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EXECUTION COPY
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CREDIT AGREEMENT
AMONG
SILICON VALLEY GROUP, INC.,
SVG LITHOGRAPHY SYSTEMS, INC.
AND
THE BANKS NAMED HEREIN
AND
ABN AMRO BANK N.V.,
SAN FRANCISCO INTERNATIONAL BRANCH,
AS AGENT
AS OF DECEMBER 7, 1995
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TABLE OF CONTENTS
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SECTION I. INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02. GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04. Plural Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.07. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.08. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.09. Calculation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10. Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION II. CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01. Revolving Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.02. Letter of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.03. Additional Amount Limitations, Commitment Reductions, Etc. . . . . . . . . . . . . . . . . 12
2.04. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.05. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.06. Other Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.07. Notes and Interest Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.08. Loan Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.09. Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.10. Change of Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.11. Taxes on Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.12. Funding Loss Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.13. Administrative Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION III. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.01. Conditions Precedent to Initial Borrowing or Initial Letter of Credit . . . . . . . . . . . 25
3.02. Conditions Precedent to Each Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.03. Conditions Precedent to Letter of Credit Issuance . . . . . . . . . . . . . . . . . . . . . 25
3.04. Conditions Precedent to Each Credit Event . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.05. Covenant to Deliver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION IV. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.01. Borrowers' Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION V. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION VI. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.02. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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SECTION VII. AGENT AND RELATIONS AMONG BANKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.01. Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.02. Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.03. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.04. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.05. Non-Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.06. Resignation of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.07. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.08. Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION VIII. LIABILITIES OF BORROWERS, GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.01. Liabilities of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.02. Joint and Several Liability of Borrowers, Guaranties . . . . . . . . . . . . . . . . . . . 56
8.03. Authorized Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.04. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.05. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.02. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.04. Waivers; Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.05. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.06. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.07. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.08. No Third Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.09. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.10. Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.11. Usury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.12. Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.14. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION X. EFFECTIVE DATE OF CREDIT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.02. Effect of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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SCHEDULES
I Banks
1.01 Definitions
3.01 Initial Conditions Precedent
ANNEXES
4.01(b) Subsidiaries Corporate Status
4.01(g) Title Exceptions
4.01(i) Litigation
4.01(o) Acquisition Agreements
4.01(u) Insurance
5.01(c) Quarterly Financial Template
5.02(e) Existing Guarantees
II Cash Equivalents
EXHIBITS
A Notice of Borrowing (2.01(b))
B Notice of Conversion (2.01(d))
C Revolver Extension Request (2.01(h))
D Note (2.07(a))
E Auditor's Letter (5.01(c))
F Covenant Compliance Certificate (5.01(c))
G Assignment Agreement (9.04(c))
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 7, 1995, is entered into by
and among:
(1) SILICON VALLEY GROUP, INC., a Delaware corporation ("SVG")
and SVG LITHOGRAPHY SYSTEMS, INC., a Delaware corporation ("SVGL") (SVG
and SVGL are, individually, a "Borrower" and, collectively,
"Borrowers");
(2) Each of the financial institutions from time to time
listed in Schedule I hereto, as amended from time to time (such
financial institutions to be referred to herein collectively as the
"Banks"); and
(3) ABN AMRO BANK N.V., San Francisco International Branch
("ABN"), as agent for the Banks (in such capacity, "Agent");
RECITALS
A. Borrowers have requested the Banks to provide certain credit
facilities to Borrowers to refinance certain existing indebtedness and for
general corporate purposes.
B. The Banks are willing to provide such credit facilities upon the
terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Credit Document, each term set forth in Schedule 1.01, when used in this
Agreement or any other Credit Document, shall have the respective meaning given
to that term in Schedule 1.01 or in the provision of this Agreement or the
other Credit Document referenced in Schedule 1.01.
1.02. GAAP. Unless otherwise indicated in this Agreement or any other
Credit Document, all accounting terms used in this Agreement or any other
Credit Document shall be construed, and all accounting and financial
computations hereunder or thereunder shall be computed, in accordance with
GAAP. If GAAP changes during the term of this Agreement such that any
covenants contained herein would then be calculated in a
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different manner or with different components, (a) Borrowers, Agent and the
Banks agree to negotiate in good faith to amend this Agreement within sixty
(60) days after such change in such respects as are necessary to conform those
covenants as criteria for evaluating Borrowers' financial condition to
substantially the same criteria as were effective prior to such change in GAAP,
(b) Borrowers shall be deemed to be in compliance with such covenants during
the sixty (60) day period following any such change in GAAP if and to the
extent that Borrowers would have been in compliance therewith under GAAP as in
effect immediately prior to such change, and (c) from and after the effective
date of such amendment (which shall be in no event later than the 61st day
following such change in GAAP) all financial information required hereunder
shall be in conformance with GAAP as so changed.
1.03. Headings. Headings in this Agreement and each of the other
Credit Documents are for convenience of reference only and are not part of the
substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used
in the plural form and vice versa.
1.05. Time. All references in this Agreement and each of the other
Credit Documents to a time of day shall mean San Francisco, California time,
unless otherwise indicated.
1.06. Governing Law. This Agreement and each of the other Credit
Documents shall be governed by and construed in accordance with the laws of the
State of California without reference to conflicts of law rules.
1.07. Construction. This Agreement is the result of negotiations
among, and has been reviewed by, Borrowers, Agent, each Bank and their
respective counsel. Accordingly, this Agreement shall be deemed to be the
product of all parties hereto, and no ambiguity shall be construed in favor of
or against Borrowers, Agent or any Bank.
1.08. Entire Agreement. This Agreement and each of the other Credit
Documents dated as of the date hereof, taken together, constitute and contain
the entire agreement of Borrowers, the Banks and Agent and supersede any and
all prior agreements, negotiations, correspondence, understandings and
communications among the parties, whether written or oral, respecting the
subject matter hereof; provided, however, that this Agreement and the other
Credit Documents shall not be deemed to impair any obligation of Borrowers to
pay the fees and other expenses set forth in the Agent's Fee Letter.
1.09. Calculation of Interest and Fees. All calculations of interest
and fees under this Agreement and the
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other Credit Documents for any period shall include the first day of such
period and exclude the last day of such period.
1.10. Other Interpretive Provisions. References in this Agreement to
"Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits," "Schedules"
and "Annexes" are to recitals, sections, paragraphs, subparagraphs, exhibits,
schedules and annexes herein and hereto unless otherwise indicated. References
in this Agreement and each of the other Credit Documents to any document,
instrument or agreement (a) shall include all exhibits, schedules and other
attachments thereto, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof, and (c) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
modified and supplemented from time to time and in effect at any given time.
The words "hereof," "herein" and "hereunder" and words of similar import when
used in this Agreement or any other Credit Document shall refer to this
Agreement or such other Credit Document, as the case may be, as a whole and not
to any particular provision of this Agreement or such other Credit Document, as
the case may be. The words "include" and "including" and words of similar
import when used in this Agreement or any other Credit Document shall not be
construed to be limiting or exclusive.
SECTION II. CREDIT FACILITIES.
2.01. Revolving Loan Facility.
(a) Revolving Loan Availability. Subject to the terms and
conditions of this Agreement (including the amount limitations set forth
in Paragraph 2.03), each Bank severally agrees to advance to each
Borrower from time to time during the period beginning on the Closing
Date and ending on the Maturity Date such loans as such Borrower may
request under this Paragraph 2.01 (individually, a "Loan"); provided,
however, that (i) the aggregate principal amount of all Loans made by
such Bank at any time outstanding shall not exceed such Bank's
Commitment at such time, (ii) the aggregate principal amount of all
Loans made by all Banks at any time outstanding shall not exceed the
Total Commitment at such time, and (iii) no more than twelve (12)
Borrowings may be outstanding at any one time. All Loans shall be made
on a pro rata basis by the Banks in accordance with their respective
Proportionate Shares, with each Borrowing to be comprised of a Loan by
each Bank equal to such Bank's Proportionate Share of such Borrowing.
Except as otherwise provided herein, Borrowers may borrow, repay and
reborrow Loans until the Maturity Date.
(b) Notice of Borrowing. A Borrower shall request each
Borrowing by delivering to Agent an irrevocable written
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notice in the form of Exhibit A, appropriately completed (a "Notice of
Borrowing"), which specifies, among other things:
(i) The principal amount of the requested Borrowing;
(ii) Whether the requested Borrowing is to consist of
(A) Loans which bear interest as provided in clause (i) of
Subparagraph 2.01(c) (individually, a "Base Rate Loan"), or (B)
Loans which bear interest as provided in clause (ii) of
Subparagraph 2.01(c) (individually, a "LIBOR Loan");
(iii) The date of the requested Borrowing, which shall be
a Business Day;
(iv) If the requested Borrowing is to consist of LIBOR
Loans, the initial Interest Period selected by such Borrower for
such Loans in accordance with Subparagraph 2.01(e); and
(v) The account or accounts to which such Borrowing is
to be disbursed.
Borrowers shall give each Notice of Borrowing to Agent at least three
(3) Business Days before the date of the requested Borrowing in the case
of a Borrowing consisting of LIBOR Loans, and at least one (1) Business
Day before the date of the requested Borrowing in the case of a
Borrowing consisting of Base Rate Loans. Each Notice of Borrowing shall
be delivered by first-class mail or telecopy to Agent at the office or
telecopy number and during the hours specified in Paragraph 9.01;
provided, however, that Borrowers shall promptly deliver to Agent an
originally executed copy of any Notice of Borrowing initially delivered
by telecopy. Agent shall promptly notify each Bank of the contents of
each Notice of Borrowing and of the amount and Type of each Loan to be
made by such Bank as part of the requested Borrowing. Each Borrowing
consisting of Base Rate Loans shall be in a minimum amount of $1,000,000
or an integral multiple of $100,000 in excess thereof. Each Borrowing
consisting of LIBOR Loans shall be in a minimum amount of $1,000,000 or
an integral multiple of $500,000 in excess thereof.
(c) Interest Rates. Each Borrower shall pay interest on the
unpaid principal amount of each of their respective Loans from the date
of such Loan until the maturity thereof, at one of the following rates
per annum:
(i) During such periods as such Loan is a Base Rate
Loan, at a rate per annum equal to the Base Rate, such rate to
change from time to time as the Base Rate shall change; and
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(ii) During such periods as such Loan is a LIBOR Loan,
at a rate per annum equal at all times during each Interest
Period for such LIBOR Loan to the LIBO Rate for such Interest
Period plus one percent (1.00%);
provided, however, that each of the rates set forth in clauses (i) and
(ii) of this Subparagraph 2.01(c) shall be increased by two percent
(2.00%) per annum on the date an Event of Default occurs and shall
continue at such increased rate unless and until such Event of Default
is waived in accordance with this Agreement. All Loans in each
Borrowing shall, at any given time prior to maturity, bear interest at
one, and only one, of the above rates. All computations of interest on
Base Rate Loans shall be based on a year of 365 or 366 days for actual
days elapsed. All computations of interest on LIBOR Loans shall be
based on a year of 360 days for actual days elapsed.
(d) Conversion of Loans. Borrowers may convert all Loans in
any Borrowing consisting of Base Rate Loans into LIBOR Loans and all
Loans in any Borrowing consisting of LIBOR Loans into Base Rate Loans;
provided, however, that any conversion of a LIBOR Loan into a Base Rate
Loan shall be made on, and only on, the last day of an Interest Period
for such LIBOR Loan. A Borrower shall request such a conversion by an
irrevocable written notice to Agent in the form of Exhibit B,
appropriately completed (a "Notice of Conversion"), which specifies,
among other things:
(i) The Borrowing which is to be converted;
(ii) The Type of Loans into which such Loans are to be
converted;
(iii) If such Loans are to be converted into LIBOR Loans,
the initial Interest Period selected by such Borrower for such
Loans in accordance with Subparagraph 2.01(e); and
(iv) The date of the requested conversion, which shall
be a Business Day.
Borrowers shall give each Notice of Conversion to Agent at least three
(3) Business Days before the date of the requested conversion in the
case of a conversion into LIBOR Loans and at least one (1) Business Day
before the date of the requested conversion in the case of a conversion
into Base Rate Loans. Each Notice of Conversion shall be delivered by
first-class mail or telecopy to Agent at the office or telecopy number
and during the hours specified in Paragraph 9.01; provided, however,
that Borrowers shall promptly deliver to Agent an originally executed
copy of any Notice of Conversion initially delivered by telecopy. Agent
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shall promptly notify each Bank of the contents of each Notice of
Conversion.
(e) LIBOR Loan Interest Periods.
(i) The initial and each subsequent Interest Period
selected by either Borrower for a LIBOR Loan shall be one (1),
two (2), three (3) or six (6) months; provided, however, that (A)
any Interest Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding
Business Day unless such next Business Day falls in another
calendar month, in which case such Interest Period shall end on
the immediately preceding Business Day; (B) any Interest Period
for a LIBOR Loan which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and (C) no
Interest Period shall end after the Maturity Date.
(ii) Each Borrower shall notify Agent by an irrevocable
written notice at least three (3) Business Days prior to the last
day of each Interest Period for such Borrower's LIBOR Loans of
the Interest Period selected by such Borrower for the next
succeeding Interest Period for such Loans. Such notice (a
"Notice of Interest Period Selection") shall be delivered by
first-class mail or telecopy to Agent at the office or telecopy
number and during the hours specified in Paragraph 9.01;
provided, however, that Borrowers shall promptly deliver to Agent
an originally executed copy of any Notice of Interest Period
Selection initially delivered by telecopy. Agent shall promptly
notify each Bank of the contents of each Notice of Interest
Period Selection. If a Borrower fails to notify Agent of the
next Interest Period for such Borrower's LIBOR Loans in
accordance with this Subparagraph 2.01(e), such Loans shall
automatically convert to Base Rate Loans on the last day of the
current Interest Period therefor.
(f) Scheduled Loan Payments. Each Borrower shall repay to
each Bank on the Maturity Date the unpaid principal amount of each Loan
made to such Borrower by such Bank. Each Borrower shall pay accrued
interest on the unpaid principal amount of each of their respective
Loans (A) in the case of a Base Rate Loan, on the last Business Day in
each calendar quarter, (B) in the case of a LIBOR Loan, on the last day
of each Interest Period therefor (and, if any such Interest Period is
longer than three (3) months, in the case of a LIBOR Loan, every three
(3) months); and (C) in
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the case of all Loans, upon prepayment (to the extent thereof) and at
maturity.
(g) Purpose. Borrowers shall use the proceeds of the Loans
for their respective working capital and general corporate needs.
(h) Maturity Date Extensions. On or before the last Business
Day which is sixty (60) days prior to each anniversary date of the
Closing Date, Borrowers may request the Banks to extend such Maturity
Date for an additional one-year period. Borrowers shall request each
such extension by appropriately completing, executing and delivering to
Agent a written request in the form of Exhibit C (a "Revolver Extension
Request"). Borrowers understand that this Subparagraph 2.01(h) is
included in this Agreement for Borrowers' convenience in requesting
extensions and acknowledge that neither Agent nor any of the Banks has
promised (either expressly or by implication), and neither Agent nor any
of the Banks has any obligation or commitment, to extend the Maturity
Date at any time. Agent shall promptly deliver to each Bank three (3)
copies of each Revolver Extension Request received by Agent. If a Bank,
in its sole and absolute discretion, consents to any Revolver Extension
Request, such Bank shall evidence such consent by executing and
returning two (2) copies of the Revolver Extension Request to Agent not
later than the last Business Day which is thirty (30) days after the
date Borrowers delivered to Agent the Revolver Extension Request. Any
failure by any Bank to execute and return a Revolver Extension Request
shall be deemed a denial thereof. If Borrowers shall deliver a Revolver
Extension Request to Agent pursuant to the first sentence of this
Subparagraph 2.01(h), then not later than the last Business Day which is
thirty-five (35) days after the date Borrowers delivered to Agent the
Revolver Extension Request, Agent shall notify Borrowers in writing
whether (i) Agent has received a copy of the Revolver Extension Request
executed by each Bank, in which case the definition of "Maturity Date"
set forth in Schedule 1.01 shall be deemed amended as provided in the
Revolver Extension Request as of the date of such written notice from
Agent to Borrowers, or (ii) Agent has not received a copy of the
Revolver Extension Request executed by each Bank, in which case such
Revolver Extension Request shall be deemed denied. Agent shall deliver
to Borrowers, with each written notice under clause (i) of the preceding
sentence which notifies Borrowers that Agent has received a Revolver
Extension Request executed by each Bank, a copy of the Revolver
Extension Request so executed by each Bank.
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2.02. Letter of Credit Facility.
(a) Letter of Credit Availability. Subject to the terms and
conditions of this Agreement (including the amount limitations set forth
in Paragraph 2.03), ABN (in its capacity as the issuer of letters of
credit under this Paragraph 2.02, "Issuing Bank") agrees to issue on
behalf of each Borrower from time to time during the period beginning on
the Closing Date and ending on the Maturity Date such letters of credit
as such Borrower may request under this Paragraph 2.02 (individually, a
"Letter of Credit"); provided, however, that:
(i) The aggregate amount available for drawing under
all Letters of Credit at any time outstanding shall not exceed
the lesser of (A) Ten Million Dollars ($10,000,000) (such amount,
as reduced from time to time pursuant to this Agreement, to be
referred to herein as the "LC Commitment") and (B) the Total
Commitment at such time;
(ii) Each Letter of Credit shall be in a minimum Stated
Amount of five hundred thousand Dollars ($500,000);
(iii) Each Letter of Credit shall have an expiration date
which is not later than the Maturity Date;
(iv) Each Letter of Credit shall be an irrevocable
standby Letter of Credit issued for a purpose permitted by
Subparagraph 2.02(g);
(v) Except as otherwise provided herein, each Letter of
Credit shall be governed by the Uniform Customs and Practices for
Documentary Credits as most recently published by the
International Chamber of Commerce prior to the date of issuance
of such Letter of Credit (the terms of which are hereby
incorporated by reference with respect to each Letter of Credit);
and
(vi) Each Letter of Credit shall be in a form reasonably
acceptable to Issuing Bank.
Except as otherwise provided herein, Borrower may request Letters of
Credit, cause or allow Letters of Credit to expire and request
additional Letters of Credit until the Maturity Date.
(b) LC Application. Each Borrower shall request each Letter
of Credit by delivering to Agent and Issuing Bank an irrevocable written
application in a form reasonably
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acceptable to Issuing Bank, appropriately completed (an "LC
Application"), which specifies, among other things:
(i) The Stated Amount of the requested Letter of
Credit;
(ii) The name and address of the beneficiary of the
requested Letter of Credit;
(iii) The expiration date of the requested Letter of
Credit;
(iv) The documentary conditions for drawing under the
requested Letter of Credit; and
(v) The date of issuance for the requested Letter of
Credit, which shall be a Business Day.
Borrower shall give each LC Application to Issuing Bank at least three
(3) Business Days before the proposed date of issuance of the requested
Letter of Credit. Each LC Application shall be delivered by first-class
mail or facsimile to Agent and Issuing Bank at their respective offices
or facsimile numbers and during the hours specified in Paragraph 9.01;
provided, however, that Borrower shall promptly deliver to Issuing Bank
the original of any LC Application initially delivered by facsimile.
Agent shall promptly notify each Bank of the contents of each LC
Application. In the event of any conflict between the terms of this
Agreement and the terms of any LC Application, the terms of this
Agreement shall control.
(c) Reimbursement. Not later than 10:00 a.m. on the date of
any payment by Issuing Bank of any drawing under any Letter of Credit (a
"Drawing Payment") or, if later, one (1) Business Day after Issuing Bank
notifies the Borrower which is the account party of a Letter of Credit
that Issuing Bank intends to make or has made a Drawing Payment on such
Letter of Credit, the Borrower which is the account party thereof shall
make or cause to be made a payment in the amount of such Drawing
Payment, together with interest thereon from the date such Drawing
Payment is made at a rate per annum equal to the Base Rate plus (a
"Reimbursement Payment") to Issuing Bank; provided, however, that such
Borrower shall make such Reimbursement Payment to, or cause such
Reimbursement Payment to be made to, Agent for the benefit of the Banks
if, prior to the time such Reimbursement Payment is made, Issuing Bank
has notified such Borrower that it has requested the Banks pursuant to
Subparagraph 2.02(e) to pay to Issuing Bank their respective
Proportionate Shares of the Drawing Payment made by Issuing Bank. If
any such Reimbursement Payment is made to Agent, Agent shall promptly
pay, to each Bank which has paid its Proportionate Share of the Drawing
Payment, such Bank's
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Proportionate Share of the Reimbursement Payment and shall promptly pay
to Issuing Bank the balance of such Reimbursement Payment, together, in
each case, with interest thereon at a per annum rate equal to the
Federal Funds Rate, as in effect from time to time, from the date Agent
receives such Reimbursement Payment to the date on which Agent makes
such payment.
(d) Reimbursement Obligation Absolute. The obligation of each
Borrower to reimburse Issuing Bank or the Banks, as the case may be, for
Drawing Payments (such obligation to be referred to herein as a
"Reimbursement Obligation") shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the
terms of this Agreement under and without regard to any circumstances,
including (i) any lack of validity or enforceability of any of the
Credit Documents, (ii) any amendment or waiver or any consent to
departure from all or any terms of any of the Credit Documents, (iii)
the existence of any claim, setoff, defense or other right which either
Borrower may have at any time against any beneficiary or any transferee
of any Letter of Credit, Agent, any Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or
in the other Credit Documents, or in any unrelated transaction, (iv) any
breach of contract or dispute between Borrower, Agent, any Bank or any
other Person, (v) any demand, statement or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, (vi) payment by Issuing Bank under any Letter
of Credit against presentation of a demand for payment which does not
comply with the terms of such Letter of Credit, (vii) any delay,
extension of time, renewal, compromise or other indulgence or
modification granted or agreed to by Agent or any Bank, with or without
notice to or approval by either Borrower, with respect to such
Borrower's Obligations, or (viii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing; provided,
however, that this Subparagraph 2.02(d) shall not abrogate any right
which either Borrower may have to recover damages from Issuing Bank
pursuant to Subparagraph 2.02(f).
(e) Bank Participation. Each Bank severally agrees with
Issuing Bank to participate in the extension of credit arising from the
issuance of Letters of Credit by Issuing Bank in an amount equal to such
Bank's Proportionate Share of the Stated Amount of the Letters of Credit
from time to time issued by Issuing Bank, and the issuance of any Letter
of Credit shall be deemed a confirmation by each Bank of such
participation in such amount. Issuing Bank may request the Banks to pay
to Issuing Bank all or any portion of any Drawing Payment made or to be
made by Issuing Bank under any Letters of Credit (up to each such Bank's
Proportionate
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Share) issued by it by delivering to each Bank (with a copy to the
respective Borrower), at any time after the drawing for which such
payment is requested has been made upon Issuing Bank, a written request
for such payment which specifies the amount of such Drawing Payment and
the date on which such Drawing Payment is to be made or was made;
provided, however, that Issuing Bank shall not request the Banks to make
any payment under this Subparagraph 2.02(e) in connection with any
portion of a Drawing Payment for which Issuing Bank has been reimbursed
from a Reimbursement Payment by a Borrower unless such Reimbursement
Payment has been thereafter recovered by such Borrower. Upon receipt of
any such request for payment from Issuing Bank, each Bank shall pay to
Issuing Bank such Bank's Proportionate Share of the applicable portion
of such Drawing Payment, together with interest thereon at a per annum
rate equal to (i) the daily Federal Funds Rate during the period from
the date of such request for payment through the third Business Day
thereafter, and (ii) the Base Rate thereafter. Each Bank's obligation
to make each such payment to Issuing Bank shall be absolute,
unconditional and irrevocable and shall not be affected by any
circumstance whatsoever, including the occurrence or continuance of any
Default or Event of Default, or the failure of any other Bank to make
any payment under this Subparagraph 2.02(e), and each Bank further
agrees that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(f) Commercial Practices. Each Borrower agrees that neither
Agent nor any Bank (nor any of their respective directors, officers or
employees) shall be liable or responsible for (i) the use which may be
made of the Letters of Credit or for any acts or omissions of any
beneficiary or transferee in connection therewith; (ii) the validity,
sufficiency or genuineness of documents other than the Letters of
Credit, or of any endorsement(s) thereon, even if such documents should
in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged or any statement therein prove to be untrue or
inaccurate in any respect whatsoever; (iii) payment by Issuing Bank
against presentation of documents which do not comply with the terms of
the respective Letter of Credit, including failure of any documents to
bear any reference or adequate reference to such Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to make
payment under the respective Letter of Credit, except only that Issuing
Bank shall be liable to the respective Borrower for acts or events
described in clauses (i) through (iv) above, to the extent, but only to
the extent, of any direct, as opposed to consequential, damages suffered
by such Borrower which such Borrower proves were caused by (1) Issuing
Bank's willful misconduct or gross negligence in determining whether a
drawing made under a Letter of Credit complies with the terms and
conditions therefor stated in such Letter of
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Credit, or (2) Issuing Bank's willful failure to pay under a Letter of
Credit after a drawing by the beneficiary thereof strictly complying
with the terms and conditions of such Letter of Credit. Without
limiting the foregoing, Issuing Bank may accept a drawing that appears
on its face to be in order, without responsibility for further
investigation. Subject to the rights of Borrowers under this
subparagraph, the determination of whether a drawing has been made under
a Letter of Credit prior to its expiration or whether a drawing made
under a Letter of Credit is in proper and sufficient form shall be made
by Issuing Bank in its sole discretion, which determination shall be
conclusive and binding upon Borrowers to the extent permitted by law.
Each Borrower hereby waives any right to object to any payment made
under any Letter of Credit with regard to a drawing that is in the form
provided in such Letter of Credit but which varies with respect to
punctuation, capitalization, spelling or similar matters of form.
(g) Purpose. Letters of Credit may be issued to support
either Borrower's performance obligations to (i) customers which have
advanced money to such Borrower, (ii) lessors for obligations arising
under real property leases, and (iii) equipment lessors and suppliers
for obligations arising under personal property leases or Borrower's
payment obligations to suppliers of goods or services, in each case
arising in the ordinary course of business as presently conducted.
2.03. Additional Amount Limitations, Commitment Reductions, Etc.
(a) Outstanding Credit. The sum at any time (without
duplication) of the aggregate principal amount of all Loans then
outstanding, the aggregate amount available for drawing under all
Letters of Credit then outstanding and the aggregate amount of all
Reimbursement Obligations then outstanding (such sum to be referred to
herein as the "Outstanding Credit") shall not exceed an amount at such
time equal to Seventy-Five Million Dollars ($75,000,000) or, if reduced
pursuant to Subparagraph 2.03(b) or otherwise, the lesser amount to
which reduced (such amount, as so reduced from time to time, to be
referred to herein as the "Total Commitment"). Banks and Agent shall
have no obligation to make any Loans or to issue, or increase the Stated
Amount of, any Letter of Credit, if such Credit Event would cause the
Outstanding Credit to exceed the Total Commitment.
(b) Reduction or Cancellation of Commitments. Borrowers may,
upon thirty (30) days written notice to Agent, permanently reduce the
Total Commitment by the amount of Three Million Dollars ($3,000,000) or
an integral multiple thereof or cancel the Total Commitment in its
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entirety; provided, however, that (i) Borrowers may not reduce the Total
Commitment prior to the Maturity Date, if, after giving effect to such
reduction, the Outstanding Credit or the LC Commitment would exceed the
Total Commitment, and (ii) Borrowers may not cancel the Total Commitment
prior to the Maturity Date, if, after giving effect to such
cancellation, any Loan, Letter of Credit or Reimbursement Obligation
would remain outstanding.
(c) Effect of Commitment Reductions. From the effective date
of any reduction of the Total Commitment, the Commitment Fees shall be
computed on the basis of the Total Commitment as so reduced. Once
reduced or cancelled, the Total Commitment may not be increased or
reinstated without the prior written consent of all Banks. Any
reduction of the Total Commitment pursuant to this Subparagraph 2.02(c)
shall be applied ratably to reduce each Bank's Commitment in accordance
with clause (i) of Subparagraph 2.09(a).
2.04. Fees.
(a) Agent's Fees. Borrowers together shall pay to Agent, for
its own account, arrangement fees and agent's fees in the amounts, at
the times and on the terms set forth in the Agent's Fee Letter.
(b) Commitment Fees. Borrowers together shall pay to Agent
for the pro rata benefit of each Bank as provided in clause (v) of
Subparagraph 2.09(a), commitment fees (the "Commitment Fees") of
three-eighths of one percent (0.375%) per annum on the Available
Commitment for each day during the period beginning on the Closing Date
and ending on the Maturity Date. Borrowers shall pay the Commitment
Fees on the last Business Day in each calendar quarter (commencing with
the first such day to occur after the Closing Date) and on the Maturity
Date (or if the Total Commitment is cancelled on a date prior to the
Maturity Date, on such prior date). All computations of Commitment Fees
shall be based on a year of 360 days for actual days elapsed.
(c) Letter of Credit Fees.
(i) LC Usage Fees. Each Borrower shall pay to Agent,
for the ratable benefit of the Banks as provided in clause (v) of
Subparagraph 2.09(a), nonrefundable usage fees for the Letters of
Credit issued for such Borrower's account (the "Standby LC Usage
Fees") equal to one percent (1.00%) per annum on the daily
average available amount of each such Letter of Credit for the
period beginning on the date such Letter of Credit is issued and
ending on the date such Letter of Credit expires. Borrowers
shall pay the LC Usage Fees quarterly in arrears on the last day
in each calendar quarter and on the Maturity Date.
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(ii) LC Issuance Fees. Each Borrower shall pay to
Agent, for the sole benefit of Issuing Bank, nonrefundable
issuance fees for the Letters of Credit issued for such
Borrower's account (the "LC Issuance Fees") equal to one-eighth
of one percent (0.125%) per annum on the daily average available
amount of each such Letter of Credit for the period beginning on
the date such Letter of Credit is issued and ending on the date
such Letter of Credit expires. Borrowers shall pay the LC
Issuance Fees quarterly in arrears on the last day in each
calendar quarter and on the Maturity Date.
(iii) Other Letter of Credit Fees, Etc. In addition to
the LC Usage Fees and the LC Issuance Fees (collectively, the
"Letter of Credit Fees"), each Borrower for which a Letter of
Credit has been issued shall pay upon demand to Agent for Issuing
Bank's sole benefit, Issuing Bank's then current standard fees in
connection with any drawing, transfer or amendment of any Letter
of Credit and all out-of-pocket costs of Issuing Bank in
connection therewith. All computations of Letter of Credit Fees
shall be based on a year of 360 days for actual days elapsed.
2.05. Prepayments.
(a) Terms of all Prepayments. Upon the prepayment of any Loan
(whether such prepayment is an optional prepayment under Subparagraph
2.05(b), a mandatory prepayment required by Subparagraph 2.05(c) or a
mandatory prepayment required by any other provision of this Agreement
or the other Credit Documents, including a prepayment upon
acceleration), the respective Borrower shall pay to the Bank which made
such Loan (i) all accrued interest to the date of such prepayment on the
amount prepaid, and (ii) if such prepayment is the prepayment of a LIBOR
Loan on a day other than the last day of an Interest Period for such
Loan, all amounts payable to such Bank pursuant to Paragraph 2.12.
(b) Optional Prepayments. At its option, each Borrower may:
(i) upon one (1) Business Day's notice to each Bank in
the case of Base Rate Loans, prepay the Base Rate Loans in any
Borrowing in part, in an aggregate principal amount of at least
$1,000,000, or in whole, at any time and from time to time,
without premium or penalty; and
(ii) upon three (3) Business Days' notice to each Bank
in the case of LIBOR Loans, prepay the LIBOR Loans in any
Borrowing in whole, at any time and from time to
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time, without premium or penalty (except as provided in Paragraph
2.12).
(c) Mandatory Prepayments. If, at any time, the Outstanding
Credit exceeds the Total Commitment at such time, then Borrowers shall
immediately prepay Loans in an aggregate principal amount equal to such
excess, and if, after the prepayment of all Loans, the Outstanding
Credit still exceeds the Total Commitment, Borrowers shall immediately
provide to Agent cash in an amount equal to such excess.
2.06. Other Payment Terms.
(a) Place and Manner. Each Borrower shall pay all amounts
payable by such Borrower to each Bank or Agent hereunder by payment to
Agent, for the account of such Bank and such Bank's Applicable Lending
Office or Agent, at Agent's office located at the address specified in
Paragraph 9.01, in lawful money of the United States and in same day or
immediately available funds not later than 10:00 a.m. on the date due.
Agent shall promptly disburse to each Bank each such payment received by
Agent for such Bank.
(b) Date. Whenever any payment due hereunder shall fall due
on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be.
(c) Late Payments. If any amounts required to be paid by
either Borrower under this Agreement or the other Credit Documents
(including principal or interest payable on any Loan, Reimbursement
Payments and any fees or other amounts) remain unpaid after such amounts
are due, such Borrower shall pay interest on the aggregate, outstanding
balance of such amounts from the date due until those amounts are paid
in full at a per annum rate equal to the Base Rate plus two percent
(2.00%), such rate to change from time to time as the Base Rate shall
change. All computations of such interest shall be based on a year of
365 or 366 days for actual days elapsed.
(d) Failure to Pay Agent. Unless Agent shall have received
notice from a Borrower at least one (1) Business Day prior to the date
on which any payment is due to the Banks hereunder that such Borrower
will not make such payment in full, Agent may assume that such Borrower
has made such payment in full to Agent on such date and Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and
to the extent such Borrower shall not have so made such payment in full
to
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Agent, such Bank shall repay to Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date
such Bank repays such amount to Agent, at the Federal Funds Rate. A
certificate of Agent submitted to any Bank with respect to any amounts
owing by such Bank under this Subparagraph 2.06(d) shall be conclusive
absent manifest error.
(e) Application of Payments. All payments by Borrowers
hereunder shall be applied first to unpaid fees, costs and expenses then
due and payable under this Agreement or the other Credit Documents,
second to accrued interest then due and payable under this Agreement or
the other Credit Documents, third to unpaid Reimbursement Obligations
and finally to reduce the principal amount of outstanding Loans.
2.07. Notes and Interest Account.
(a) Notes. The obligation of each Borrower to repay the Loans
made by each Bank to such Borrower and to pay interest thereon at the
rates provided herein shall be evidenced by a promissory note in the
form of Exhibit D (individually, a "Note") which note shall be (i)
payable to the order of such Bank, (ii) in the amount of such Bank's
Commitment, (iii) dated the Closing Date, and (iv) otherwise
appropriately completed. Each Borrower authorizes each Bank to record
on the schedule annexed to such Bank's Note the date and amount of each
Loan made by such Bank and of each payment or prepayment of principal
thereon made by the respective Borrower, and agrees that all such
notations shall constitute prima facie evidence of the matters noted;
provided, however, that the failure by any Bank to make such notations
shall not affect either Borrower's obligations hereunder or thereunder.
Each Borrower further authorizes each Bank to attach to and make a part
of such Bank's Note continuations of the schedule attached thereto as
necessary. If, because any Bank designates separate Applicable Lending
Offices for Base Rate Loans or LIBOR Loans, such Bank requests that
separate promissory notes be executed to evidence separately such Loans,
then each such note shall be in the form of Exhibit D, mutatis mutandis
to reflect such division, and shall be (w) payable to the order of such
Bank, (x) in the amount of such Bank's Commitment, (y) dated the Closing
Date and (z) otherwise appropriately completed. Such notes shall,
collectively, constitute a Note.
(b) Interest Account. Each Borrower authorizes Agent to
record in an account or accounts maintained by Agent on its books (the
"Interest Account") (i) the interest rates applicable to all Loans and
the effective dates of all changes thereto, (ii) the Interest Period for
each LIBOR
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Loan, (iii) the date and amount of each principal and interest payment
on each Loan, and (iv) such other information as Agent may determine is
necessary for the computation of the interest payable by Borrowers
hereunder; provided, however, that the failure by Agent to make such
notations shall not affect either Borrower's obligations hereunder.
2.08. Loan Funding.
(a) Bank Funding and Disbursement to Borrowers. Each Bank
shall, before 10:00 a.m. on the date of each Borrowing, make available
to Agent at its office specified in Paragraph 9.01, in same day or
immediately available funds, such Bank's Proportionate Share of such
Borrowing. After Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Section III, Agent will promptly
disburse such funds in same day or immediately available funds to the
Borrower which requested such Borrowing. Unless otherwise directed by
such Borrower, Agent shall disburse the proceeds of each Borrowing to
such Borrower by disbursement to the account or accounts specified in
the applicable Notice of Borrowing.
(b) Bank Failure to Fund. Unless Agent shall have received
notice from a Bank prior to the date of any Borrowing that such Bank
will not make available to Agent such Bank's Proportionate Share of such
Borrowing, Agent may assume that such Bank has made such portion
available to Agent on the date of such Borrowing in accordance with
Subparagraph 2.08(a), and Agent may, in reliance upon such assumption,
make available to the Borrower which requested such Borrowing (or
otherwise disburse) on such date a corresponding amount. If any Bank
does not make the amount of its Proportionate Share of any Borrowing
available to Agent on or prior to the date of such Borrowing, such Bank
shall pay to Agent, on demand, interest which shall accrue on such
amount until made available to Agent at rates equal to (i) the daily
Federal Funds Rate during the period from the date of such Borrowing
through the third Business Day thereafter, and (ii) the Base Rate
thereafter. A certificate of Agent submitted to any Bank with respect
to any amounts owing under this Subparagraph 2.08(b) shall be conclusive
absent manifest error. If any Bank's Proportionate Share of any
Borrowing is not in fact made available to Agent by such Bank within
three (3) Business Days after the date of such Borrowing, the Borrower
which received such Borrowing shall pay to Agent, on demand, an amount
equal to such Proportionate Share together with interest thereon, for
each day from the date such amount was made available to such Borrower
until the date such amount is repaid to Agent, at the interest rate
applicable at the time to the Loans comprising such Borrowing.
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(c) Banks' Obligations Several. The failure of any Bank to
make the Loan to be made by it as part of any Borrowing or to pay its
Proportionate Share of any Drawing Payment which it has been requested
to pay shall not relieve any other Bank of its obligation hereunder to
make its Loan on the date of such Borrowing or to pay such portion of a
Drawing Payment, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on the date of
any Borrowing or to pay such share of any Drawing Payment.
2.09. Pro Rata Treatment.
(a) Borrowings, Commitment Reductions, Etc. Except as
otherwise provided herein:
(i) Each Borrowing, each reduction of the Total
Commitment and each participation in each Letter of Credit shall
be made or shared among the Banks pro rata according to their
respective Proportionate Shares;
(ii) Each payment of principal of Loans in any Borrowing
shall be shared among the Banks which made or funded the Loans in
such Borrowing pro rata according to the respective unpaid
principal amounts of such Loans so made or funded by such Banks;
(iii) Each payment of interest on Loans in any Borrowing
shall be shared among the Banks which made or funded the Loans in
such Borrowing pro rata according to (A) the respective unpaid
principal amounts of such Loans so made or funded by such Banks
and (B) the dates on which such Banks so made or funded such
Loans;
(iv) Each Reimbursement Payment and interest payable by
either Borrower thereon shall be shared among the Banks
(including Issuing Bank) which made or funded the applicable
Drawing Payment pro rata according to the respective amounts of
such Drawing Payment so made or funded by such Bank;
(v) Each payment of Commitment Fees and LC Usage Fees
shall be shared among the Banks pro rata according to (A) their
respective Proportionate Shares and (B) in the case of each Bank
which becomes a Bank hereunder after the date hereof, the date
upon which such Bank so became a Bank;
(vi) Each payment of interest (other than interest on
Loans) shall be shared among the Banks and Agent owed the amount
upon which such interest accrues pro rata according to (A) the
respective amounts so owed such Banks and Agent and (B) the dates
on which such amounts became owing to such Banks and Agent; and
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(vii) All other payments under this Agreement and the
other Credit Documents shall be for the benefit of the Person or
Persons specified.
(b) Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) on account of Loans or Reimbursement
Obligations owed to it in excess of its ratable share of payments on
account of such Loans or Reimbursement Obligations obtained by all Banks
entitled to such payments, such Bank shall forthwith purchase from the
other Banks such participations in the Loans or Reimbursement
Obligations, as the case may be, as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase shall be
rescinded and each other Bank shall repay to the purchasing Bank the
purchase price to the extent of such recovery together with an amount
equal to such other Bank's ratable share (according to the proportion of
(i) the amount of such other Bank's required repayment to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. Each Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Subparagraph 2.09(b)
may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of setoff) with respect to such
participation as fully as if such Bank were the direct creditor of such
Borrower in the amount of such participation. Nothing in this
Subparagraph 2.09(b) shall affect any Bank's Proportionate Share under
this Agreement nor shall any Bank as a result of the purchase of any
participation pursuant to this Subparagraph 2.09(b) have any obligation
to extend any credit to either Borrower.
2.10. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the first
day of any Interest Period for any LIBOR Loan:
(i) Any Bank shall advise Agent that the LIBO Rate for
such Interest Period cannot be adequately and reasonably
determined due to the unavailability of funds in, or other
circumstances affecting, the London interbank market; or
(ii) Any Bank shall advise Agent that the rates of
interest for such Loans do not adequately and fairly reflect the
cost to such Bank of making or maintaining such LIBOR Loans;
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then Agent shall immediately give notice of such condition to Borrowers
and the other Banks. After the giving of any such notice and until
Agent shall otherwise notify Borrowers that the circumstances giving
rise to such condition no longer exist, each Borrower's right to request
the making of or conversion to, and the Banks' obligations to make or
convert to, LIBOR Loans shall be suspended. Any LIBOR Loans outstanding
at the commencement of any such suspension shall be converted at the end
of the then current Interest Period for such Loans into Base Rate Loans
unless such suspension has then ended.
(b) Illegality. If, after the date of this Agreement the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by Agent or any Bank with any request or directive
(whether or not having the force of law) of any Governmental Authority
(a "Change of Law") shall make it unlawful or impossible for any Bank to
make or maintain any LIBOR Loan, such Bank shall immediately notify
Agent of such Change of Law and Agent shall immediately give notice of
such condition to Borrowers and the other Banks. Upon receipt of such
notice, (i) each Borrower's right to request the making of or conversion
to, and the Banks' obligations to make, or convert to, LIBOR Loans shall
be terminated, and (ii) Borrowers shall, for their respective LIBOR
Loans, at the request of any Bank, either (A) pursuant to Subparagraph
2.01(d), convert any such then outstanding LIBOR Loans into Base Rate
Loans at the end of the current Interest Period for such LIBOR Loans, or
(B) immediately repay or convert any such LIBOR Loans if any Bank shall
notify Borrowers that such Bank may not lawfully continue to fund and
maintain such Loans. Any conversion or prepayment of LIBOR Loans made
pursuant to the preceding sentence prior to the last day of an Interest
Period for such Loans shall be deemed a prepayment thereof for purposes
of Paragraph 2.12.
(c) Increased Costs. If, after the date of this Agreement,
any Change of Law:
(i) Shall subject any Bank to any tax, duty or other
charge with respect to any LIBOR Loans, or shall change the basis
of taxation of payments by either Borrower to any Bank on such a
LIBOR Loan or in respect to such a Loan under this Agreement
(except for changes in the rate of taxation on the overall net
income of any Bank); or
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(ii) Shall impose, modify or hold applicable any
reserve, special deposit or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances or loans by, or any other acquisition of funds by any
Bank for any LIBOR Loan; or
(iii) Shall impose on any Bank any other condition
related to any LIBOR Loan, the Commitments or the Letters of
Credit;
and the effect of any of the foregoing is to increase the cost to such
Bank of making, renewing, or maintaining any such Loan, the Commitments
or the Letters of Credit or to reduce any amount receivable by such Bank
hereunder; then Borrowers shall from time to time, upon demand by such
Bank, pay to such Bank additional amounts sufficient to reimburse such
Bank for such increased costs or to compensate such Bank for such
reduced amounts. A certificate as to the amount of such increased costs
or reduced amounts, setting forth in reasonable detail (to the extent
such information would not violate confidentiality requirements of the
relevant Bank) the calculation thereof, submitted by such Bank to
Borrowers shall, in the absence of manifest error, be conclusive and
binding on Borrowers for all purposes. Without affecting its rights
specified above or under any other provision of this Agreement, each
Bank agrees that if there is any increase in any cost to or reduction in
any amount receivable by such Bank with respect to which either Borrower
would be obligated to compensate such Bank pursuant to this Subparagraph
2.10(c), such Bank shall use reasonable efforts to select an alternative
Applicable Lending Office which would avoid or materially reduce any
such increase in any cost to or reduction in any amount receivable by
such Bank; provided, however, that no Bank shall be obligated to select
an alternative Applicable Lending Office if such Bank determines that
(A) as a result of such selection such Bank would be in violation of any
Governmental Rule by any Governmental Authority, or any request or
directive (whether or not having the force of law) of any Governmental
Authority, or would incur additional costs or expenses or (B) such
selection would be inadvisable for regulatory reasons or disadvantageous
to the interests of such Bank.
(d) Capital Requirements. If, after the date of this
Agreement, any Bank determines that (i) any Change of Law affects the
amount of capital required or expected to be maintained by such Bank or
any Person controlling such Bank (a "Capital Adequacy Requirement"), and
(ii) the amount of capital maintained by such Bank or such Person which
is attributable to or based upon the Loans, the Commitments, the Letters
of Credit or this Agreement must be increased as a result of such
Capital Adequacy Requirement (taking into account such Bank's or such
Person's policies with respect to capital adequacy), Borrowers shall pay
to such Bank or
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such Person, upon demand of such Bank, such amounts as such Bank or such
Person shall determine are reasonably necessary to compensate such Bank
or such Person for the increased costs to such Bank or such Person of
such increased capital. A certificate of any Bank setting forth (to the
extent such information would not violate confidentiality requirements
of the relevant Bank) in reasonable detail the computation of any such
increased costs, delivered by such Bank to Borrowers shall, in the
absence of manifest error, be conclusive and binding on Borrowers for
all purposes. Without affecting its rights specified above or under any
other provision of this Agreement, each Bank agrees that if there is any
Change of Law which causes the amount of capital maintained by such Bank
or such Person to be increased and with respect to which either Borrower
would be obligated to compensate such Bank pursuant to this Subparagraph
2.10(d), such Bank shall use reasonable efforts to select an alternative
Applicable Lending Office which would avoid or materially reduce any
such increase in capital; provided, however, that no Bank shall be
obligated to select an alternative Applicable Lending Office if such
Bank determines that (A) as a result of such selection such Bank would
be in violation of any Governmental Rule by any Governmental Authority,
or any request or directive (whether or not having the force of law) of
any Governmental Authority, or would incur additional costs or expenses,
or (B) such selection would be inadvisable for regulatory reasons or
disadvantageous to the interests of such Bank.
2.11. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by either
Borrower under this Agreement and the other Credit Documents shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (except net income taxes and franchise taxes in
lieu of net income taxes imposed on Agent or any Bank as a result of a
present or former connection between the jurisdiction of the
Governmental Authority imposing such tax and Agent or such Bank,
excluding a connection arising solely from Agent or such Bank having
executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the other Credit Documents) (all
such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "Taxes"). If any
Taxes are required to be withheld from any amounts payable to Agent or
any Bank hereunder or under the other Credit Documents, the amounts so
payable to Agent or such Bank shall be increased to the extent necessary
to yield to Agent or such Bank (after payment of all Taxes) interest or
any such other
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amounts payable hereunder at the rates or in the amounts specified in
this Agreement and the other Credit Documents. Whenever any Taxes are
payable by either Borrower, as promptly as possible thereafter, such
Borrower shall send to Agent, if for its own account, or to such Bank,
as the case may be, a certified copy of an original official receipt
received by such Borrower showing payment thereof. If either Borrower
fails to pay any Taxes when due to the appropriate taxing authority or
fail to remit to Agent or such Bank the required receipts or other
required documentary evidence, then such Borrower shall indemnify Agent
and the Banks for any incremental taxes, interest or penalties that may
become payable by Agent and/or Bank as a result of any such failure.
The obligations of Borrowers in this Subparagraph 2.11(a) shall survive
the payment and performance of the Obligations and the termination of
this Agreement.
(b) Withholding Exemption Certificates. On or before the
Closing Date, each Bank agrees that it will deliver to each Borrower and
to Agent either (i) a statement that it is incorporated under the laws
of the United States of America or a state thereof, or (ii) if it is not
so incorporated, two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled to
receive payments under this Agreement without deduction or withholding
of any United States federal income taxes. Each Bank which delivers to
Borrowers and Agent a Form 1001 or 4224 pursuant to the immediately
preceding sentence further undertakes to deliver to Borrowers and Agent
two further copies of Form 1001 or 4224, or successor applicable forms,
or other manner of certification or procedure, as the case may be, at
least thirty (30) days before the date that any such form expires or
becomes obsolete or promptly after the occurrence of any event requiring
a change in the most recent form previously delivered by it to Borrowers
and Agent, and such extensions or renewals thereof as may reasonably be
requested by Borrowers or Agent, certifying in the case of a Form 1001
or 4224 that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes, unless in any such cases an event (including any change in
treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent a Bank from duly completing and
delivering any such form with respect to it and such Bank advises
Borrowers and Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
(c) Mitigation. Each Bank agrees that (i) it will take all
reasonable actions to maintain all exemptions, if
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any, available to it from such Taxes (whether available by treaty,
existing administrative waiver, by virtue of the location of any Bank's
Applicable Lending Office or otherwise), and (ii) otherwise cooperate
with Borrowers to minimize amounts payable by Borrowers under this
Paragraph 2.11. Nothing in this Paragraph 2.11 shall prevent either
Borrower from bringing a cause of action against any Bank or Agent for
its failure to comply with its obligations under this Paragraph 2.11.
Without affecting its rights specified above or under any other
provision of this Agreement, each Bank agrees that if it claims any
additional amounts payable pursuant to this Paragraph 2.11, such Bank
shall use reasonable efforts to select an alternative Applicable Lending
Office which would avoid or materially reduce any such additional
amounts; provided, however, that no Bank shall be obligated to select an
alternative Applicable Lending Office if such Bank determines that (A)
as a result of such selection such Bank would be in violation of any
Governmental Rule by any Governmental Authority, or any request or
directive (whether or not having the force of law) of any Governmental
Authority, or would incur additional costs or expenses, or (B) such
selection would be inadvisable for regulatory reasons or disadvantageous
to the interests of such Bank.
2.12. Funding Loss Indemnification. If either Borrower shall (a) repay
or prepay any LIBOR Loan on any day other than the last day of an Interest
Period therefor (whether an optional prepayment, a mandatory prepayment, a
payment upon acceleration or otherwise), (b) fail to borrow any LIBOR Loan for
which a Notice of Borrowing has been delivered to Agent (whether as a result of
the failure to satisfy any applicable condition or otherwise), or (c) fail to
convert any Loans into LIBOR Loans in accordance with a Notice of Loan
Conversion delivered to Agent (whether as a result of the failure to satisfy
any applicable condition or otherwise), such Borrower shall, upon demand by any
Bank, reimburse such Bank and hold such Bank harmless for all costs and losses
incurred by such Bank as a result of such repayment, prepayment or failure.
Borrowers understand that such costs and losses may include losses incurred by
a Bank as a result of funding and other contracts entered into by such Bank to
fund a LIBOR Loan. Each Bank demanding payment under this Paragraph 2.12 shall
deliver to Borrowers, with a copy to Agent, a certificate setting forth in
reasonable detail (to the extent such information would not violate
confidentiality requirements of the relevant Bank) the calculation of the
amount of costs and losses for which demand is made. Such a certificate so
delivered to Borrowers shall, in the absence of manifest error, be conclusive
and binding on Borrowers as to the amount of such loss for all purposes. Each
Bank and Agent shall use its reasonable efforts to minimize and mitigate all
such costs and losses.
2.13. Administrative Role. The parties hereto agree that if Agent
shall reasonably determine that Borrowers are
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inadequately performing any of the administrative functions under this
Agreement and the other Credit Documents, including delivering to each Bank the
notices, reports, financial statements and other information required to be
delivered pursuant to this Agreement and the other Credit Documents, including
Subparagraph 5.01(c), then Agent shall be entitled to assume such
administrative functions. Such assumption shall include a requirement that
Borrowers deliver to Agent, for distribution to the other parties, the notices,
reports, financial statements and other information required to be delivered by
either Borrower pursuant to this Agreement (with sufficient copies for each
Bank and Agent). The parties hereto agree to enter into such amendments to
this Agreement and the other Credit Documents as shall be necessary to give
effect to the assumption by Agent of such administrative functions.
SECTION III. CONDITIONS PRECEDENT.
3.01. Conditions Precedent to Initial Borrowing or Initial Letter of
Credit. The obligations of the Banks to make the Loans comprising the initial
Borrowing or for Issuing Bank to issue the initial Letter of Credit, are
subject to receipt by each Bank, on or prior to the Closing Date, of each item
listed in Schedule 3.01, each in form and substance satisfactory to such Bank.
3.02. Conditions Precedent to Each Borrowing. The obligations of the
Banks to make each Loan, including the Loans comprising the initial Borrowing,
are subject to receipt by Agent of a Notice of Borrowing requesting such Loans
in accordance Subparagraph 2.01(b).
3.03. Conditions Precedent to Letter of Credit Issuance. The
obligations of Issuing Bank to issue a Letter of Credit, is subject to receipt
by Agent and Issuing Bank of the LC Application requesting such Letter of
Credit in accordance with Subparagraph 2.02(b).
3.04. Conditions Precedent to Each Credit Event. The occurrence of
each Credit Event, including the initial Borrowing and the initial Letter of
Credit issuance, is subject to the further conditions that on the date such
Credit Event is to occur and after giving effect to such Credit Event, the
following shall be true and correct:
(a) The representations and warranties set forth in Paragraph
4.01 are true and correct in all respects as if made on such date,
except to the extent any such representation expressly relates solely to
a particular date occurring prior to such date;
(b) No Default or Event of Default has occurred and is
continuing or will result from such Credit Event; and
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(c) Each of the Credit Documents remains in full force and
effect.
The submission by either Borrower to Agent of each Notice of Borrowing, each
Notice of Conversion for a conversion of Base Rate Loans to LIBOR Loans, each
Notice of Interest Period Selection, each LC Application and each Revolver
Extension Request, shall be deemed to be a representation and warranty by such
Borrower as of the date thereon as to the above.
3.05. Covenant to Deliver. Each Borrower agrees (not as a condition
but as a covenant) to deliver to each Bank each item required to be delivered
to the Banks as a condition to the occurrence of any Credit Event if such
Credit Event occurs. Each Borrower expressly agrees that the occurrence of any
such Credit Event prior to the receipt by each Bank of any such item shall not
constitute a waiver by Agent or any Bank of such Borrower's obligation to
deliver such item.
SECTION IV. REPRESENTATIONS AND WARRANTIES.
4.01. Borrowers' Representations and Warranties. In order to induce
Agent and the Banks to enter into this Agreement, each Borrower hereby
represents and warrants to Agent and the Banks as follows:
(a) Organization of Borrowers. Each Borrower is a corporation
duly organized and validly existing under the laws of Delaware and has
the power and authority to own, lease and carry on its business as now
conducted and each is properly licensed and qualified and in good
standing in, and, where necessary to maintain its respective rights and
privileges, has complied with the fictitious name statute of, each of
the jurisdictions in which the character of the properties owned or held
under lease by it or the nature of business transacted by it makes such
qualification necessary, except where the failure to so qualify, be in
good standing or comply could not reasonably be expected to have a
Material Adverse Effect.
(b) Organization, Standing and Qualification of Subsidiaries.
Each Material Subsidiary and, to the knowledge of each Borrower, each
other Subsidiary, is a corporation duly organized and validly existing
under the laws of its respective state of incorporation and has the
power and authority to own, lease and operate its properties and carry
on its business as now conducted and each is properly licensed and
qualified and in good standing in, and, where necessary to maintain its
respective rights and privileges, has complied with the fictitious name
statute of, each of the jurisdictions in which the character of the
properties owned or held under lease by it or the nature of business
transacted by it makes such qualification
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necessary, except where the failure to so qualify, be in good standing
or comply could not reasonably be expected to have a Material Adverse
Effect. Set forth in Annex 4.01(b) (as supplemented by written notices
delivered to the Banks pursuant to clause (xi) of Subparagraph 5.01(c)
or otherwise) is a complete and accurate list of the Subsidiaries of
Borrowers, showing as of the date hereof for each such Subsidiary, the
jurisdiction of its incorporation, the number of shares of each class of
common and preferred stock authorized, the number of shares of each
class of common and preferred stock outstanding, the number and
percentage of the outstanding shares of each such class owned (directly
or indirectly) by either Borrower or one or more of the Subsidiaries and
whether such Subsidiary is a Material Subsidiary.
(c) Authorization of Agreement. The execution, delivery and
performance of this Agreement and each of the other Credit Documents are
within each Borrower's powers, have been duly authorized, are not in
conflict with the terms of any Contractual Obligation of either Borrower
or any Subsidiary in such a manner as could reasonably be expected to
have a Material Adverse Effect.
(d) Approvals. No approval, consent, exemption or other
action by, or notice to or filing with, any Governmental Authority or
other Person (including, without limitation, the shareholders of any
Person) is necessary in connection with the execution, delivery,
performance or enforcement against each Borrower of this Agreement or
any other Credit Document, except such as have been obtained and are in
full force and effect or where the failure to so do could not reasonably
be expected to have a Material Adverse Effect
(e) Compliance with Laws. There is no Requirement of Law
binding on either Borrower or any Subsidiary, which would be contravened
by the execution, delivery, performance or enforcement against either
Borrower of this Agreement or any other Credit Document in such a manner
as could reasonably be expected to have a Material Adverse Effect.
(f) Enforceability of Agreement and Other Credit Documents.
This Agreement and each other Credit Document to which either Borrower
is a party are (to the extent it is a party thereto) legal, valid and
binding agreements of such Borrower, enforceable against such Person in
accordance with its respective terms, and each other Credit Document
hereafter executed and delivered by either Borrower, when so executed
and delivered, will be similarly legal, valid, binding and enforceable
against such Person, subject, in each case, to general principles of
equity and the effects of bankruptcy and insolvency laws applicable to
creditors generally.
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(g) Title to Property. The real property and all the other
property and assets of each Borrower and the Subsidiaries reflected in
the audited consolidated balance sheet (and related notes) of SVG most
recently delivered to the Banks are free and clear of all Liens or
rights of others, except for Permitted Liens and except as set forth on
Annex 4.01(g). Except as set forth in the immediately preceding
sentence, Borrowers and the Subsidiaries have good and marketable title
to all such real property and good and marketable title to all other
such property and assets (except for any such real property or other
property or assets disposed of in compliance with this Agreement). The
execution, delivery or performance of this Agreement or any other Credit
Document will not result in the creation of any Lien other than in favor
of Agent and the Banks.
(h) Environmental Laws. Except as disclosed in a letter dated
September 20, 1994 from Borrowers to ABN, a copy of which has been
provided to each Bank:
(i) Borrowers and each Subsidiary are in compliance
with all Environmental Laws, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect; and
(ii) There have not been during the period of either
Borrower's or any Subsidiary's ownership and, to each Borrower's
knowledge, information and belief, there have not been at any
other times, any activities on any property owned, leased or
operated by either Borrower or any Subsidiary involving, directly
or indirectly, the use, generation, treatment, storage or
disposal of any Hazardous Substances in violation of
Environmental Laws where such violation, either individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect (A) under, on or in any such real property,
whether contained in soil, tanks, sumps, ponds, lagoons, barrels,
cans or other containments, structures or equipment, (B)
incorporated in the buildings, structures or improvements on such
property, including any building material containing asbestos, or
(C) used in connection with any operations on or in such real
property.
(i) No Litigation. Except as set forth on Annex 4.01(i),
there are no actions, proceedings, claims or disputes pending or, to the
knowledge of either Borrower, threatened against or affecting either
Borrower or any Subsidiary or any of their respective property, the
adverse determination of which could reasonably be expected to have a
Material Adverse Effect.
(j) Events of Default. No Default or Event of Default has
occurred and is continuing.
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(k) Margin Stock. Neither Borrower is engaged principally, or
as one of its principal activities, in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T, U or X of the Federal Reserve Board). No
part of the proceeds of the Loans will be used by, nor will the Letters
of Credit be used by, either Borrower or any Subsidiary to purchase or
carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.
(l) Financial Information.
(i) The most recent financial statements furnished by
Borrowers to Banks pursuant to Paragraph 3.01 or clause (i) or
(ii) of Subparagraph 5.01(c) are complete in all material
respects, and such financial statements have been prepared in
accordance with GAAP and fairly present the consolidated
financial condition and results of operations of SVG as of such
date. Except as disclosed to Banks in writing prior to the
Closing Date, since June 30, 1995, no event, change or condition
has occurred or arisen which could reasonably be expected to have
a Material Adverse Effect.
(ii) Neither Borrower nor any Subsidiary has any
contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material in the
aggregate, except as disclosed in the most recent financial
statements furnished by Borrowers to Banks pursuant to Paragraph
3.01 or clause (i) or (ii) of Subparagraph 5.01(c).
(iii) As of the Closing Date, the fiscal year of each
Borrower is a 52 to 53 week fiscal year ending on the Friday
closest to September 30.
(m) Other Regulations. Neither either Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act
of 1940, as amended. Neither any Borrower nor any Subsidiary is subject
to regulation under the Federal Power Act, the Public Utility Holding
Company Act of 1935 or any state public utilities code.
(n) Banks' and Agent's Disclaimers. Each Borrower
acknowledges that neither Agent nor any Bank has acted as a broker,
adviser or in any other capacity other than as a lender or agent in
connection with the transactions to which this Agreement relates.
(o) Existing Defaults. Neither either Borrower nor any
Subsidiary is in (i) default under any Contractual Obligation, or (ii)
in violation of any Requirement of Law
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to which it or any of its properties is subject, in each case, which has
had or could reasonably be expected to have a Material Adverse Effect.
There are no payment defaults under any of the agreements listed on
Annex 4.01(o) (the "Acquisition Agreements"), except with respect to
reimbursement obligations of one party to another party which do not
exceed, under all of the Acquisition Agreements, an aggregate amount
outstanding at any one time of $1,000,000. These defaults do not, or
with the lapse of time or notice or both will not, give rise to a right
to terminate any Acquisition Agreement. To each Borrower's knowledge,
no other event has occurred which is, or upon the lapse of time or
notice or both would become, a default giving rise to a right to
terminate any Acquisition Agreement.
(p) Taxes. Each Borrower and each Material Subsidiary have
filed all tax returns (federal, state, local and foreign) required to be
filed by it and have paid or caused to be paid all taxes shown thereon
to be due and payable for the periods covered thereby, including
interest and penalties, other than taxes which are being or will be
contested in good faith and by appropriate proceedings with respect to
which adequate reserves have been established in accordance with GAAP
and tax returns for which the failure to file or pay is not material to
either Borrower or such Subsidiary.
(q) ERISA. Each Borrower and each Material Subsidiary are in
compliance in all material respects with all applicable provisions of
ERISA and the regulations and published interpretations thereunder. No
Reportable Event has occurred with respect to any Plan nor are there any
unfunded vested liabilities under any Plan. Each Borrower and the
Subsidiaries have met their minimum funding requirements under ERISA
with respect to each of their Plans and have not incurred any material
liability to the PBGC in connection with any such Plan.
(r) Licenses, Trademarks, etc. Each Borrower and each
Subsidiary have obtained and maintained in full force and effect all
patents, licenses, trademarks, trademark rights, trade names, trade name
rights, copyrights, permits and franchises which, if they had not been
obtained and so maintained, could reasonably be expected to have a
Material Adverse Effect.
(s) Partnerships and Joint Ventures. Except as permitted by
Subparagraph 5.02(m), neither Borrower nor any Subsidiary is a general
partner or a limited partner in any general or limited partnerships or a
joint venturer in any joint ventures.
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(t) Leases. Each Borrower and each Material Subsidiary enjoys
peaceful and undisturbed possession under all material leases to which
it is a party or under which it is operating. All of such leases are
valid and subsisting and no default exists under any of them which could
reasonably be expected to have a Material Adverse Effect.
(u) Insurance. Each material insurance policy maintained by
either Borrower or a Material Subsidiary is validly existing and is in
full force and effect. To each Borrower's knowledge, neither Borrower
nor any Material Subsidiary is in default in any material respect under
the provisions of any insurance policy, and there are no facts which,
with the giving of notice or passage of time (or both), would result in
such a default under any provision of any such insurance policy. Set
forth in Annex 4.01(u) is a complete and accurate list of the insurance
of each Borrower and each Material Subsidiary in effect on the date of
this Agreement covering fire, public liability, property damage and
worker's compensation, showing as of such date, (i) the type of
insurance carried, (ii) the name of the insurance carrier, and (iii) the
amount of each type of insurance carried.
(v) Catastrophic Events. None of the business nor the
properties or operations of either Borrower or any Material Subsidiary
are affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy or other casualty (whether or not covered by
insurance) which could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Annex 4.01(i), there are no disputes
presently subject to arbitration or litigation under any of the
employment contracts or employee welfare or incentive plans to which
either Borrower or any Subsidiary is a party which could reasonably be
expected to have a Material Adverse Effect.
SECTION V. COVENANTS.
5.01. Affirmative Covenants. Until the Termination Date, each Borrower
will comply, and will cause compliance, with the following affirmative
covenants, unless the Required Banks shall otherwise consent in writing:
(a) Accounting Records. Each Borrower shall, and shall cause
each operating Subsidiary to, maintain adequate books and accounts in
accordance with GAAP, and permit any representative of any Bank, at any
reasonable time, to inspect, audit and examine such books and inspect
any of their properties, and, shall furnish any Bank with all
information regarding the business or finances of each Borrower and the
Subsidiaries promptly upon any such Bank's
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request. Except as otherwise specifically provided herein, such
inspections, audits and examinations shall be at the expense of such
Bank or Agent prior to the occurrence of a Default or Event of Default,
and thereafter and during the continuance thereof, at the expense of
Borrowers. Notwithstanding any provision of this Agreement to the
contrary, neither either Borrower nor any Subsidiary shall be required
to disclose, or permit the inspection or examination of any document,
information or matter that (i) constitutes non-financial trade secrets
or non-financial proprietary information, or (ii) in respect of which
disclosure to Agent or any Bank is then prohibited by law or by any
agreement binding upon either Borrower or any Subsidiary that was not
entered into by such Person for the purpose of concealing such
information from such Agent or Bank.
(b) Proceeds. Borrowers will use the Letters of Credit and
the proceeds of the Loans only for the respective purposes set forth in
Subparagraph 2.01(g) and Subparagraph 2.02(g) and will furnish Agent and
the Banks such evidence as Agent or any Bank may reasonably require with
respect to such use.
(c) Financial Statements and Notices. Borrowers will furnish
to each Bank:
(i) Quarterly Financial Statements. As soon as
available, but in any event within forty-five (45) days after the
close of each quarterly accounting period in each fiscal year of
Borrowers: (A) consolidated statements of stockholders' equity,
and income, and consolidated statements of cash flow, of
Borrowers and the Subsidiaries for such quarterly period and for
that portion of Borrowers' fiscal year ending with such quarter;
(B) consolidated balance sheets of Borrowers and the Subsidiaries
as of the end of such quarterly period, all such statements in
(A) and (B) above to be in reasonable detail, subject to year-end
audit adjustments and certified by each Borrowers' chief
financial officer, corporate controller or treasurer to have been
prepared in accordance with GAAP; and (C) such other financial
information relating to Borrowers and their Subsidiaries as
specified in Annex 5.01(c) as to each fiscal quarter, and in
addition, with respect to the last fiscal quarter in each fiscal
year, as to the fiscal year then ended.
(ii) Annual Financial Statements. As soon as available,
but in any event within one hundred and five (105) days after the
close of each fiscal year of Borrowers, a copy of the annual
audit report for such year for Borrowers and the Subsidiaries,
including therein: (A) consolidated statements of stockholders'
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equity, cash flow and income of Borrowers and the Subsidiaries
for such fiscal year; and (B) consolidated balance sheets of
Borrowers and the Subsidiaries as of the end of such fiscal year.
The consolidated income statements and balance sheets to be
audited by Deloitte & Touche, or another independent certified
public accountant acceptable to the Required Banks, and certified
by such accountants to have been prepared in accordance with
GAAP, whose report in connection therewith shall not have been a
qualified report, or contain a disclaimer because of a restricted
or a limited examination by such accountants of any material
portion of Borrowers' and the Subsidiaries' records and which
report is otherwise in form and substance reasonably satisfactory
to the Required Banks. Such financial statements shall be
accompanied by a certificate executed by such accountants in the
form of Exhibit E. The Borrowers and Banks acknowledge that the
Banks will rely on the accuracy of such financial statements.
(iii) General Compliance Certification.
Contemporaneously with each quarterly and year-end financial
report required by the foregoing clauses (i) and (ii), a
certificate of each Borrower, executed by such Borrower's chief
financial officer or corporate controller, stating that he or she
has individually reviewed the provisions of this Agreement and
that a review of the activities of Borrowers and the Subsidiaries
during such quarterly or year period, as the case may be, has
been made by him or her or under his or her supervision, with a
view to determining whether such Borrower has fulfilled all its
obligations under this Agreement, and that such Borrower has
observed and performed each undertaking contained in this
Agreement and is not in default in the observance or performance
of any of the provisions hereof or, if such Borrower shall be so
in default, specifying all such defaults and events of which he
or she may have knowledge.
(iv) Covenant Compliance Certificate. Contemporaneously
with each quarterly financial report required by the foregoing
clause (i), a covenant compliance certificate in the form of
Exhibit F (a "Covenant Compliance Certificate"), which calculates
Borrowers' compliance with the financial covenants contained in
this Agreement.
(v) Projections. As soon as available but in any event
within one hundred twenty (120) days after the close of each
fiscal year, a three (3) year projection and estimate (to the
best of each Borrower's ability at the time made) of its
financial position and the
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results of its operations for, and as of the end of, such three
(3) year period. Such projections and estimates shall be in a
form reasonably satisfactory to the Required Banks. Such
projections and estimates shall not, to the knowledge of each
Borrower at the time they are made, be based upon or include any
misleading information or fail to take into account material
information regarding the matters covered therein.
(vi) Public Documents. Promptly after they are sent,
made available or filed, copies of all reports, proxy statements
and financial statements that either Borrower sends or makes
available to its stockholders and, within five (5) Business Days
of filing, all registration statements and reports that either
Borrower files with the Securities and Exchange Commission,
including 10Q, 10K and 8K reports, or with any other Governmental
Authority where such registration statements and reports may be
filed.
(vii) Default, Etc. As soon as possible, and in any
event within five (5) Business Days after either Borrower has
knowledge of (A) the occurrence of a Default or an Event of
Default, or (B) any default or event of default as defined in any
other evidence of Debt of Borrower or under any other agreement,
indenture or other instrument under which such Debt has been
issued which default or event of default entitles, or would with
the passage of time or the giving of notice or both entitle, the
holder thereof to accelerate such Debt, whether or not such Debt
is accelerated, but only if such Debt exceeds Two Million Dollars
($2,000,000), the statement of the chief financial officer or
treasurer of such Borrower setting forth details of such default
or event of default and the action which such Borrower proposes
to take with respect thereto.
(viii) Material Adverse Effect, Etc. Prompt written
notice of any condition or event which has resulted or could
reasonably be expected to result in (A) a Material Adverse
Effect, or (B) a Default, or (C) a material breach by Borrower or
any Subsidiary of, or noncompliance with, any term, condition or
covenant of any contract to which either Borrower or any
Subsidiary is a party or by which it or its property may be bound
which contract is material to either Borrower or any Subsidiary.
(ix) Litigation, Etc. Prompt written notice of any
actual or threatened claims, litigation, suits, proceedings or
disputes (whether or not purportedly on behalf of either
Borrower) against or affecting either
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Borrower or any Subsidiary which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect
(including claims, litigation, suits, proceedings or disputes
involving monetary amounts in excess of Two Million Dollars
($2,000,000) not covered by insurance or self-insurance), or any
material labor controversy resulting in or threatening to result
in a strike against either Borrower or any Subsidiary, or any
proposal by any Governmental Authority to acquire any of the
material assets or business of either Borrower or any Subsidiary,
if such strike or acquisition could reasonably be expected to
have a Material Adverse Effect.
(x) ERISA. As soon as possible, and in any event
within thirty (30) days after either Borrower or any Subsidiary
knows or has reason to know that any Reportable Event has
occurred with respect to any Plan, a statement from the chief
financial officer or treasurer of either Borrower setting forth
details as to such Reportable Event and the action which such
Borrower or the affected Subsidiary proposes to take with respect
thereto, together with a copy of the notice of such Reportable
Event given to the PBGC if a copy of such notice is available to
either Borrower or the affected Subsidiary.
(xi) Acquisition of Subsidiary/Division. As soon as
possible but in any event within five (5) Business Days after the
acquisition or formation of a new Subsidiary, division or joint
venture by either Borrower or any Subsidiary, a statement from
the chief financial officer or treasurer of either Borrower
setting forth details as to such acquisition or formation.
(xii) Acquisition Agreements. As soon as available, any
notices of default received or given in connection with the
Acquisition Agreements.
(xiii) Environmental Law. Within five (5) Business Days
after receipt or completion of any report, citation, order,
manifest or other written or oral communication from any
Governmental Authority empowered to enforce, investigate or
oversee compliance with any Environmental Law, concerning any
real property owned, leased or operated by either Borrower or any
Subsidiary, any condition thereon, or the activities of any
Person on or near any such property, notice of the contents of
such communication, and a copy of all relevant documents received
by, or reasonably obtainable by, either Borrower. Immediately
upon the discovery of a material quantity of any Hazardous
Substance on or in any property owned, leased or
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operated by either Borrower or any Subsidiary in violation of
Environmental Laws, including substances that have leached onto
such property from neighboring property or substances that were
deposited prior to such Person's use or ownership of such
property, notice of such event and any actions which either
Borrower proposes to take to remediate such contamination.
(xiv) Other Information. Subject to the last sentence of
Subparagraph 5.01(a), such other information concerning either
Borrower or any Subsidiary as any Bank shall from time to time
reasonably request.
(d) Corporate Existence. Each Borrower shall, and shall cause
each Subsidiary to, preserve and maintain its corporate existence and
all of its rights, privileges and franchises; provided, however, either
Borrower or any Subsidiary may dissolve or terminate a non-Material
Subsidiary if either Borrower or any other wholly-owned Subsidiary
succeeds to the assets and liabilities of such dissolved or terminated
Subsidiary and immediately prior to, and after giving effect to, such
dissolution and succession, no Default or Event of Default shall have
occurred and be continuing and such dissolution and succession could not
reasonably be expected to result in a Material Adverse Effect.
(e) Compliance with Law.
(i) Each Borrower shall, and shall cause each
Subsidiary to, comply with the requirements of all applicable
Requirements of Law (including Environmental Laws and ERISA with
respect to each of its Plans), the noncompliance with which could
reasonably be expected to cause a Material Adverse Effect;
provided, however, each Borrower and each Subsidiary may fail to
comply with a Requirement of Law if (A) such is being contested
by such Borrower or Subsidiary in good faith, by appropriate
proceedings reasonably satisfactory to the Banks, (B) adequate
reserves have been established in accordance with GAAP with
respect to such matter, and (C) it is reasonably expected that,
if compliance with such Requirement of Law is found to be valid,
the failure to comply with such requirement while so contesting
it could not have a Material Adverse Effect.
(ii) Upon discovery of any Hazardous Substance on or in
any property owned, leased or operated by either Borrower or any
Subsidiary in violation of any Environmental Law Borrowers shall,
or shall cause such Subsidiary to, immediately take all actions
necessary to comply with laws requiring notification of
Governmental Authorities concerning such Hazardous
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Substance and to remedy or correct the violation (and Borrowers
shall immediately provide Banks with copies of any such notices),
and take such other actions as are prudent in Borrower's or such
Subsidiary's reasonable business judgment under the
circumstances, which may include: (A) handling and disposing of
such substances in accordance with applicable Environmental Laws,
and (B) taking any and all actions, including institution of
legal action against third parties, necessary to obtain
reimbursement or compensation from such Persons as were
responsible for the presence of any Hazardous Substance on such
property or otherwise obligated by law to bear the cost of such
remedy.
(f) Insurance. Each Borrower shall, and shall cause each
Subsidiary to, (i) maintain and keep in force insurance of the types and
in amounts customarily carried from time to time during the term of this
Agreement in its lines of business, including fire, public liability,
property damage and worker's compensation, such insurance to be carried
with companies and in amounts reasonably satisfactory to the Required
Banks, which may include self-insurance under a self-insurance program
reasonably acceptable to the Required Banks and (ii) deliver to the
Banks from time to time, as any Bank may request, schedules setting
forth all insurance then in effect.
(g) Facilities. Each Borrower shall, and shall cause each
Material Subsidiary to, keep those properties reasonably necessary to
the business of such Person in good repair and condition, and from time
to time make or cause to be made necessary repairs, renewals and
replacements thereto so that such Person's property shall be fully and
efficiently preserved and maintained.
(h) Payment of Obligations. Each Borrower shall, and shall
cause each Material Subsidiary to, pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may
be, all Debts and other obligations and liabilities of whatever nature
(including taxes) which, if unpaid, are reasonably likely to have a
Material Adverse Effect, except such Debts and other obligations (other
than the Obligations) as may in good faith be disputed, provided
adequate reserves are maintained in accordance with GAAP.
(i) New Material Subsidiaries. Within fifteen (15) Business
Days after either Borrower acquires a new Subsidiary which is a Material
Subsidiary or any Subsidiary of either Borrower becomes a Material
Subsidiary, Borrowers shall deliver to Agent a written notice of such
event.
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(j) Quick Ratio. Borrowers will maintain, on the last day of
each fiscal quarter of Borrowers, the ratio of Quick Assets to Current
Liabilities of not less than 1.00 to 1.00.
(k) Interest Coverage Ratio. Borrowers will maintain an
Interest Coverage Ratio for each quarter of not less than 3.00 to 1.00.
(l) Ratio of Total Liabilities to Tangible Net Worth.
Borrowers will maintain, on the last day of each fiscal quarter of
Borrowers, the ratio of Total Liabilities of Borrowers and the
Subsidiaries to Tangible Net Worth, each as of such date, at not more
than 1.00 to 1.00.
(m) Tangible Net Worth. Borrowers will maintain, on the last
day of each fiscal quarter of Borrowers, Tangible Net Worth in an amount
of not less than the sum of (i) $315,000,000, plus (ii) eighty percent
(80%) of the cumulative Net Incomes (if positive) for each fiscal
quarter from and including the fiscal quarter ending June 30, 1995, plus
(iii) seventy-five percent (75%) of the Net Equity Proceeds from the
issuance of capital stock by SVG after the date hereof.
(n) Profitability. Borrowers will not permit (i) Net Income
to be negative in more than two fiscal quarters in any consecutive
four-quarter period; (ii) any negative Net Income in any fiscal quarter
to be more than a $10,000,000 loss; or (iii) Net Income for any
consecutive four-fiscal quarter period to be negative.
5.02. Negative Covenants. Until the Termination Date, each Borrower
will comply, and will cause compliance, with the following negative covenants,
unless the Required Banks shall otherwise consent in writing:
(a) Mergers. Neither Borrower shall, nor shall either of them
permit any Material Subsidiary to, change the nature of its business,
sell (whether in any one transaction or a series of transactions) all or
substantially all of its assets, enter into any merger, consolidation,
reorganization or recapitalization, or reclassify its capital stock;
provided, however:
(i) Any Material Subsidiary may be merged or
consolidated with a wholly-owned Subsidiary or may be merged into
either Borrower (if such Borrower is the surviving corporation)
so long as immediately prior to, and after giving effect to, such
merger or consolidation, no Default or Event of Default shall
have occurred and be continuing and such merger or consolidation
could not reasonably be expected to result in a Material Adverse
Effect; and
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(ii) Subject to the other provisions of this Agreement,
each Borrower and any Material Subsidiary may sell, lease,
transfer or otherwise dispose of its assets ("Transfer") to
either Borrower or any wholly-owned Material Subsidiary, if (A)
immediately prior to, and after giving effect to, such Transfer
no Default or Event of Default shall have occurred and be
continuing, and (B) such Transfer could not reasonably be
expected to result in a Material Adverse Effect.
(b) Sale of Assets. Neither Borrower shall, nor shall either
of them permit any Material Subsidiary to, Transfer any of its assets
other than:
(i) Transfers of assets in the ordinary course of its
business as currently conducted (but excluding Transfers to any
Person other than either Borrower or a wholly-owned Subsidiary
thereof of any Debt or other obligations owed by either Borrower
or any Subsidiary);
(ii) Transfers of worn-out or obsolete assets;
(iii) Transfers permitted by clause (ii) of Subparagraph
5.02(a);
(iv) Transfers in connection with the purchase and sale
of investments permitted by Subparagraph 5.02(h);
(v) Sales of the capital stock of any non-Material
Subsidiary to either Borrower or any wholly-owned Subsidiary;
(vi) Transfers (including, without limitation, Transfers
to ABN in its individual capacity) for cash of Accounts if such
Transfers are on a non-recourse basis and at a discount not
exceeding fifteen percent (15%) of the face amount of such
Account; provided, however, that the aggregate amount of Accounts
which can be so transferred in any fiscal quarter of Borrowers
shall not exceed the lesser of Twenty-Five Million Dollars
($25,000,000) and twenty percent (20%) of the gross amount of all
Accounts created during the immediately preceding fiscal quarter;
(vii) Transfers of real property not required for the
conduct of either Borrower's or any Subsidiary's business on fair
market terms and conditions;
(viii) Licensing of patents, copyrights, trademarks, trade
names, trade secrets and similar proprietary information on
commercially reasonable terms and conditions; and
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(ix) Other Transfers of assets, provided that the
aggregate fair market value of such assets so transferred
pursuant to this clause (ix) in any consecutive four fiscal
quarter period does not exceed five percent (5%) of the Tangible
Net Worth of Borrowers and their Subsidiaries on the last day of
the third quarter of such period.
(c) Limitation on Business; Fiscal Changes Neither Borrower
shall, nor shall either of them permit any Subsidiary to, engage in any
business other than the designing, manufacturing, assembling, marketing,
licensing and distributing, of semiconductor, optical or related
equipment or devices or components thereof, and engaging in related
activities. Neither Borrower shall, nor shall either of them permit any
Subsidiary to change (i) its fiscal year; or (ii) its accounting
practices except as required by GAAP and in accordance with Paragraph
1.02 hereof.
(d) Liens. Neither Borrower shall, nor shall either of them
permit any Material Subsidiary to, mortgage, pledge, grant or permit to
exist a Lien upon, any of its assets of any kind now owned or hereafter
acquired, except for the following permitted liens ("Permitted Liens"):
(i) Existing Liens reflected on the consolidated
balance sheet (and notes thereto) of SVG dated June 30, 1995
furnished to the Banks prior to the date hereof;
(ii) Carriers', warehousemen's, mechanics', landlords',
materialmen's, suppliers', tax, assessment, governmental and
other like Liens and charges arising in the ordinary course of
business securing obligations that are not incurred in connection
with the obtaining of any advance or credit and which are not
overdue, or are being contested in good faith by appropriate
proceedings; provided, however, that reasonable provision is made
for the eventual payment thereof if it is found that such is
payable by either Borrower or any Material Subsidiary;
(iii) Liens arising in connection with worker's
compensation, unemployment insurance and progress payments under
government contracts and Liens securing the performance of bids,
tenders, leases, contracts (other than for the repayment of
borrowed money), statutory obligations, surety, customs and
appeal bonds and other obligations of like nature, incurred, in
each case, in the ordinary course of business;
(iv) Purchase money Liens given, simultaneously with or
within one hundred twenty (120) days after the acquisition or
construction of real property or
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tangible personal property (including vendor's rights under
purchase contracts under an agreement whereby title is retained
for the purpose of securing the purchase price thereof and
lessors' liens under Capitalized Lease Obligations) or any Lien
given to a financial institution financing the acquisition or
construction of the real property or tangible personal property,
on real property or tangible personal property hereafter acquired
or constructed and not heretofore owned by Borrowers or any
Subsidiary; provided, however, that in each such case such Lien
(A) does not exceed the amount paid for such acquisition or
construction, and (B) is limited to such acquired or constructed
real or tangible personal property;
(v) Any pre-existing Lien (whether or not assumed) on
any real property or tangible personal property hereafter
acquired by either Borrower or any Subsidiary; provided, however,
that in each such case such Lien is limited to such acquired real
or tangible personal property;
(vi) Judgment Liens arising from judgments which do not
create Events of Default under Subparagraph 6.01(g) or in
existence less than forty (40) days after the entry thereof or
with respect to which execution has been stayed or the payment of
which is covered in full by insurance;
(vii) Zoning restrictions, easements, licenses,
encumbrances, reservations, provisions, covenants, conditions,
waivers, restrictions on the use of property or minor
irregularities of title (and with respect to leasehold interests,
mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or
under a landlord or owner of the leased property, with or without
consent of the lessee) as normally exist with respect to similar
properties which do not in the aggregate materially impair the
use thereof in the operation of either Borrower's or any
Subsidiary's business;
(viii) The rights of IBM in the capital stock of SVGL
pursuant to the Stockholders Agreement;
(ix) Liens of brokers under brokerage agreements entered
into in the ordinary course of business as presently conducted
and of a type substantially similar to the brokerage agreements
to which SVG is currently a party;
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(x) Extensions, renewals and replacements of the Liens
referred to in clause (i), (iv) or (v) above; provided, any such
extension, renewal or replacement Liens shall be limited to the
property or assets covered by the Lien extended, renewed or
replaced and that the obligations secured by any such extension,
renewal or replacement Lien shall be in an amount not greater
than the amount of the obligations secured by the Lien extended,
renewed or replaced;
(xi) Liens in favor of Agent or any Bank pursuant to the
Credit Documents;
(xii) The Liens set forth in Annex 4.01(g);
(xiii) Liens in favor of a Bank securing Debt to such Bank
in an aggregate amount not to exceed $1,000,000 for any Bank;
(xiv) Liens consisting of any right of setoff against or
banker's lien on any bank deposit accounts maintained in the
ordinary course of business; and
(xv) Other Liens, provided that the amount of the
liabilities secured by such other Liens does not exceed at any
time five percent (5%) of the Tangible Net Worth of Borrowers and
their Subsidiaries on the last day of the immediately preceding
fiscal quarter.
(e) Guarantees. Neither Borrower shall, nor shall either of
them permit any Material Subsidiary to, become liable, directly or
indirectly, as guarantor or otherwise, for any obligation of any other
Person, including either Borrower or any Subsidiary, except for:
(i) Guarantees of the Debt of either Borrower or any
Material Subsidiary which Debt is permitted by Subparagraph
5.02(f) (other than clause (viii) thereof);
(ii) The existing guarantees listed in Annex 5.02(e)
issued by either Borrower or any Material Subsidiary;
(iii) Endorsements of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business;
(iv) Guarantees of the Debt of employees of either
Borrower or any Subsidiary, which guarantees shall not guarantee
in excess of Five Million Dollars ($5,000,000) at any time
outstanding and shall be subject to the limitations in
Subparagraph 5.02(h)(v); and
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(v) Guarantees of the Debt of any non-Material
Subsidiary up to an aggregate amount at any time outstanding not
to exceed Five Million Dollars ($5,000,000).
(f) Debt. Neither Borrower shall, nor shall either of them
permit any Material Subsidiary to, incur, create, assume, or permit to
exist any Debt except:
(i) The Obligations;
(ii) Existing Debt (other than Debt arising out of the
PE Obligation to Purchase and, after the Closing Date, Debt under
the Existing Credit Agreement) as described on the consolidated
balance sheet of Borrowers (and notes thereto) dated June 30,
1995 furnished to the Banks prior to the date hereof;
(iii) Unsecured trade debt incurred, and cash advances
received from customers, in each case in the ordinary course of
business;
(iv) Unsecured intercompany Debt incurred by either
Borrower or any Material Subsidiary to either Borrower or any
wholly-owned Subsidiary, except that neither Borrower shall make
any payments on account of any such Debt if, at the time such
payment is to be made, any Default or Event of Default has
occurred and is continuing, or if, after giving effect to such
payment, any Default or Event of Default would result;
(v) Debt which is subordinated to the Obligations on
terms acceptable to the Required Banks in their sole discretion;
(vi) Unsecured obligations to banks and other financial
institutions (A) to reimburse them for liabilities under letters
of credit, bankers assurances, bank guarantees, and payment and
performance bonds, issued by any such institution to support
either Borrower's or any Subsidiary's performance obligations to
customers which have advanced money to such Person in the
ordinary course of business and/or payment obligations to
suppliers of goods or services, or (B) under foreign exchange or
interest rate hedge arrangements, provided, that the aggregate
amount of Debt which may be outstanding at any time under this
clause (vi) shall not exceed Ten Million Dollars ($10,000,000);
(vii) Debt described in Subparagraph 5.02(d)(xiii) and
Subparagraph 5.02(e);
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(viii) Debt arising out of the PE Obligation to Purchase
so long as the terms of such Debt are at least as favorable to
SVGL as the terms provided in the PE Lease, including the
requirement that the "Senior Loan" (as defined in the PE Lease)
be amortized for at least twenty (20) years and that the
principal on the "Junior Loan" (as defined in the PE Lease) be
payable no earlier than the fifth anniversary thereof;
(ix) Debt with respect to Capitalized Lease Obligations
and Debt described in Subparagraph 5.02(d)(iv) of Borrowers and
any Material Subsidiary in an aggregate amount not to exceed
Sixty-Five Million Dollars ($65,000,000) at any time;
(x) Debt (which is not described in clauses (i) through
(ix) above) of either Borrower or any Material Subsidiary,
provided that the aggregate amount of such Debt does not exceed
at any time ten percent (10%) of the Tangible Net Worth of
Borrowers and their Subsidiaries on the last day of the
immediately preceding fiscal quarter; and
(xi) Extensions, renewals and replacements of any Debt
described in the foregoing clauses (ii), (viii), (ix) or (x);
provided, however, (A) any such extension, renewal or replacement
obligation shall be on terms at least as favorable to the obligor
thereon as the obligation being extended, renewed or replaced,
and (B) the amount so extended, renewed or replaced (1) shall be
in an amount not greater than the amount of the obligation
extended, renewed or replaced, and (2) shall not be assumed or
guaranteed by any Person not currently liable for such
obligation.
(g) Dividends, Redemptions, Etc. Neither Borrower shall,
directly or indirectly, make or declare any dividend in cash, securities
(other than SVG's capital stock) or any other form of property on, or
other payment or distribution n account of, any shares of any class of
such Borrower's capital stock, provided, that SVG may pay dividends
using shares of its capital stock; nor may either Borrower or any
Subsidiary redeem, retire, repurchase or otherwise acquire any of its
capital stock, except in exchange for other capital stock of such
Borrower or Subsidiary; except that:
(i) Borrower or any Subsidiary may repurchase or redeem
stock under any employee stock option plan or any employee
benefit plan so long as the aggregate amount expended in
connection with any such repurchase or redemption (including
amounts paid into any sinking fund) shall not exceed One Million
Dollars ($1,000,000) in any fiscal year of Borrowers, exclusive
of any
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amounts consisting of the cancellation of employee notes;
(ii) SVG may pay dividends in cash with respect to its
capital stock up to an aggregate amount of Five Million Dollars
($5,000,000) in each fiscal year of SVG so long as (A)
immediately prior to and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing, and
(B) such payment could not reasonably be expected to have a
Material Adverse Effect. SVG shall not declare any dividend
payable more than ninety (90) days after the date of declaration
thereof. Any dividend shall be deemed paid at the date of
declaration thereof and the subsequent payment thereof shall not
be treated as a separate payment; and
(iii) SVG or SVGL may purchase, redeem or convert to SVG
common or preferred stock any "Voting Securities" (as defined in
the Stockholders Agreement) of SVGL owned by IBM or its
"Affiliated Transferees" (as defined in the Stockholders
Agreement), but only if:
(A) Immediately prior to, and after giving
effect to such purchase, redemption or conversion, no
Default or Event of Default shall have occurred and be
continuing;
(B) Such purchase, redemption or conversion
could not reasonably be expected to result in a Material
Adverse Effect; and
(C) The terms of such purchase, redemption or
conversion are approved by Required Banks; provided,
however that such approval of Required Banks shall not be
required if (1) SVG or SVGL is required to make such
purchase, redemption or conversion by Section 9.1 of the
Stockholders Agreement and such purchase, redemption or
conversion is made in accordance with Section 9.1 of the
Stockholders Agreement or (2) the aggregate consideration
paid by Borrowers and their Subsidiaries in connection
with all such purchases, redemptions and conversions does
not exceed $6,000,000.
(h) Investments. Neither Borrower shall, nor shall either
Borrower permit any Material Subsidiary to, make or permit to remain
outstanding any advances or loans or extensions of credit to, purchase
or own any interest in, purchase or own any stock, bonds, notes,
debentures or other securities of, make any contribution of capital to,
or otherwise invest in (collectively, "Investments"), any
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Person, or acquire by purchase of stock or by purchase of assets all or
any substantial division or portion of the assets and business of any
Person, except:
(i) Loans to either Borrower or any Material
Subsidiary;
(ii) Investments in Cash Equivalents provided that in no
event may any Investments in Cash Equivalents which are "margin
stock" within the meaning of Regulation U of the Federal Reserve
Board or any regulations, interpretations or rulings thereunder,
when aggregated with any margin stock in which the Borrowers
invest under (xi) hereof, exceed in the aggregate 25% of all such
Investments outstanding at any time;
(iii) Loans, advances or other extensions of credit to
suppliers in the ordinary course of either Borrower's or such
Subsidiary's business as presently conducted which do not exceed
in the aggregate Seven Million Five Hundred Thousand Dollars
($7,500,000) at any time outstanding;
(iv) Endorsements of negotiable instruments in the
ordinary course of business;
(v) Loans to employees and officers of either Borrower
or any Subsidiary which loans, together with any amounts covered
by any guaranty issued pursuant to Subparagraph 5.02(e)(iv),
shall not exceed Five Million Dollars ($5,000,000) at any time
outstanding;
(vi) Accounts, including any liquidated amounts owed by
any customer arising out of the settlement of any delinquent
obligation or other dispute (including the settlement of such
obligation in the context of a bankruptcy of such a customer),
arising in the ordinary course of business as presently conducted
from the sale of goods or services;
(vii) Investments consisting of capital contributions (x)
in either Borrower without limit or (y) in new or existing
wholly-owned Subsidiaries in the ordinary course of business,
provided that the aggregate amount of such Investments in new or
existing wholly-owned Subsidiaries does not exceed at any time
ten percent (10%) of the Tangible Net Worth of Borrowers and
their Subsidiaries on the last day of the immediately preceding
fiscal quarter (exclusive of such Investments to the extent they
have been repaid);
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(viii) Loans to non-Material Subsidiaries which loans
shall not exceed in the aggregate Twenty Million Dollars
($20,000,000) at any time outstanding;
(ix) Purchase money loans to the purchasers of assets
Transferred pursuant to Subparagraph 5.02(b), provided that the
aggregate principal amount of such loans outstanding at any time
does not exceed Fifteen Million Dollars ($15,000,000);
(x) Non-speculative Investments in interest rate and
foreign currency hedge arrangements, including interest rate caps
and collars, to cover either Borrower's or any Material
Subsidiary's interest rate or foreign currency exposure, if such
exposure was incurred in the ordinary course of either Borrower's
or such Subsidiary's business as presently conducted; and
(xi) Investments in general or limited partnerships,
limited liability companies, joint ventures or corporations
(other than "margin stock" within the meaning of Regulation U of
the Federal Reserve Board or any regulations, interpretations or
rulings thereunder to the extent such margin stock, when
aggregated with any margin stock in which the Borrowers invest
under (ii) hereof, exceed in the aggregate 25% of all such
Investments outstanding at any time), whether such Investments
constitute minority interests, controlling interests or
otherwise, provided that (A) the aggregate consideration paid by
the Borrowers and their Subsidiaries for all such Investments
after the date of this Agreement, including consideration
consisting of the issuance or transfer of SVG capital stock, does
not exceed $100,000,000; (B) the aggregate consideration paid by
the Borrowers and their Subsidiaries for all such Investments
after the date of this Agreement, excluding consideration
consisting of the issuance or transfer of SVG capital stock, does
not exceed $65,000,000; (C) both immediately before and after
giving effect to each such Investment, no Default or Event of
Default shall have occurred and be continuing, and (D) no such
Investment could reasonably be expected to have a Material
Adverse Effect.
(i) Prepayment of Indebtedness. Neither Borrower nor any of
their Material Subsidiaries will prepay any Debt (other than the Loans),
either directly or indirectly through redemption, purchase or otherwise
if, immediately prior to or as a result of, such prepayment a Default or
Event of Default has occurred and is continuing or such prepayment could
reasonably be expected to result in a Material Adverse Effect; provided,
however, the foregoing
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restriction shall not apply to revolving or similar loans which have no
periodic fixed payment dates.
(j) Transactions With Affiliates. Neither Borrower shall, nor
shall either of them permit any Material Subsidiary to, directly or
indirectly, enter into any transaction with or for the benefit of, any
Affiliate of either Borrower or such Subsidiary on terms which, when
considered with any related transaction or series of transactions of
which such transaction is a part, are more favorable to the Affiliate
than would have been obtainable in arms' length dealings.
(k) Misrepresentations. Neither Borrower shall, nor shall
either of them permit any Subsidiary to, furnish any Agent or Bank any
certificate or other document that contains any untrue statement of
material fact or that omits to state a material fact necessary to make
it not misleading in light of the circumstances under which it was
furnished.
(l) Margin Stock. Neither Borrower shall, nor shall either of
them permit any Subsidiary to, directly or indirectly apply any part of
the proceeds of the Loans to, or use any Letter of Credit in connection
with, the purchasing or carrying of any margin stock within the meaning
of Regulation G,T, U or X of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder.
(m) Subsidiary Ownership. Except as specifically permitted by
Subparagraph 5.02(a), (b), (g) or (h), (i) neither Borrower shall,
unless required with respect to directors' qualifying shares, directly
or indirectly sell, assign, pledge or otherwise transfer (except to SVG
or a wholly-owned Subsidiary) any Debt of, or claim against, a
Subsidiary or any shares of stock or securities of any Subsidiary, and
will not permit a Subsidiary to sell, assign, pledge or otherwise
transfer (except to SVG or a wholly-owned Subsidiary) any Debt of, or
claim against, either Borrower or any other Subsidiary, or any shares of
stock or securities of any Subsidiary, and (ii) neither Borrower shall
permit any Subsidiary to, nor shall SVGL, issue any shares of capital
stock or any warrant, right or option pertaining thereto (except to SVG
or a wholly-owned Subsidiary and except for directors' qualifying
shares); provided, however, that SVGL may issue shares of capital stock
to meet obligations under the SVG Lithography Systems, Inc. 1990 Stock
Option Plan; and provided, further, that SVGL may issue shares of
capital stock so long as SVG continues to own more than eighty-five
percent (85%) of the capital stock of SVGL.
(n) Acquisition Agreements. Borrowers shall not amend,
modify, or terminate any of the Acquisition
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Agreements, except that Borrowers may amend, modify or terminate any
term or provision of the Acquisition Agreements, other than Section 9.1
of the Shareholders Agreement, to the extent necessary to allow SVG
and/or SVGL to purchase from IBM for an aggregate purchase price not to
exceed $45,000,000 any and all royalty and related rights previously
granted to IBM pursuant to the Acquisitions Agreements.
SECTION VI. DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or
more of the following shall constitute an "Event of Default" hereunder:
(a) Either Borrower shall fail to pay within five (5) Business
Days of when due any principal, interest, fees or other amount payable
under the terms of this Agreement or any of the other Credit Documents;
or
(b) Either Borrower shall fail to observe or perform any other
covenant, obligation or agreement contained in this Agreement or the
other Credit Documents (including, without limitation, any failure of
either Borrower to cause a Subsidiary to observe or perform any such
covenant, obligation or agreement to the extent required by this
Agreement or the other Credit Documents), and such failure shall
continue until the earlier to occur of (i) ten (10) Business Days after
Agent or any Bank notifies either Borrower of such failure, or (ii)
fifteen (15) Business Days after either Borrower notifies or should have
notified Agent or any Bank of such failure; or
(c) Any representation, warranty, certificate, or other
statement (financial or otherwise) made or furnished by or on behalf of
either Borrower to Agent or any Bank in, or in connection with, this
Agreement or any of the other Credit Documents, or as an inducement to
Agent or any Bank to enter into this Agreement (including, without
limitation, any representation, warranty, certificate or other statement
(financial or otherwise) made or furnished by any Subsidiary of either
Borrower on behalf of either Borrower to Agent or any Bank in, or in
connection with, this Agreement or any of the other Credit Documents),
shall prove to have been false, incorrect, incomplete or misleading in
any material respect when made or deemed made; or
(d) Either Borrower or any Subsidiary shall fail to make any
payment when due under the terms of any bond, debenture, note or other
evidence of indebtedness to be paid by such Borrower or such Subsidiary
(except for this Agreement or the other Credit Documents), and such
failure shall continue beyond any period of grace provided with
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respect thereto, or shall default in the observance or performance of
any other agreement, term or condition contained in any such bond,
debenture, note or other evidence of indebtedness, and the effect of
such failure or default is to cause, or permit the holder or holders
thereof to cause indebtedness in an aggregate amount of $2,000,000 or
more to become due prior to its stated date of maturity; or
(e) Either Borrower or any Subsidiary shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property,
(ii) be unable, or admit in writing its inability, to pay its debts
generally as they mature, (iii) make a general assignment for the
benefit of creditors, (iv) be dissolved or liquidated in full or in part
(other than by a merger or dissolution permitted pursuant to the terms
of this Agreement), (v) become insolvent (as such term may be defined or
interpreted under any applicable statute), (vi) commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consent to
any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding
commenced against it, or (vii) take any corporate action for the purpose
of effecting any of the foregoing; or
(f) Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of either Borrower or any Subsidiary or of all
or a substantial part of the property thereof, or an involuntary case or
other proceeding seeking liquidation, reorganization or other relief
with respect to any such Person or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect
shall be commenced and an order for relief entered or such proceeding
shall not be dismissed or discharged within sixty (60) days of
commencement; or
(g) A final judgment or final judgments for the payment of
money, which individually or in the aggregate exceed $2,000,000, shall
be rendered against either Borrower or any Material Subsidiary and the
same shall remain undischarged for a period of forty (40) days during
which execution shall not be effectively stayed; or any judgment, writ,
assessment, warrant of attachment, execution, levy or similar process
shall be issued or levied against a substantial part of the property of
either Borrower or any Material Subsidiary and such judgment, writ,
assessment, warrant of attachment, execution, levy or similar process
shall not be released, stayed, vacated or otherwise dismissed within
fifteen (15) days after issue or levy; or
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(h) Any Credit Document shall cease to be, or be asserted by
either Borrower, not to be, a legal, valid and binding obligation of
such Person enforceable in accordance with its terms, or any Credit
Document shall cease to be, or be asserted by any other Person, other
than Agent or any Bank, not to be, a legal, valid and binding obligation
of such Person enforceable in accordance with its terms in any material
respect; or
(i) Any Reportable Event occurs which the Required Banks
determine in good faith constitutes grounds for the termination of any
Plan by the PBGC or for the appointment of a trustee to administer any
Plan, or any Plan shall be terminated within the meaning of Title IV of
ERISA, and any of the foregoing could reasonably be expected to have a
Material Adverse Effect; or
(j) Any material adverse change occurs in Borrowers'
consolidated financial condition or results of operations or ability to
perform their obligations hereunder or under any other Credit Document;
or
(k) Either:
(i) Individuals who on the Closing Date, constituted
either SVG's or SVGL's Board of Directors (together with any new
directors of either SVG or SVGL whose election by their
respective Board of Directors or whose nomination for election by
their respective shareholders was approved by a vote of at least
a majority of their respective directors then still in office who
either were directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of either SVG or
SVGL then in office; or
(ii) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934)
shall own or control by proxy or otherwise (other than with
respect to SVG, of SVGL), or (other than with respect to SVGL
pursuant to the Stockholders' Agreement) shall be party to any
agreement or arrangement to obtain any right to acquire, more
than 30% of the Voting Securities of either SVG or SVGL, and,
with respect to SVGL under the Stockholders' Agreement, any such
"person" or "group" other than SVG shall acquire more than 30% of
the Voting Securities of SVGL.
As used in this Subparagraph 6.01(k), the term "Voting Securities" means
all of the capital stock of SVG or SVGL which is entitled to vote for
the election of directors, all warrants, options, and other rights to
immediately acquire
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such voting capital stock, and all other securities of SVG or SVGL which
are immediately convertible at the option of the holder into any class
of such voting capital stock.
6.02. Remedies. Upon the occurrence or existence of any Event of
Default (other than an Event of Default referred to in Subparagraph 6.01(e) or
6.01(f)) and at any time thereafter during the continuance of such Event of
Default, Agent may, with the consent of the Required Banks, or shall, upon
instructions from the Required Banks, by written notice to Borrowers, (a)
terminate the Commitments and the obligations of the Banks to make Loans and of
Issuing Bank to issue Letters of Credit, and/or (b) declare all outstanding
Obligations payable by Borrowers hereunder to be immediately due and payable
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Subparagraph 6.01(e) or 6.01(f), immediately and without
notice, (1) the Commitments and the obligations of the Banks to make Loans and
of Issuing Bank to issue Letters of Credit, shall automatically terminate, and
(2) all outstanding Obligations payable by Borrowers hereunder shall
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Notes to the contrary
notwithstanding. If, upon the acceleration of the Obligations under this
Paragraph 6.02, any amounts remain available for drawing under any Letter of
Credit then outstanding, the Borrower for which each such Letter of Credit was
issued shall pay to Agent for the account of the Banks an amount equal to each
such available amounts. Agent shall hold such amounts in an interest bearing
account and apply such amounts to satisfy such Borrower's Reimbursement
Obligations for drawings under each such Letter of Credit. Borrowers hereby
grant to Agent, as security for the Obligations, a security interest in all
such amounts and accounts. After the satisfaction in full by Borrowers of all
their Obligations and the expiration of all Letters of Credit, Agent shall pay
to each Borrower all amounts, if any, remaining in such account which were
attributable to such Borrower. In addition to the foregoing remedies, upon the
occurrence or existence of any Event of Default and at any time thereafter
until such time, if any, that such Event of Default is waived, Agent may
exercise any right, power or remedy permitted to it by law, either by suit in
equity or by action at law, or both. Immediately after taking any action under
this Paragraph 6.02, Agent shall notify each Bank of such action.
SECTION VII. AGENT AND RELATIONS AMONG BANKS.
7.01. Appointment, Powers and Immunities. Each Bank hereby appoints
and authorizes Agent to act as its agent hereunder and under the other Credit
Documents with such powers
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as are expressly delegated to such Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement or in any other Credit Document, be
a trustee for, or have any fiduciary duty to, any Bank. Notwithstanding
anything to the contrary contained herein, Agent shall not be required to take
any action which is contrary to this Agreement or any other Credit Document or
applicable law. Neither Agent nor any Bank shall be responsible to Agent or
any other Bank for any recitals, statements, representations or warranties made
by either Borrower or any Subsidiary contained in this Agreement or in any
other Credit Document, for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any other Credit Document
or for any failure by either Borrower or any Subsidiary to perform their
respective obligations hereunder or thereunder. Agent may employ agents and
attorneys-in-fact and shall not be responsible to any Bank for the negligence
or misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither Agent nor any of its directors, officers, employees
or agents shall be responsible to any Bank for any action taken or omitted to
be taken by it hereunder or under any other Credit Document or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct. Except as otherwise provided under this Agreement, Agent shall
take such action with respect to the Credit Documents as shall be directed by
the Required Banks.
7.02. Reliance by Agent. Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, telecopy
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent. As to any other matters not expressly provided for
by this Agreement, Agent shall not be required to take any action or exercise
any discretion, but shall be required to act or to refrain from acting upon
instructions of the Required Banks and shall in all cases be fully protected by
the Banks in acting, or in refraining from acting, hereunder or under any other
Credit Document in accordance with the instructions of the Required Banks, and
such instructions of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
7.03. Defaults. Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default unless Agent has received
a notice from a Bank or a Borrower, referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "Notice of
Default". If Agent receives such a notice of the occurrence of a Default or
Event of Default, Agent shall give prompt notice thereof to the Banks. Agent
shall take such action with respect
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to such Default or Event of Default as shall be reasonably directed by the
Required Banks; provided, however, that until Agent shall have received such
directions, 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 interest of the Banks.
7.04. Indemnification. Without limiting the Obligations of Borrowers
hereunder, each Bank agrees to indemnify Agent, ratably in accordance with such
Bank's Proportionate Share, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or the other Operative Documents or the transactions contemplated
hereby or thereby or the enforcement of any of the terms hereof or thereof;
provided, however, that no Bank shall be liable for any of the foregoing to the
extent they arise from Agent's gross negligence or willful misconduct. Agent
shall be fully justified in refusing to take or to continue to take any action
hereunder unless it shall first be indemnified to its satisfaction by the Banks
against any and all liabilities and expenses which may be incurred by it by
reason of taking or continuing to take any such action. The obligations of
each Bank under this Paragraph 7.04 shall survive the payment and performance
of the Obligations, the termination of this Agreement and any Bank ceasing to
be a party to this Agreement.
7.05. Non-Reliance. Each Bank represents that it has, independently
and without reliance on Agent, or any other Bank, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of each Borrower and the Subsidiaries and
decision to enter into this Agreement and agrees that it will, independently
and without reliance upon 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 appraisals and decisions in taking or not taking action under this
Agreement. Neither Agent nor any Bank shall be required to keep informed as to
the performance or observance by Borrowers or any Subsidiary of the obligations
under this Agreement or any other Credit Document or to make inquiry of, or to
inspect the properties or books of, either Borrower or any Subsidiary. Except
for notices, reports and other documents and information expressly required to
be furnished to the Banks by Agent hereunder, neither Agent nor any Bank shall
have any duty or responsibility to provide any Bank or Agent with any credit or
other information concerning Borrowers or any Subsidiary, which may come into
the possession of such Agent or such Bank or any of its or their Affiliates.
7.06. Resignation of Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, Agent may resign at any time by giving
notice thereof to the Banks. Upon
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any such resignation, the Required Banks shall have the right to appoint a
successor Agent to perform the duties of Agent, which Agent shall be reasonably
acceptable to Borrowers. If no successor Agent shall have been appointed by
the Required Banks and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a bank having a combined capital, surplus and retained earnings of not
less than U.S. $500,000,000 and which shall be reasonably acceptable to
Borrowers. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or removal
hereunder, the provisions of this Section VII shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting in such capacity.
7.07. Authorization. Agent is hereby authorized by the Banks to
execute, deliver and perform, each of the Credit Documents to which Agent is,
or is intended to be, a party and each Bank agrees to be bound by all of the
agreements of Agent contained in the Credit Documents.
7.08. Agent in Its Individual Capacity. Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of
business with either Borrower and the Subsidiaries and their Affiliates as
though Agent were not an Agent hereunder. With respect to Loans or Letters of
Credit, if any, made or issued by ABN under this Agreement, ABN shall have the
same rights and powers under this Agreement and the other Credit Documents as
any other Bank and may exercise the same as though it were not Agent, and the
terms "Bank" or "Banks" shall include ABN in its individual capacity as an
issuer of Letters of Credit under Subparagraph 2.02(a) of this Agreement and
otherwise as a maker of Loans under Article II of this Agreement.
SECTION VIII. LIABILITIES OF BORROWERS, GUARANTIES.
8.01. Liabilities of Borrowers. Subject to Paragraph 8.02, the
Obligations of each Borrower under this Agreement and the other Credit
Documents to repay the principal amount of Loans made to such Borrower, to make
Reimbursement Payments on account of drawings made under Letters of Credit
issued for the account of such Borrower, to pay Letter of Credit Fees for
Letters of Credit issued for the account of such Borrower and to pay interest
on the foregoing amounts are the primary obligations of such Borrower. All
other payment Obligations of Borrowers under this Agreement and the other
Credit Documents are joint and several.
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8.02. Joint and Several Liability of Borrowers, Guaranties.
Notwithstanding Paragraph 8.01, each Borrower unconditionally guarantees and
promises to pay and perform as and when due, upon the demand of Agent or any
Bank, any and all of the Obligations for which it is not primarily liable,
including all of the Obligations for which the other Borrower is primarily or
jointly and severally liable (the "Other Obligations"). The liability of each
Borrower under this Paragraph 8.02 is independent of the Other Obligations, and
a separate action or actions may be brought and prosecuted against such
Borrower irrespective of whether action is brought against the other Borrower
or any other guarantor of the Other Obligations or whether the other Borrower
or any other guarantor of the Other Obligations is joined in any such action or
actions.
8.03. Authorized Actions. Each Borrower authorizes Agent and the
Banks, in their discretion, without notice to such Borrower, irrespective of
any change in the financial condition of the other Borrower, such Borrower or
any other guarantor of the Other Obligations since the date hereof, and without
affecting or impairing in any way the liability of such Borrower hereunder,
from time to time to (a) create new Other Obligations and renew, compromise,
extend, accelerate or otherwise change the time for payment or performance of,
or otherwise change the terms of the Other Obligations or any part thereof,
including increase or decrease of the rate of interest thereon; (b) take and
hold security for the payment or performance of the Other Obligations and
exchange, enforce, waive or release any such security; (c) apply such security
and direct the order or manner of sale thereof; (d) purchase such security at
public or private sale; (e) otherwise exercise any right or remedy it may have
against the other Borrower, such Borrower, any other guarantor of the Other
Obligations or any security, including, without limitation, the right to
foreclose upon any such security by judicial or nonjudicial sale; and (f)
settle, compromise with, release or substitute any one or more makers,
endorsers or guarantors of the Other Obligations; provided, however, that
neither Borrower shall be required to provide any security for the Obligations
except to the extent required by other provisions of this Agreement (other than
this Paragraph 8.03)) or the other Credit Documents.
8.04. Waivers. Each Borrower waives (a) any right to require Agent or
any Bank to (i) proceed against the Other Borrower or any other guarantor of
the Other Obligations, (ii) proceed against or exhaust any security received
from the other Borrower or any other guarantor of the Other Obligations, or
(iii) pursue any other remedy in Agent's or any Bank's power whatsoever; (b)
any defense arising by reason of the application by the other Borrower of the
proceeds of any Borrowing; (c) any defense resulting from the absence,
impairment or loss of any right of reimbursement, subrogation, contribution or
other right or remedy of such Borrower against the other Borrower, any other
guarantor of the Other Obligations or any security, whether resulting from an
election by Agent or any Bank to foreclose upon
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security by nonjudicial sale, or otherwise; (d) any setoff or counterclaim of
the other Borrower or any defense which results from any disability or other
defense of the other Borrower or the cessation or stay of enforcement from any
cause whatsoever of the liability of the other Borrower (including, without
limitation, the lack of validity or enforceability of any Credit Document); (e)
any right to exoneration of sureties which would otherwise be applicable; (f)
any right of subrogation or reimbursement and, if there are any other
guarantors of the Other Obligations, any right of contribution, and right to
enforce any remedy which Agent or any Bank now has or may hereafter have
against the other Borrower, and any benefit of, and any right to participate
in, any security now or hereafter received by Agent or any Bank; (g) all
presentments, demands for performance, notices of non-performance, notices
delivered under this Agreement or any other Credit Document, protests, notice
of dishonor, and notices of acceptance and of the existence, creation or
incurring of new or additional Other Obligations and notices of any public or
private foreclosure sale; (h) the benefit of any statute of limitations to the
extent permitted by law; (i) any appraisement, valuation, stay, extension,
moratorium redemption or similar law or similar rights for marshalling; (j) any
right to be informed by Agent or any Bank of the financial condition of the
other Borrower or any other guarantor of the Other Obligations or any change
therein or any other circumstances bearing upon the risk of nonpayment or
nonperformance of the Other Obligations; and (k) until all obligations of the
Banks to extend credit are terminated and all Other Obligations are satisfied
in full, any right to revoke its obligations under Paragraph 8.02. Each
Borrower has the ability and assumes the responsibility for keeping informed of
the financial condition of the other Borrower and any other guarantors of the
Other Obligations and of other circumstances affecting such nonpayment and
nonperformance risks. Without limiting the scope of any of the foregoing
waivers, each Borrower hereby waives (i) all rights and defenses arising out of
an election of remedies by Agent or any Bank, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for any
Other Obligation, has destroyed such Borrower's rights of subrogation and
reimbursement against the other Borrower by the operation of Section 580d of
the Code of Civil Procedure or otherwise, (ii) all rights and defenses such
Borrower may have by reason of protection afforded to the other Borrower with
respect to the Other Obligations pursuant to the antideficiency or other laws
of California limiting or discharging the Other Obligations, including, without
limitation, Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure, and (iii) all other rights and defenses available to such Borrower
by reason of Sections 2787 to 2855, inclusive, Section 2899 or Section 3433 of
the California Civil Code.
8.05. Subordination. Each Borrower hereby subordinates any obligations
owed by the other Borrower to such Borrower to the Other Obligations as
provided in this Paragraph 8.05. Until the occurrence of a Default or an Event
of Default, such Borrower
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may receive regularly scheduled payments from the other Borrower on account of
obligations owed by the other Borrower to such Borrower. Upon the occurrence
and during the continuance of any Default or Event of Default, however:
(a) such Borrower agrees that Agent and the Banks shall be
entitled to receive payment of all Other Obligations before such
Borrower receives payment of any obligations owed by the other Borrower
to such Borrower;
(b) Any payments on any obligations owed by the other Borrower
to such Borrower, if Agent so requests, shall be collected, enforced and
received by such Borrower as trustee for Agent and the Banks and be paid
over to Agent on account of the Other Obligations, but without reducing
or affecting in any manner the liability of such Borrower under
Paragraph 8.02; and
(c) Agent is authorized and empowered (but without any
obligation to so do), in its discretion, (i) in the name of such
Borrower, to collect and enforce, and to submit claims in respect of,
obligations owed by the other Borrower to such Borrower and to apply any
amounts received thereon to the Other Obligations, and (ii) to require
such Borrower (A) to collect and enforce, and to submit claims in
respect of, obligations owed by the other Borrower to such Borrower, and
(B) to pay any amounts received on such obligations to Agent for
application to the Other Obligations.
SECTION IX. MISCELLANEOUS.
9.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications under this
Agreement and the other Credit Documents shall be duly given or made if sent in
writing or by telecopy, and shall be deemed to have been duly given or made
upon the transmittal thereof by telecopy, or upon the date received if
delivered by courier or if deposited by mail, postage prepaid, or if delivery
is rejected, on the date of such rejection, in each case addressed to the party
to which such notice is requested or permitted to be given or made, if to Agent
or either Borrower, at the respective addresses or telecopy numbers indicated
below, and, if to any Bank, at the address or telecopy number specified beneath
the heading "Address for Notices" under the name of such Bank in Schedule I, or
at such other address or telecopy number of which such Person shall have
notified in writing the party giving such notice; provided, however, that any
notice delivered to Agent under Section II shall not be effective until
received by Agent, unless rejected, in which case it shall be deemed received
upon rejection.
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Agent: ABN AMRO Bank N.V.
San Francisco International Branch
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and
ABN AMRO Bank N.V.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Borrowers:
SVG: Silicon Valley Group, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
SVGL: SVG Lithography Systems, Inc.
c/o Silicon Valley Group, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Each Notice of Borrowing, Notice of Loan Conversion, Notice of Interest Period
Selection and LC Application shall be given by the respective Borrower to
Agent's office located at the address specified above during such Person's
normal business hours; provided, however, that any such notice received by
Agent after 9:00 a.m. on any Business Day shall be deemed received by such
Person on the next Business Day. In any case where this Agreement authorizes
notices, requests, demands or other communications by a Borrower to Banks or
Agent to be made by telephone or telecopy, each Bank and Agent may conclusively
presume that anyone purporting to be a person designated in the certificates
received by such Bank or Agent pursuant to item B(4) in Schedule 3.01, or in
any other such document delivered by either Borrower to such Bank or Agent, is
such a person.
9.02. Expenses. Each Borrower shall pay on demand, whether or not any
Loan is made or any Letter of Credit is issued hereunder, (a) all reasonable
fees and expenses, including reasonable attorneys' fees and expenses, incurred
by Agent in
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connection with the preparation, execution and delivery of, and the exercise of
its respective duties under, this Agreement and the other Credit Documents, and
the structuring of, due diligence relating to and syndication of the credit
facilities set forth in this Agreement; (b) all reasonable fees and expenses,
including reasonable attorneys' fees and expenses, incurred by Agent in the
preparation, negotiation, execution and delivery of amendments and waivers
hereunder and thereunder (other than fees and expenses attributable to internal
portfolio reviews conducted by any such Persons in the ordinary course of their
business); and (c) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by the Banks and Agent in the
enforcement or in any attempt to enforce any of the Obligations which is not
performed as and when required by this Agreement or the other Credit Documents
or in preserving Agent's or any Bank's rights and remedies (including all such
fees and expenses incurred in connection with any "workout" or restructuring
affecting the Credit Documents or the Obligations or any bankruptcy or similar
proceeding involving Borrowers or any of their Subsidiaries). As used herein,
the term "reasonable attorneys' fees" shall include, without limitation,
allocable costs of each Bank's and Agent's in-house legal counsel and staff.
The obligations of Borrowers under this Paragraph 9.02 shall survive for one
(1) year after the date of termination of this Agreement.
9.03. Indemnification. To the fullest extent permitted by law, each
Borrower agrees to protect, indemnify, defend and hold harmless Agent and each
Bank and their respective directors, officers, employees, agents and affiliates
("Indemnitees") from and against any liabilities, losses, damages or expenses
of any kind or nature and from any suits, claims or demands (including those in
respect of, or for, reasonable attorneys' fees and other expenses) arising on
account of or in connection with any matter or thing or action or failure to
act by the Indemnitees, or any of them, or arising out of or relating to the
Credit Documents, including any use by either Borrower of any proceeds of the
Loans or the use of any Letter of Credit ("Claims"), except to the extent such
liability arises from the willful misconduct or gross negligence of such
Indemnitee or such Indemnitee's breach of this Agreement or any other Credit
Document. Upon becoming aware of any Claim, Agent or any Bank shall give
Borrowers prompt written notice of any Claim setting forth a description of
those elements of the Claim of which Agent or such Bank has knowledge.
Borrowers shall have the right at any time during which a Claim is pending to
select counsel to defend and settle any Claims for which Borrowers are
indemnitors hereunder, so long as in any such event Borrowers shall have stated
in a writing delivered to the applicable Indemnitee that, as between Borrowers
and such Indemnitee, Borrowers are responsible to such Indemnitee with respect
to such Claim to the extent and subject to the limitations set forth herein and
Borrowers shall have provided to such Indemnitee evidence reasonably
satisfactory to such Indemnitee that Borrowers will be able to perform their
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indemnification obligations hereunder. In any other case, the Indemnitee shall
have the right to select counsel and control the defense of any Claims to the
extent provided for herein. With respect to any Claim for which Borrowers are
entitled to select counsel, each Indemnitee shall have the right, at its
expense, to participate in the defense of such Claim. If for any reason the
foregoing indemnity is unavailable to any Indemnitee or insufficient to hold it
free and harmless as contemplated by such indemnity, then Borrowers shall
contribute to the amount paid or payable by the Indemnitee as a result of any
Claim (other than an excluded Claim) in such proportion as is appropriate to
reflect not only the relative benefits received by Borrowers on the one hand
and such Indemnitee on the other hand, but also the relative fault of Borrowers
and such Indemnitee, as well as any other relevant equitable considerations.
The obligations of each Borrower under this Paragraph 9.03 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.
9.04. Waivers; Amendments. Any term, covenant, agreement or condition
of this Agreement or any other Credit Document may be amended or waived if such
amendment or waiver is in writing and is signed by each Borrower and the
Required Banks; provided, however that:
(a) Any amendment, waiver or consent which (i) increases the
Total Commitment, (ii) extends the Maturity Date, (iii) reduces the
principal of, or interest on, any Loan or any fees or other amounts
payable for the account of the Banks hereunder, (iv) postpones any date
fixed for any payment of the principal of, or interest on, any Loans or
any fees or other amounts payable for the account of the Banks hereunder
or thereunder, (v) amends this Paragraph 9.04 or (vi) amends the
definition of Required Banks;
(b) Any amendment, waiver or consent which increases or
decreases the Dollar amount of any Bank's Proportionate Share of the
Total Commitment must be in writing and signed by such Bank;
(c) Any amendment, waiver or consent which increases the LC
Commitment or otherwise affects the rights or obligations of Issuing
Bank must be signed by Issuing Bank;
(d) Any amendment, waiver or consent which affects the rights
of Agent must be in writing and signed by Agent.
No failure or delay by Agent or any Bank in exercising any right hereunder or
under the other Credit Documents shall operate as a waiver thereof or of any
other right, nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. Unless
otherwise specified in such waiver or consent, a waiver or consent given
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hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
9.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other Credit
Documents shall be binding upon and inure to the benefit of each
Borrower, each Bank, Agent, all future holders of the Notes and their
respective successors and permitted assigns, except that neither
Borrower may assign or transfer any of its rights or obligations under
any Credit Document without the prior written consent of Agent and each
Bank. All references in this Agreement to any Person shall be deemed to
include all successors and assigns of such Person.
(b) Participations. Any Bank may, in the ordinary course of
its commercial banking business and in accordance with applicable law,
at any time sell to one or more banks or other financial institutions
("Participants") participating interests in any Loan owing to such Bank,
any Note held by such Bank, any Commitment of such Bank, any risk
participation in any Letter of Credit or any other interest of such Bank
under this Agreement and the other Credit Documents; provided, however,
that no Bank may sell a participating interest in its Loans, Commitment
or Letter of Credit risk participation in a principal amount of less
than Ten Million Dollars ($10,000,000) per Participant. In the event of
any such sale by a Bank of participating interests to a Participant,
such Bank's obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the
holder of any such Note for all purposes under this Agreement and
Borrowers and Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this
Agreement; provided, however, that any agreement pursuant to which any
Bank sells a participating interest to a Participant may require the
selling Bank to obtain the consent of such Participant in order for such
Bank to agree in writing to any amendment of a type specified in clause
(i), (ii), (iii) or (iv) of Subparagraph 9.04(a). Each Borrower agrees
that if amounts outstanding under this Agreement and the other Credit
Documents are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the fullest extent permitted by law, be deemed to
have the right of setoff in respect of its participating interest in
amounts owing under this Agreement and any other Credit Documents to the
same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or any other Credit
Documents; provided, however, that such rights of setoff shall be
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subject to the obligation of such Participant to share with the Banks,
and the Banks agree to share with such Participant, as provided in
Subparagraph 2.09(b). Each Borrower also agrees that any Bank which has
transferred all or any part of its interests in the Commitments, Loans
or Letters of Credit to one or more Participants shall, notwithstanding
such transfer, be entitled to the full benefits accorded such Bank under
Paragraph 2.10, Paragraph 2.11 and Paragraph 2.12, as if such Bank had
not made such transfer (but no Bank shall be entitled to any increased
benefit thereunder because of any such transfer). Nothing in this
Agreement shall be deemed to grant to any Participant the right to make
any claim directly against either Borrower for any amounts under
Paragraph 2.10, Paragraph 2.11 or Paragraph 2.12; provided, however,
Participants shall have the right to have passed through to them by any
Bank payments of the type described in such paragraphs to the extent
provided in their respective participation agreements.
(c) Assignments. Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time, sell and assign to any Bank, any affiliate of a Bank or any
other bank or financial institution (individually, an "Assignee Bank")
all or a portion of its rights and obligations under this Agreement and
the other Credit Documents (such a sale and assignment to be referred to
herein as an "Assignment") pursuant to an assignment agreement in the
form of Exhibit G (an "Assignment Agreement"), executed by each Assignee
Bank and such transferor Bank (an "Assignor Bank") and delivered to
Agent for its acceptance and recording in the Register; provided,
however, that:
(i) Without the prior written consent of Borrowers and
Agent (which consent shall not be unreasonably withheld), no Bank
may make any Assignment to any Assignee Bank which is not,
immediately prior to such Assignment, a Bank hereunder or an
affiliate thereof (unless an Assignment to such affiliate will
result in any additional costs or Taxes under Paragraph 2.10 or
Paragraph 2.11)
(ii) Without the prior written consent of Borrowers and
Agent (which consent shall not be unreasonably withheld), no Bank
may make any Assignment to any Assignee Bank if, after giving
effect to such Assignment, the Commitment of the Assignor Bank or
Assignee Bank would be less than Ten Million Dollars
($10,000,000);
(iii) Without the prior written consent of Borrowers and
Agent (which consent shall not be unreasonably withheld), no Bank
may make any Assignment
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which does not assign and delegate an equal pro rata interest in
such Bank's Loans, Commitments and all other rights, duties and
obligations of such Bank under this Agreement and the other
Credit Documents;
(iv) Without the prior written consent of Borrowers
(which consent shall not be unreasonably withheld), no Bank may
make any Assignment to any Assignee Bank that is not duly
licensed to transact business within the United States or that
has combined capital, surplus and retained earnings of less than
U.S. $500,000,000 as of the Assignment Effective Date; and
(v) Without the prior written consent of Borrowers
(which consent shall not be unreasonably withheld), no Bank may
make any Assignment (A) to any Person that is not organized under
the laws of the United States of America or any jurisdiction
thereof if by so doing Borrowers would become liable on the
applicable Assignment Effective Date for any additional costs or
Taxes under Paragraph 2.10 or Paragraph 2.11, or (B) to any
Person or in any manner if as a direct consequence thereof either
Borrower would be prohibited from deducting all or any portion of
the interest payable on the Loans as a business expense for
purposes of calculating any tax liability due to the United
States.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective Date
determined pursuant to such Assignment Agreement, (A) each Assignee
Bank thereunder shall be a Bank hereunder with a Proportionate Share as
set forth on Attachment 1 to such Assignment Agreement and shall have
the rights, duties and obligations of a Bank under this Agreement and
the other Credit Documents, and (B) the Assignor Bank thereunder shall
be a Bank with a Proportionate Share as set forth on Attachment 1 to
such Assignment Agreement, or, if the Proportionate Share of the
Assignor Bank has been reduced to 0%, the Assignor Bank shall cease to
be a Bank. Each Assignment Agreement shall be deemed to amend Schedule
I to the extent, and only to the extent, necessary to reflect the
addition of each Assignee Bank, the deletion of each Assignor Bank which
reduces its Proportionate Share to 0% and the resulting adjustment of
Proportionate Shares arising from the purchase by each Assignee Bank of
all or a portion of the rights and obligation of an Assignor Bank under
this Agreement and the other Credit Documents. On or prior to the
Assignment Effective Date determined pursuant to each Assignment
Agreement, each Borrower, at their own expense, shall execute and
deliver to Agent, in exchange for the respective surrendered Note of the
Assignor Bank thereunder, a new Note
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to the order of each Assignee Bank thereunder (with each new Note to be
in an amount equal to the Commitment assumed by such Assignee Bank) and,
if the Assignor Bank has retained a Commitment hereunder, a new Note to
the order of the Assignor Bank (with the new Note to be in an amount
equal to the Commitment retained by it). Each such new Note shall be
dated the Closing Date, and each such new Note shall otherwise be in the
form of the Note replaced thereby. The Notes surrendered by the
Assignor Bank shall be returned by Agent to Borrowers marked
"cancelled". Each Assignee Bank which was not previously a Bank
hereunder shall, on or before the date of it becoming such a Bank,
deliver to Borrowers and Agent a statement or form as described in
clause (i) or (ii) of Subparagraph 2.11(b).
(d) Register. Agent shall maintain at its address referred to
in Paragraph 9.01 a copy of each Assignment Agreement delivered to it
and a register (the "Register") for the recordation of the names and
addresses of the Banks and the Proportionate Shares of each Bank from
time to time. The entries in the Register shall be conclusive in the
absence of manifest error, and Borrowers, Agent and the Banks may treat
each Person whose name is recorded in the Register as the owner of the
Loans recorded therein for all purposes of this Agreement. The Register
shall be available for inspection by Borrowers or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(e) Registration. Upon its receipt of an Assignment Agreement
executed by an Assignor Bank and an Assignee Bank (and by Borrowers and
Agent if their consent is required hereunder) together with payment to
Agent by Assignor Bank of a registration and processing fee of $2,000,
Agent shall (i) promptly accept such Assignment Agreement, and (ii) on
the Effective Date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the Banks and Borrowers. Agent may, from time to time at
its election, prepare and deliver to the Banks and Borrowers a revised
Schedule I reflecting the names, addresses and respective Proportionate
Shares of all Banks then parties hereto.
(f) Confidentiality. Agent and the Banks may disclose the
Credit Documents and any financial or other information relating to
either Borrower or any Subsidiary to each other or to any potential
Participant or Assignee Bank as provided in Paragraph 9.06.
(g) Discount With or Assignment to Federal Reserve. Nothing
in this Agreement or any of the other Credit Documents shall prevent any
Bank from discounting with the Federal Reserve Bank all or any part of
its Notes. Notwithstanding any other provision to the contrary in this
Agreement, any Bank may at any time, without the consent of
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Agent or either Borrower assign all or any portion of its Notes to a
Federal Reserve Bank; provided, however, such assignment shall not
affect the obligations of such Bank under this Agreement.
9.06. Confidentiality. Each Bank agrees to maintain confidentiality
with respect to all information which is furnished by or on behalf of either
Borrower to such Bank under this Agreement or any other Credit Document, except
to the extent such information:
(a) Was or becomes generally available to the public other
than as a result of a disclosure by such Bank;
(b) Was or becomes available on a non-confidential basis from
a source other than either Borrower or any Subsidiary, provided that
such source is not bound by a confidentiality agreement with a Borrower
or any Subsidiary known to such Bank;
(c) Is disclosed:
(i) To any governmental or regulatory authority as may
be required in the course of its duties;
(ii) Pursuant to subpoena or other legal process;
(iii) To legal counsel and other advisors retained by
such Bank;
(iv) When and to the extent necessary in such Bank's
judgment to protect such Bank's interest in connection with any
claim or dispute involving such Bank, to any Person and in any
proceeding; or
(v) To any prospective Participant or Assignee and any
Participant or Assignee, provided such Person has executed in
favor of Borrower a confidentiality agreement containing terms
substantially identical to this Paragraph 9.06.
9.07. Setoff. In addition to any rights and remedies of the Banks
provided by law, each Bank shall have the right, with the prior consent of
Agent (which consent shall not be unreasonably withheld) but without prior
notice to Borrowers, any such notice being expressly waived by Borrowers to the
extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default, to set-off and apply against any
Obligations then due, whether matured or unmatured, of Borrowers to such Bank,
any amount then or thereafter owing from such Bank to either Borrower, and as
security for such indebtedness, each Borrower hereby grants to each Bank a
continuing security interest in any and all deposits, accounts or moneys of
such Borrower then or thereafter maintained with such
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Bank, subject in each case to Subparagraph 2.09(b). The aforesaid right of
set-off may be exercised by such Bank against either Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of either
Borrower or against anyone else claiming through or against either Borrower or
such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Bank prior to the occurrence of an Event of Default. Each
Bank agrees promptly to notify Borrowers after any such set-off and application
made by such Bank, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
9.08. No Third Party Rights. Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and to the other Credit Documents and
their permitted successors and assigns hereunder, any benefit or legal or
equitable right, remedy or claim under or by virtue of this Agreement or under
or by virtue of any provision herein.
9.09. Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability
of the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
9.10. Submission to Jurisdiction. Each Borrower hereby irrevocably and
unconditionally:
(a) Submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
jurisdiction of the courts of the State of California and the courts of
the United States of America for the Northern District of California,
and consents and agrees to suit being brought in such courts as any Bank
or Agent may elect;
(b) Waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that
such proceeding was brought in an inconvenient court and agrees not to
plead or claim the same; and
(c) Agrees that nothing herein shall affect any Bank's or
Agent's right to effect service of process in any manner permitted by
law, and that Agent and the Banks shall have the right to bring any
legal proceedings (including a proceeding for enforcement of a judgment
entered by any of
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the aforementioned courts) against such Borrower in such courts or in
any other court or jurisdiction in accordance with applicable law.
9.11. Usury. In the event that, contrary to the intent of Agent, the
Banks and Borrowers, either of the Borrowers pays any interest under this
Agreement, the Notes or any of the other Credit Documents and it is determined
that such interest rate was in excess of the then legal maximum rate, then that
portion of the interest payment representing an amount in excess of the then
legal maximum rate shall be deemed a payment of principal and applied against
the principal then due under the applicable Note.
9.12. Jury Trial. EACH BORROWER, AGENT AND EACH BANK, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
CREDIT DOCUMENTS.
9.13. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
9.14. Termination. Notwithstanding anything contained in this
Agreement or any other Credit Document to the contrary, other than the
obligations of Borrowers which specifically are to survive any termination of
this Agreement or any of the other Credit Documents or the payment and
performance of the Obligations, including, without limitation, Subparagraph
2.10(c), Subparagraph 2.10(d), Subparagraph 2.11(a), Paragraph 2.12, Paragraph
9.02 and Paragraph 9.03, all covenants, responsibilities, obligations and
liabilities of Borrowers and all Subsidiaries shall automatically terminate as
of the date (the "Termination Date") all of the following shall have occurred
(i) the Commitments shall have expired or been terminated, (ii) all Letters of
Credit shall have expired or been terminated, (iii) all Loans, Reimbursement
Obligations and interest under the Credit Documents shall have been paid in
full, and (iv) all fees and expenses under the Credit Documents and other
Obligations due and payable on or before such date shall have been paid in
full.
SECTION X. EFFECTIVE DATE OF CREDIT AGREEMENT.
10.01. Effective Date. This Agreement shall become effective on the
Closing Date. On or prior to the Closing Date, Borrowers shall pay all loans,
interest, reimbursement obligations, fees and other amounts payable under the
Existing Credit Agreement and all related documents, instruments and
agreements. Upon such payment, Agent and the Banks shall execute and deliver
to Borrowers on the Closing Date such documents, instruments and agreements
(including UCC termination statements
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and amendments) as Borrowers reasonably request to evidence the release of the
Liens granted to Agent for the benefit of the Banks and Agent in connection
with the Existing Credit Agreement.
10.02. Effect of this Agreement. On and after the Closing Date, (a) the
Existing Banks' obligations to make any loans, issue any letters of credit or
otherwise extend credit to Borrowers under the Existing Credit Agreement shall
terminate and (b) this Agreement and the Notes shall supersede and replace the
Existing Credit Agreement and the Existing Notes, respectively; provided,
however, that the execution and delivery of this Agreement, the Notes and the
other Credit Documents shall not extinguish or impair any obligations of
Borrowers under the Existing Credit Agreement, the Existing Notes or any
related document, instrument or agreement to pay any principal amount of any
loan thereunder, to reimburse the Existing Banks for any drawings under any
letters of credit issued pursuant thereto, to pay any accrued interest or fees
payable thereunder or to pay any amounts payable under Subparagraph 2.11(a),
Paragraph 8.02 or Paragraph 8.03 of the Existing Credit Agreement, except to
the extent any such obligations are actually satisfied by Borrowers.
[The first signature page follows.]
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IN WITNESS WHEREOF, Borrowers, Agent and the Banks have caused
this Agreement to be executed as of the day and year first above written.
SILICON VALLEY GROUP, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
SVG LITHOGRAPHY SYSTEMS, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
ABN AMRO BANK N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, As Agent
By:_____________________________________
Name: _______________________________
Title: ______________________________
By:_____________________________________
Xxxxxx X. Xxxxxxxxx
Group Vice President
ABN AMRO BANK N.V., SAN FRANCISCO
INTERNATIONAL BRANCH, As A Bank
By:_____________________________________
Name: _______________________________
Title: ______________________________
By:_____________________________________
Xxxxxx X. Xxxxxxxxx
Group Vice President
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COMERICA BANK-CALIFORNIA, As A Bank
By:_____________________________________
Name:________________________________
Title:_______________________________
FIRST INTERSTATE BANK OF CALIFORNIA, As A Bank
By:_____________________________________
Name:________________________________
Title:_______________________________
By:_____________________________________
Name:________________________________
Title:_______________________________
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SCHEDULE I
BANKS
Bank Proportionate Share
---- -------------------
ABN AMRO BANK N.V,
San Francisco International Branch 46.6666667%
Address for notices:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
and
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
Applicable Lending Office:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
COMERICA BANK-CALIFORNIA 26.6666667%
Address for notices:
00 Xxxxxxx Xxxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
Applicable Lending Office:
00 Xxxxxxx Xxxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
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77
Bank Proportionate Share
---- -------------------
FIRST INTERSTATE BANK OF CALIFORNIA 26.6666667%
Address for notices:
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
Applicable Lending Office:
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Phone: (000) 000-0000
Fax No.: (000) 000-0000
I-2
78
SCHEDULE 1.01
DEFINITIONS
"ABN" shall have the meaning given to such term in clause (3) of the
introductory paragraph hereof.
"Account Debtor" shall mean any Person which is obligated to pay an
Account.
"Accounts" shall mean, with respect to any Person, all accounts
receivable owned by such Person including all "accounts" within the meaning of
Section 9106 of the California Uniform Commercial Code and "Account" shall mean
any one of the Accounts.
"Acquisition Agreements" shall have the meaning given to such term in
Subparagraph 4.01(o).
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. "Control" (including, with correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of voting securities, by contract or otherwise);
provided, however, that in any event any Person or affiliated group which owns
directly or indirectly five percent (5%) or more of a corporation's securities
having ordinary voting power for the election of directors shall be
conclusively presumed to control such corporation; and, provided further, that
in no case shall Agent or any Bank be deemed to be an Affiliate of Borrowers or
any Subsidiaries for purpose of this Agreement and the other Credit Documents.
"Agreement" shall mean this Credit Agreement.
"Agent" shall have the meaning given to that term in clause (3) of the
introductory paragraph hereof and shall include ABN when acting in its capacity
as the Issuing Bank.
"Agent's Fee Letter" shall mean the letter agreement dated November 20,
1995, between Agent and Borrowers relating to the payment of fees.
"Applicable Lending Office" shall mean, with respect to any Bank, (a)
initially, its office designated as such in Schedule I, and (b) subsequently,
such other office or offices of such Bank which it may designate to Agent and
Borrowers as the office at which such Bank's Loans and its obligations under
Letters of Credit will thereafter be maintained and for the account of which
all payments of principal of, and interest on,
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79
such Bank's Loans, and all payments of Reimbursement Obligations due to such
Bank, will thereafter be made.
"Assignee Bank" shall have the meaning given to that term in
Subparagraph 9.05(c).
"Assignment" shall have the meaning given to that term in Subparagraph
9.05(c).
"Assignment Agreement" shall have the meaning given to that term in
Subparagraph 9.05(c).
"Assignment Effective Date" shall have, with respect to each Assignment
Agreement, the meaning set forth therein.
"Assignor Bank" shall have the meaning given to that term in
Subparagraph 9.05(c).
"Available Commitment" shall mean, as of any day, the remainder of (a)
the Total Commitment on such day minus (b) the aggregate principal amount of
all Loans and the aggregate Stated Amounts of all Letters of Credit,
outstanding on such day.
"Banks" shall have the meaning given to that term in clause (2) of the
introductory paragraph hereof and shall include ABN when acting in its capacity
as the Issuing Bank.
"Base Rate" shall mean, on any day, the greater of (a) the Prime Rate in
effect on such date, and (b) the Federal Funds Rate for such day plus one-half
of one percent (0.50%).
"Base Rate Loan" shall have the meaning given to that term in
Subparagraph 2.01(b).
"Borrower" and "Borrowers" shall have the respective meaning given to
such terms in clause (1) of the introductory paragraph hereof.
"Borrowing" shall mean a borrowing by either Borrower consisting of a
Loan made by each Bank on or as of the same date and of the same Type pursuant
to a single Notice of Borrowing.
"Business Day" shall mean any day on which (a) commercial banks are not
authorized or required to close in San Francisco, California, New York, New
York or Chicago, Illinois, and (b) if such Business Day is related to a Loan
which bears or is to bear interest based on a LIBO Rate, dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Adequacy Requirement" shall have the meaning given to that term
in Subparagraph 2.10(d).
"Capitalized Lease Obligations" shall mean any and all lease obligations
that, in accordance with GAAP, are required to
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be capitalized on the books of a lessee. Unless otherwise indicated, the term
"Capitalized Lease Obligations" shall mean the consolidated Capitalized Lease
Obligations of Borrowers and their Subsidiaries.
"Cash Equivalent" shall mean any securities of the type specified on
Annex II.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.10(b).
"Closing Date" shall mean the date on which each of the conditions
precedent set forth in Schedule 3.01 are satisfied or waived by the Banks,
which date shall be no later than December 7, 1995.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall mean, with respect to any Bank at any time, such
Bank's Proportionate Share at such time of the Total Commitment at such time.
"Commitment Fees" shall have the meaning given to that term in
Subparagraph 2.04(b).
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Covenant Compliance Certificate" shall have the meaning given to that
term in clause (iv) of Subparagraph 5.01(c).
"Credit Documents" shall mean and include this Agreement, the Notes, the
Agent's Fee Letter, the Revolver Extension Requests, each LC Application, each
Letter of Credit and all other documents, instruments and agreements delivered
to Agent or the Banks in connection with this Agreement, provided, however,
that Credit Documents shall not include any documents or agreements entered in
connection with the termination of the Existing Credit Agreement.
"Credit Event" shall mean the making of any Loan, the conversion of any
Base Rate Loan into a LIBOR Loan, the selection of a new Interest Period for
any LIBOR Loan or LIBOR Portion, the issuance of any Letter of Credit or any
amendment of any Letter of Credit which increases its stated amount or extends
its expiration date or any extension of the Maturity Date pursuant to
Subparagraph 2.01(g).
"Current Assets" shall mean, as of any date, the aggregate amount of all
of the consolidated assets of Borrowers and the Subsidiaries that would, in
accordance with GAAP, be classified
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81
as current assets on their consolidated balance sheet as of such date.
"Current Liabilities" shall mean, as of any date, the aggregate amount
of all of the consolidated liabilities of Borrowers and the Subsidiaries that
would, in accordance with GAAP, be classified as current liabilities on their
consolidated balance sheet as of such date, plus, without duplication, the
Outstanding Credit and the aggregate amount available for drawing under all
letters of credit (other than Letters of Credit) issued for the account of
either Borrower or any Subsidiary, then outstanding.
"Debt" shall mean, with respect to any Person, the aggregate amount of,
without duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, (d) all monetary Capitalized Lease
Obligations of such Person, (e) all monetary obligations or liabilities of
others secured by a lien on any asset of such Person, whether or not such
obligation or liability is assumed, but, if such Debt is non- recourse to such
Person, not exceeding the lesser of (i) the fair market value of such asset,
and (ii) the Debt so secured, (f) all monetary obligations or liabilities of
others guaranteed by such Person to the extent of such guarantee; and (g) any
other obligations or liabilities which are required by GAAP to be shown as debt
on the balance sheet of such Person. Unless otherwise indicated, the term
"Debt" shall mean the consolidated Debt of the Borrowers and the Subsidiaries.
"Default" shall mean any event or circumstance not yet constituting an
Event of Default which, with the giving of any notice or the lapse of any
period of time or both, would become an Event of Default.
"Depreciation and Amortization" shall mean the deductions from Net
Income for depreciation expense of Borrowers and the Subsidiaries and for
amortization of goodwill and other intangible assets, on a consolidated basis.
"Dollars" and "$" shall mean the lawful currency of the United States of
America and, in relation to any payment under this Agreement, same day or
immediately available funds.
"Domestic" means, with respect to any Person, any corporation or other
entity which is organized and operating under the laws of the United States of
America or any State thereof, including the District of Columbia, or any
individual residing in the United States.
"Drawing Payment" shall have the meaning given to such term in
Subparagraph 2.01(c).
1.01-4
82
"Environmental Laws" shall mean all Requirements of Law relating to the
environment, including without limitation, all Requirements of Law pertaining
to reporting, licensing, permitting, investigation, and remediation of
emissions, discharges, releases, or threatened releases of hazardous materials,
chemical substances, pollutants, contaminants, or hazardous or toxic
substances, materials or wastes whether solid, liquid, or gaseous in nature,
into the air, surface water, groundwater, or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of chemical substances, pollutants, contaminants, or
hazardous or toxic substances, materials, or wastes, whether solid, liquid, or
gaseous in nature.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.
"Event of Default" shall have the meaning given to that term in
Paragraph 6.01.
"Existing Banks" shall mean the banks currently parties to the Existing
Credit Agreement.
"Existing Credit Agreement" shall mean that certain Credit Agreement
dated as of October 7, 1994, by and among Borrowers, the Existing Banks and
ABN, as agent for the Existing Banks.
"Existing Notes" shall mean the Notes executed by Borrowers pursuant to
the Existing Credit Agreement.
"Extraordinary Gain" shall mean all income properly classified as
extraordinary in accordance with GAAP.
"Federal Funds Rate" shall mean, for any day, the weighted average of
the per annum rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers as published by
the Federal Reserve Bank of New York for such day, (or, if such rate is not so
published for any day, the average rate quoted to Agent on such day by three
(3) Federal funds brokers of recognized standing selected by Agent).
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
"GAAP" shall mean generally accepted accounting principles as in effect
in the United States of America from time to time, consistently applied, as
commonly used by the American Institute of Certified Public Accountants.
"Governmental Authority" shall mean any domestic or foreign national,
state or local government, any political subdivision
1.01-5
83
thereof, any department, agency, authority or bureau of any of the foregoing,
or any other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including the Federal
Deposit Insurance Corporation, the Federal Reserve Board, the Comptroller of
the Currency, any central bank or any comparable authority.
"Governmental Rule" shall mean any law, rule, regulation, ordinance,
order, code interpretation, judgment, decree, directive, guidelines, policy or
similar form of decision of any Governmental Authority.
"Hazardous Substance" shall mean (a) any oil, flammable substance,
explosives, radioactive materials, hazardous wastes or substances, toxic wastes
or substances; (b) asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls, or radon gas;
and (c) any chemical, material or substance defined as or included in the
definition of "waste," "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," or
"toxic substances" or words of similar import under any Environmental Law.
"IBM" shall mean International Business Machines Corporation, a New York
corporation.
"Interest Account" shall have the meaning given to that term in
Subparagraph 2.07(b).
"Interest Coverage Ratio" shall mean, for any period, on a consolidated
basis for Borrowers and their Subsidiaries the ratio of (a) Net Income for such
period plus, to the extent deducted in connection with determining such Net
Income amount, (i) Interest Expense, (ii) income taxes, (iii) Depreciation and
Amortization less, to the extent constituting such Net Income amount, any
Extraordinary Gains, to (b) Interest Expense.
"Interest Expense" shall mean, without duplication, for any period, the
consolidated gross interest expense of Borrowers and their Subsidiaries for
such period, determined in accordance with GAAP.
"Interest Period" shall mean, with respect to any LIBOR Loan, the time
periods selected by a Borrower pursuant to Subparagraph 2.01(b), which
commences on the first day of such Loan or the effective date of any conversion
and ends on the last day of such time period, and thereafter, each subsequent
time period selected by a Borrower pursuant to Subparagraph 2.01(e) which
commences on the day immediately following the last day of the immediately
preceding time period and ends on the last day of that time period.
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84
"Investments" shall have the meaning given to such term in Subparagraph
5.02(h).
"Issuing Bank" shall have the meaning given to such term in Subparagraph
2.02(a).
"LC Application" shall have the meaning given to such term in
Subparagraph 2.02(b).
"LC Commitment" shall have the meaning given to such term in
Subparagraph 2.02(a).
"LC Issuance Fees" shall have the meaning given to such term in
Subparagraph 2.04(c).
"LC Usage Fees" shall have the meaning given to such term in
Subparagraph 2.04(c).
"Letter of Credit" shall have the meaning given to such term in
Subparagraph 2.02(a).
"Letter of Credit Fees" shall have the meaning given to such term in
Subparagraph 2.03(c).
"LIBO Rate" shall mean, with respect to any Interest Period for the
LIBOR Loans in any Borrowing consisting of LIBOR Loans, a rate per annum equal
to the quotient of (a) the arithmetic mean (rounded upward if necessary to the
nearest 1/16 of one percent) of the rates per annum appearing on the Telerate
Page 3750 (or any successor page or publication) on the second Business Day
prior to the first day of such Interest Period at or about 11:00 A.M. (London
time) (for delivery on the first day of such Interest Period) for a term
comparable to such Interest Period, divided by (b) one minus the Reserve
Requirement for such Loans in effect from time to time. If for any reason
rates are not available as provided in clause (a) of the preceding sentence,
the rate to be used in clause (a) shall be the rate per annum at which Dollar
deposits are offered to ABN in the London interbank eurodollar currency market
on the second Business Day prior to the commencement of such Interest Period at
or about 11:00 A.M. (London time) (for delivery on the first day of such
Interest Period) for a term comparable to such Interest Period and in an amount
approximately equal to the amount of the LIBOR Loan to be made or funded by
ABN, as part of such Borrowing. The LIBO Rate applicable to any Loan for any
Interest Period shall be automatically adjusted during such Interest Period to
reflect any change in the applicable Reserve Requirement.
"LIBOR Loan" shall have the meaning given to that term in Subparagraph
2.01(b).
"Lien" shall mean, with respect to the property of any Person, any
mortgage, pledge, hypothecation, encumbrance, lien
1.01-7
85
(statutory or other), charge or other security interest of any kind in, or with
respect to, such property (including any conditional sale or other retention
agreement or any financing lease under which such Person is lessee having the
same economic effects as any of the foregoing).
"Loan" shall have the meaning given to that term in Subparagraph
2.01(a).
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects or financial or other condition of
Borrowers and their Subsidiaries taken as whole, (b) the ability of SVG alone,
or of SVGL together with SVG, to pay or perform the Obligations in accordance
with the terms of this Agreement and the other Credit Documents, or (c) the
rights and remedies of Agent and the Banks under this Agreement, the other
Credit Documents or any related document, instrument or agreement.
"Material Subsidiary" shall mean SVGIS; and any other Subsidiary which
at any time has assets with a book value equal to or greater than ten percent
(10%) of the total consolidated assets of Borrowers and all Subsidiaries and
any Subsidiary which owns more than ten percent (10%) of the capital stock of
any Material Subsidiary.
"maturity" shall mean, with respect to any Loan, interest, fees or other
amount payable by either Borrower under this Agreement or the other Credit
Documents, the date such Loan, interest, fee or other amount becomes due,
whether upon the stated maturity or due date, upon acceleration or otherwise.
"Maturity Date" shall mean December 7, 1998, or, if such date is
extended from time to time pursuant to Subparagraph 2.01(h), any later date to
which so extended.
"Net Equity Proceeds" shall mean, with respect to any issuance of
capital stock by SVG, the gross consideration received by SVG from such
issuance less the amount of fees and commissions, payable to Persons other than
either Borrower or any Subsidiary or their Affiliates, legal expenses and other
costs and expenses reasonably related to such issuance that are to be paid by
SVG.
"Net Income" shall mean, for any period, the consolidated gross revenues
of Borrowers and the Subsidiaries, less all expenses and other proper charges
for such period, all as determined in accordance with GAAP; provided, however,
that in determining Net Income of Borrowers and the Subsidiaries, there shall
not be included in gross revenues any of the following items: (a) if a
corporation shall have become a Subsidiary, any earnings of such corporation
prior to the date it shall have become a Subsidiary, (b) if either Borrower or
a Subsidiary shall have acquired the assets and business of any Person or any
1.01-8
86
substantial part of the assets and business of any Person, any earnings
properly attributable to such assets and business or part thereof prior to the
date of such acquisition, and (c) any earnings of, and dividends payable to,
either Borrower or a Subsidiary in currencies which at the time are blocked
against conversion into Dollars.
"Note" shall have the meaning given to that term in Subparagraph
2.07(a).
"Notice of Borrowing" shall have the meaning given to that term in
Subparagraph 2.01(b).
"Notice of Conversion" shall have the meaning given to that term in
Subparagraph 2.01(d).
"Notice of Interest Period Selection" shall have the meaning given to
that term in Subparagraph 2.01(e).
"Obligations" shall mean and include, with respect to each Borrower, all
loans, advances, debts, liabilities, and obligations, owed by such Borrower to
Agent or any of the Banks of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising pursuant to the terms of this Agreement or any of
the other Credit Documents, including all interest, fees, charges, expenses,
attorneys' fees and accountants' fees chargeable to such Borrower or payable by
such Borrower hereunder or thereunder.
"Outstanding Credit" shall have the meaning given to that term in
Subparagraph 2.03(a).
"Participant" shall have the meaning given to that term in Subparagraph
9.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PE" shall mean The Xxxxxx Xxxxx Corporation, a New York corporation.
"PE Lease" shall mean that certain Lease Agreement dated May 15, 1990 by
and between PE and SVGL.
"PE Obligation to Purchase" shall mean the obligation of SVGL to
purchase the Premises (as defined in the PE Lease) pursuant to Article 17
thereof and the financing described in Article 18 thereof.
"Permitted Liens" shall have the meaning given to such term in
Subparagraph 5.02(d).
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87
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a joint venture or other entity or a Governmental
Authority.
"Plan" shall mean an employee pension or other benefit plan of either
Borrower or any Subsidiary subject to Title IV of ERISA or to which Section 412
of the Code applies.
"Prime Rate" shall mean the rate most recently announced by Agent at its
principal office in Chicago, Illinois as its "Prime Rate". The Prime Rate is
one of the base rates of Agent and serves as the basis upon which effective
rates of interest are calculated for those loans making reference thereto, and
is evidenced by the recording thereof after its announcement in such internal
publication or publications as Agent may designate. Any change in the Base
Rate resulting from a change in such Prime Rate shall become effective as of
12:01 a.m. of the Business Day on which each change in the Prime Rate is
announced by Agent.
"Proportionate Share" shall mean, with respect to each Bank, the
percentage set forth under the caption "Proportionate Share" opposite such
Bank's name on Schedule I, or, if different, such percentage as may be set
forth for such Bank in the Register.
"Quick Assets" shall mean, as of any date, the aggregate amount of cash,
Cash Equivalents and Accounts of Borrowers and their consolidated Subsidiaries
as of such date.
"Register" shall have the meaning given to that term in Subparagraph
9.05(d).
"Reimbursement Obligation" shall have the meaning given to such term in
Subparagraph 2.02(d).
"Reimbursement Payment" shall have the meaning given to such term in
Subparagraph 2.02(c).
"Reportable Event" shall have the meaning given to that term in ERISA.
"Required Banks" shall mean, at any time, Banks whose Proportionate
Shares equal or exceed sixty-six and two-thirds percent (66 2/3%) in the
aggregate.
"Requirement of Law" shall mean, as to any Person, the Articles or
Certificate of Incorporation and By-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its
1.01-10
88
property or to which such Person or any of its property is subject.
"Reserve Requirement" shall mean, with respect to any day in an Interest
Period for a LIBOR Loan, the aggregate of the reserve requirement rates
(expressed as a decimal) in effect on such day for eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of the
Federal Reserve Board) maintained by a member bank of the Federal Reserve
System. As used herein, the term "reserve requirement" shall include, without
limitation, any basic, supplemental or emergency reserve requirements imposed
on any Bank by any Governmental Authority.
"Revolver Extension Request" shall have the meaning given to that term
in Subparagraph 2.01(h).
"Stated Amount" shall mean, with respect to any Letter of Credit, the
aggregate amount which can be drawn on such Letter of Credit.
"Stockholders Agreement" shall mean that certain Stockholders Agreement
dated as of May 15, 1990, among SVG, SVGL, PE and IBM.
"Subsidiary" shall mean any corporation at least the majority of whose
securities having ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) are at the time owned by either Borrower and/or one or more
Subsidiaries; provided, however, the term Subsidiary shall not include SVGL.
"SVG" shall have the meanings given to that term in clause (1) of the
introductory paragraph hereof.
"SVGIS" shall mean SVG International Service, a California corporation.
"SVGL" shall have the meaning given to that term in clause (1) of the
introductory paragraph hereof.
"Tangible Net Worth" shall mean, as of any date, with respect to
Borrowers and the Subsidiaries, their consolidated total assets as determined
in accordance with GAAP as of such date minus (a) consolidated liabilities, as
defined by GAAP, (b) all intangible assets of Borrowers and the Subsidiaries,
including all assets which should be classified as intangible assets, in
accordance with GAAP, such as goodwill, patents, trademarks, copyrights,
franchises, treasury stock and deferred charges (including unamortized debt
discount and research and development costs), (c) cash held in a sinking or
other similar fund established for the purpose of redemption or other
retirement of capital stock, (d) to the extent not already
1.01-11
89
deducted from total assets, reserves for depreciation, depletion, obsolescence
or amortization of properties and other reserves or appropriations of retained
earnings which have been or should be established in accordance with GAAP in
connection with the business conducted by the relevant corporation, and (e) any
revaluation or other write-up in book value of assets subsequent to such
Borrower's or Subsidiary's fiscal year last ended at the date of this
Agreement.
"Taxes" shall have the meaning given to such term in Subparagraph
2.11(a).
"Termination Date" shall have the meaning given to that term in
Paragraph 9.14.
"Total Commitment" shall have the meaning given to that term in
Subparagraph 2.03(a).
"Total Liabilities" shall mean, as of any date, with respect to
Borrowers and the Subsidiaries, their consolidated total Debt as of such date.
"Transfer" shall have the meaning given to such term in clause (ii) of
Subparagraph 5.02(a).
"Type" shall mean, with respect to any Loan or Borrowing at any time,
the classification of such Loan or Borrowing by the type of interest rate it
then bears, whether an interest rate based on the Base Rate or the LIBO Rate.
1.01-12
90
SCHEDULE 3.01
INITIAL CONDITIONS PRECEDENT
A. Principal Credit Documents.
(1) The Credit Agreement, duly executed by each Borrower, each
Bank and Agent; and
(2) Notes payable to each Bank, duly executed by each
Borrower.
B. SVG and SVGL Corporate Documents.
(1) The Certificate of Incorporation of each Borrower,
certified as of a recent date prior to the Closing Date by the Secretary
of State of Delaware;
(2) A Certificate of Good Standing for each Borrower,
certified as of a recent date prior to the Closing Date by the Secretary
of State of Delaware and Certificates of Good Standing for each
Borrower, certified as of a recent date prior to the Closing Date by the
Secretary of State of California and of each State in which such
Borrower is qualified to do business and to include tax good standing
(if applicable);
(3) A certificate of the Secretary or an Assistant Secretary
of each Borrower, dated the Closing Date, certifying (a) that the
Certificate of Incorporation of such Borrower, in the form certified by
the Secretary of State of Delaware and delivered to Banks pursuant to
item B(1), is in full force and effect and has not been amended,
supplemented, revoked or repealed since the date of such certification;
(b) that attached thereto is a true and correct copy of the Bylaws of
such Borrower as in effect on the Closing Date; (c) that attached
thereto are true and correct copies of resolutions duly adopted by the
Board of Directors of such Borrower and continuing in effect, which
authorize the execution, delivery and performance by such Borrower of
this Agreement and the other Credit Documents executed or to be executed
by such Borrower and the consummation of the transactions contemplated
hereby and thereby; and (d) that there are no proceedings for the
dissolution or liquidation of such Borrower (commenced or threatened);
and
(4) A certificate of the Secretary or an Assistant Secretary
of each Borrower, dated the Closing Date, certifying the incumbency,
signatures and authority of the officers of such Borrower authorized to
execute, deliver
3.01-1
91
and perform this Agreement and the other applicable Credit Documents on
behalf of such Borrower.
C. Domestic Material Subsidiary Corporate Documents.
(1) The Certificates or Articles of Incorporation of each
Domestic Material Subsidiary, certified as of a recent date prior to the
Closing Date by the Secretary of State of its respective state of
incorporation; and
(2) A Certificate of Good Standing for each Domestic Material
Subsidiary, certified as of a recent date prior to the Closing Date by
the Secretary of State of its respective state of incorporation and
Certificates of Good Standing for each Domestic Material Subsidiary,
certified as of a recent date prior to the Closing Date by the Secretary
of State of each State in which such Domestic Material Subsidiary is
qualified to do business and to include tax good standing (if
applicable).
D. Opinions.
(1) A written opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
outside counsel for Borrowers, dated the Closing Date and addressed to
each Agent and each Bank, in form and substance reasonably acceptable to
Agent, each Bank and Borrowers.
E. Financial Statements, Financial Condition, Etc.
(1) Copies of (a) the audited consolidated statements of
stockholders' equity, cash flow and income of Borrowers and the
Subsidiaries for the fiscal year ended September 30, 1994, and
consolidated balance sheets of Borrowers and the Subsidiaries as of the
end of such fiscal year prepared by Deloitte & Touche, and (b) the
unqualified opinion and management letter (if any) delivered by such
accountants in connection with such financial statements; and
(2) Copies of (a) the unaudited consolidated statements of
stockholders' equity, and income, and consolidated statements of cash
flow, of Borrowers and the Subsidiaries for the fiscal quarter ending
June 30, 1995 and for that portion of Borrower's fiscal year ending with
such quarter; (b) consolidated balance sheets of Borrowers and the
Subsidiaries as of the end of such quarterly period, all such statements
in (a) and (b) to be in reasonable detail, subject to year-end audit
adjusted and certified by each Borrower's chief financial officer,
treasurer or corporate controller to have been prepared in accordance
with GAAP; and (c) such other financial
3.01-2
92
information relating to Borrowers and the Subsidiaries as specified in
Annex 5.01(c).
(3) An organizational chart for Borrowers and the
Subsidiaries; and
(4) A Certificate, dated the Closing Date and signed by the
chief financial officer of each Borrower, certifying that (i) the
Acquisition Agreements are in full force and effect in the forms
delivered to the Existing Banks on October 7, 1994 in connection with
the Existing Credit Agreement and (ii) the Acquisition Agreements have
not been amended or modified since October 7, 1994, except to the extent
disclosed in such certificate.
F. Other Items.
(1) A duly completed and timely delivered Notice of Borrowing
for the initial Borrowing, if Loans are to be borrowed on the Closing
Date;
(2) All fees payable to Agent and the Banks on or prior to the
Closing Date;
(3) Payment to Agent of the fees and expenses of its counsel
(both inside and outside counsel) to the Closing Date;
(4) Payment of all loans, interest, reimbursement obligations,
fees and other amounts payable under the Existing Credit Agreement and
all related documents, instruments and agreements; and
(5) Such other evidence as Agent or any Bank may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Agreement and the other Credit Documents.
3.01-3
