Exhibit 10.4(d) Loan Agreement LOAN AGREEMENT CORNERSTONE EQUITY INVESTORS IV, L.P., BANKERS TRUST COMPANY, OAK INVESTMENT FUNDS AND AUGUST CAPITAL (AS LENDERS) WITH MCMS, INC. (BORROWER) February 29, 2000 LOAN AGREEMENT Loan Agreement dated as of...
Exhibit 10.4(d) Loan Agreement
CORNERSTONE EQUITY INVESTORS IV, L.P., BANKERS TRUST COMPANY, OAK INVESTMENT FUNDS AND AUGUST CAPITAL (AS LENDERS)
WITH
MCMS, INC. (BORROWER)
February 29, 2000
Loan Agreement dated as of February 29, 2000 among MCMS, INC., a corporation organized under the laws of the State of Idaho ("Borrower"), Cornerstone Equity Investors IV, L.P., Bankers Trust Company, Oak Investment Funds, August Capital and each other entity which is or which hereafter becomes a party hereto as a lender hereunder (collectively, the "Lenders" and individually a "Lender").
IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrower and Lenders hereby agree as follows:
"Accountants" shall have the meaning set forth in Section 9.7 hereof.
"Advances" shall mean and include the Advances as set forth in Section 2.1(a).
"Affiliate" of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person who is a director or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
"Baan Project" shall mean the implementation by Borrower of a resource planning system.
"Borrower" shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Person.
"Business Day" shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in New York, New York and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.
"CEI" shall mean Cornerstone Equity Investors IV, L.P., a Delaware limited partnership.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. SS 9601 et seq.
"Charges" shall mean all taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including, without limitation, the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral or Borrower.
"Closing Date" shall mean February 29, 2000 or such other date as may be agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time and the regulations promulgated thereunder.
"Commitment Percentage" of any Lender shall mean the percentage set forth below such Lender's name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 15.3(b) hereof.
"Commitment Transfer Supplement" shall mean a document in the form of Exhibit 15.3 hereto, properly completed and otherwise in form and substance satisfactory to the Lenders by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.
"Consents" shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third parties, domestic or foreign, necessary to carry on Borrower's business, including, without limitation, any Consents required under all applicable federal, state or other applicable law.
"Continuing Directors" shall mean (a) the directors of Borrower as of the Closing Date and each other director if such director's nomination for election to the board of directors of Borrower was approved by the affirmative vote of a majority of the Continuing Directors who were members of the board of directors at the time of such nomination or election or (b) any director of Borrower who is a designee of CEI or was nominated by CEI or any designee of CEI on the Board of Directors.
"Controlled Group" shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Borrower, are treated as a single employer under Section 414 of the Code.
"Customer" shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into any contract or other arrangement with Borrower, pursuant to which Borrower is to deliver any personal property or perform any services.
"Default" shall mean an event which, with the giving of notice or passage of time or both, would constitute an Event of Default.
"Default Rate" shall have the meaning set forth in Section 3.1 hereof.
"Documents" shall have the meaning set forth in Section 8.1(c) hereof.
"Dollar" and the sign "$" shall mean lawful money of the United States of America.
"Earnings Before Interest and Taxes" shall mean for any period the sum of (i) net income (or loss) of Borrower on a consolidated basis for such period (excluding extraordinary, unusual or nonrecurring gains and charges and losses including any unrealized losses and gains for such period resulting from marking to market of hedging or swap agreements and foreign currency transaction gains or losses in respect of intercompany payments to or from a foreign Subsidiary of Borrower), plus (ii) all interest expense of Borrower on a consolidated basis for such period, plus (iii) all charges against income of Borrower on a consolidated basis for such period for federal, state and local taxes actually paid.
"EBITDA" shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period plus (iv) other non-cash charges (including, without limitation, non-cash charges in connection with the granting of options, warrants or other equity interests and any write-off of deferred financing costs existing as of the Closing Date but excluding write-offs of Inventory to the extent such write-offs are deemed to be non-cash charges or Inventory reserves, plus (v) transaction costs incurred by Borrower in connection with acquisitions and investments entered into by Borrower after the Closing Date which are permitted under Section 7.4 hereof not to exceed the aggregate amount of $5,000,000 in any fiscal year. In addition EBITDA shall be calculated without giving effect to (x) non-cash purchase accounting adjustments required or permitted by Account Principles Board Opinion Nos. 16 (including non-cash write-ups and non-cash charges), in each case arising in connection with any acquisition entered into by Borrower after the Closing Date which is permitted by Section 7.4 hereof) and 17 (including non-cash charges relating to intangibles and good will arising in connection with any such permitted acquisition), and (y) any non-cash gains or losses recognized in determining consolidated net income (or net loss) for such period in respect of post-retirement benefits as a result of the application of FASB 106.
"Environmental Laws" shall mean all federal, state and local laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, and to the extent specifically relating to the type of business conducted by Borrower or the facilities of Borrower and having the effect of law, policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto .
"Equipment" shall mean and include all of Borrower's goods (other than Inventory) whether now owned or hereafter acquired and wherever located including, without limitation, all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.
"Equipment Loans" shall have the meaning set forth in Section 2.4 of the Senior Credit Facility.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.
"Event of Default" shall mean the occurrence of any of the events set forth in Article X hereof.
"Exchange Debentures" shall mean the 12 1/2% of subordinated exchange debentures due 2010, as amended or supplemented from time to time to the extent permitted by this Agreement and which shall be issued pursuant to the Exchange Indenture.
"Exchange Indenture" shall mean that certain Indenture dated as of February 26, 1998 between Borrower and Trustee relating to the Exchange Debentures as amended, modified, restated or supplemented from time to time to the extent not prohibited by Section 7.18 hereof.
"Extraordinary Receipts" shall mean the net proceeds received by Borrower in connection with (a) the sale of capital stock of Borrower, (b) a public offering of securities issued by Borrower or (c) a cash equity contribution to Borrower.
"Federal Funds Rate" shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day which is a Business Day, the average of quotations for such day on such transactions received by Bankers Trust Company from three Federal funds brokers of recognized standing selected by Bankers Trust Company.
"Fixed Charge Coverage Ratio" shall mean and include for Borrower on a consolidated basis, with respect to any fiscal period, the ratio of (a) the sum of (i) EBITDA for such period plus (ii) capitalized lease payments during such period, minus the sum of (x) non-financed capitalized expenditures made during such period plus (y) permitted cash dividends paid on the Preferred Stock during such period plus (z) cash taxes during such period paid during such period to (b) the sum of (i) all Senior Debt Payments made during such period plus (ii) all Subordinated Debt Payments made during such period. For purposes of this definition, (a) capital expenditures made in connection with the Baan Project not to exceed $12,000,000 to the extent that such capital expenditures are not made with the proceeds of an Equipment Loan or (b) capital expenditures made solely out of the proceeds of the disposition of assets (other than Equipment purchased with the proceeds of an Equipment Loan), insurance losses (other than losses received with respect to Equipment which was purchased with the proceeds of an Equipment Loan) or Extraordinary Receipts, shall not be included in the calculation of clause (a)(ii)(x) of the definition hereof.
"Fixed Rate Notes" shall mean, collectively, the 9 3/4% senior subordinated term securities due 2008, as amended or supplemented from time to time to the extent permitted by this Agreement, in the aggregate original principal amount not to exceed $145,000,000 issued by Borrower pursuant to the Indenture.
"Floating Rate Notes" shall mean, collectively, the floating interest rate subordinated term securities, as amended or supplemented from time to time to the extent permitted by this Agreement, in the aggregate original principal amount not to exceed $30,000,000 issued by Borrower pursuant to the Indenture.
"GAAP" shall mean generally accepted accounting principles in the United States of America in effect from time to time.
"Governmental Body" shall mean any nation or government, any state or other political subdivision thereof or any entity exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.
"Guarantor" shall mean MCMS Customer Services, Inc., an Idaho corporation, MCMS Holdings LLC, an Idaho limited liability company, and any other Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations and "Guarantors" means collectively, all such Persons.
"Guaranty" shall mean any guaranty of the obligations of Borrower executed by a Guarantor in favor of the Lenders.
"Hazardous Substance" shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or toxic substances as defined in CERCLA, the Hazardous Materials Transportation Act, TSCA as amended (49 U.S.C. Sections 1801, et seq.), RCRA, or any other applicable Environmental Law.
"Hazardous Wastes" shall mean all waste materials subject to regulation under RCRA or any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste management and disposal.
"Indebtedness" of a Person at a particular date shall mean all obligations for money borrowed of such Person which in accordance with GAAP would be classified upon a balance sheet as liabilities for money borrowed (except capital stock and surplus earned or otherwise) and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created, assumed or incurred by such Person. Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.
"Indenture" shall mean that certain Indenture dated as of February 26, 1998 between Borrower and Trustee relating to the Subordinated Notes as amended, modified, restated or supplemented from time to time to the extent not prohibited by Section 7.18 hereof.
"Ineligible Security" shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
"Interest Rate" shall mean, for any day, a rate per annum equal to the Eurodollar Rate (as defined in the Senior Credit Facility) applicable to a 90-day Interest Period in effect on such day plus 3.25%; provided that, if the rates provided for in the Senior Credit Facility are increased, then the Interest Rate shall be adjusted to equal the rate then used for the greatest amount of borrowings under the Senior Credit Facility plus 1.0%.
"Inventory" shall mean and include all of Borrower's now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in Borrower's business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.
"Investment Property" shall mean and include all of Borrower's now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.
"Lender" and "Lenders" shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including, without limitation, any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.
"Loan Year" shall mean each period of twelve (12) consecutive months commencing on the Closing Date and on each anniversary thereof.
"Management Services Agreement" shall mean that certain Management Services Agreement dated February 26, 1998 between CEI and Borrower, as amended, modified, restated or supplemented from time to time to the extent not prohibited by Section 7.18 hereof.
"Material Adverse Effect" shall mean a material adverse effect on (a) the condition, operations, assets or business of Borrower, (b) Borrower's ability to pay the Obligations in accordance with the terms thereof or (c) the practical realization of the benefits of each Lender's rights and remedies under this Agreement and the Other Documents taken as a whole.
"MEI" shall mean Micron Electronics, Inc., a Minnesota corporation.
"MTI" shall mean Micron Technology, Inc., a Delaware corporation.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in Sections 3(37) and 4001(a)(3) of ERISA.
"Note" shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof.
"Obligations" shall mean and include any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by Borrower to Lenders of any kind or nature, present or future (including, without limitation, any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, arising under this Agreement and the Other Documents whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of any Lenders' non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, including, but not limited to, any and all of Borrower's Indebtedness and/or liabilities under this Agreement or the Other Documents and any amendments, extensions, renewals or increases and all costs and expenses of the Lenders and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including but not limited to reasonable attorneys' fees and expenses and all obligations of Borrower to Lenders to perform acts or refrain from taking any action.
"Original Owners" shall mean, collectively, CEI and the shareholders listed on Schedule A hereto.
"Other Documents" shall mean the Note, the Questionnaire, the Guaranty, and any and all other agreements, instruments and documents, including, without limitation, guaranties, pledges, powers of attorney, consents, and all other writings heretofore, now or hereafter executed by Borrower or any Guarantor and/or delivered to any Lender in respect of the transactions contemplated by this Agreement.
"Parent" of any Person shall mean a corporation or other entity owning, directly or indirectly at least 50% of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.
"Participant" shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Benefit Plan" shall mean an employee pension benefit plan subject to Title IV of ERISA.
"Permitted Encumbrances" shall mean (a) intentionally omitted; (b) Liens for taxes, assessments or other Charges not delinquent or being contested in good faith and by appropriate proceedings and with respect to which proper reserves have been taken by Borrower; (c) Liens disclosed in the financial statements referred to in Section 5.5, the existence of which the Lenders have consented to in writing; (d) deposits or pledges to secure obligations under worker's compensation, social security or similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of borrowed money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the ordinary course of Borrower's business; (f) judgment Liens that have been stayed or bonded or otherwise would not result in an Event of Default and mechanics', workers', landlord's, materialmen's, warehousemen's, carriers' or other like Liens arising in the ordinary course of Borrower's business with respect to obligations which are not due or which are being contested in good faith by Borrower and by appropriate proceedings and with respect to which proper reserves have been taken by Borrower; (g) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (x) any such lien shall not encumber any other property of Borrower; (h) Liens disclosed on Schedule 1.2; (i) zoning and municipal ordinances, easements, rights-of-way, restrictions and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of business of Borrower or such other matters affecting Real Property as the Lenders may consent to in writing; (j) Liens arising from precautionary UCC financing statements regarding operating leases or consignments; (k) Liens securing hedge agreements entered into by Borrower to the extent such agreements are permitted by Section 7.8 hereof; (l) Liens on property or assets acquired pursuant to an acquisition or investment permitted under Section 7.4 hereof, provided that (x) such Liens are not incurred in connection with or in anticipation of such permitted acquisition or permitted investment, (y) do not attach to any other asset of the Borrower, and (z) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such permitted investment or permitted acquisition during any fiscal year shall not exceed the amount provided for in Section 7.4 hereof; (m) Liens consisting of rights of set-off of a customary nature or bankers' liens on amounts on deposit arising by operation of law or contract, incurred in the ordinary course of business; (n) Liens encumbering customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business to the extent such Liens secure investments which are permitted under Section 7.4 hereof; (o) Liens solely on any xxxx xxxxxxx money deposits made by Borrower in connection with any letter of intent or purchase agreement entered into by it in compliance with acquisitions or investments permitted by Section 7.4 hereof; (p) any interest or title of a licensor under any license permitted by this Agreement provided that such interest shall not extend to the proceeds of such license; (q) the ownership interest and title of a lessor or sublessor under any operating lease which is permitted by this Agreement; and (r) Liens incurred by Borrower with respect to liabilities and obligations of Borrower to any Person (other than for Indebtedness for money borrowed) which do not exceed $500,000 in the aggregate at any time; and (s) Liens under the Senior Credit Facility.
"Person" shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, institution, public benefit corporation, joint venture, entity or government (whether Federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA other than a Multiemployer Plan, maintained for employees of Borrower or any member of the Controlled Group or any such Plan to which Borrower or any member of the Controlled Group is required to contribute on behalf of any of its employees.
"Preferred Stock" shall mean, collectively, the 12 1/2% senior exchangeable preferred stock of Borrower, of which 274,632 shares are issued and outstanding as of the Closing Date.
"Pro Forma Balance Sheet" shall have the meaning set forth in Section 5.5(a) hereof.
"Pro Forma Financial Statements" shall have the meaning set forth in Section 5.5(b) hereof.
"Projections" shall have the meaning set forth in Section 5.5(b) hereof.
"Purchasing Lender" shall have the meaning set forth in Section 15.3 hereof.
"Questionnaire" shall mean the Documentation Information Questionnaire and the responses thereto provided by Borrower and delivered to the Lenders.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C. SS 6901 et seq., as same may be amended from time to time.
"Real Property" shall mean all of Borrower's right, title and interest in and to the owned and leased premises identified on Schedule 4.19 hereto.
"Receivables" shall mean and include all of Borrower's accounts, contract rights, instruments (including those evidencing indebtedness owed to Borrower by its Affiliates), documents, chattel paper, general intangibles relating to accounts, drafts and acceptances, and all other forms of obligations owing to Borrower arising out of or in connection with the sale or lease of Inventory or the rendition of services, all guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Lenders hereunder.
"Release" shall have the meaning set forth in Section 5.7(c)(i) hereof.
"Reportable Event" shall mean a reportable event described in Section 4043(b) of ERISA or the regulations promulgated thereunder.
"Required Lenders" shall mean Lenders holding at least sixty-six and two-thirds (66 2/3%) of the Advances and, if no Advances are outstanding, shall mean Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the Commitment Percentages.
"Senior Credit Facility" shall mean the Revolving Credit, Equipment Loan and Security Agreement, dated as of February 26, 1999, by and among Borrower, PNC Bank, National Association (as lender and as agent in such capacity as agent, the "Agent") and the Lenders from time to time a party thereto, as same may be amended, modified, restated or supplemented from time to time;
"Senior Debt Payments" shall mean and include all cash actually expended by Borrower to make (a) interest payments on any Advances hereunder, plus, (b) payments for all fees, commissions and charges set forth herein and with respect to any Advances, plus (c) capitalized lease payments, plus (d) payments with respect to any other Indebtedness for borrowed money other than with respect to the Subordinated Notes.
"Settlement Date" shall mean the Closing Date and thereafter Wednesday of each week unless such day is not a Business Day in which case it shall be the next succeeding Business Day.
"Subordinated Debt Payments" shall mean and include all cash actually expended to make payments of principal and interest on the Subordinated Notes.
"Subordinated Loan" shall mean the loan evidenced by the Subordinated Notes.
"Subordinated Notes" shall mean, collectively, the Fixed Rate Notes and the Floating Rate Notes.
"Subordinated Note Documentation" shall mean, collectively, the Subordinated Notes, the Exchange Debentures, the Indenture and the Exchange Indenture.
"Subordination Agreement" shall mean the provisions of Article 10 of each of the Indenture and the Exchange Indenture.
"Subsidiary" of any Person shall mean a corporation or other entity of whose shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.
"Subsidiary Stock" shall mean all of the issued and outstanding shares of stock or membership interests owned by Borrower of its direct Subsidiaries listed on Schedule 5.2(b).
"Term" shall have the meaning set forth in Section 13.1 hereof.
"Termination Event" shall mean (i) a Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the withdrawal of Borrower or any member of the Controlled Group from a Plan or Multiemployer Plan during a plan year in which such entity was a "substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which would constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, or (b) that results in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of Borrower or any member of the Controlled Group from a Multiemployer Plan.
"Transactions" shall have the meaning set forth in Section 5.5 hereof.
"Transferee" shall have the meaning set forth in Section 15.3(b) hereof.
"Trustee" shall mean the United States Trust Company of New York and shall include its successors and assigns.
"Week" shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.
1.3. Uniform Commercial Code Terms. All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York shall have the meaning given therein unless otherwise defined herein.
(a) The Advances shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided solely to the extent that all amounts due under the Senior Credit Facility have been paid in full in cash and the Senior Credit Facility and all commitments to lend thereunder have been irrevocably terminated. No amounts prepaid or repaid shall be permitted to be reborrowed.
(b) Intentionally Omitted
(c) All payments of principal, interest and other amounts payable hereunder, or under any of the Other Documents shall be made to the Lenders by wire transfer to accounts designated by them, not later than 2:00 P.M. (New York time) on the due date therefor in lawful money of the United States of America in federal funds or other funds immediately available to the Lenders.
(d) Borrower shall pay principal, interest, and all other amounts payable hereunder, or under any related agreement, without any deduction whatsoever, including, but not limited to, any deduction for any setoff or counterclaim.
3.1. Interest. Interest on Advances shall accrue on the last day of each fiscal month and shall be payable in arrears on the last day of the Term; provided that if the Fixed Charge Coverage Ratio for any fiscal month (measured on the last day of such fiscal month and calculated after giving effect to any cash interest payment) exceeds 1.1 to 1, then interest accrued during such fiscal month shall be payable on the first day of the following fiscal month so long as no "Default" or "Event of Default" has occurred under and as defined in the Senior Credit Facility or would occur as a result of the payment by Borrower of such cash interest payment. Interest charges shall be computed on the aggregate principal amount of Advances and accrued and unpaid interest outstanding during the month at a rate per annum equal to the Interest Rate. Upon and after the occurrence of an Event of Default, and during the continuation thereof, (i) the Obligations shall bear interest at the applicable Interest Rate plus two percent (2%) per annum (the "Default Rate").
3.2. Intentionally Omitted.
3.3. Intentionally Omitted.
IV. Intentionally Omitted
V. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants as follows:
(b) The only Subsidiaries of Borrower are listed on Schedule 5.2(b).
(a) The pro forma balance sheet of Borrower (the "Pro Forma Balance Sheet") furnished to Lenders on the Closing Date reflects the consummation of the transactions contemplated under this Agreement (the "Transactions") and is, in Borrower's good faith judgment, accurate, complete and correct and fairly reflects in all material respects the financial condition of Borrower as of the Closing Date after giving effect to the Transactions. The Pro Forma Balance Sheet has been certified as accurate, complete and correct in all material respects by the Chief Financial Officer of Borrower.
(b) The twelve-month cash flow projections of Borrower and its projected balance sheets as of the Closing Date, copies of which are annexed hereto as Exhibit 5.5(b) (the "Projections") were prepared by the Chief Financial Officer of Borrower, are based in Borrower's good faith judgment on underlying assumptions which provide a reasonable basis for the projections contained therein which are based on circumstances existing at the time made. The cash flow Projections together with the Pro Forma Balance Sheet, are referred to as the "Pro Forma Financial Statements".
(c) The consolidated and consolidating balance sheets of Borrower, its Subsidiaries and such other Persons described therein (including the accounts of all Subsidiaries for the respective periods during which a subsidiary relationship existed) as of September 3, 1998, and the related statements of income, changes in stockholder's equity, and changes in cash flow for the period ended on such date, all accompanied by reports thereon containing opinions without qualification by independent certified public accountants, copies of which have been delivered to Lenders, have been prepared in accordance with GAAP, consistently applied (except for changes in application in which such accountants concur and present fairly in all material respects the financial position of Borrower and its Subsidiaries at such date and the results of their operations for such period. Except as set forth on Schedule 5.5(c), since December 3, 1998 there has been no change in the condition, financial or otherwise, of Borrower and its Subsidiaries as shown on the consolidated balance sheet as of such date and no change in the aggregate value of machinery, equipment and Real Property owned by Borrower and its Subsidiaries, except changes in the ordinary course of business, none of which individually or in the aggregate has been materially adverse.
5.7. O.S.H.A. and Environmental Compliance.
(a) Borrower has duly complied with, and its facilities, business, assets, property, leaseholds and Equipment are in compliance in all material respects with, the provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act, RCRA and all other Environmental Laws except as set forth on Schedule 5.7 hereto or where the failure to so comply could not reasonably be expected to result in a Material Adverse Effect; there are no outstanding citations, notices or orders of non-compliance issued to Borrower or relating to its business, assets, property, leaseholds or Equipment under any such laws, rules or regulations which could reasonably be expected to result in a Material Adverse Effect.
(b) Borrower has been issued all required federal, state and local licenses, certificates or permits relating to all applicable Environmental Laws except where failure to have such licenses, certificates or permits could not reasonably be expected to result in a Material Adverse Effect.
(c) Except as set forth on Schedule 5.7(c) or where the presence of any Hazardous Substances could not reasonably be expected to result in a Material Adverse Effect, (i) there are no visible signs of releases, spills, discharges, leaks or disposal (collectively referred to as "Releases") of Hazardous Substances at, upon, under or within any Real Property or any premises leased by Borrower; (ii) there are no underground storage tanks or polychlorinated biphenyls on the Real Property or any premises leased by Borrower; (iii) to the best of Borrower's knowledge following diligent inquiry, neither the Real Property nor any premises leased by Borrower has ever been used as a treatment, storage or disposal facility of Hazardous Waste; and (iv) no Hazardous Substances are present on the Real Property or any premises leased by Borrower, excepting such quantities as are handled in accordance with all applicable manufacturer's instructions and governmental regulations and in proper storage containers and as are necessary for the operation of the commercial business of Borrower or of its tenants.
5.8. Solvency; No Litigation, Violation, Indebtedness or Default.
(a) After giving effect to the Transactions, Borrower will be solvent, able to pay its debts as they mature, have capital sufficient to carry on its business and all businesses in which it is about to engage, and (i) as of the Closing Date, the fair present saleable value of its assets, calculated on a going concern basis, is in excess of the amount of its liabilities and (ii) subsequent to the Closing Date, the fair saleable value of its assets (calculated on a going concern basis) will be in excess of the amount of its liabilities.
(b) Except as disclosed in Schedule 5.8(b), Borrower has no (i) pending or threatened litigation, arbitration, actions or proceedings which are reasonably likely to have a Material Adverse Effect on Borrower, and (ii) indebtedness for borrowed money other than the Obligations or as permitted by Section 7.8 hereof.
(c) Borrower is not in violation of any applicable statute, regulation or ordinance in any respect which could reasonably be expected to have a Material Adverse Effect, nor is Borrower in violation of any order of any court, governmental authority or arbitration board or tribunal which could reasonably be expected to have a Material Adverse Effect.
(d) Borrower does not maintain or contribute to any Multiemployer Plan or any Pension Benefit Plan other than those listed on Schedule 5.8(d) hereto. Except as set forth in Schedule 5.8(d) or as could not reasonably be expected to result in a Material Adverse Effect, (i) no Plan has incurred any "accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived, and Borrower and each member of the Controlled Group has met all applicable minimum funding requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Code (or a request for determination has been made within the applicable remedial period) and the trust related thereto is exempt from federal income tax under Section 501(a) of the Code, (iii) Borrower has not incurred any liability to the PBGC which could reasonably be expected to result in a Material Adverse Effect other than for the payment of premiums, and there are no premium payments which have become due which are unpaid, (iv) no Plan that is subject to Title IV of ERISA has been terminated by the plan administrator thereof nor by the PBGC, and there is no occurrence which would reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any such Plan, (v) the current value of the assets of each Plan that is subject to Title IV of ERISA equals or exceeds the present value of the accrued benefits and other liabilities of such Plan and neither Borrower nor to the best of Borrower's knowledge, any member of the Controlled Group knows of any facts or circumstances which would materially change the value of such assets and accrued benefits and other liabilities, (vi) neither Borrower nor to the best of Borrower's knowledge, any member of the Controlled Group has breached any of the responsibilities, obligations or duties imposed on it by ERISA with respect to any Plan, (vii) neither Borrower nor to the best of Borrower's knowledge, any member of a Controlled Group has incurred any liability for any excise tax arising under Section 4972 or 4980B of the Code, and to the best of Borrower's knowledge no fact exists which would give rise to any such liability, (viii) neither Borrower nor to the best of Borrower's knowledge, any member of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a "prohibited transaction" described in Section 406 of the ERISA or Section 4975 of the Code nor taken any action which could reasonably be expected to constitute or result in a Termination Event with respect to any such Plan which is subject to ERISA, (ix) Borrower has made all contributions due and payable with respect to each Plan which is subject to Title IV of ERISA, (x) there exists no event described in Section 4043(b) of ERISA, for which the thirty (30) day notice period contained in 29 CFR S2615.3 has not been waived, (xi) neither Borrower nor any member of the Controlled Group has any fiduciary responsibility for investments with respect to any plan existing for the benefit of persons other than employees or former employees of Borrower and any member of the Controlled Group, and (xii) neither Borrower nor any member of the Controlled Group has withdrawn, completely or partially, from any Multiemployer Plan which would impose liability upon Borrower under the Multiemployer Pension Plan Amendments Act of 1980.
5.18. [Intentionally Omitted]
5.19. Swaps. Except as set forth on Schedule 5.19 or as otherwise permitted pursuant to Article VII hereof, Borrower is not a party to, nor will it be a party to, any swap agreement whereby Borrower has agreed or will agree to swap interest rates or currencies unless same provides that damages upon termination following an event of default thereunder are payable on an unlimited "two-way basis" without regard to fault on the part of either party.
Borrower shall be permitted to amend the schedules to this Agreement at any time that the information contained in any such schedule is no longer true and correct at such time, provided, however , that any such amended schedules shall not cure or waive any Default or Event of Default which may be reflected on such amended schedules nor will the Required Lenders' consent to any action or disclosure reflected on such amended schedules be deemed to be implied solely as a result of Required Lenders' acceptance of such amended schedules.
Borrower shall, until payment in full of the Obligations (other than indemnity obligations with respect to which no claim has been made) and termination of this Agreement:
6.1. Payment of Fees. Pay to the Lenders on demand all usual and customary reasonable out-of-pocket expenses (including without limitation, all wire transfer charges) which the Lenders incur in connection with the forwarding of Advance proceeds.
6.2. Conduct of Business and Maintenance of Existence and Assets. (a) Conduct and operate its business according to good business practices and maintain all of its properties which are necessary in its business in good working order and condition (reasonable wear and tear excepted and casualty damage excepted to the extent covered by insurance and except as may be disposed of in accordance with the terms of this Agreement), including, without limitation, all licenses, patents, copyrights, design rights, tradenames, trade secrets and trademarks and take all actions necessary to enforce and protect the validity of any intellectual property right necessary in the conduct or operation of Borrower's business or other right included in the Collateral; (b) keep in full force and effect its existence and comply in all material respects with the laws and regulations governing the conduct of its business where the failure to do so could reasonably be expected to have a Material Adverse Effect on Borrower; and (c) make all such reports and pay all such franchise and other taxes and license fees and do all such other acts and things as may be lawfully required to maintain its rights, licenses, leases, powers and franchises under the laws of the United States or any political subdivision thereof where the failure to do so could reasonably be expected to have a Material Adverse Effect on Borrower.
6.4. [Intentionally Omitted].
6.5. [Intentionally Omitted].
Borrower shall not, until satisfaction in full of the Obligations (other than indemnity obligations with respect to which no claim has been made) and termination of this Agreement:
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
(a) Enter into any merger, consolidation or other reorganization with or into any other Person other than any merger of a shell corporation with Borrower being the surviving corporation of such merger for the purpose of reincorporating Borrower under a different state following written notice of same to Lenders ("Reincorporation Merger") or acquire all or a substantial portion of the assets or stock of any Person other than as permitted by Section 7.4 hereof or permit any other Person to consolidate with or merge with it other than a Reincorporation Merger or in connection with an investment or acquisition which is permitted by Section 7.4 hereof and then only to the extent that Borrower is the surviving entity of any such merger consummated in connection with such permitted investment or acquisition.
(b) Sell, lease, transfer ownership or otherwise dispose of any of its properties or assets, except in the ordinary course of its business and as otherwise permitted under the Senior Credit Facility.
7.2. Creation of Liens. Create or suffer to exist any Lien or transfer upon or against any of its property or assets now owned or hereafter acquired, except Permitted Encumbrances.
(1) acquire assets constituting a business unit or substantially all of the stock or other equity interests of any Person engaged in a line of business currently engaged in by Borrower as described in Section 5.22, provided that (i) the aggregate value of the consideration (including, without limitation, the assumption of liabilities) of all such investments made during the Term shall not exceed $30,000,000 plus the appreciated value, if any, of such investments, (ii) no more than twenty five percent (25%) of such consideration shall be funded, directly or indirectly, with the proceeds of advances under Senior Credit Facility, (iii) any portion of such consideration consisting of Indebtedness of Borrower to the seller or sellers of such assets, stock or other investments or to any other Person shall be subordinated in right of payment to the prior payment in full of the Obligations on terms and conditions satisfactory to Lenders and (iv) after giving effect to any advances under the Senior Credit Facility made or to be made to Borrower to consummate such acquisition, Borrower shall have Undrawn Availability under (and as defined in) the Senior Credit Facility of at least $10,000,000 upon such consummation;
(2) invest in direct Subsidiaries of Borrower so long as (x) Borrower has pledged sixty five percent (65%) (to the extent it is a foreign Subsidiary) or one hundred percent (100%) (to the extent it is a domestic Subsidiary) of each class of equity securities of such Subsidiary owned by Borrower and (y) the aggregate amount of such investments during any fiscal year net of the aggregate amount of cash dividends actually received by Borrower in such fiscal year from such Subsidiaries plus the aggregate amount of loans made by Borrower to its Subsidiaries during such fiscal year which remain outstanding after giving effect solely to principal repayments of such loans made by such Subsidiary, shall not exceed $15,000,000;
(3) make investments solely with the proceeds of Extraordinary Receipts;
(4) maintain investments existing on the date hereof and set forth on Schedule 7.4;
(5) acquire and hold Receivables owing to it or created in the ordinary course of its business;
(6) make pledges and deposits to the extent such pledges and deposits constitute "Permitted Encumbrances" under clauses (d), (e), (n) or (o) of the definition thereof;
(7) acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and Customers and in good faith settlement of delinquent obligations of, and other disputes with Customers or suppliers arising in the ordinary course of business;
(8) make deposits in the ordinary course consistent with past practices to secure Borrower's performance under leases;
(9) enter into transactions which are permitted under Section 7.1 (a) hereof; and
(10) other investments not to exceed the aggregate amount of $250,000 at any time or from time to time.
7.10. Transactions with Affiliates. Directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise deal with, any Affiliate, except transactions in the ordinary course of business, on an arm's-length basis on terms no less favorable than terms which would have been obtainable from a Person other than an Affiliate, provided that in any event the following transactions shall be permitted:
(a) the payment of management fees and expenses incurred by CEI and/or any of their respective Affiliates in providing services to Borrower from time to time in accordance with the Management Services Agreement as in effect on the Closing Date;
(b) the payment of customary and reasonable fees to, and the out-of-pocket expenses of the Board of Directors of Borrower and customary indemnities for the benefit of members of the Board of Directors of Borrower;
(c) the payment by Borrower, in connection with any acquisition, divestiture or financing transaction that is consummated, of a transaction fee to CEI and/or any of their respective Affiliates for such transaction in an amount which is customary in transactions of that nature;
(d) the making of any payments permitted pursuant to Section 7.7;
(e) the payment of customary compensation paid to, and indemnity provided on behalf of, officers, employees or consultants of Borrower or any of its Subsidiaries as determined in good faith by the Board of Directors of Borrower; and
(f) transactions with Subsidiaries to the extent such transactions are permitted under Sections 7.1, 7.3, 7.4 or 7.5 hereof.
(a) Form any Subsidiary unless (i) such Subsidiary executes a Guaranty if such Subsidiary is incorporated in the United States of America or any state thereof and (ii) Lenders shall have received all documents, including legal opinions, it may reasonably require to establish compliance with each of the foregoing conditions.
(b) Enter into any partnership, joint venture or similar arrangement except to the extent permitted by Section 7.4 hereof.
7.12. Fiscal Year and Accounting Changes. Change its fiscal year from a year ending on or about August 31 or make any significant change (i) in accounting treatment and reporting practices except as is consistent with GAAP or (ii) in tax reporting treatment except as permitted by law and provided that Borrower shall promptly notify Lenders of any such changes.
7.14. Amendment of Articles of Incorporation, By-Laws. Amend, modify or waive any term or material provision of its Articles of Incorporation or By-Laws if any such amendment, modification or waiver could, in Lenders' reasonable judgment, have a Material Adverse Effect.
7.18. Other Agreements. Enter into any material amendment, waiver or modification of the Subordinated Note Documentation, Indenture, Exchange Indenture, Management Services Agreement or any related agreements.
8.1. Conditions to Advances. The agreement of Lenders to make the Advances requested to be made on the Closing Date is subject to the satisfaction, or waiver by Lenders, immediately prior to or concurrently with the making of such Advances, of the following conditions precedent:
(k) Financial Condition Certificates. The Lenders shall have received an executed Financial Condition Certificate in the form of Exhibit 8.1(i).
(l) Intentionally Omitted.
(o) Intentionally Omitted.
(u) Intentionally Omitted.
8.2. Intentionally Omitted.
IX. INFORMATION AS TO BORROWER.
Borrower shall, until satisfaction in full of the Obligations (other than indemnity obligations with respect to which no claims have been made) and the termination of this Agreement:
9.1. Disclosure of Material Matters. Promptly (but in any event no later than five (5) Business Days) upon learning thereof, report to Lenders all matters materially affecting the value, enforceability or collectibility of any material portion of the Collateral including, without limitation, Borrower's reclamation or repossession of, or the return to Borrower of, a material amount of goods or claims or disputes asserted by any Customer or other obligor.
9.3. Environmental Reports. Furnish Lenders, concurrently with the delivery of the financial statements referred to in Sections 9.7 and 9.8, with a certificate signed by the President or any other executive officer of Borrower stating, to the best of his knowledge, that Borrower is in compliance in all material respects with all federal, state and local laws relating to environmental protection and control and occupational safety and health except to the extent the failure to be in compliance could not reasonably be expected to result in a Material Adverse Effect. To the extent Borrower is not so in compliance with the foregoing laws, the certificate shall set forth with specificity all areas of non-compliance and the proposed action Borrower will implement in order to resolve such matter.
9.4. Litigation. Promptly notify Lenders in writing of any litigation, suit or administrative proceeding affecting Borrower, whether or not the claim is covered by insurance, and of any suit or administrative proceeding, which in any such case could reasonably be expected to have a Material Adverse Effect on Borrower.
9.5. Material Occurrences. Promptly notify Lenders in writing upon the occurrence of (a) any Event of Default or Default; (b) any event of default under any of the Subordinated Note Documentation or the Senior Credit Facility; (c) any event which with the giving of notice or lapse of time, or both, would constitute an event of default under any of the Subordinated Note Documentation; (d) any event, development or circumstance whereby any financial statements or other reports furnished to Lenders fail in any material respect to present fairly, in accordance with GAAP consistently applied, the financial condition or operating results of Borrower as of the date of such statements; (e) any accumulated retirement plan funding deficiency which, if such deficiency continued for two plan years and was not corrected as provided in Section 4971 of the Code, could subject Borrower to a material tax imposed by Section 4971 of the Code or could reasonably be expected to result in a Material Adverse Effect; (f) each and every default by Borrower which might result in the acceleration of the maturity of any Indebtedness, including the names and addresses of the holders of such Indebtedness with respect to which there is a default existing or with respect to which the maturity has been or could be accelerated, and the amount of such Indebtedness; and (g) any other development in the business or affairs of Borrower which could reasonably be expected to have a Material Adverse Effect; in each case describing the nature thereof and the action Borrower propose to take with respect thereto.
The occurrence of any one or more of the following events shall constitute an "Event of Default":
10.1. failure by Borrower to (a) pay any principal, interest on the Obligations when due, whether at maturity or by reason of acceleration pursuant to the terms of this Agreement or by notice of intention to prepay, or by required prepayment or failure to pay any other liabilities or (b) make any other payment, fee or charge provided for herein or in any Other Document within five (5) Business Days of when due;
10.2. any representation or warranty made or deemed made by Borrower in this Agreement or any related agreement or in any certificate, document or financial or other statement furnished at any time to Lenders in connection herewith or therewith shall prove to have been misleading in any material respect on the date when made or deemed to have been made;
10.3. failure by Borrower to (i) furnish financial information required by Section 9.2 hereof or any other financial information within ten (10) days of when due or when requested or (ii) permit the inspection of its books or records in accordance with the terms hereof;
10.4. issuance of a notice of Lien, levy, assessment, injunction or attachment against a material portion of Borrower's property which is not stayed or lifted within thirty (30) days;
10.5. except as otherwise provided for in Sections 10.1 through 10.4 or Section 10.19 (i) failure or neglect of Borrower to perform, keep or observe any term, provision, condition, covenant contained in Sections 6.1, 6.3, 9.4 or 9.6 hereof which is not cured within thirty (30) days from the occurrence of such failure or neglect or (ii) failure or neglect of Borrower to perform, keep or observe any other term, provision, condition or covenant contained in any other agreement or arrangement, now or hereafter entered into between Borrower and any Lender;
10.6. any judgment or judgments are rendered or judgment liens filed against Borrower for an aggregate amount in excess of $5,000,000 solely as it relates to a Subsidiary of Borrower not incorporated in the United States of America or any state thereof or $2,000,000 in all other matters which within forty (40) days of such rendering or filing is not either satisfied, bonded, stayed or discharged of record;
10.7. Borrower shall (i) apply for, consent to or suffer the appointment of, or the taking of possession by, a receiver, custodian, trustee or similar fiduciary of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within sixty (60) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing;
10.8. Borrower shall admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business in its entirety;
10.9. any Subsidiary of Borrower which is material to the operations of Borrower shall (i) apply for, consent to or suffer the appointment of, or the taking of possession by, a receiver, custodian, trustee or similar fiduciary of itself or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business unless consolidated, merged or liquidated with and into Borrower or any other Subsidiary of Borrower; (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, within sixty (60) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;
10.11. an event of default has occurred and been declared under the Senior Credit Facility or the Subordinated Note Documentation which default shall not have been cured or waived within any applicable grace period and for which Trustee is permitted to take action under the Indenture or the Exchange Indenture, as applicable, or with respect to the Senior Credit Facility, which has resulted in the acceleration of amounts owing thereunder;
10.12. a default of the obligations of Borrower under any other agreement to which it is a party shall occur which could reasonably be expected to result in a Material Adverse Effect which default is not cured within any applicable grace period;
10.14. any material provision of this Agreement or any Other Document shall, for any reason, cease to be valid and binding on Borrower, or Borrower shall so claim in writing to Lenders;
10.15. (i) any Governmental Body shall (A) revoke, terminate, suspend or adversely modify any license, permit, patent trademark or tradename of Borrower, the continuation of which is material to the continuation of Borrower's business and is not replaced by a substitute acceptable to Lenders within sixty (60) days after the date of such revocation, termination or similar action and such revocation, termination or other similar action could reasonably be expected to result in a Material Adverse Effect, or (ii) any agreement which is necessary or material to the operation of Borrower's business shall be revoked or terminated and not replaced by a substitute acceptable to Lenders within sixty (60) days after the date of such revocation or termination, and such revocation or termination and non-replacement would reasonably be expected to have a Material Adverse Effect on Borrower;
10.18. termination except in accordance with its terms or breach of any Guaranty executed and delivered to Lenders in connection with the Obligations or if any Guarantor attempts to terminate the validity of, or its liability under, any such Guaranty except in accordance with its terms; or
10.19. an event or condition specified in Sections 7.15 or 9.15 hereof shall occur or exist with respect to any Plan and, as a result of such event or condition, together with all other such events or conditions, Borrower or any member of the Controlled Group shall incur, or in the opinion of Lenders be reasonably likely to incur, a liability to a Plan or the PBGC (or both) which, in the reasonable judgment of Lenders, would have a Material Adverse Effect on Borrower.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1 Rights and Remedies. Upon the occurrence of (i) an Event of Default pursuant to Section 10.7 all Obligations shall be immediately due and payable and this Agreement and the obligation of Lenders to make Advances shall be deemed terminated; and, (ii) any of the other Events of Default and at any time thereafter (such default not having previously been cured), at the option of Required Lenders (and only if all amounts due under the Senior Credit Facility or the Subordinated Note Documentation shall have been declared immediately due and payable), all Obligations shall be immediately due and payable and Lenders shall have the right to terminate this Agreement and (iii) a filing of a petition against Borrower in any involuntary case under any state or federal bankruptcy laws, the obligation of Lenders to make Advances hereunder shall be terminated other than as may be required by an appropriate order of the bankruptcy court having jurisdiction over Borrower.
11.2 Intentionally Omitted.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1 Waiver of Notice. Borrower hereby waives demand, presentment, protest and notice thereof with respect to any and all instruments, notice of acceptance hereof, notice of loans or advances made, credit extended, or any other action taken in reliance hereon, and all other demands and notices of any description, except such as are expressly provided for herein.
12.2 Delay. No delay or omission on any Lender's part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any default.
12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1 Term. This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of Borrower and each Lender, shall become effective on the date hereof and shall continue in full force and effect until February 27, 2004 (the "Term") unless sooner terminated as herein provided. Borrower may terminate this Agreement at any time upon ten (10) Business Days' prior written notice upon payment in full of the Obligations so long as all amounts due under the Senior Credit Facility have been paid in full in cash and the Senior Credit Facility and all commitments to lend thereunder have been irrevocably terminated.
15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York. Any judicial proceeding brought by or against Borrower with respect to any of the Obligations, this Agreement or any related agreement may be brought in any court of competent jurisdiction in the State of New York, United States of America, and, by execution and delivery of this Agreement, Borrower accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Borrower hereby waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to Borrower at its address set forth in Section 15.6 and service so made shall be deemed completed five (5) Business Days after the same shall have been so deposited in the mails of the United States of America. Nothing herein shall affect the right to serve process in any manner permitted by law or shall limit the right of any Lender to bring proceedings against Borrower in the courts of any other jurisdiction. Borrower waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Any judicial proceeding by Borrower against any Lender involving, directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Agreement or any related agreement, shall be brought only in a federal or state court located in the County of New York, State of New York.
(b) The Required Lenders and Borrower may, subject to the provisions of this Section 15.2 (b), from time to time enter into written supplemental agreements to this Agreement or the Other Documents executed by Borrower, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the rights of Lenders or Borrower thereunder or the conditions, provisions or terms thereof of waiving any Event of Default thereunder, but only to the extent specified in such written agreements; provided, however, that no such supplemental agreement shall, without the consent of all Lenders:
(i) increase the Commitment Percentage or maximum dollar commitment of any Lender.
(ii) extend the maturity of any Note or the due date for any amount payable hereunder, or decrease the rate of interest or reduce any fee payable by Borrower to Lenders pursuant to this Agreement.
(iii) alter the definition of the term Required Lenders or alter, amend or modify this Section 15.2(b).
Any such supplemental agreement shall apply equally to each Lender and shall be binding upon Borrower and Lenders and all future holders of the Obligations. In the case of any waiver, Borrower and Lenders shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of Default is the same as the Event of Default which was waived), or impair any right consequent thereon.
15.3. Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of Borrower and each Lender, all future holders of the Obligations and their respective successors and assigns, except that Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender.
(b) Borrower acknowledges that in the regular course of commercial banking business one or more Lenders may at any time and from time to time sell participating interests in the Advances to other financial institutions (each such transferee or purchaser of a participating interest, a "Transferee"). Each Transferee may exercise all rights of payment (including without limitation rights of set-off) with respect to the portion of such Advances held by it or other Obligations payable hereunder as fully as if such Transferee were the direct holder thereof provided that Borrower shall not be required to pay to any Transferee more than the amount which it would have been required to pay to Lender which granted an interest in its Advances or other Obligations payable hereunder to such Transferee had such Lender retained such interest in the Advances hereunder or other Obligations payable hereunder and in no event shall Borrower be required to pay any such amount arising from the same circumstances and with respect to the same Advances or other Obligations payable hereunder to both such Lender and such Transferee. Borrower hereby grants to any Transferee a continuing security interest in any deposits, moneys or other property actually or constructively held by such Transferee as security for the Transferee's interest in the Advances.
(c) Any Lender may with the consent of the Agent, Lenders and Borrower (which consent of the Agent, Lenders and Borrowers shall not be unreasonably withheld or delayed and which consent of Borrower shall not be required at any time following the occurrence of an Event of Default and during the continuation thereof) sell, assign or transfer all or any part of its rights under this Agreement and the Other Documents to one or more additional banks or financial institutions and one or more additional entities may commit to make Advances hereunder (each a "Purchasing Lender"), in minimum amounts of not less than $500,000, pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender and the transferor Lender, and delivered to Borrower for recording in the Register described in paragraph (d) below. Upon such execution, delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder with a Commitment Percentage as set forth therein, and (ii) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement, the Commitment Transfer Supplement creating a novation for that purpose. Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents. Borrower hereby consents to the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents. Borrower shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
(d) Borrower shall maintain at its address a copy of each Commitment Transfer Supplement delivered to it and a register (the "Register") for the recordation of the names and addresses of each Lender and the outstanding principal, accrued and unpaid interest and other fees due and owing hereunder from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and Borrower and Lenders may treat each Person whose name is recorded in the Register as the owner of the Advance recorded therein for the purposes of this Agreement. The Register shall be available for inspection by any Lender at any reasonable time and from time to time upon reasonable prior notice.
(e) Borrower authorizes each Lender to disclose to any Transferee or Purchasing Lender and any prospective Transferee or Purchasing Lender who has signed a confidentiality agreement in substantially the form of Exhibit A attached hereto any and all financial information in such Lender's possession concerning Borrower which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement or in connection with such Lender's credit evaluation of Borrower.
(A) If to a Lender, as specified on the signature pages hereof
(B) If to Borrower: | MCMS, Inc. | 16000 Xxxxxxxx Xxxx | Xxxxx, Xxxxx 00000 | Attention: Xxxxxxxxxxx X. Xxxxx | Telephone: (000) 000-0000 | Facsimile: (000) 000-0000 |
with copies to: | Xxxxxxxx & Xxxxx | 150 Xxxx 00xx Xxxxxx, 00xx Xxxxx |
| Xxx Xxxx, Xxx Xxxx 00000-0000 |
| Attention: Xxxxxxxxx Xxxxx, Esq. | Telephone: (000) 000-0000 | Telecopier: (000) 000-0000 | and: | Cornerstone Equity Investors IV, L.P. | 710 Xxxxx Xxxxxx, Xxxxx 0000 | Xxx Xxxx, Xxx Xxxx 00000 | Attention: Xxxxxxx Xxxxxx | Xxxx X. Xxxxxx | Telephone: (000) 000-0000 | Telecopier: (000) 000-0000 | and: | Xxxxxxxx & Xxxxx | 150 Xxxx 00xx Xxxxxx, 00xx Xxxxx | Xxx Xxxx, Xxx Xxxx 00000 | Attention: Xxxxxxxxx Xxxxx, Esq. | Telephone: (000) 000-0000 |
Telecopier: (000) 000-0000
(b) Borrower acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to Borrower or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and Borrower hereby authorizes each Lender to share any information delivered to such Lender by Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such Lender for such purposes only to the extent such Person(s) has signed a confidentiality agreement in substantially the form of Exhibit A hereto, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provision of Section 15.15 as if it were a Lender hereunder. Such authorization shall survive the repayment of the other Obligations and the termination of the Loan Agreement.
[SIGNATURE PAGE TO FOLLOW] Each of the parties has signed this Agreement as of the day and year first above written. . WITNESS: MCMS, INC ________________________ By:_______________________________ [SEAL] Name: Xxxxxxxxxxx X. Xxxxx Title: Vice President, Finance and Chief Financial Officer 16399 Franklin Road Nampa, Idaho 83687 CORNERSTONE EQUITY INVESTORS IV, L.P. as Lender By:_______________________________ Name:_____________________________ Title:____________________________ 710 Xxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxx, Xxx Xxxx 00000 Xommitment Percentage: 58.4% BANKERS TRUST COMPANY, as Lender By:_______________________________ Name: Xxxxx Xxxx Title:____________________________ Commitment Percentage: 22.4% OAK INVESTMENT FUNDS, as Lender By:_______________________________ Name:_____________________________ Title:____________________________ Commitment Percentage: 9.6% AUGUST CAPITAL, as Lender By:_______________________________ Name:_____________________________ Title:____________________________ Commitment Percentage: 9.6% STATE OF NEW YORK ) ) ss. COUNTY OF NEW YORK ) On this _____ day of February, 2000, before me personally came Xxxxxxxxxxx X. Xxxxx, to me known, who, being by me duly sworn, did depose and say that he is the Vice President, Finance and Chief Financial Officer of MCMS, INC., the corporation described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the board of directors of said corporation, and that he signed his name thereto by like order. ______________________________ Notary Public STATE OF NEW YORK ) ) ss. COUNTY OF NEW YORK ) On this _____ day of February, 2000, before me personally came ___________, to me known, who, being by me duly sworn, did depose and say that he is the ____________ of ________, the national association described in and which executed the foregoing instrument and that he signed his name thereto by on behalf of said association ______________________________ Notary Public List of Exhibits and Schedules
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