a
Mandatory Borrowing) or the issuance of a Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Development Agreements" shall mean, collectively, (i) the Development
License Agreement, dated June 16, 1992, among the Borrower, Therma-Wave (Japan),
Toray Industries and Shimadzu, (ii) the New Development Agreement, dated
December 22, 1995, between the Borrower and Toray Industries and (iii)
additional Development Agreements entered into pursuant to the Development
Agreement referred to in clause (i) of this definition.
"Dividends" shall have the meaning provided in Section 8.06.
"Documents" shall mean the Credit Documents, the Refinancing
Documents, the Equity Financing Documents and the Recapitalization Documents.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
investment company, financial institution or other "accredited investor" (as
defined in Regulation D of the Securities Act).
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"Employment Agreements" shall have the meaning provided in Section
5.13(f).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by the Borrower or any of its
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit
issued to the Borrower or any of its Subsidiaries under any such law, including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Law" shall mean any federal, state or local statute,
law, rule, regulation, ordinance, code, policy or rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment (for purposes of this definition
(collectively, "Laws")), relating to the environment or Hazardous Materials or
health and safety to the extent health and safety issues arise under the
Occupational Safety and Health Act of 1970, as amended, or any such similar
Laws.
"Equity Financing" shall mean the issuance by the Borrower of shares
of its Common Stock to Xxxx Capital and/or its Related Parties, Xxxxxx Hill
Ventures, certain related investors and members of the Borrower's senior
management team on or prior to the Effective Date as part of the Transaction.
"Equity Financing Documents" shall mean each of the documents and
agreements entered into in connection with the consummation of the Equity
Financing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in effect
at the date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or any Subsidiary of the Borrower
would be deemed to be a "single employer" within the meaning of Section 414(b),
(c), (m) or (o) of the Code.
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"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean, with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100 of
1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by BTCo for U.S. dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan of BTCo for which an
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Loan, determined as of 10:00
A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Existing Indebtedness" shall have the meaning provided in Section
6.22.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.13(c).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Final Maturity Date" shall mean May 16, 2002.
"Foreign Cash Equivalents" shall mean certificates of deposit or
bankers acceptances of any bank organized under the laws of Canada, Japan or any
country that is a member of the European Economic Community whose short-term
commercial paper rat-
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ing from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at
least P-1 or the equivalent thereof, in each case with maturities of not more
than twelve months from the date of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated under the laws of any jurisdiction other than the United States
of America, any State thereof or any territory thereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as promulgated by the American Institute of Certified
Public Accountants and its committees, as in effect from time to time; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted,
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i.e., take-or-pay and similar obligations, (vii) all obligations under Interest
Rate Protection Agreements and Other Hedging Agreements and (viii) all
Contingent Obligations of such Person, provided, that Indebtedness shall not
include trade payables and accrued expenses, in each case arising in the
ordinary course of business.
"Indebtedness to be Refinanced" shall mean (i) the Term Loan
Agreement, dated as of April 27, 1992, between the Borrower and The Long-Term
Credit Bank of Japan, Ltd., (ii) the Loan Agreement, dated as of April 27, 1992,
between the Borrower and The Sakura Bank, Limited, (iii) the Term Loan
Agreement, dated as of April 30, 1992, between the Borrower and Union Bank, (iv)
the Loan Agreement, dated as of April 30, 1992, between the Borrower and The
Mitsubishi Bank, Ltd., and (v) the four Lines of Credit with each of the above
four banks in the aggregate amount of $6,200,000.
"Intercompany Loan" shall have the meaning provided in Section
8.05(g).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit K, evidencing Intercompany Loans.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business with
respect to insurance obligations and workers' compensation, surety bonds and
other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably acceptable to the Agent
and the Letter of Credit Issuer and otherwise permitted to exist pursuant to the
terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
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"Letter of Credit Issuer" shall mean BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Leverage Ratio" shall mean, at any time, the ratio of (i)
Consolidated Debt at such time minus the amount of cash and Cash Equivalents
held by the Borrower and its Subsidiaries at such time to (ii) Consolidated
EBITDA for the Test Period then last ended.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in Section
5.13(e).
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower or of the Borrower and its Subsidiaries taken as a
whole.
"Material Contracts" shall have the meaning provided in Section
5.13(h).
"Maximum Swingline Amount" shall mean $2,500,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $250,000.
"Mortgaged Properties" shall mean and include each Real Property
subjected to a mortgage in favor of the Collateral Agent for the benefit of the
Secured Creditors pursuant to Section 7.11.
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"NAIC" shall have the meaning provided in Section 1.10(c).
"Net Proceeds" shall mean, with respect to any Asset Sale, the
Proceeds resulting therefrom net of (a) cash expenses of sale (including
brokerage fees, if any, transfer taxes and payment of principal, premium and
interest of Indebtedness other than the Loans required to be repaid as a result
of such Asset Sale) and (b) incremental income taxes paid or payable as a result
thereof.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent, the Letter of Credit Issuer or any Bank
pursuant to the terms of this Agreement or any other Credit Document.
"Old Common Stock" shall mean the common stock, par value $.001, of
the Borrower outstanding prior to the consummation of the Recapitalization.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean, at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Loan Commitment at such time by the
Total Revolving
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Loan Commitment then in effect, provided, that if the Total Revolving Loan
Commitment has been terminated, the Percentage of each Bank shall be determined
by dividing such Bank's Revolving Loan Commitment as in effect immediately prior
to such termination by the Total Revolving Loan Commitment as in effect
immediately prior to such termination.
"Permitted Acquisition" shall have the meaning provided in Section
8.02(p).
"Permitted Encumbrances" shall mean (i) those liens, encumbrances and
other matters affecting title to any Mortgaged Property listed in the Mortgage
Policies in respect thereof and found, on the date of delivery of such Mortgage
Policies to the Agent in accordance with the terms hereof, reasonably acceptable
by the Agent, (ii) as to any particular Mortgaged Property at any time, such
easements, encroachments, covenants, rights of way, minor defects,
irregularities or encumbrances on title which do not, in the reasonable opinion
of the Agent, materially impair such Mortgaged Property for the purpose for
which it is held by the mortgagor thereof, or the lien held by the Collateral
Agent, (iii) municipal and zoning ordinances which are not violated in any
material respect by the existing improvements and the present use made by the
mortgagor thereof of the Premises (as defined in the respective Mortgage), (iv)
general real estate taxes and assessments not yet delinquent, and (v) such other
items with respect to Real Property as the Agent may consent to (such consent
not to be unreasonably withheld).
"Permitted Liens" shall have the meaning provided in Section 8.03.
"Person" shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, limited liability company,
association, trust or other enterprise or any government or political
subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 3(2) of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Borrower, any of its Subsidiaries
or any ERISA Affiliate and each such plan for the five calendar year period
immediately following the latest date on which the Borrower, any of its
Subsidiaries or any ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.10(a).
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
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"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Proceeds" shall mean, with respect to any Asset Sale, the aggregate
cash payments (including any cash received by way of deferred payment pursuant
to a note receivable issued in connection with any such Asset Sale, other than
the portion of such deferred payment constituting interest, but only as and when
so received) received by the Borrower and/or any of its Subsidiaries from such
Asset Sale.
"Pro Forma Leverage Ratio" shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Debt at such time to (y)
Consolidated EBITDA for the Test Period then last ended, with such Pro Forma
Leverage Ratio to be determined on a pro forma basis as if the respective
Permitted Acquisition (and the incurrence, assumption and/or repayment of any
Indebtedness in connection with such Permitted Acquisition), as the case may be,
had occurred on the first day of such Test Period (and such Indebtedness, if
any, had remained outstanding (or had not been outstanding, as the case may be)
throughout such Test Period). On the date of a Permitted Acquisition pursuant to
which the Pro Forma Leverage Ratio is to be calculated, the Borrower shall
deliver to the Agent a certificate of the Borrower's chief financial officer
setting forth in reasonable detail the pro forma calculations required to
establish the Pro Forma Leverage Ratio (with such pro forma calculations to be
made on a basis reasonably satisfactory to the Agent and to assume that the
interest expense attributable to any Indebtedness (whether existing or being
incurred) bearing a floating interest rate shall be computed as if the rate in
effect on the date of such Permitted Acquisition (taking into account any
Interest Rate Protection Agreement applicable to such Indebtedness if such
Interest Rate Protection Agreement has a remaining term in excess of 12 months)
had been the applicable rate for the entire period. In calculating the Pro Forma
Leverage Ratio in connection with any Permitted Acquisition, it is understood
that Consolidated EBITDA shall include the results of operations of the Person
or assets acquired pursuant to such Permitted Acquisition on a pro forma basis
as if such acquisition had occurred on the first day of the respective Test
Period.
"Projections" shall have the meaning provided in Section 5.16.
"Qualified PIK Debt Securities" shall mean unsecured junior
subordinated notes issued by the Borrower so long as the terms of any such
junior subordinated note (i) do not provide any collateral security, (ii) do not
provide any guaranty or other support by any Subsidiaries of the Borrower, (iii)
do not contain any mandatory put, redemption, repayment, sinking fund or other
similar provision occurring before December 31, 2004, (iv) do not require the
cash payment of interest before December 31, 2004, (v) do not contain any
covenants other than periodic reporting requirements, (vi) do not grant the
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holders thereof any voting rights except for limited customary voting rights on
fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of the Borrower, or liquidations involving the
Borrower, and (vii) are otherwise reasonably satisfactory to the Agent.
"Qualified Preferred Stock" shall mean any preferred stock of the
Borrower so long as the terms of any such preferred stock (i) do not provide any
collateral security, (ii) do not provide any guaranty or other support by the
Borrower or any Subsidiaries of the Borrower, (iii) do not contain any mandatory
put, redemption, repayment, sinking fund or other similar provision occurring
before December 31, 2004, (iv) do not require the cash payment of dividends
before December 31, 2004, (v) do not contain any covenants other than periodic
reporting requirements, (vi) do not grant the holders thereof any voting rights
except for (x) voting rights required to be granted to such holders under
applicable law and (y) limited customary voting rights on fundamental matters
such as mergers, consolidations, sales of all or substantially all of the assets
of the Borrower, or liquidations involving the Borrower, and (vii) are otherwise
reasonably satisfactory to the Agent.
"Quarterly Payment Date" shall mean the last Business Day of each
November, August, February and May.
"Quarterly Payment Period" shall mean the quarterly period between one
Quarterly Payment Date and the immediately succeeding Quarterly Payment Date.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recapitalization" shall mean, collectively, (i) the redemption by the
Borrower of approximately 86.6% of the Old Common Stock held by the Sellers for
an aggregate redemption price equal to $96,900,000, (ii) the purchase by Xxxx
Capital and/or its Related Parties, Xxxxxx Hill Venture and other related
investors from the Borrower of shares of Old Common Stock for a purchase price
equal to approximately $17,100,000, (iii) the exchange by the Sellers of the
remaining shares of Old Common Stock owned by the Sellers and not redeemed
pursuant to clause (i) of this definition in exchange for Seller Preferred
Stock, Class A Common Stock, Class B Common Stock and Class L Common Stock, (iv)
the exchange by Xxxx Capital and/or its Related Parties, Xxxxxx Hill Venture and
other related investors of all of their shares of Old Common Stock for Class A
Common Stock, Class B Common Stock and Class L Common Stock, in each case
pursuant to the Recapitalization Documents and (v) the purchase by certain
members of management of the Borrower from the Borrower of shares of Class A
Common Stock, Class B Common Stock and Class L Common Stock equal to
approximately $2,900,000.
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"Recapitalization Documents" shall mean the Recapitalization
Agreement, dated December 18, 1996, among the Borrower, the Sellers and Xxxx
and/or its Related Parties, and each other agreement, instrument and document
relating to the Recapitalization.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of
any theft, physical destruction or damage or any other similar event with
respect to any properties or assets of the Borrower or any of its Subsidiaries,
(ii) by reason any condemnation, taking, seizing or similar event with respect
to any properties or assets of the Borrower or any of its Subsidiaries and (iii)
under any policy of insurance required to be maintained under Section 7.03.
"Refinancing" shall mean the refinancing by the Borrower, and the
termination in full of all commitments and letters of credit in respect of,
together with the payment of all loans, accrued interest, premiums, fees,
commissions, expenses and other amounts owing in connection with, the
Indebtedness to be Refinanced.
"Refinancing Documents" shall mean each of the agreements, documents
and instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 7.12.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof establishing margin requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from to time in effect and any successor to all or
any portion thereof establishing margin requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof establishing margin requirements.
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"Related Party" shall mean any Affiliate of Xxxx Capital on the
Effective Date, provided that for purposes of the definition of "Change of
Control Event," the term Related Party shall not include (x) any portfolio
company of Xxxx Capital or any Affiliate of Xxxx Capital or (y) any officer or
director of the Borrower or any of its Subsidiaries if such officer or director
is not also a partner or stockholder of Xxxx Capital on the Effective Date.
"Release" shall mean the disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation 2615.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
Revolving Loan Commitments (or, if after the Total Revolving Loan Commitment has
been terminated, outstanding Revolving Loans and Percentages of outstanding
Swingline Loans and Letter of Credit Outstandings) constitute greater than 50%
of the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of Defaulting Banks (or, if after the Total Revolving Loan
Commitment has been terminated, the total outstanding Revolving Loans of
Non-Defaulting Banks and the aggregate Percentages of all Non-Defaulting Banks
of the total outstanding Swingline Loans and Letter of Credit Outstandings at
such time).
"Returns" shall have the meaning provided in Section 6.21.
"Revolving Loan" shall have the meaning provided in Section 1.01(a).
"Revolving Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "Revolving Loan Commitment," as the same may be reduced from time to
time pursuant to Section 3.02 or Section 3.03 and/or otherwise modified pursuant
to Section 1.13 and/or Section 12.04(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
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"Revolving Outstandings" shall mean, at any time, the sum of (I) the
aggregate principal amount of all Revolving Loans at such time plus (II) the
aggregate amount of all Letter of Credit Outstandings at such time.
"Rollover Amount" shall have the meaning provided in Section
8.08(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the respective
Security Documents.
"Security Agreement" shall have the meaning provided in Section
5.10(b).
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement, each Mortgage, and each Additional Security Document, if
any.
"Seller Preferred Stock" shall have the meaning provided in Section
6.14.
"Seller Stock" shall mean the Seller Preferred Stock and the Common
Stock in each case issued to the Sellers as part of the Recapitalization.
"Sellers" shall mean, collectively, Toray Industries, Toray Industries
(America), and Shimadzu.
"Senior Note Documents" shall mean and include the Senior Note
Indenture and the Senior Notes, as in effect on the Effective Date, and as the
same may be modified, supplemented or amended from time to time pursuant to the
terms hereof and thereof.
"Senior Note Indenture" shall mean the Indenture, dated as of May 15,
1997, by and between the Borrower and IBJ Xxxxxxxx Bank & Trust Company, as
trustee thereunder, as in effect on the Effective Date, and as the same may be
modified, amended or supplemented from time to time in accordance with the terms
hereof and thereof.
"Senior Notes" shall mean the Borrower's 10-5/8% Senior Notes due
2004, as in effect on the Effective Date, and as the same may be modified,
supplemented or amended from time to time pursuant to the terms hereof and
thereof.
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"Senior Officer" shall mean the Chief Executive Officer, the
President, the Chief Financial Officer, the Treasurer, the Controller or the
Secretary or any other senior officer of the Borrower or any of its Subsidiaries
with knowledge of, or responsibility for, the financial affairs of such Person.
"Shareholders' Agreements" shall have the meaning provided in Section
5.13(d).
"Shareholder Subordinated Notes" shall mean an unsecured junior
subordinated note issued by the Borrower (and not guaranteed or supported in any
way by any of the Borrower's Subsidiaries) in the form of Exhibit L
(appropriately completed), as amended, modified or supplemented from time to
time in accordance with the terms of this Agreement.
"Shimadzu" shall mean Shimadzu Corporation, a Japanese corporation.
"Stated Amount" of each Letter of Credit shall mean at any time the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
(other than (x) Therma-Wave Domestic Sales Corp. so long as it does not have any
operations or any significant assets and (y) a Foreign Subsidiary except to the
extent otherwise provided in Section 7.13) that is or becomes a party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section 5.11.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
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"Syndication Date" shall mean that date upon which the Agent
determines (and notifies the Borrower and the Banks) that the primary
syndication (and resulting addition of Persons as Banks pursuant to Section
12.04(b)) has been completed.
"Tax Allocation Agreements" shall have the meaning provided in Section
5.13(g).
"Taxes" shall have the meaning provided in Section 4.04.
"Test Period" shall mean (i) for purposes of Sections 8.02(p), 8.10
and 8.11, the four consecutive fiscal quarters of the Borrower then last ended
(taken as one accounting period) and (ii) for purposes of Section 8.09(a), the
two consecutive fiscal quarters of the Borrower then last ended (taken as one
accounting period).
"Therma-Wave Domestic Sales Corp." shall mean Therma-Wave Domestic
International Sales Corp., a California corporation and a Wholly-Owned Domestic
Subsidiary of the Borrower.
"Therma-Wave (Japan)" shall mean Therma-Wave (Japan), K.K., a Japanese
corporation and a Wholly-Owned Subsidiary of the Borrower.
"Toray Industries" shall mean Toray Industries, Inc., a Japanese
corporation.
"Toray Industries (America)" shall mean Toray Industries (America),
Inc., a New York corporation.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of the
aggregate principal amount of all Revolving Loans and Swingline Loans at such
time plus the Letter of Credit Outstandings at such time.
"Transaction" shall mean, collectively, (i) the Recapitalization, (ii)
the Equity Financing, (iii) the issuance of the Senior Notes, (iv) the
Refinancing, (v) the occurrence of the Effective Date, (vi) such other
transactions as contemplated by the Documents and (vii) the payment of fees and
expenses in connection with the foregoing.
"Type" shall mean any type of Revolving Loan determined with respect
to the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Loan.
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"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"Unutilized Revolving Loan Commitment" with respect to any Bank at any
time shall mean such Bank's Revolving Loan Commitment at such time less the sum
of (i) the aggregate outstanding principal amount of all Revolving Loans made by
such Bank and (ii) such Bank's Percentage of the Letter of Credit Outstandings
at such time.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100%
equity interest (other than nominal amounts of equity interest required to be
held other than by such Person under applicable law) at such time.
"Written", "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
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SECTION 11. The Agent.
11.01 Appointment. Each Bank hereby irrevocably designates and
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 11, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the express
conditions contained in this Section 11. Notwithstanding any provision to the
contrary elsewhere in this Agreement or in any other Credit Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in the other Credit Documents, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against the
Agent. The provisions of this Section 11 are solely for the benefit of the Agent
and the Banks, and neither the Borrower nor any of its Subsidiaries shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for the Borrower or any of its Subsidiaries.
11.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person in its capacity as Agent under or in connection with this Agreement or
the other Credit Documents (except for its or such Person's own gross negligence
or willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Borrower,
any of its Subsidiaries or any of their respective officers contained in this
Agreement, any other Credit Document, any other Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Document
or for any failure of the Borrower or any of its Subsidiaries or any of their
respective officers to perform its obligations hereunder or thereunder. The
Agent shall not be under any obligation to any Bank to ascertain or to inquire
as to the observance or performance of any of the agree-
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ments contained in, or conditions of, this Agreement or the other Documents, or
to inspect the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Banks or by or on behalf of the Borrower
or any of its Subsidiaries to the Agent or any Bank or be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
11.04 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or any of its
Subsidiaries), independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Credit Document unless it shall first receive
such advice or concurrence of the Required Banks as it deems appropriate or it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Banks (or at
all the Banks, to the extent required by this Agreement), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Banks.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has actually received notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default. In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Banks. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks;
provided, that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Banks.
11.06 Non-reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents,
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attorneys-in-fact or affiliates have made any representations or warranties to
it and that no act by the Agent hereinafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other condition, prospects
and creditworthiness of the Borrower and its Subsidiaries and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Bank
also represents that it will, independently and without reliance upon the Agent
or any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other condition, prospects and
creditworthiness of the Borrower and its Subsidiaries. The Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, assets, property, financial and
other condition, prospects or creditworthiness of the Borrower or any of its
Subsidiaries which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such ratably according to their respective "percentages" as used in
determining the Required Banks at such time or, if the Total Revolving Loan
Commitment has terminated and all Loans have been repaid in full, as determined
immediately prior to such termination and repayment (with such "percentages" to
be determined as if there are no Defaulting Banks), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower or any of its
Subsidiaries; provided, that no Bank shall be liable to the Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
primarily from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent be insufficient or become impaired (other than as a result of the gross
negligence or willful misconduct of the Agent), the Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section 11.07 shall survive the payment of all Obligations.
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11.08 Agent in its Individual Capacity. The Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and its Subsidiaries as though the Agent were not the
Agent hereunder. With respect to the Loans made by it and all Obligations owing
to it, the Agent shall have the same rights and powers under this Agreement as
any Bank and may exercise the same as though it were not the Agent and the terms
"Bank" and "Banks" shall include the Agent in its individual capacity. The Agent
and/or its affiliates may own stock of the Borrower and may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with the Borrower or any Affiliate of the Borrower as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Banks.
11.09 Holders. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
11.10 Resignation of the Agent; Successor Agent. The Agent may resign
as the Agent upon 20 days' notice to the Banks and, unless a Default or an Event
of Default of the type referred to in Section 9.05 has occurred and is
continuing, to the Borrower. Upon the resignation of the Agent, the Required
Banks shall appoint from among the Banks a successor Agent which is a bank or a
trust company for the Banks subject, to the extent that no payment Default or
Event of Default has occurred and is then continuing, to prior approval by the
Borrower (such approval not to be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent, and
the term "Agent" shall include such successor agent effective upon its
appointment, and the resigning Agent's rights, powers and duties as the Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement. If a successor Agent
shall not have been so appointed within such 20 day period after the date such
notice of resignation was given by the Agent, the Agent's resignation shall
become effective and the Banks shall thereafter perform all duties of the Agent
hereunder and/or under any other Credit Documents until such time, if any, as
the Required Banks appoint a successor Agent as provided above. After the
resignation of the Agent hereunder, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 12. Miscellaneous.
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12.01 Payment of Expenses, etc. The Borrower hereby agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the negotiation, preparation, execution and delivery
of the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto and in connection with the
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent and each of the Banks
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein and, after an Event of Default shall have
occurred and be continuing, the protection of the rights of the Agent and each
of the Banks thereunder (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) for the Agent and for each
of the Banks); (iii) pay and hold each of the Banks harmless from and against
any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iv)
indemnify the Agent, the Collateral Agent and each Bank, its officers,
directors, trustees, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not the Agent, the Collateral Agent or any Bank is a
party thereto and whether or not any such investigation, litigation or other
proceeding is between or among the Agent, the Collateral Agent, any Bank, any
Credit Party or any third Person or otherwise) related to the entering into
and/or performance of this Agreement or any other Document or the use of the
proceeds of any Loans or any Letter of Credit hereunder or the Transaction or
the consummation of any other transactions contemplated in any Document (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified), or (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any Real Property or any Environmental Claim, in each case,
including, without limitation, the reasonable fees and disbursements of counsel
and independent consultants incurred in connection with any such investigation,
litigation or other proceeding.
12.02 Right of Setoff; Collateral Matters. (a) In addition to any
rights now or hereafter granted under applicable law or otherwise, and not by
way of limitation of any such rights, upon the occurrence and during the
continuance of an Event of Default, each Bank is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to the Borrower or any of its Subsidiaries or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank (including, without limitation, by branches
and
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agencies of such Bank wherever located) to or for the credit or the account of
the Borrower or any of its Subsidiaries against and on account of the
Obligations of the Borrower or any of its Subsidiaries to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of the Borrower or any of its
Subsidiaries purchased by such Bank pursuant to Section 12.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said Obligations shall be
contingent or unmatured.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT
THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN
CALIFORNIA, NO BANK SHALL EXERCISE A RIGHT OF SETOFF, BANKER'S LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE THAT IS NOT
TAKEN BY THE REQUIRED BANKS OR APPROVED IN WRITING BY THE REQUIRED BANKS IF SUCH
SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b,
580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE
CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE
VALIDITY, PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE COLLATERAL
AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND
OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY BANK OF ANY SUCH
RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED BANKS SHALL BE NULL AND
VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE BANKS
HEREUNDER AND MAY BE AMENDED, MODIFIED OR WAIVED IN ANY RESPECT BY THE REQUIRED
BANKS WITHOUT THE REQUIREMENT OF PRIOR NOTICE TO OR CONSENT BY ANY CREDIT PARTY
AND DOES NOT CONSTITUTE A WAIVER OF ANY RIGHTS AGAINST ANY CREDIT PARTY OR
AGAINST ANY COLLATERAL.
12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to the Agent, at its Notice Office; if
to any Bank, at its address specified for such Bank on Annex II; or, at such
other address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied or cabled or sent by overnight courier, and
shall be effective when received.
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12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Credit Party may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of all the Banks and, provided
further, that, no Bank may assign or transfer all or any portion of its Total
Revolving Loan Commitment and/or its outstanding Loans except as provided in
Section 12.04(b) and, provided further, that although any Bank may transfer,
assign or grant participations in its rights hereunder in accordance with this
Section, such Bank shall remain a "Bank" for all purposes hereunder and such
participant shall not constitute a "Bank" hereunder and, provided further, that
no Bank shall grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Final Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Revolving Loan
Commitment shall not constitute a change in the terms of such participation, and
that an increase in any Revolving Loan Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) to its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (y) assign all, or if less
than all, a portion equal to at least $1,500,000 in the aggregate for the
assigning Bank or assigning Banks, of such Revolving Loan Commitment (and
related outstanding Obligations hereunder) to one or more Eligible Transferees,
each of which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that (i) at such
time Annex I shall be deemed modified to reflect the Revolving Loan Commitments
of such new Bank and of the existing Banks, (ii) upon surrender of the old
Revolving Notes, new
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Revolving Notes will be issued, at the Borrower's expense, to such new Bank and
to the assigning Bank, such new Revolving Notes to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments, (iii) the consent of
the Agent shall be required in connection with any such assignment pursuant to
clause (y) of this Section 12.04(b) (which consent shall not be unreasonably
withheld or delayed) and (iv) the Agent shall receive at the time of each such
assignment, from the assigning or assignee Bank, the payment of a non-refundable
assignment fee of $3,500 and, provided further, that such transfer or assignment
will not be effective until recorded by the Agent on the Register pursuant to
Section 7.12. To the extent of any assignment pursuant to this Section 12.04(b),
the assigning Bank shall be relieved of its obligations hereunder with respect
to its assigned Revolving Loan Commitment. At the time of each assignment
pursuant to this Section 12.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrower and the Agent the appropriate
Internal Revenue Service Forms (and, if applicable a Section 4.04(b)(ii)
Certificate) described in Section 4.04(b). To the extent that an assignment of
all or any portion of a Bank's Revolving Loan Commitment and related outstanding
Obligations pursuant to Section 1.13 or this Section 12.04(b) would, at the time
of such assignment, result in increased costs under Section 1.10, 1.11, 2.05 or
4.04 from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the Agent or any Bank shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the Agent
or the Banks to any other or further action in any circumstances without notice
or demand.
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12.06 Payments Pro Rata. (a) The Agent agrees that promptly after
its receipt of each payment from or on behalf of any Credit Party in respect of
any Obligations of such Credit Party, it shall, except as otherwise provided in
this Agreement, distribute such payment to the Banks (other than any Bank that
has consented in writing to waive its pro rata share of such payment) pro rata
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount; provided, that if
all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to
be furnished to 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 Banks); provided, that (A) except as otherwise
specifically provided herein, all computations determining compliance with
Section 8, including definitions used therein, shall, in each case, utilize
accounting principles and policies in effect at the time of the preparation of,
and in conformity with those used to prepare, the March 31, 1996 financial
statements of the Borrower delivered to the Banks pursuant to Section 6.10(b),
but shall not give effect to (without duplication) (i) purchase accounting
adjustments required or permitted by APB 16 (including non-cash write-ups and
non-cash charges relating to inventory, fixed assets and in-process research and
development, in each case arising in connection with the Recapitalization and
any Permitted Acquisition) and APB 17 (including non-cash charges relating to
intangibles and goodwill arising in connection with the Recapitalization and any
Permitted Acquisition) or (ii) the fees paid to Xxxx and/or its Related Parties
pursuant to Section 8.07(ii) and (B) for purposes of the computations described
in preceding (A), any outstanding Shareholder Subordinated Notes and Qualified
PIK Debt Securities shall be treated as if same did not exist and as if there
were no interest expense applicable thereto.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
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12.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or any
other Credit Document brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such Credit Party. Each Credit Party irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such Credit Party, at its address for notices pursuant to Section 12.03, such
service to become effective 30 days after such mailing. Each Credit Party hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
the Agent, any Bank or the holder of any Note to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Agent.
12.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which (i) the Borrower, the Agent and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it and (ii) the
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conditions contained in Section 5 are met to the satisfaction of the Agent and
the Required Banks. Unless the Agent has received actual notice from any Bank
that the conditions described in clause (ii) of the preceding sentence have not
been met to its satisfaction, upon the satisfaction of the condition described
in clause (i) of the immediately preceding sentence and upon the Agent's good
faith determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Effective Date shall have
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto had not been met (although the occurrence of the
Effective Date shall not release the Borrower from any liability for failure to
satisfy one or more of the applicable conditions contained in Section 5). The
Agent will give the Borrower and each Bank prompt written notice of the
occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Final Maturity Date, or reduce the
rate or extend the time of payment of interest or Fees thereon, or reduce the
principal amount thereof, (ii) release all or substantially all of the
Collateral (except as expressly provided in the Security Documents) under all
the Security Documents, (iii) amend, modify or waive any provision of this
Section 12.12, (iv) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Revolving Loan Commitments are included on the
Effective Date) or (v) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement; provided further, that
no such change, waiver, discharge or termination shall (1) increase the
Revolving Loan Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Revolving Loan Commitment shall not
constitute an increase of the Revolving Loan Commitment of any Bank, and that an
increase in the available portion of any Revolving Loan Commitment of any Bank
shall not constitute an increase in the Revolving Loan Commitment of such Bank),
(2) without the consent of the Letter of Credit Issuer, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (3) without the consent of BTCo,
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alter its rights or obligations with respect to Swingline Loans, (4) without the
consent of the Agent, amend, modify or waive any provision of Section 11 as same
applies to the Agent or any other provision as same relates to the rights or
obligations of the Agent or (5) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment and repay in full its outstanding Revolving Loans in accordance
with Sections 3.02(b) and/or 4.01(b), provided that, unless the Revolving Loan
Commitment which is terminated and Revolving Loans which are repaid pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Revolving Loan Commitments and/or
outstanding Revolving Loans of existing Banks (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) the Required Banks (determined before giving effect to the
proposed action) shall specifically consent thereto, provided further, that the
Borrower shall not have the right to replace a Bank solely as a result of the
exercise of such Bank's rights (and the withholding of any required consent by
such Bank) pursuant to the second proviso to Section 12.12(a).
12.13 Survival. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any branch office, Subsidiary or affiliate of such
Bank; provided, that the Borrower shall not be responsible for costs arising
under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer (other
than a transfer pursuant to Section 1.12) to the extent such costs would not
otherwise be applicable to such Bank in the absence of such transfer.
12.15 Confidentiality. (a) Each of the Banks agrees that it will use
its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion determines that
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any such party should have access to such information) any information with
respect to the Borrower or any of its Subsidiaries which is furnished pursuant
to this Agreement; provided, that any Bank may disclose any such information (a)
as has become generally available to the public or has become available to such
Bank on a non-confidential basis, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank or to the
Federal Reserve Board, the Federal Deposit Insurance Corporation, the NAIC or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (d) in order to comply with any
law, order, regulation or ruling applicable to such Bank, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Bank; provided, that such prospective
transferee agrees to be bound by the provisions this Section 12.15 to the same
extent as such Bank.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided that such Persons shall be subject to the provisions of
this Section 12.15 to the same extent as such Bank.
12.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
47320 Mission Falls Court THERMA-WAVE, INC.
Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 By: /s/ Xxxxx Xxxxxxxxxx
Attention: President ------------------------------
Title: President and Chief
Executive Officer
BANKERS TRUST COMPANY,
Individually and as Agent
By: /s/ Xxxx Xxx Xxxxx
------------------------------
Title: Managing Director
ANNEX I
-------
LIST OF BANKS AND COMMITMENTS
-----------------------------
Revolving Loan
Bank Commitment
---- ---------------
Bankers Trust Company $30,000,000
-----------
Total: $30,000,000
ANNEX II
--------
BANK ADDRESSES
--------------
Bank Address
---- -------
Bankers Trust Company 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
ANNEX III
---------
THERMA-WAVE, INC.
REAL PROPERTIES
---------------
Owned Real Property
-------------------
None.
Leased Real Property
--------------------
1. Landlord: Sobrato Interests
Description: Headquarters facility
Address: 0000 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxx
2. Landlord: Frog Hollow Realty
Description: Massachusetts field office
Address: 000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
3. Landlord: RMI-Palm Plaza
Description: Arizona field office
Address: 0000 X. Xxxxxxx Xxx., #000
Xxxxxxxx, Xxxxxxx 00000
4. Landlord: Telephone Real Estate Equity Trust
Description: Texas field office
Address: 0000 Xxxxxxxx Xxxx, #000
Xxxxxx, Xxxxx 00000
5. Xxxxxx Xxxxxxx
Description: Florida field office
Address: 0000 Xxxxxxxxx Xxxxxxxx Xxxxx, Xxxxx #000
Xxxxxxx, Xxxxxxx 00000
ANNEX IV
--------
THERMA-WAVE, INC.
PROJECTIONS
-----------
See attached.
ANNEX V
-------
THERMA-WAVE, INC.
SUBSIDIARIES
------------
1. Name: Therma-Wave, Ltd.
Jurisdiction of Organization: United Kingdom
100 shares of capital stock authorized
100 shares of capital stock issued and outstanding
Shares Owner
------ -----
98 Therma-Wave, Inc.
1 Xxxxxxx X. Xxxxxxx
1 Xxxxx Xxxxxxxxxx
2. Name: Therma-Wave, (Japan) K.K.
Jurisdiction of Organization: Japan
120 shares of capital stock authorized
30 shares of capital stock issued and outstanding
Shares Owner
------ -----
30 Therma-Wave, Inc.
3. Name: Therma-Wave Foreign Sales Corp.
Jurisdiction of Organization: Barbados
100 shares of capital stock authorized
100 shares of capital stock issued and outstanding
Shares Owner
------ -----
100 Therma-Wave, Inc.
4. Name: Therma-Wave Domestic International Sales Corp./1/
Jurisdiction of Organization: California
100,000 shares of capital stock authorized
3,500 shares of authorized capital stock issued and outstanding.
---------------------
/1/ Therma-Wave Domestic International Sales Corp. is expected to be dissolved
in the near term as changes in the United States federal tax laws no longer make
the use of such entity tax advantageous.
Shares Owner
------ -----
3,500 Therma-Wave, Inc.
ANNEX VI
--------
THERMA-WAVE, INC.
EXISTING INDEBTEDNESS
---------------------
1. Capital Leases
Therma-Wave, Inc.
-----------------
(a) Capital equipment lease with MetLife Capital Corporation Amount owed:
$13,805.
(b) Phone equipment leases for Orlando office, dated as of November 27,
1995 with AT&T. Amount owed: $222,039.
(c) Phone equipment leases for Fremont facility, dated as of November 29,
1996 with AT&T. Amount owed: $3,114.
(d) Phone equipment leases for New Mexico office. Amount owed:
Approximately $2,000.
Therma-Wave (Japan) K.K.
------------------------
(a) Various equipment leases in Japan with Toray Agency, Inc. & NTT
Amount owed: 59 million Yen (as of 3/31/97)
3. A Letter of Credit issued by Commerzbank in the amount of DEM 320,000 as
security for the costs of the Jenoptik lawsuit in Germany disclosed on Annex
X.
4. A Letter of Credit issued by Union Bank of California, N.A. in the amount of
$750,000 in favor of Sobrato Interests as security for the Fremont lease.
ANNEX VII
---------
THERMA-WAVE, INC.
INSURANCE
---------
Exp. Self Insurance/
Type/Insurer/Policy# Term Date Deductible Coverage Limit
-------------------- ---- ---- --------------- --------------
Property Damage 1 year 4/1/98 $1,000 per $36,509,111 - Personal Property
occurrence; 34,000,000 - Business Income
USF&G except: 10,000,000 - Earthquake
MP30124803501 (1) 24 hours for Sprinkler Leakage
business income 375,000 - Personal Property
losses from at any other local
boiler & 100,000 - Loss of Project
machinery R&D
1,000,000 - Off Premises Power
Commercial General
Liability 1 year 4/1/98 $2,000,000 - General Aggregate
2,000,000 - Products/Completed
USF&G Operations
MP30124803501 1,000,000 - Personal &
Advertising
1,000,000 - Each Occurrence
10,000 - Medical Expense
1,000,000 - Employee
Benefits Liability ($1,000)
Automobile 1 year 4/1/98 Liability
---------
$ 1,000,000 - Non-Owned &
USF&G Hired Auto
MP30124803501 (liability)
Property
--------
$ 35,000 - Limit per Vehicle
1,000 - Deductible
Comprehensive
1,000 - Deductible
Collision
Umbrella Liability
USF&G
MP30124803501
ANNEX VIII
----------
THERMA-WAVE, INC.
EXISTING LIENS
----------------------
Therma-Wave, Inc.
-----------------
State of California
-------------------
National Bank of Alaska 7/13/88 88169430 Specific equipment pursuant
(cont. 6/18/93) a lease.
MetLife Capital Corp. 8/27/90 90215706 Specific equipment (test
(cont. 3/6/95) equipment, cad cam and
engineering items, business
information equipment,
personal computers, lab and
bench tools).
MetLife Capital Corp. 11/15/90 90280759 Specific equipment (test
(cont. 6/13/95) equipment, cad cam and
engineering items, business
information equipment,
personal computers, lab and
bench tools).
MetLife Capital Corp. 9/9/91 91195025 Therma Wave Imager 3300
(cont. 9/9/96) Inspection System.
AT&T Credit Corp. 12/12/95 9534760313 Leased AT&T Definity G31
with Intuity.
New Mexico
----------
AT&T Capital Services 4/12/96 960412003 Computer equipment
Corp.
Therma-Wave, Ltd.
-------------------------
Toray Agency and NTT Various equipment
ANNEX IX
--------
THERMA-WAVE, INC.
EXISTING INVESTMENTS
--------------------
1. Borrower's money market account.
2. Borrower's general depository/concentration account maintained at the Union
Bank.
3. Local bank accounts maintained in Japan, Korea and the United Kingdom.
4. Loans made to certain employees in Taiwan and Korea in the aggregate amount
of $231,636.
ANNEX X
-------
THERMA-WAVE, INC.
PATENT MATTERS
-----------------
Jenoptik
--------
In July of 1994, the Borrower instituted a patent infringement action
against Jenoptik AG, a Germany company ("Jenoptik"), in the Federal District
Court in Northern California. Jenoptik has begun manufacturing a device for
inspecting materials using thermal wave technology which is similar in many
respects to the Therma-Probe device sold by the Borrower. The principal market
application for the two devices is the same, namely, the non-destructive
monitoring of ion implant dosage levels in semiconductors.
The Borrower believes that although the device sold by Jenoptik is not
identical to the Therma-Probe, it nonetheless falls within the scope of some of
the basic patents owned by the Borrower. The suit was initiated and is being
prosecuted because the unrestricted sale of what are believed to be infringing
products would likely have an impact on the market share enjoyed by the
Borrower. If the suit is successful, the Borrower should be able to prevent
Jenoptik from importing its device in the United States.
As a defensive tactic, Jenoptik has countersued the Borrower alleging
violations of the antitrust regulations.
In February 1996, the Borrower initiated a patent infringement action
against Jenoptik in Germany based on a corresponding German patent owned by the
Borrower. If the infringement suit was successful in Germany, it is possible
that Jenoptik would be prevented from manufacturing in Germany.
As a defensive tactic, Jenoptik has filed a "nullity" action in Germany
alleging that the German patent owned by the Borrower is not valid. The Borrower
is contesting the nullity action.
The above described litigation has been brought by the Borrower to enforce
its proprietary rights against Jenoptik. Therefore, the risk of loss to the
Borrower is principally limited to Jenoptik's having unrestricted access to the
market. It is conceivable that a settlement could be reached in the future which
would allow Jenoptik to sell its device in exchange for some form of royalty
payments to the Borrower.
In the course of preparing for the commercial release of the Opti-Probe,
the Borrower reviewed a competitor's patent covering a format for displaying
data on a screen which might be asserted as the basis for a claim or threatened
claim against the Borrower. Although the Borrower does not believe that its
screen display infringes the patent, it is the Borrower's position that the
business of the Borrower would not be materially affected since the patent does
not relate to the
underlying technology of the Opti-Probe, but only relates to a particular screen
format which could be easily changed.
Nanometrics
-----------
On October 31, 1996, the Borrower received a letter from Xx. Xxxxxxx X.
Xxxxxx of Nanometrics offering to license its U.S. Patent No. Re. 34,783 for a
Method for Determining Absolute Reflectance of a Material in the Ultraviolet
Range. The Borrower first became aware of the original parent patent relating to
Re. 34,783 in June of 1994 based on a letter from Xx. Xxxxxx.
In July of 1995, the Borrower announced the development of a version of the
Opti-Probe with UV capability. Xx. Xxxxxx sent a follow-up letter to the
Borrower. The Borrower did not respond.
Sometime in the beginning of 1996, the Borrower began deliveries of
Optiprobe models with UV capability. Roughly 20 units with this capability have
been delivered to date.
Tencor
------
In the process of reviewing the above identified Nanometrics patent, a
Tencor patent, No. 4,899,055, came to the attention of the Borrower. This patent
includes claims related to the evaluation of thin films using UV light.
Lemelson
--------
In 1989, Xxxxxx Xxxxxxxx (and his Licensee, Technivision Corporation),
began seeking licenses from manufacturers for his "machine version" patents,
including Texas Instruments ("TI"), a customer of the Borrower.
The Borrower was notified by TI that Xx. Xxxxxxxx was asserting patent
rights with respect to "machine vision". TI brought the issue to the attention
of Borrower to protect TI's rights of indemnification under TI's purchase
agreement with the Borrower. In response thereto, the Borrower obtained an
opinion from outside patent counsel that the Lemelson patents were invalid and
unenforceable. Since that time, the Borrower was also contacted by Mictron and
Motorola, two other customers of the Borrower, which received similar licensing
offers from Xx. Xxxxxxxx.
Ford Motor Company was also contacted by Lemelson and, in response thereto,
Ford Motor Company filed a declaratory judgment action in Reno, Nevada. In June
of 1995, the Court in Reno held that the Lemelson machine patents were
unenforceable because of Lemelson's undue delay in filing claims in his pending
applications.
Xxxxxxx Reissue
---------------
On August 27, 1991, Therma-Wave obtained U.S. Patent No. 5,042,951,
relating to a high resolution ellipsometric apparatus. This patent cover a
concept which has not yet been incorporated in any of the devices of the
Borrower. The patented concept may be incorporated in a device in the future.
On November 24, 1992, U.S. Patent No. 5,166,752, was issued to Xxxxxxx
Research Corporation. This patent claims subject matter similar to that
disclosed in Therma-Wave's '951 patent. The filing date of the Xxxxxxx patent
was four months after the filing date of the Therma-Wave '951 patent.
In order to obtain the claims in the Xxxxxxx patent, Therma-Wave filed a
reissue patent application on August 16, 1993. This reissue patent application
"copied" the claims from the Xxxxxxx patent. The reissue application also
included a request to provoke an interference with the Xxxxxxx patent.
In a telephone conference with the Patent Examiner in 1995, the Examiner
indicated that the Borrower's reissue application was acceptable and that it had
been passed on to the Board of Patent Interferences.
The above-described matters could not reasonably be expected to have a
Material Adverse Effect and this disclosure is for information purposes only.
EXHIBIT A-1
-----------
FORM OF NOTICE OF BORROWING
---------------------------
[Date]
Bankers Trust Company, as Agent
for the Banks party to the
Credit Agreement referred
to below
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ______________
Ladies and Gentlemen:
The undersigned, Therma-Wave, Inc. (the "Borrower"), refers to the
Credit Agreement, dated as of May 16, 1997 (as amended from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time
party thereto (the "Banks"), and you, as Agent for such Banks, and, subject to
the terms of Sections 1.10(a) and (b) of the Credit Agreement, hereby gives
you irrevocable notice pursuant to Section 1.03(a) of the Credit Agreement,
that the undersigned hereby requests a Borrowing of Revolving Loans under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is __________,
19__. (1)
(ii) The aggregate principal amount of the Proposed Borrowing is
$________.
(iii) The Revolving Loans to be made pursuant to the
Proposed Borrowing shall be initially maintained as [Base Rate
Loans] [Eurodollar Loans].
-----------------------------
(1) Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each case,
after the date hereof.
EXHIBIT A-1
Page 2
[(iv) The initial Interest Period for the Proposed Borrowing is
(one month] [two months] [three months] [six months][, subject to
approval by all of the Banks, twelve months, and if such interest
period is unavailable [specify alternative desired]].] (2)
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and correct
in all material respects, both before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof, as though made on
such date, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
THERMA-WAVE, INC.
By
-------------------------------
Name:
Title:
----------------------------
(2) To be included for a Proposed Borrowing of Eurodollar Loans.
EXHIBIT A-2
-----------
FORM OF LETTER OF CREDIT REQUEST
--------------------------------
No. (1) Dated (2)
----------- ----------
Bankers Trust Company, individually and as Agent
under the Credit Agreement (as amended,
modified or supplemented from time to time,
the "Credit Agreement"), dated as of May 16,
1997, among Therma-Wave, Inc., the financial
institutions from time to time party thereto
and Bankers Trust Company, as Agent
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We hereby request that Bankers Trust Company, in its individual
capacity, issue a [trade] [standby] Letter of Credit for the account of the
undersigned on (3) (the "Date of Issuance") in the
aggregate stated amount of (4) .
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
_______________
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least 5 Business Days from the date
hereof (or such shorter period as may be acceptable to the Letter of
Credit Issuer).
(4) Aggregate initial stated amount of Letter of Credit which shall not be
less than $100,000 or such lesser amount as is acceptable to the
Letter of Credit Issuer.
EXHIBIT A-2
Page 2
The beneficiary of the requested Letter of Credit will be
(5) , and such Letter of Credit will be in support of (6)
and will have a stated expiration date of (7) .
We hereby certify that:
(1) The representations and warranties contained in the Credit
Agreement and in the other Credit Documents will be true and correct in all
material respects on the Date of Issuance, both before and after giving effect
to the issuance of the Letter of Credit requested hereby (it being understood
and agreed that any representation or warranty which by its terms is made as
of a specified date shall be required to be true and correct in all material
respects only as of such specified date).
(2) No Default or Event of Default has occurred and is continuing
nor, after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or an Event of Default occur.
Copies of all documentation with respect to the supported
transaction are attached hereto.
THERMA-WAVE, INC.
By
-------------------------------
Name:
Title:
-----------------
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Indebtedness in the case of
standby Letters of Credit and insert description of permitted trade
obligations in the case of trade Letters of Credit.
(7) Insert last date upon which drafts may be presented which may not be
later than (i) in the case of standby Letter of Credit, the earlier of
(x) 12 months after the Date of Issuance and (y) the Business Day next
preceding the Final Maturity Date and in the case trade Letters of
Credit, the earlier of (x) 180 days after the Date of Issuance and (y)
30 days prior to the Final Maturity Date.
EXHIBIT B-1
-----------
FORM OF REVOLVING NOTE
----------------------
$________________ New York, New York
____________, _____
FOR VALUE RECEIVED, THERMA-WAVE, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to _________________ or its registered
assigns (the "Bank"), in lawful money of the United States of America in
immediately available funds, at the office of Bankers Trust Company (the
"Agent") located at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the
Final Maturity Date (as defined in the Agreement referred to below) the
principal sum of ____________ DOLLARS ($___________) or, if less, the unpaid
principal amount of all Revolving Loans (as defined in the Agreement) made by
the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of May 16, 1997, among the Borrower, the financial
institutions from time to time party thereto (including the Bank) and the
Agent (as amended, modified or supplemented from time to time, the
"Agreement") and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). This Note is secured by the Security
Documents (as defined in the Agreement) and is entitled to the benefits of the
Subsidiary Guaranty (as defined in the Agreement). This Note is subject to
voluntary prepayment and mandatory repayment prior to the Final Maturity Date,
in whole or in part, as provided in the Agreement, and Revolving Loans may be
converted from one Type (as defined in the Agreement) into another Type to the
extent provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note
may become or be declared to be due and payable in the manner and with the
effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
THERMA-WAVE, INC.
By
------------------------------
Name:
Title:
EXHIBIT B-2
-----------
FORM OF SWINGLINE NOTE
----------------------
$ ________________ New York, New York
__________, ___ 1997
FOR VALUE RECEIVED, THERMA-WAVE, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to BANKERS TRUST COMPANY or its registered
assigns (the 'Bank'), in lawful money of the United States of America in
immediately available funds, at the office of Bankers Trust Company (the
"Agent") located at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the
Swingline Expiry Date (as defined in the Agreement referred to below) the
principal sum of _____________ DOLLARS ($_______) or, if less, the unpaid
principal amount of all Swingline Loans (as defined in the Agreement) made by
the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of May 16, 1997, among the Borrower, the financial institutions from
time to time party thereto (including the Bank) and the Agent (as amended,
modified or supplemented from time to time, the "Agreement") and is entitled
to the benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Subsidiary Guaranty (as
defined in the Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the Swingline Expiry Date, in whole or in part,
as provided in the Agreement.
In case an Event of Default (as defined in the Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note
may become or be declared to be due and payable in the manner and with the
effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
THERMA-WAVE, INC.
By
---------------------------------
Name:
Title:
EXHIBIT C
---------
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
---------------------------------------
Reference is hereby made to the Credit Agreement, dated as of May
16, 1997, among Therma-Wave, Inc., the financial institutions from time to
time party thereto and Bankers Trust Company, as Agent (as amended, modified
or supplemented from time to time, the "Credit Agreement"). Pursuant to the
provisions of Section 4.04(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By
----------------------------
Name:
Title:
Date:
-------------, -----
EXHIBIT E
---------
FORM OF OFFICERS' CERTIFICATE
-----------------------------
I, the undersigned, [President/Vice President/Treasurer] of [Name of
Credit Party], a corporation organized and existing under the laws of the
State of ____________ (the "Company"), do hereby certify on behalf of the
Company that:
1. This Certificate is furnished pursuant to the Credit
Agreement, dated as of May 16, 1997, among [the Company][Therma-Wave, Inc.],
the financial institutions from time to time party thereto, and Bankers Trust
Company, as Agent (such Credit Agreement, as in effect on the date of this
Certificate, being herein called the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his name and
has held such office since ____________, 19___. (1) The signature written
opposite the name and title of each such officer is his genuine signature.
Name (2) Office Signature
---------------- ----------- ---------------
---------------- ----------- ---------------
---------------- ----------- ---------------
---------------- ----------- ---------------
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation of the Company, as filed in the Office of the
Secretary of State of the State of _________ on ___________, 19___, together
with all amendments thereto adopted through the date hereof.
-------------------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
(2) Include name, office and signature of each officer who will sign any
Credit Document, including the officer who will sign the certification at the
end of this Certificate or related documentation.
EXHIBIT E
Page 2
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Company which were duly adopted, are in full force and
effect on the date hereof, and have been in effect since _____________, 19___.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on ______________, 19___ [by unanimous
written consent of the Board of Directors of the Company] [by a meeting of the
Board of Directors of the Company at which a quorum was present and acting
throughout], and said resolutions have not been rescinded, amended or
modified. Except as attached hereto as Exhibit C, no resolutions have been
adopted by the Board of Directors of the Company which deal with the
execution, delivery or performance of the Documents by the Company.
[6. On the date hereof, all of the applicable conditions set forth
in Sections 5.02, 5.07, 5.08 and 5.09 of the Credit Agreement have been
satisfied.
7. Attached hereto as Exhibit D are true and correct copies of
all Plans of the Company and its Subsidiaries and the other documents referred
to in Section 5.13(a) of the Credit Agreement.
8. Attached hereto as Exhibit E are true and correct copies of
all Collective Bargaining Agreements of the Company and its Subsidiaries.
9. Attached hereto as Exhibit F are true and correct copies of
all Existing Indebtedness Agreements of the Company and its Subsidiaries.
10. Attached hereto as Exhibit G are true and correct copies of
all Shareholders' Agreements of the Company and its Subsidiaries.
11. Attached hereto as Exhibit H are true and correct copies of
all Management Agreements of the Company and its Subsidiaries.
12. Attached hereto as Exhibit I are true and correct copies of
all Employment Agreements of the Company and its Subsidiaries.
13. Attached hereto as Exhibit J are true and correct copies of
all Tax Allocation Agreements of the Company and its Subsidiaries.
EXHIBIT E
Page 3
14. Attached hereto as Exhibit K are true and correct copies of
all Material Contracts of the Company and its Subsidiaries.
15. Attached hereto as Exhibit L are true and correct copies of the
Recapitalization Documents, the Equity Financing Documents and the Senior Note
Documents] (3)
[6][16]. On the date hereof, the representations and warranties
contained in the [Credit Agreement and in the other] (4) Credit Documents to
which the Company is a party are true and correct in all material respects
with the same effect as though such representations and warranties had been
made on the date hereof.
[7](17]. On the date hereof, no Default or Event of Default has
occurred and is continuing.
[8][181. There is no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
May, 1997.
[NAME OF CREDIT PARTY]
By
---------------------------------
Name:
Title:
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify on behalf of the Company that:
-------------------
(1) Insert bracketed items 6 through 15 in Officers' Certificate of the
Borrower.
(2) Insert bracketed language in Officers' Certificates of the Borrower.
EXHIBIT E
Page 4
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Vice President/Treasurer] of the Company and
the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4, 5 and [8][18] above
are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
May, 1997.
[NAME OF CREDIT PARTY]
By
---------------------------------
Name:
Title:
EXHIBIT F
---------
FORM OF PLEDGE AGREEMENT
------------------------
SEE EXHIBIT 10.18
EXHIBIT G
---------
FORM OF SECURITY AGREEMENT
--------------------------
SEE EXHIBIT 10.19
EXHIBIT H
---------
FORM OF SUBSIDIARY GUARANTY
---------------------------
GUARANTY, dated as of May 16, 1997 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned guarantors (each, a "Guarantor" and, together with any other
entity that becomes a party hereto pursuant to Section 26 hereof, the
"Guarantors"). Except as otherwise defined herein, terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H:
WHEREAS, Therma-Wave, Inc. (the "Borrower"), the financial
institutions from time to time party thereto (the "Banks"), and Bankers Trust
Company, as Agent (together with any successor agent, the "Agent"), have
entered into a Credit Agreement, dated as of May 16, 1997 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans to the Borrower and the issuance of, and participation
in, Letters of Credit for the account of the Borrower, all as contemplated
therein (the Banks, the Agent and the Collateral Agent are herein called the
"Bank Creditors");
WHEREAS, the Borrower may from time to time be party to one or more
(i) interest rate agreements, interest rate cap agreements, interest rate
collar agreements or other similar agreements or arrangements, (ii) foreign
exchange contracts, currency swap agreements or similar agreements or
arrangements designed to protect against the fluctuations in currency values
and\or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement with an Other Creditor (as hereinafter defined), an
"Interest Rate Protection Agreement or Other Hedging Agreement"), with a Bank
or an affiliate of a Bank (each such Bank or affiliate, even if the respective
Bank subsequently ceases to be a Bank under the Credit Agreement for any
reason, together with such Bank's or affiliate's successors and assigns,
collectively, the "Other Creditors," and together with the Bank Creditors, are
herein called the "Creditors");
WHEREAS, each Guarantor is a Subsidiary of the Borrower;
WHEREAS, it is a condition to the making of Loans under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty;
and
EXHIBIT H
Page 2
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by, and the issuance of Letter of Credit for account of, the Borrower
under the Credit Agreement and the entering into of Interest Rate Protection
Agreements or Other Hedging Agreements and, accordingly, desires to execute
this Guaranty in order to satisfy the conditions described in the preceding
paragraph and to induce the Banks to make Loans to, and issue (and/or
participate in) Letters of Credit for the account of, the Borrower and Other
Creditors to enter into interest Rate Protection Agreements or Other Hedging
Agreements with the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of and interest on the Notes issued by, and
the Loans made to, the Borrower under the Credit Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit and (y) all other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities owing by the Borrower to the Bank Creditors under the Credit
Agreement (including, without limitation, indemnities, Fees and interest
thereon) and the other Credit Documents to which the Borrower is a party,
whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any such other Credit Document and the
due performance and compliance with the terms of the Credit Documents by the
Borrower (all such principal, interest, liabilities and obligations under this
clause (i), except to the extent consisting of obligations or liabilities with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the "Credit Document Obligations"); and (ii)
to each Other Creditor the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities owing by the Borrower under
any Interest Rate Protection Agreements or Other Hedging Agreements, whether
now in existence or hereafter arising, and the due performance and compliance
by the Borrower with all terms, conditions and agreements contained therein
(all such obligations and liabilities being herein collectively called the
"Other Obligations", and together with the Credit Document Obligations are
herein collectively called the "Guaranteed Obligations"), provided that the
maximum amount payable by each Guarantor hereunder shall at no time exceed the
Maximum Amount (as hereinafter defmed) of such Guarantor. As used herein,
"Maximum Amount" of any Guarantor
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EXHIBIT H
Page 3
means an amount equal to 95% of the amount by which (i) the present fair
saleable value of such Guarantor's assets exceeds (ii) the amount
reasonably expected to come due in respect of all liabilities
(including, without limitation, contingent liabilities), other than
liabilities (contingent or otherwise) of such Guarantor hereunder, in
each case determined on the Effective Date (or, in the case of a
Guarantor that becomes a party hereto pursuant to Section 26 hereof, on
the date such Guarantor becomes a party hereto) or (in either case) on
the day any demand is made under this Guaranty, whichever date results
in a higher Maximum Amount. Subject to the proviso in the second
preceding sentence, each Guarantor understands, agrees and confirms that
the Creditors may enforce this Guaranty up to the full amount of the
Guaranteed Obligations against each Guarantor without proceeding against
any other Guarantor, the Borrower, against any security for the
Guaranteed Obligations, or under any other guaranty covering all or a
portion of the Guaranteed Obligations. All payments by each Guarantor
under this Guaranty shall be made on the same basis as payments by the
Borrower are made under Sections 4.03 and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any
of the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money
of the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed
Obligations of the Borrower whether executed by such Guarantor, any other
Guarantor, any other guarantor or by any other party, and the liability of
each Guarantor hereunder shall not be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability
of a guarantor or of any other party as to the Guaranteed Obligations of the
Borrower, (c) any payment on or in reduction of any such other guaranty or
undertaking, (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower or (e) any payment made to any Creditor on the
Guaranteed Obligations which any Creditor repays the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and each Guarantor waives any right to the
deferral or modification of its obligations hereunder by reason of any such
proceeding.
4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other
Guarantor, any other guarantor or the Borrower and whether or not any other
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EXHIBIT H
Page 4
Guarantor, any other guarantor of the Borrower or the Borrower be joined in
any such action or actions. Each Guarantor waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereol Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each
Guarantor.
5. Each Guarantor hereby waives (to the fullest extent permitted
by applicable law) notice of acceptance of this Guaranty and notice of any
liability to which it may apply, and waives promptness, diligence,
presentment, demand of payment, protest, notice of dishonor or nonpayment of
any such liabilities, suit or taking of other action by the Agent or any other
Creditor against, and any other notice to, any party liable thereon (including
such Guarantor or any other guarantor or the Borrower).
6. Any Creditor may (except as shall be required by applicable
statute and cannot be waived) at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such
Guarantor hereunder, upon or without any terms or conditions and in whole or
in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations, any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the guaranty herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of the Borrower to creditors of the
Borrower;
-4-
EXHIBIT H
Page 5
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Creditors
regardless of what liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or
supplement any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of such other
instruments or agreements; and/or
(g) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or
equitable discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Creditor in exercising any right, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein expressly specified are cumulative and not exclusive of
any rights or remedies which any Creditor would otherwise have. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any
other further notice or demand in similar or other circumstances or constitute
a waiver of the rights of any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Creditor
to inquire into the capacity or powers of the Borrower or any of its
Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Agent, after an Event of Default has occurred and is
-5-
EXHIBIT H
Page 6
continuing, so requests, shall be collected, enforced and received by
such Guarantor as trustee for the Creditors and be paid over to the
Creditors on account of the indebtedness of the Borrower to the
Creditors, but without affecting or impairing in any manner the
liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable
instrument evidencing any indebtedness of the Borrower to such
Guarantor, such Guarantor shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination. Without
limiting the generality of the foregoing, each Guarantor hereby agrees
with the Guaranteed Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code
or otherwise) until all Guaranteed Obligations have been irrevocably
paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute or law and cannot be waived) to require the
Creditors to: (i) proceed against the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other party; (ii) proceed against or exhaust
any security held from the Borrower, any other Guarantor, any other guarantor
of the Borrower or any other party; or (iii) pursue any other remedy in the
Creditors' power whatsoever. Each Guarantor waives (to the fullest extent
permitted by applicable law) any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on or arising
out of the disability of the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower other than payment in full of
the Guaranteed Obligations. The Creditors may, at their election, foreclose
on any security held by the Agent, the Collateral Agent or the other Creditors
by one or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable (to the extent such sale is permitted
by applicable law), or exercise any other right or remedy the Creditors may
have against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the Guaranteed Obligations have been paid in full. Each
Guarantor waives any defense arising out of any such election by the
Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new
or additional indebtedness. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances
-6-
EXHIBIT H
Page 7
bearing upon the risk of nonpayment of the Guaranteed Obligations and
the nature, scope and extent of the risks which such Guarantor assumes
and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Each Guarantor understands, is aware and hereby acknowledges
that to the extent the Guaranteed Obligations are secured by real property
located in tile State of California, such Guarantor shall be liable for the
full amount of its liability hereunder notwithstanding foreclosure on such
real property by trustee sale or any other reason impairing such Guarantor's
or any Creditor's right to proceed against any Credit Party. Each Guarantor
hereby waives, to the fullest extent permitted by law, all rights and benefits
under Section 2809 of the California Civil Code (or any similar law in any
other jurisdiction) purporting to reduce a guarantor's obligation in
proportion to the principal obligation. Each Guarantor hereby waives all
rights and benefits under Section 580a of the California Code of Civil
Procedure (or any similar law in any other jurisdiction) purporting to limit
the amount of any deficiency judgment which might be recoverable following the
occurrence of a trustee's sale under a deed of trust and all rights and
benefits under Section 580b of the California Code of Civil Procedure (or any
similar law in any other jurisdiction) stating that no deficiency may be
recovered on a real property purchase money obligation. Each Guarantor
ftirther understands, is aware and hereby acknowledges that if the Creditors
elect to nonjudicially foreclose on any real property security located in the
State of California any right of subrogation of such Guarantor against any
Creditor may be impaired or extinguished and that as a result of such
impairment or extinguishment of subrogation rights, such Guarantor may have a
defense to a deficiency judgment arising out of the operation of (i) Section
580d of the California Code of Civil Procedure which states that no deficiency
may be recovered on a note secured by a deed of trust on real property in case
such real property is sold under the power of sale contained in such deed of
trust, and (ii) related principles of estoppel. To the ftillest extent
permitted by law, each Guarantor waives all rights and benefits and any
defense arising out of the operation of Section 580d of the California Code of
Civil Procedure and related principles of estoppel, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against any Credit Party or any other
party or any security. In addition, each Guarantor hereby waives, to the
fullest extent permitted by applicable law, without limiting the generality of
the foregoing or any other provision hereof, all rights and benefits which
might otherwise be available to such Guarantor under Section 726 of the
California Code of Civil Procedure and all rights and benefits which might
otherwise be available to such Guarantor under California Civil Code Sections
2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 (or
any similar law in any other jurisdiction).
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EXHIBIT H
Page 8
(d) Each Guarantor hereby further waives (to the ftillest extent
permitted by applicable law): (i) all rights and defenses arising out of an
election of remedies by the Creditors, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for a Guaranteed
Obligation, has destroyed such Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
California Code of Civil Procedure or otherwise and (ii) such Guarantor's
rights of subrogation and reimbursement and any other rights and defenses
available to such Guarantor by reason of the California Civil Code Sections
2787 to 2855, inclusive, including, without limitation, (x) any defenses such
Guarantor may have to the Guaranteed Obligations by reason of an election of
remedies by the Creditors and (y) any rights or defenses such Guarantor may
have by reason of protection afforded to the principal borrower with respect
to the obligation so guaranteed pursuant to the antideficiency or other laws
of the State of California limiting or discharging the borrower's
indebtedness, including, without limitation, California Code of Civil
Procedure Sections 580a, 580b, 580d or 726.
11. The Creditors agree that this Guaranty may be enforced only
by the action of the Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Banks (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least a
majority of the outstanding Other Obligations) and that no other Creditor
shall have any right individually to seek to enforce or to enforce this
Guaranty or to realize upon the security to be granted by the Security
Documents, it being understood and agreed that such rights and remedies may be
exercised by the Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case may be, for the
benefit of the Creditors upon the terms of this Guaranty and the Security
Documents. The Creditors further agree that this Guaranty may not be enforced
against any director, officer, employee, or stockholder of any Guarantor
(except to the extent such stockholder is also a Guarantor hereunder).
12. In order to induce the Banks to make Loans and issue Letters
of Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants
and covenants that:
(a) Such Guarantor (i) is a duly organized and validly existing
corporation and is in good standing (to the extent such concept is relevant
in such jurisdiction) under the laws of the jurisdiction of its
organization, and has the corporate power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (ii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required
to be so qualified and where the failure to be so qualified could reasonably
be expected to have a Material Adverse Effect.
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EXHIBIT H
Page 9
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and each
other Credit Document to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it
of each such Credit Document. Such Guarantor has duly executed and
delivered this Guaranty and each other Credit Document to which it is a
party and each such Credit Document constitutes the legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except to the extent that the enforceability hereof or thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Credit Document to which it is a party, nor
compliance by it with the terms and provisions hereof or thereof (i) will
contravene any applicable provision of any law, statute, rule or regulation,
or any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security
Documents) result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, credit agreement or other material
agreement or other material instrument to which such Guarantor or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws of such Guarantor or any of its
Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of this Guaranty or any other Credit Document to
which such Guarantor is a party, or (ii) the legality, validity, binding
effect or enforceability of this Guaranty or any other Credit Document to
which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or to the
knowledge of such Guarantor, threatened with respect to such Guarantor (i)
that could reasona ' xxx be expected to have a Material Adverse Effect or
(ii) that could reasonably be expected to have a material adverse effect on
the rights or remedies of the Creditors or on the ability of such
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EXHIBIT H
Page 10
Guarantor to perform its respective obligations to the Creditors hereunder
and under the other Credit Documents to which it is a party.
13. Each Guarantor covenants and agrees that on and after the
date hereof and until the termination of the Total Revolving Loan Commitment
and all Interest Rate Protection Agreements or Other Hedging Agreements and
when no Note or Letter of Credit remains outstanding (other than Letters of
Credit, together with all Fees that have accrued and will accrue thereon
through the stated termination date of such Letters of Credit, which have been
supported in a manner satisfactory to the Letter of Credit Issuer in its sole
and absolute discretion) and all Guaranteed Obligations have been paid in full
(other than indemnities described in Section 12.13 of the Credit Agreement and
analogous provisions in the Security Documents which are not then due and
payable), such Guarantor shall take, or will refrain from taking, as the case
may be, all actions that are necessary to be taken or not taken so that no
violation of any provision, covenant or agreement contained in Section 7 or 8
of the Credit Agreement, and so that no Default or Event of Default, is caused
by the actions of such Guarantor or any of its Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Creditor in connection
with the enforcement of this Guaranty and any amendment, waiver or consent
relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by any of the
Creditors).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and
their successors and assigns.
16. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and either (x) the Required Banks (or
to the extent required by Section 12.12 of the Credit Agreement, with the
written consent of each Bank) at all times prior to the time on which all
Credit Document Obligations have been paid in full or (y) the holders of at
least a majority of the outstanding Other Obligations at all times after the
time on which all Credit Document Obligations have been paid in full;
provided, that any change, waiver, modification or variance affecting the
rights and benefits of a single Class (as defined below) of Creditors (and not
all Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors (as defined below) of such Class of Creditors (it
being understood that the addition or release of any Guarantor hereunder shall
not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released). For the purpose of
this Guaranty the term "Class" shall mean each class of Creditors, i.e.,
whether (x) the Bank Creditors as holders of the Credit Document Obligations
or (y) the Other Creditors as the holders of the Other Obligations. For the
purpose of
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EXHIBIT H
Page 11
this Guaranty, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Banks and
(y) with respect to the Other Obligations, the holders of at least a majority
of all obligations outstanding from time to time under the Interest Rate
Protection Agreements or Other Hedging Agreements.
17. Each Guarantor acknowledges that an executed (or conformed)
copy of each of the Credit Documents and Interest Rate Protection Agreements
or Other Hedging Agreements has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement or Other
Hedging Agreement continuing after any applicable grace period), each Creditor
is hereby authorized at any time or from time to time, without notice to any
Guarantor or to any other Person, any such notice being expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other indebtedness at any time held or owing by such Creditor to or
for the credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or
claims, or any of them, shall be contingent or urunatured. Notwithstanding
anything to the contrary contained in this Section 18, no Creditor shall
exercise any such right of set-off without the prior consent of the Agent or
the Required Banks so long as the Guaranteed Obligations shall be secured by
any Real Property located in the State of California, it being understood and
agreed, however, that this sentence is for the sole benefit of the Creditors
and may be amended, modified or waived in any respect by the Required Banks
without the requirement of prior notice to or consent by any Credit Party and
does not constitute a waiver of any rights against any Credit Party or against
any Collateral.
19. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to
such party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at its address set forth
opposite its signature below and (iii) in the case of any Other Creditor, at
such address as such Other Creditor shall have specified in
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EXHIBIT H
Page 12
writing to the Guarantor; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.
20. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part
of said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any
revocation hereof or other instrument evidencing any liability of the
Borrower, and such Guarantor shall be and remain liable to the aforesaid
payees hereunder for the amount so repaid or recovered to the same extent as
if such amount had never originally been received by any such payee.
21. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
such Guarantor is a party may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor
hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such Guarantor, and agrees not to plead or claim, in any
legal action or proceeding with respect to this Guaranty or any other Credit
Document to which such Guarantor is a party brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such Guarantor. Each
Guarantor further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to each
Guarantor at its address set forth opposite its signature below, such service
to become effective 30 days after such mailing. Each Guarantor hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document to which
such Guarantor is a party that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any of the Creditors to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
-12-
EXHIBIT H
Page 13
(b) Each Guarantor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Guaranty or
any other credit document brought in the courts referred to in clause (a)
above and hereby further irrevocably waives and agrees not to plead or claim
in any such court that such action or proceeding brought in any such court has
been brought in an inconvenient forum.
22. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with
the requirements of Section 8.02 of the Credit Agreement (or such sale or
other disposition or liquidation has been approved in writing by the Required
Banks (or all Banks if required by Section 12.12 of the Credit Agreement)) and
the proceeds of such sale, disposition or liquidation are applied in
accordance with the provisions of the Credit Agreement, to the extent
applicable, such Guarantor shall be released from this Guaranty and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have
no further force or effect (it being understood and agreed that the sale of
one or more Persons that own, directly or indirectly, all of the capital stock
or partnership interests of any Guarantor shall be deemed to be a sale of such
Guarantor for the purposes of this Section 22).
23. This Guaranty may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
24. EACH GUARANTOR AND EACH OF THE CREDITORS HEREBY IRREVOCABLY
WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO TIUS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
25. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
26. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute a counterpart of this Guaranty after the
date hereof pursuant to Sections 7.13 and/or 8.14 of the Credit Agreement
shall automatically become a Guarantor hereunder by executing a counterpart
hereof and delivering the same to the Agent.
* * *
-13-
EXHIBIT H
Page 14
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
[NAME OF ANY FUTURE GUARANTOR],
as Guarantor
By
------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Agent for the Banks
By
----------------------------
Name:
Title:
-14-
EXHIBIT I
---------
FORM OF SUBORDINATION PROVISIONS
--------------------------------
Section 1.01. Subordination of Liabilities. [Name of Borrower
or applicable Domestic Subsidiary] (the "Company"), for itself, its successors
and assigns, covenants and agrees, and each holder of the Note to which this
Annex A is attached (the "Note") by its acceptance thereof likewise covenants
and agrees, that the payment of the principal of, interest on, and all other
amounts owing in respect of, the Note (the "Subordinated Indebtedness") is
hereby expressly subordinated, to the extent and in the manner hereinafter set
forth, to the prior payment in full in cash of all Senior Indebtedness (as
defined in Section 1.07 of this Annex A). The provisions of this Annex A
shall constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior
Indebtedness, and such holders are hereby made obligees hereunder the same as
if their names were written herein as such, and they and/or each of them may
proceed to enforce such provisions.
Section 1.02. Company Not to Make Payments with Respect to
Subordinated Indebtedness in Certain Circumstances. (a) Upon the maturity of
any Senior Indebtedness (including interest thereon or fees or any other
amounts owing in respect thereof), whether at stated maturity, by acceleration
or otherwise, all Obligations (as defined in Section 1.07 of this Annex A)
owing in respect thereof, in each case to the extent due and owing, shall
first be paid in full in cash, before any payment (whether in cash, property,
securities or otherwise) is made on account of the Subordinated Indebtedness.
(b) The Company may not, directly or indirectly, make any
payment of any Subordinated Indebtedness and may not acquire any Subordinated
Indebtedness for cash or property until all Senior Indebtedness has been paid
in full in cash if any default or event of default under the Credit Agreement
referred to below or any other issue of Senior Indebtedness is then in
existence or would result therefrom. Each holder of the Note hereby agrees
that, so long as any such default or event of default in respect of any issue
of Senior Indebtedness exists, it will not xxx for, or otherwise take any
action to enforce the Company's obligations to pay, amounts owing in respect
of the Note. Each holder of the Note understands and agrees that to the
extent that clause (a) of this Section 1.02 or this clause (b) prohibits the
payment of any Subordinated Indebtedness, such unpaid amount shall not
constitute a payment default under the Note and the holder of the Note may not
xxx for, or otherwise take action to enforce the Company's obligation to pay
such amount, provided that such unpaid amount shall remain an obligation of
the Company to the holder of the Note pursuant to the terms of the Note.
EXHIBIT I
Page 2
(c) In the event that notwithstanding the provisions of the
preceding subsections (a) and (b) of this Section 1.02, the Company shall make
any payment on account of the Subordinated Indebtedness at a time when payment
is not permitted by said subsection (a) or (b), such payment shall be held by
the holder of the Note, in trust for the benefit of, and shall be paid
forthwith over and delivered to, the holders of Senior Indebtedness or their
representative or the trustee under the indenture or other agreement pursuant
to which any instruments evidencing any Senior Indebtedness may have been
issued, as their respective interests may appear, for application pro rata to
the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in accordance with the terms
of such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. Without in any way
modifying the provisions of this Annex A or affecting the subordination
effected hereby if the hereafter referenced notice is not given, the Company
shall give the holder of the Note prompt written notice of any event which
would prevent payments under Section 1.02(a) or (b) hereof.
Section 1.03. Subordination to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon
any distribution of assets of the Company upon dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including,
without limitation, post-petition interest at the rate provided in the
documentation with respect to the Senior Indebtedness, whether or not such
post-petition interest is an allowed claim against the debtor in any
bankruptcy or similar proceeding) before the holder of the Note is entitled
to receive any payment of any kind or character on account of the
Subordinated Indebtedness;
(b) any payment or distributions of assets of the Company of any kind
or character, whether in cash, property or securities to which the holder of
the Note would be entitled except for the provisions of this Annex A, shall
be paid by the liquidating trustee or agent or other person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or other trustee or agent, directly to the holders of
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been issued, to the extent
necessary to make payment in full in cash of all Senior
EXHIBIT I
Page 3
Indebtedness remaining unpaid, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, shall be
received by the holder of the Note on account of Subordinated Indebtedness
before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be received and held in trust for and shall be paid over
to the holders of the Senior Indebtedness remaining unpaid or unprovided for
or their representative or representatives, or to the trustee or trustees
under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been
paid in full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if the hereafter referenced notice
is not given, the Company shall give prompt written notice to the holder of
the Note of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
assignment for the benefit of creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in full
in cash of all Senior Indebtedness, the holder of the Note shall be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder
of the Note by virtue of this Annex A which otherwise would have been made to
the holder of the Note shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holder of the Note, be deemed to
be payment by the Company to or on account of the Senior Indebtedness, it
being understood that the provisions of this Annex A are and are intended
solely or the purpose of defining the relative rights of the holder of the
Note, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between the Company and the holder of the Note, the obligation of the Company,
which is absolute and unconditional, to pay to the holder of
EXHIBIT I
Page 4
the Note the principal of and interest on the Note as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holder of the Note and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the holder of the Note from exercising all
remedies otherwise permitted by applicable law upon an event of default under
the Note, subject to the rights, if any, under this Annex A of the holders of
Senior Indebtedness in respect of cash, property, or securities of the Company
received upon the exercise of any such remedy. Upon any distribution of
assets of the Company referred to in this Annex A, the holder of the Note
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of the
Note, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto
or to this Annex A.
Section 1.06. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act in good faith by any such holder, or by any noncompliance by the Company
with the terms and provisions of the Note, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The holders of
the Senior Indebtedness may, without in any way affecting the obligations of
the holder of the Note with respect hereto, at any time or from time to time
and in their absolute discretion, change the manner, place or terms of payment
of, change or extend the time of payment of, or renew or alter, any Senior
Indebtedness or amend, modify or supplement any agreement or instrument
governing or evidencing such Senior Indebtedness or any other document
referred to therein, or exercise or refrain from exercising any other of their
rights under the Senior Indebtedness including, without limitation, the waiver
of default thereunder and the release of any collateral securing such Senior
Indebtedness, all without notice to or assent from the holder of the Note.
Section 1.07. Senior Indebtedness. The term "Senior
Indebtedness" shall mean all Obligations (as defined below) (i) of the Company
under, or in respect of, the Credit Agreement (as amended, modified,
supplemented, extended, restated, refinanced, replaced or refunded from time
to time, the "Credit Agreement"), dated as of May 16, 1997, by and among
Therma-Wave, Inc., the lenders from time to time party thereto (the "Banks"),
and Bankers Trust Company, as Agent,
EXHIBIT I
Page 5
and any renewal, extension, restatement, refinancing or refunding thereof and
(ii) of the Company under, or, in respect of, any Interest Rate Protection
Agreements (as defined in the Credit Agreement) or Other Hedging Agreements
(as defined in the Credit Agreement). As used herein, the term "Obligation"
shall mean any principal, interest, premium, penalties, fees, expenses,
indemnities and other liabilities and obligations (including any guaranties of
the foregoing liabilities and obligations) payable under the documentation
governing any Senior Indebtedness (including interest after the commencement
of any bankruptcy, insolvency, receivership or similar proceeding, whether or
not such interest is an allowed claim against the debtor in any such
proceeding).
EXHIBIT J
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
DATE: _____________, 19___
Reference is made to the Credit Agreement described in Item 2 of
Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement'). Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined. _____________ (the "Assignor") and
_____________________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the
percentage interest specified in Item 4 of Annex I (the "Assigned Share") of
all of the outstanding rights and obligations under the Credit Agreement
relating to the Assigned Share of the Total Revolving Loan Commitment and of
any outstanding Revolving Loans, Swingline Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any liens or security interests; (ii) makes
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of its Subsidiaries of any of their respective obligations
under the Credit Agreement or the other Credit Documents or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Agent, the Assignor
or any other Bank and based
EXHIBIT J
Page 2
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Credit Documents as are
delegated to the Agent and the Collateral Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; [and] (iv) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Bank[; and (v) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such rates at a rate reduced by an applicable tax treaty]. (1)
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Agent. The effective
date of this Assignment and Assumption Agreement shall be the date of
execution hereof by the Assignor and the Assignee, to the extent required by
the Credit Agreement, the receipt of the consent of the Agent, receipt by the
Agent of the assignment fee referred to in Section 12.04(b) of the Credit
Agreement and the registration of the transfer on the Register as provided in
Section 7.12 of the Credit Agreement, or such later date as otherwise
specified in Item 5 of Annex I (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Agent, as of the Settlement Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Bank thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment and Assumption Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (x) all interest on the Assigned Share of the Revolving
Loans at the rates specified in Item 6 of Annex 1, (y) all Commitment Fees on
the Assigned Share of the Total Revolving Loan Commitment at the rate
specified in Item 7 of Annex I and (z) all Letter of Credit Fees on the
Assignee's participation in all Letters of Credit at the rate specified in
Item 8 of Annex I, which, in each case, accrue on and after the Settlement
Date, such interest, Commitment Fees and Letter of Credit Fees
-------------------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
EXHIBIT J
Page 3
to be paid by the Agent directly to the Assignee. It is further agreed that
all payments of principal made on the Assigned Share of the Revolving Loans
which occur on and after the Settlement Date will be paid directly by the
Agent to the Assignee. Upon the Settlement Date, the Assignee shall pay to the
Assignor an amount specified by the Assignor in writing which represents the
Assigned Share of the principal amount of the respective Revolving Loans made
by the Assignor pursuant to the Credit Agreement which are outstanding on the
Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
EXHIBIT J
Page 4
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Assumption Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution also being
made on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By
-----------------------------
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By
-----------------------------
Name:
Title:
[Acknowledged and Agreed:
BANKERS TRUST COMPANY,
as Agent
By
------------------------------
Name:
[Title:] (2)
-------------------
(2) The consent of the Agent is required only in connection with assignments
pursuant to clause (y) of Section 12.04(b) of the Credit Agreement (which
consent shall not be unreasonably withheld or delayed).
EXHIBIT K
---------
FORM OF INTERCOMPANY NOTE
-------------------------
New York, New York
___________, ______
FOR VALUE RECEIVED, _____________________________, a _______________
corporation (the "Payor"), hereby promises to pay on demand to the order of
____________________, or its registered assigns (the "Payee"), in lawful money
of the United States of America in immediately available funds, at such
location in the United States of America as the Payee shall from time to time
designate, the unpaid principal amount of all loans and advances made by the
Payee to the Payor.
The Payor promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
such rate per annum as shall be agreed upon from time to time by the Payor and
Payee.
Upon the commencement of any bankruptcy, reorganization,
arrangement, adjustment of debt,, relief of debtors, dissolution, insolvency
or liquidation or similar proceeding of any jurisdiction relating to the
Payor, the unpaid principal amount hereof shall become immediately due and
payable without presentment, demand, protest or notice of any kind in
connection with this Note.
This Note is one of the Intercompany Notes referred to in the Credit
Agreement, dated as of May 16, 1997, among Therma-Wave, Inc., the financial
institutions from time to time party thereto and Bankers Trust Company, as
Agent (as amended, modified or supplemented from time to time, the "Credit
Agreement') and is subject to the terms thereof [, and shall be pledged by the
Payee pursuant to the Pledge Agreement (as defined in the Credit Agreement).
The Payor hereby acknowledges and agrees that the Collateral Agent pursuant to
and as defined in the Pledge Agreement, as in effect from time to time, may
exercise all rights provided therein with respect to this Note].
[This Note, and all of the Company's hereunder, shall be subordinate
and junior to all Senior Indebtedness (as defined in Section 1.07 of Annex A
hereto) on the terms and conditions set forth in Annex A hereto, which Annex A
is incorporated herein by reference and made a part hereof as if set forth
herein in its entirety.]
The Payee is hereby authorized (but not required) to record all
loans and advances made by it to the Payor (all of which shall be evidenced by
this Note), and all repayments or prepayments thereof, in its books and
records, such books and records constituting prima facie evidence of the
accuracy of the information contained therein.
Page 2
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
[NAME OF PAYOR]
By
------------------------------------
Name:
Title:
Pay to the order of
-------------------------
[NAME OF PAYEE]
By
-------------------------------
Name:
Title:
EXHIBIT L
---------
FORM OF SHAREHOLDER SUBORDINATED NOTE
-------------------------------------
$________________ New York, New York
[DATE]
FOR VALUE RECEIVED, Therma-Wave, Inc.. a Delaware corporation (the
"Company"), hereby promises to pay to ____________ or [his] [her] [its]
assigns (the "Payee"), in lawful money of the United States of America in
immediately available funds, at ________________________, the principal sum of
____________ DOLLARS, which amount shall be payable on ___________. (1)
[The Company promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
a rate per annum equal to _________________, such interest to be paid
[semi-annually] [annually] on ___________ [and _____________] of each year and
at maturity hereof.]
This Note is subject to voluntary prepayment, in whole or in part,
at the option of the Company, without premium or penalty.
This Note is one of the Shareholder Subordinated Notes referred to
in the Credit Agreement, dated as of May 16, 1997, by and among the Company,
the lenders from time to time party thereto (the "Banks"), and Bankers Trust
Company, as Agent (as amended, modified, supplemented, extended, restated,
refinanced, replaced or refunded from time to time, the "Credit Agreement")
and shall be subject to the provisions thereof. Unless otherwise defined
herein, all capitalized terms used herein or in Annex A attached hereto and
defined in the Credit Agreement shall have the meaning assigned to such term
in the Credit Agreement.
Notwithstanding anything to the contrary contained in this Note, the
Payee understands and agrees that the Company shall not be required to make,
and shall not make, any
-------------------
(1) Insert a date on or after December 31, 2004.
EXHIBIT L
Page 2
payment of principal, interest or other amounts on this Note to the extent
that such payment is prohibited by the terms of any Senior Indebtedness (as
defined in Annex A attached hereto), including, but not limited to, Sections
8.06 and 8.12 of the Credit Agreement.
This Note, and the Company's obligations hereunder, shall be
subordinate and junior to all indebtedness of the Company constituting Senior
Indebtedness (as defined in Section 1.07 of Annex A attached hereto) on the
terms and conditions set forth in Annex A attached hereto, which Annex A is
herein incorporated by reference and made a part hereof as if set forth herein
in its entirety.
The Company hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
THERMA-WAVE, INC.
By
--------------------------------
Title:
ANNEX A
TO EXHIBIT L
------------
Section 1.01. Subordination of Liabilities. Therma-Wave, Inc.
(the "Company"), for itself, its successors and assigns, covenants and agrees,
and each holder of the Note to which this Annex A is attached (the "Note") by
its acceptance thereof likewise covenants and agrees, that the payment of the
principal of, interest on, and all other amounts owing in respect of, the Note
(the "Subordinated Indebtedness") is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full
in cash of all Senior Indebtedness (as defined in Section 1.07 of this Annex
A). The provisions of this Annex A shall constitute a continuing offer to all
persons who, in reliance upon such provisions, become holders of, or continue
to hold, Senior Indebtedness, and such provisions are made for the benefit of
the holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such, and they
and/or each of them may proceed to enforce such provisions.
Section 1.02. Company Not to Make Payments with Respect to
Subordinated Indebtedness in Certain Circumstances. (a) Upon the maturity of
any Senior Indebtedness (including interest thereon or fees or any other
amounts owing in respect thereof), whether at stated maturity, by acceleration
or otherwise, all Obligations (as defined in Section 1.07 of this Annex A)
owing in respect thereof, in each case to the extent due and owing, shall
first be paid in full in cash, before any payment, whether in cash, property,
securities or otherwise, is made on account of the Subordinated Indebtedness.
(b) Until all Senior Indebtedness has been paid in full in cash
and all commitments in respect of such Senior Indebtedness have been
terminated, the sum of all payments in respect of the Note (including
principal and interest), together with the sum of (i) all payments made under
all other Shareholder Subordinated Notes and (ii) all payments made by the
Company and its Subsidiaries to repurchase stock or options to purchase stock
of the Company held by employees of the Company and its Subsidiaries shall not
exceed at any time that amount permitted by the terms of the respective issue
of Senior Indebtedness.
(c) The Company may not, directly or indirectly, make any
payment of any Subordinated Indebtedness and may not acquire any Subordinated
Indebtedness for cash or property until all Senior Indebtedness has been paid
in full in cash if any default or event of default under the Credit Agreement
(as defined in Section 1.07 of this Annex A) or any other issue of Senior
Indebtedness is then in existence or would result therefrom. Each holder of
the Note hereby agrees that, so long as any such default or event of default
in respect of any issue of Senior Indebtedness exists, it will not xxx for, or
otherwise take any action to enforce the Company's obligations to pay, amounts
owing in respect of the Note. Each holder of the Note understands and agrees
that to the
ANNEX A
TO EXHIBIT L
Page 2
extent that clause (b) of this Section 1.02 reduces the payment of interest
and/or principal which would otherwise be payable under the Note but for the
limitations set forth in such clause (b), such unpaid amount shall not
constitute a payment default under the Note and the holder of the Note may not
xxx for, or otherwise take action to enforce the Company's obligation to pay
such amount, provided that such unpaid principal or interest shall remain an
obligation of the Company to the holder of the Note pursuant to the terms of
the Note.
(d) In the event that notwithstanding the provisions of the
preceding subsections (a), (b) and (c) of this Section 1.02, the Company shall
make any payment on account of the Subordinated Indebtedness at a time when
payment is not permitted by said subsection (a), (b) or (c), such payment
shall be held by the holder of the Note, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness or their representative or the trustee under the indenture or
other agreement pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may appear,
for application pro rata to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in
accordance with the terms of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness. Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if the hereafter referenced notice
is not given, the Company shall give the holder of the Note prompt written
notice of any event which would prevent payments under Section 1.02(a), (b) or
(c) hereof.
Section 1.03. Subordination to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon
any distribution of assets of the Company upon dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including,
without limitation, post-petition interest at the rate provided in the
documentation with respect to the Senior Indebtedness, whether or not such
post-petition interest is an allowed claim against the debtor in any
bankruptcy or similar proceeding) before the holder of the Note is entitled
to receive any payment of any kind or character on account of the
Subordinated Indebtedness;
(b) any payment or distributions of assets of the Company of any kind
or character, whether in cash, property or securities to which the holder of
the Note would be
ANNEX A
TO EXHIBIT L
Page 3
entitled except for the provisions of this Annex A, shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee
or trustees under any indenture under which any instruments evidencing any
such Senior Indebtedness may have been issued, to the extent necessary to
make payment in full in cash of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders
of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, shall be
received by the holder of the Note on account of Subordinated Indebtedness
before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be received and held in trust for and shall be paid over
to the holders of the Senior Indebtedness remaining unpaid or unprovided for
or their representative or representatives, or to the trustee or trustees
under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been
paid in full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if the hereafter referenced notice
is not given, the Company shall give prompt written notice to the holder of
the Note of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
assignment for the benefit of creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in full
in cash of all Senior Indebtedness, the holder of the Note shall be subrogated
to the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Note shall be paid in full, and for the purpose
of such subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the holder
of the Note by virtue of this Annex A which otherwise would have been made to
the holder of the Note shall, as between the Company, its creditors other than
the holders of Senior Indebtedness, and the holder of the Note, be deemed to
be payment by the Company to or on account of the Senior Indebtedness, it
being understood that the provisions of this Annex A are and are intended
solely or the purpose of defining the relative rights
ANNEX A
TO EXHIBIT L
Page 4
of the holder of the Note, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between the Company and the holder of the Note, the obligation of the Company,
which is absolute and unconditional, to pay to the holder of the Note the
principal of and interest on the Note as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holder of the Note and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein
or therein prevent the holder of the Note from exercising all remedies
otherwise permitted by applicable law upon an event of default under the Note,
subject to the provisions of this Annex A and the rights, if any, under this
Annex A of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this Annex A, the
holder of the Note shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
holder of the Note, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Annex A.
Section 1.06. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act or failure
to act in good faith by any such holder, or by any noncompliance by the
Company with the terms and provisions of the Note, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The
holders of the Senior Indebtedness may, without in any way affecting the
obligations of the holder of the Note with respect hereto, at any time or from
time to time and in their absolute discretion, change the manner, place or
terms of payment of, change or extend the time of payment of, or renew or
alter, any Senior Indebtedness or amend, modify or supplement any agreement or
instrument governing or evidencing such Senior Indebtedness or any other
document referred to therein, or exercise or refrain from exercising any other
of their rights under the Senior Indebtedness including, without limitation,
the waiver of default thereunder and the release of any collateral securing
such Senior Indebtedness, all without notice to or assent from the holder of
the Note.
ANNEX A
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Page 5
Section 1.07. Senior Indebtedness. The term "Senior
Indebtedness" shall mean all Obligations (as defined below) (i) of the Company
under the Credit Agreement (as amended, modified, supplemented, extended,
restated, refinanced, replaced or refunded from time to time, the "Credit
Agreement"), dated as of May 16, 1997, by and among the Company, the lenders
from time to time party thereto (the "Banks"), and Bankers Trust Company, as
Agent, and the other Credit Documents (as defined in the Credit Agreement),
and any renewal, extension, restatement, refinancing or refunding thereof,
(ii) of the Company in respect of any Interest Rate Protection Agreements or
Other Hedging Agreements (each as defined in the Credit Agreement) and (iii)
of the Company under the Indenture (as amended, modified or supplemented from
time to time), dated as of May 15, 1997, by and between the Company IBJ
Xxxxxxxx Bank & Trust Company, as trustee, and the Senior Notes (as defined in
the Credit Agreement). As used herein, the term "Obligation" shall mean any
principal, interest, premium, penalties, fees, expenses, indemnities and other
liabilities and obligations payable under the documentation governing any
Senior Indebtedness (including post-petition interest of the rate provided in
the documentation with respect to such Senior Indebtedness, whether or not
such interest is an allowed claim against the debtor in any bankruptcy or
similar proceeding).
