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EXHIBIT 5(b)
REVOLVING CREDIT AGREEMENT
Dated as of March 27, 1997
among
FLEXTRONICS INTERNATIONAL USA, INC.
THE FIRST NATIONAL BANK OF BOSTON and
the other lending institutions set forth on Schedule 1 hereto, and
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
with
BANCBOSTON SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION..................................................... 1
1.1. Definitions...................................................................... 1
1.2. Rules of Interpretation.......................................................... 14
2. THE REVOLVING CREDIT FACILITY............................................................... 15
2.1. Commitment to Lend............................................................... 15
2.2. Commitment Fee................................................................... 16
2.3. Reduction of Total Commitment.................................................... 16
2.3.1. Optional Reduction.................................................... 16
2.3.2. Mandatory Reduction................................................... 16
2.4. The Revolving Credit Notes....................................................... 17
2.5. Interest on Revolving Credit Loans............................................... 17
2.6. Requests for Revolving Credit Loans.............................................. 17
2.7. Conversion Options............................................................... 17
2.7.1. Conversion to Different Type of Revolving Credit Loan................. 17
2.7.2. Continuation of Type of Revolving Credit Loan......................... 18
2.7.3. Eurodollar Rate Loans................................................. 18
2.8. Funds for Revolving Credit Loan.................................................. 18
2.8.1. Funding Procedures.................................................... 18
2.8.2. Advances by Agent..................................................... 19
2.9. Change in Borrowing Base......................................................... 19
3. REPAYMENT OF THE REVOLVING CREDIT LOANS..................................................... 19
3.1. Maturity......................................................................... 19
3.2. Mandatory Repayments of Revolving Credit Loans................................... 19
3.3. Optional Repayments of Revolving Credit Loans.................................... 20
4. LETTERS OF CREDIT........................................................................... 20
4.1. Letter of Credit Commitments..................................................... 20
4.1.1. Commitment to Issue Letters of Credit................................. 20
4.1.2. Letter of Credit Applications......................................... 20
4.1.3. Terms of Letters of Credit............................................ 20
4.1.4. Reimbursement Obligations of Banks.................................... 21
4.1.5. Participations of Banks............................................... 21
4.2. Reimbursement Obligation of the Borrower......................................... 21
4.3. Letter of Credit Payments........................................................ 22
4.4. Obligations Absolute............................................................. 22
4.5. Reliance by Issuer............................................................... 22
4.6. Letter of Credit Fee............................................................. 22
5. CERTAIN GENERAL PROVISIONS.................................................................. 23
5.1. Closing Fee...................................................................... 23
5.2. Agent's Fee...................................................................... 23
5.3. Funds for Payments............................................................... 23
5.3.1. Payments to Agent..................................................... 23
5.3.2. No Offset, etc........................................................ 24
5.4. Computations..................................................................... 24
5.5. Inability to Determine Eurodollar Rate........................................... 24
5.6. Illegality....................................................................... 25
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5.7. Additional Costs, etc............................................................ 25
5.8. Capital Adequacy................................................................. 26
5.9. Certificate...................................................................... 27
5.10. Indemnity....................................................................... 27
5.11. Interest After Default.......................................................... 27
5.12. Certain Bank Obligations........................................................ 27
5.12.1. Replacement Banks.................................................... 27
5.12.2. Mitigation........................................................... 28
5.12.3. Filing Requirements.................................................. 28
6. COLLATERAL SECURITY AND GUARANTIES.......................................................... 29
6.1. Security of Borrower............................................................. 29
6.2. Guarantees and Security of Subsidiaries.......................................... 29
6.3. Change of Status................................................................. 29
7. REPRESENTATIONS AND WARRANTIES.............................................................. 29
7.1. Corporate Authority.............................................................. 29
7.1.1. Incorporation; Good Standing.......................................... 29
7.1.2. Authorization......................................................... 30
7.1.3. Enforceability........................................................ 30
7.2. Governmental Approvals........................................................... 30
7.3. Title to Properties; Leases...................................................... 30
7.4. No Material Changes, etc; Solvency............................................... 31
7.4.1. No Changes............................................................ 31
7.4.2. Solvency.............................................................. 31
7.5. Franchises, Patents, Copyrights, etc............................................. 31
7.6. Litigation....................................................................... 31
7.7. No Materially Adverse Contracts, etc............................................. 31
7.8. Compliance with Other Instruments, Laws, etc..................................... 32
7.9. Tax Status....................................................................... 32
7.10. No Event of Default............................................................. 32
7.11. Holding Company and Investment Company Acts..................................... 32
7.12. Absence of Financing Statements, etc............................................ 32
7.13. Perfection of Security Interest................................................. 32
7.14. Certain Transactions............................................................ 33
7.15. Employee Benefit Plans.......................................................... 33
7.15.1. In General........................................................... 33
7.15.2. Terminability of Welfare Plans....................................... 33
7.15.3. Guaranteed Pension Plans............................................. 33
7.15.4. Multiemployer Plans.................................................. 34
7.16. Regulations U and X............................................................. 34
7.17. Environmental Compliance........................................................ 34
7.18. Subsidiaries, etc............................................................... 36
7.19. Chief Executive Offices......................................................... 36
7.20. Fiscal Year..................................................................... 36
7.21. No Amendments to Certain Documents.............................................. 36
7.22. Disclosure...................................................................... 36
7.23. Insurance....................................................................... 36
8. AFFIRMATIVE COVENANTS OF THE BORROWER....................................................... 37
8.1. Punctual Payment................................................................. 37
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8.2. Maintenance of Office............................................................ 37
8.3. Records and Accounts............................................................. 37
8.4. Financial Statements, Certificates and Information............................... 37
8.5. Notices.......................................................................... 38
8.5.1. Defaults.............................................................. 38
8.5.2. Environmental Events.................................................. 38
8.5.3. Notification of Claim against Collateral.............................. 38
8.5.4. Notice of Litigation and Judgments.................................... 39
8.6. Corporate Existence; Maintenance of Properties................................... 39
8.7. Insurance........................................................................ 39
8.8. Taxes............................................................................ 39
8.9. Inspection of Properties and Books, etc.......................................... 40
8.9.1. General............................................................... 40
8.9.2. Appraisals............................................................ 40
8.9.3. Communications with Accountants....................................... 40
8.10. Compliance with Laws, Contracts, Licenses, and Permits.......................... 40
8.11. Employee Benefit Plans.......................................................... 41
8.12. Use of Proceeds................................................................. 41
8.13. Fair Labor Standards Act........................................................ 41
8.14. Recordation of Corporate Mortgage............................................... 41
8.15. Further Assurances.............................................................. 42
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.................................................. 42
9.1. Distributions.................................................................... 42
9.2. Compliance with Environmental Laws............................................... 42
9.3. Employee Benefit Plans........................................................... 42
9.4. Change in Terms of Capital Stock................................................. 43
9.5. Fiscal Year...................................................................... 43
9.6. Transactions with Affiliates..................................................... 43
9.7. Inconsistent Agreements.......................................................... 43
9.8. Change in Nature of Business..................................................... 44
9.9. Charter Amendments............................................................... 44
9.10. Limitations on Foreign Exchange Arrangements.................................... 44
10. CLOSING CONDITIONS......................................................................... 44
10.1. Loan Documents, etc............................................................. 44
10.2. Certified Copies of Charter Documents........................................... 44
10.3. Corporate Action................................................................ 44
10.4. Incumbency Certificate.......................................................... 44
10.5. Validity of Liens............................................................... 44
10.6. Perfection Certificates and UCC Search Results.................................. 45
10.7. Certificates of Insurance....................................................... 45
10.8. Solvency Certificate............................................................ 45
10.9. Opinion of Counsel.............................................................. 45
10.10. Payment of Fees................................................................ 45
10.11. Payoff Letter.................................................................. 45
10.12. Disbursement Instructions...................................................... 46
10.13. Borrowing Base Report.......................................................... 46
10.14. Consents and Approvals......................................................... 46
11. CONDITIONS TO ALL BORROWINGS............................................................... 46
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11.1. Representations True; No Event of Default....................................... 46
11.2. No Legal Impediment............................................................. 46
11.3. Governmental Regulation......................................................... 46
11.4. Proceedings and Documents....................................................... 47
11.5. Exchange Limitations............................................................ 47
11.6. Borrowing Base Report........................................................... 47
12. EVENTS OF DEFAULT; ACCELERATION; ETC....................................................... 47
12.1. Events of Default and Acceleration.............................................. 47
12.2. Termination of Commitments...................................................... 49
12.3. Remedies........................................................................ 50
12.4. Currency Conversion............................................................. 50
12.5. Distribution of Collateral Proceeds............................................. 51
13. SETOFF..................................................................................... 51
14. THE AGENT.................................................................................. 52
14.1. Authorization................................................................... 52
14.2. Employees and Agents............................................................ 53
14.3. No Liability.................................................................... 53
14.4. No Representations.............................................................. 53
14.5. Payments........................................................................ 53
14.5.1. Payments to Agent.................................................... 54
14.5.2. Distribution by Agent................................................ 54
14.5.3. Delinquent Banks..................................................... 54
14.6. Holders of Revolving Credit Notes............................................... 54
14.7. Indemnity....................................................................... 55
14.8. Agent as Bank................................................................... 55
14.9. Resignation..................................................................... 55
14.10. Notification of Defaults and Events of Default................................. 55
15. EXPENSES................................................................................... 55
16. INDEMNIFICATION............................................................................ 56
17. SURVIVAL OF COVENANTS, ETC................................................................. 57
18. ASSIGNMENT AND PARTICIPATION............................................................... 57
18.1. Conditions to Assignment by Banks............................................... 57
18.2. Certain Representations and Warranties; Limitations; Covenants.................. 58
18.3. Register........................................................................ 59
18.4. New Notes....................................................................... 59
18.5. Participations.................................................................. 59
18.6. Disclosure...................................................................... 60
18.7. Assignee or Participant Affiliated with the Borrower............................ 60
18.8. Miscellaneous Assignment Provisions............................................. 60
18.9. Assignment by Borrower.......................................................... 61
19. NOTICES, ETC............................................................................... 61
20. GOVERNING LAW.............................................................................. 61
21. HEADINGS................................................................................... 62
22. COUNTERPARTS............................................................................... 62
23. ENTIRE AGREEMENT, ETC...................................................................... 62
24. WAIVER OF JURY TRIAL....................................................................... 62
25. CONSENTS, AMENDMENTS, WAIVERS, ETC......................................................... 62
26. SEVERABILITY............................................................................... 63
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27. CONFIDENTIALITY............................................................................ 63
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List of Schedules and Exhibits
Schedule 1 Banks; Bank Commitments; Commitment Percentages
Schedule 7.3 Liens to Properties; Leases
Schedule 7.7 Litigation
Schedule 7.17 Environmental Matters
Schedule 7.18 Subsidiaries
Schedule 7.23 Insurance
Exhibit A Form of Borrowing Base Report
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Loan Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of March 27, 1997 by and
among FLEXTRONICS INTERNATIONAL, USA, INC. (the "Borrower"), a California
corporation with its principal place of business at 0000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000, THE FIRST NATIONAL BANK OF BOSTON, a national banking
association and the other lending institutions listed on Schedule 1 and THE
FIRST NATIONAL BANK OF BOSTON as agent for itself and such other lending
institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Accounts Receivable. All rights of FIL or any of its Subsidiaries to
payment for goods sold, leased or otherwise marketed in the ordinary course of
business and all rights of FIL or any of its Subsidiaries to payment for
services rendered in the ordinary course of business and all sums of money or
other proceeds due thereon pursuant to transactions with account debtors (except
for that portion of the sum of money or other proceeds due thereon that relate
to sales, use or property taxes in conjunction with such transactions), all as
recorded on books of account in accordance with generally accepted accounting
principles.
Acquisition Closing Date. The first date on which the conditions set
forth in the Asset Purchase Agreement have been satisfied and the Ericsson
Acquisition has occurred.
Acquisition Documents. Collectively, the Asset Purchase Agreement and
all agreements and documents required to be entered into or delivered pursuant
thereto or in connection with the Ericsson Acquisition.
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to Section 8.4(a).
Affiliate. Any Person, other than a wholly-owned Subsidiary, that would
be considered to be an affiliate of the Borrower under Rule 144(a) of the Rules
and Regulations of the Securities and Exchange Commission, as in effect on the
date hereof, if the Borrower were issuing securities.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent. The First National Bank of Boston acting as agent for the Banks.
Agent's Special Counsel. Xxxxxxx, Xxxx & Xxxxx LLP or such other
counsel as may be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the
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Applicable Margin shall be the applicable margin set forth below with respect to
FIL's Leverage Ratio, as determined for the fiscal period of the FIL and its
Subsidiaries ending immediately prior to the applicable Rate Adjustment Period.
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BASE RATE EURODOLLAR COMMITMENT LETTER OF
LEVEL LEVERAGE RATIO LOANS RATE LOANS FEE RATE CREDIT FEES
----------------------------------------------------------------------------------------------------
I Less than 1.50:1.00 0 62.50 25.00 62.50
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II Equal to or greater 0 87.50 25.00 87.50
than 1.50:1.00 but
less than 2.00:1.00
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III Equal to or greater 0 112.50 25.00 112.50
than 2.00:1.00 but
less than 2.50:1.00
----------------------------------------------------------------------------------------------------
IV Equal to or greater 0 162.50 37.50 162.50
than 2.50:1.00 but
less than 3.00:1.00
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V Equal to or greater 0 200.00 37.50 200.00
than 3.00:1.00 but
less than 3:50:1.00
----------------------------------------------------------------------------------------------------
VI Equal to or greater 0 237.50 50.00 237.50
than 3.50:1.00 but
less than 4.00:1.00
----------------------------------------------------------------------------------------------------
VIi Equal to or greater 0 275.50 50.00 275.50
than 4.00:1.00
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Notwithstanding the foregoing, (a) for purposes of interest on
Revolving Credit Loans outstanding, the Letter of Credit Fees and the Commitment
Fee Rate payable during the period commencing on the Closing Date through the
date immediately preceding the first Adjustment Date to occur after the fiscal
quarter ending June 30, 1997, the Applicable Margin shall be the highest
Applicable Margin set forth above, and (b) if the Borrower fails to deliver any
Compliance Certificate pursuant to Section 8.4(a) hereof then, for the period
commencing on the next Adjustment Date to occur subsequent to such failure
through the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be at the highest
Applicable Margin set forth above.
Asset Purchase Agreement. The Asset Transfer Agreement dated as of
February 12, 1997 between Ericsson and Flextronics Sweden, together with all
schedules, exhibits and annexes thereto.
Assignment and Acceptance. See Section 18.1.
Astron Consideration Shares. The ordinary shares of FIL allotted and to
be issued to the Vendors on June 30, 1998 pursuant to the Astron Sales
Agreement.
Astron Sales Agreement. The Agreement dated January 6, 1996 among the
Vendors and FIL relating to the sale and purchase of the issued share capital of
Astron Group Limited.
Balance Sheet Date. March 31, 1996.
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Banks. FNBB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 18.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by FNBB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to Section 8.4(e), which is equal
to the sum of:
(a) seventy percent (70%) of Eligible Accounts Receivable for which
invoices have been issued and are payable and which have not otherwise been
included in the FIL Borrowing Base; plus
(b) twenty percent (20%) of the net book value (determined on a first
in first out basis at lower of cost or market) of Eligible Inventory which has
not otherwise been included in the FIL Borrowing Base
provided, however, at such time as the FIL Term Loan has been
indefeasibly repaid in full in cash, the Borrowing Base shall equal the Total
Commitment.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of FIL and in substantially the form of Exhibit A hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 7.18.
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Closing Date. The first date on which the conditions set forth in
Section 10 have been satisfied and any Revolving Credit Loans are to be made or
any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower
and the Guarantors that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
Commitment Fee Rate. As referred to as such in the table contained in
the definition of Applicable Margin.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Compliance Certificate. See Section 8.4(a).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of FIL and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). With respect to FIL and its
Subsidiaries for any period, the consolidated net income (or deficit) of FIL and
its Subsidiaries, after deduction of all expenses, taxes, and other proper
charges, determined in accordance with generally accepted accounting principles,
after eliminating therefrom all extraordinary nonrecurring items of income.
Consolidated Total Interest Expense. With respect to FIL and its
Subsidiaries for any period, the aggregate amount of interest required to be
paid or accrued by FIL and its Subsidiaries during such period on all
Indebtedness of FIL and its Subsidiaries outstanding during all or any part of
such period, whether such interest was or is required to be reflected as an item
of expense or capitalized, including payments consisting of interest in respect
of Capitalized Leases and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money but excluding any closing fees, structuring fees, arrangement
fees, accounting and other transactions costs that have been or are capitalized.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with Section 2.7.
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Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Default. See Section 12.1.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7.
EBITDA. With respect to FIL and its Subsidiaries for any fiscal period,
an amount equal to Consolidated Net Income for such period, plus, to the extent
deducted in the calculation of Consolidated Net Income and without duplication,
(a) depreciation and amortization for such period, (b) other noncash charges for
such period, (c) income tax expense for such period, (d) Consolidated Total
Interest Expense paid or accrued during such period, (e) the aggregate amount of
the Xxxx Payments made during such period and (f) fiscal quarter losses for
FIL's 1997 fiscal year from discontinued operations in the aggregate amounts not
to exceed $569,000 for the fiscal quarter ended June 30, 1996, $1,013,000 for
the fiscal quarter ended September 30, 1996, $2,039,000 for the fiscal quarter
ended December 31, 1996, $3,441,000 for the fiscal quarter ended December 31,
1996 relating to the Texas plant closure and the amounts in the fiscal quarter
ending March 31, 1997 related to the Singapore consolidation, the Ericsson
Acquisition transaction costs and plant closings and other extraordinary
expenses up to a maximum aggregate amount of $5,000,000.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) which are classified as "accounts receivable" on FIL's
balance sheet, less the aggregate amount of all such Accounts Receivable which
FIL has written off or otherwise reasonably and in good faith determines to be
uncollectible.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with
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generally accepted accounting principles; (c) a commercial bank organized under
the laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld.
Eligible Inventory. With respect to FIL or any of its Subsidiaries,
finished goods, work in progress and raw materials and component parts inventory
owned by FIL or any of its Subsidiaries and which is classified as "inventory"
on FIL's balance sheet, less the amount of such Eligible Inventory which FIL
reasonably determines has been damaged or otherwise unsaleable.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained of contributed to by the Borrower or any
Subsidiary, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See Section 7.18(a).
Ericsson. Ericsson Business Networks AB, a company duly incorporated
and existing under the laws of Sweden.
Ericsson Acquisition. The acquisition by Flextronics Sweden on the
Acquisition Closing Date of certain of the assets of Ericsson consisting
primarily of Ericsson's business in Vedeby and Verko which includes the
manufacturing of complete integrated information networks for voice, data and
multimedia in wired and mobile applications pursuant to the Acquisition
Documents.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower or a Subsidiary under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
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Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate determined by the Agent at
which Dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. London time on the second
Eurodollar Business Day prior to the first day of such Interest Period, divided
by (b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if
applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See Section 12.1.
Excluded Subsidiaries. Collectively, Astron Technologies Ltd.,
Flextronics Industrial (Shenzhen) Limited, Flextronics Computer (Shekou)
Limited, Zhuhai Daomen Xxxx Xx Technology Co. Ltd., Zhuhai Daomen Xxxx Xx
Electronics Co. Ltd., Flex Asia (UK) Ltd. and any other Subsidiary of FIL formed
or acquired after the Closing Date and which are not required to become a
Guarantor pursuant to Section 8.5 hereof and which does not elect to become a
Guarantor pursuant to Section 6 hereof; provided, however, to the extent any
Person which is an Excluded Subsidiary hereunder subsequently elects to become a
Guarantor hereunder and complies with Section 6.3 hereof, such Person shall
cease being an Excluded Subsidiary hereunder on the date all the conditions of
Section 6.3 have been satisfied.
Fee Letter. The fee letter dated as of March 18, 1997 by and among the
Borrower, FIL, the Agent and BancBoston Securities Inc., as the same may be
amended, supplemented, restated or otherwise modified from time to time.
FIL. Flextronics International Ltd., a Singapore limited liability
company and the parent the Borrower.
FIL Borrowing Base. The "Borrowing Base" as such term is defined in the
FIL Credit Agreement.
FIL Agent. As defined in the definition of FIL Credit Agreement.
FIL Banks. As defined in the definition of FIL Credit Agreement.
FIL Credit Agreement. The Revolving Credit and Term Loan Agreement
dated as of March 27, 1997 by and among FIL, FNBB and the other lending
institutions party thereto (collectively, the "FIL Banks") and The First
National Bank of Boston as agent for the FIL
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Banks (in such capacity, the "FIL Agent"), as the same may be amended and in
effect from time to time.
FIL Guarantees. The "Guarantees" as such term is defined in the FIL
Credit Agreement.
FIL Guarantors. Collectively, the Borrower and each of the Guarantors
other than FIL, which FIL Guarantors have guaranteed to the FIL Agent and the
FIL Banks all of FIL's obligations to the FIL Agent and the FIL Banks under the
FIL Credit Agreement.
FIL Guaranty. The Guaranty, in form and substance satisfactory to the
Agent and the Banks, dated or to be dated on or prior to the Closing Date, made
by FIL in favor of the Banks and the Agent pursuant to which FIL guaranties to
the Banks and the Agent the payment and performance of the Obligations of the
Borrower.
FIL Letter of Credit Applications. The "Letter of Credit Applications"
as such term is defined in the FIL Credit Agreement.
FIL Letters of Credit. The "Letters of Credit" as such term is defined
in the FIL Credit Agreement.
FIL Loan Documents. The FIL Credit Agreement, the FIL Notes, the FIL
Letter of Credit Application, the FIL Letters of Credit, the Fee Letter, and the
FIL Security Documents.
FIL Notes. The "Revolving Credit Notes" and the "Term Notes" as such
terms are defined in the FIL Credit Agreement.
FIL Obligations. The "Obligations" as such term is defined in the FIL
Credit Agreement.
FIL Revolver. The "Revolving Credit Loans" (as such term is defined in
the FIL Credit Agreement) made by the FIL Banks to FIL pursuant to the FIL
Credit Agreement.
FIL Security Documents. The "Security Documents" as such term is
defined in the FIL Credit Agreement.
FIL Term Loan. The "Term Loan" as such term is defined in the FIL
Credit Agreement.
Flextronics Holdings. Flextronics Holding AB, a company duly
incorporated and existing under the laws of Sweden and a wholly-owned Subsidiary
of FIL.
Flextronics Singapore. Flextronics Singapore Pte Ltd., a company
incorporated in Singapore and a wholly-owned Subsidiary of FIL.
Flextronics Sweden. Flextronics International Sweden AB, a company duly
incorporated and existing under the laws of Sweden, and a wholly-owned
Subsidiary of Flextronics Holdings.
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FNBB. The First National Bank of Boston, a national banking
association, in its individual capacity.
generally accepted accounting principles. (a) When used in calculating
the Leverage Ratio, whether directly or indirectly through reference to a
capitalized term used therein, means (i) principles that are consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, in effect for the fiscal year ended on the Balance Sheet
Date, and (ii) to the extent consistent with such principles, the accounting
practice of FIL reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of FIL adopting the same principles, provided that in each case
referred to in this definition of "generally accepted accounting principles" a
certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(other than a qualification regarding changes in generally accepted accounting
principles) as to financial statements in which such principles have been
properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantees. Collectively, each of the Guarantees, including without
limitation the FIL Guaranty, in form and substance satisfactory to the Agent and
the Banks, dated or to be dated on or prior to the Closing Date, or such later
date as contemplated by Section 6.3 or Section 9.5.2 hereof, made by each
Guarantor in favor of the Banks and the Agent pursuant to which such Guarantor
guaranties to the Banks and the Agent, among other things, the payment and
performance of the Obligations of the Borrower.
Guarantors. FIL and each Subsidiary of FIL other than the Excluded
Subsidiaries.
Hazardous Substances. See Section 7.18(b).
Indebtedness. With respect to any Person, whether recourse is to all or
a portion of the assets of such Person or non-recourse, and whether or not
contingent, the following (without duplication): (a) all indebtedness of such
Person for borrowed money or credit obtained, whether current or funded, secured
or unsecured, recourse or non-recourse, (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of such Person for the deferred purchase price of property or
services, whether or not represented by a note or other security (other than in
respect of any trade payable to a Person other than a Subsidiary of the Borrower
which is not overdue for more than ninety days incurred in the ordinary course
of business), (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to the repurchase, repossession or
sale of such property), (e) all indebtedness of such Person secured by a
purchase money mortgage or
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other lien to secure all or part of the purchase price of property subject to
such mortgage or lien, (f) all Capitalized Lease and Synthetic Lease
obligations, (g) any liability of such Person, whether contingent or otherwise,
in respect of banker's acceptances, letters of credit or similar facilities
issued for the account of such Person, (h) all other indebtedness secured by any
mortgage, pledge, security interest, or other consensual lien, charge or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed, (i) all obligations
to purchase, redeem, retire, defease or otherwise make any payment in cash
(including any mandatory dividends or Distributions) in respect of any capital
stock or any warrants, rights or options to acquire such capital stock, except
to the extent considered an Investment; (j) any interest swap obligations or
currency hedge obligations of such Person, determined on xxxx-to-market basis.
at the time of determination, (k) all Indebtedness of others referred to in
clauses (a) through (j) above guaranteed directly or indirectly in any manner,
or in effect guaranteed directly or indirectly through an agreement (i) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (iii) to supply funds to or in any manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (iv) otherwise to assure a creditor against loss, and (l) all Indebtedness of
the type referred to in clauses (a) through (j) above of another Person which is
secured or supported by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured or supported by) any lien
on (or other right of recourse to or against) property (including without
limitation accounts and contract rights) or assets of such Person even though
such Person has not assumed or become liable, contractually or otherwise, for
the payment of such Indebtedness.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar quarter which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (i) three (3)
months or less, the last day of such Interest Period and (ii) more than three
(3) months, the date that is 3 months from the first day of such Interest Period
and, in addition, the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrower in a Loan Request (i) for any Base Rate Loan, the last
day of the calendar quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3, or
6 months; and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Revolving Credit Loan and ending on
the last day of one of the periods set forth above, as selected by the Borrower
in a Conversion Request; provided that all of the foregoing provisions relating
to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in
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which event such Interest Period shall end on the immediately preceding
Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
Section 2.7, the Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar 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 Eurodollar Business Day of a calendar month; and
(e) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Revolving Credit Loan Maturity
Date shall end on the Revolving Credit Loan Maturity Date.
Letter of Credit. See Section 4.1.1.
Letter of Credit Application. See Section 4.1.1.
Letter of Credit Fee. See Section 4.6.
Letter of Credit Participation. See Section 4.1.4.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
Funded Indebtedness of FIL and its Subsidiaries outstanding on such date to (b)
the EBITDA of FIL and its Subsidiaries for the period of four (4) consecutive
fiscal quarters (treated as a single accounting period) most recently ended on
such date.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Fee Letter, the
Security Trust Deed and the Security Documents.
Loan Request. See Section 2.6.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty-one percent (51%) percent of the Total
Commitment.
Material Adverse Effect. A material adverse effect on (a) the business,
assets, condition (financial or otherwise), or properties of the Borrower and
its Subsidiaries taken as a whole, or the Collateral, (b) the rights and
remedies of the Agent or any Bank under any of
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the Loan Documents or (c) the ability of the Borrower or any of its Subsidiaries
to perform their respective Obligations under the Loan Documents.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrower, the Guarantors and their respective Subsidiaries to any of the
Banks and the Agent, individually or collectively, existing on the date of this
Credit Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Credit Agreement or any of the other Loan
Documents or in respect of any of the Revolving Credit Loans made or
Reimbursement Obligations incurred or any of the Revolving Credit Notes, Letter
of Credit Application, Letter of Credit, or arising or incurred in connection
with any interest rate protection arrangements entered into by such Person or
any documents, agreements or instruments executed in connection therewith, or
other instruments at any time evidencing any thereof.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificates. Collectively, the Perfection Certificate and
Collateral Certificates dated as of the date hereof, executed by each of the
Borrower and each Guarantor and in form and substance satisfactory to the Agent
and the Banks.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Rate Adjustment Period. See the definition of Applicable Margin.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Revolving Credit Note.
Xxxx Payment. All payments or other amounts due at any time by FIL or
any of its Subsidiaries to Xxxxxxx Xxxx pursuant to that certain (a) Services
Agreement dated February 2, 1996 between the Borrower, Astron Technologies
Limited and Xxxxxxx Xxxx in the form delivered to the Agent on or prior to the
Closing Date and (b) the Supplemental Services
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Agreement dated February 2, 1996 between Astron Group Limited and Xxxxxxx Xxxx
in the form delivered to the Agent on or prior to the Closing Date.
Reference Bank. FNBB.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in Section 4.2.
Revolving Credit Loan Maturity Date. March 24, 2000.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to Section 2.
Revolving Credit Note Record. A Record with respect to a Revolving
Credit Note.
Revolving Credit Notes. See Section 2.4.
Security Agreements. Collectively, the several Security Agreements,
Charges, Debentures, Mortgages and Corporate Mortgages, each dated or to be
dated on or prior to the Closing Date, between the Borrower and each of the
Guarantors and the Agent and in form and substance satisfactory to the Banks and
the Agent.
Security Documents. The Guarantees, the Security Agreements and the
Stock Pledge Agreements.
Security Trust Deed. The Trust Deed dated March 27, 1997 by and among
the Borrower, FIL, the FIL Agent and the Agent.
Stock Pledge Agreements. Collectively, (a) the Charge Over Shares by
FIL Flextronics Singapore Pte Ltd, Flextronics de Mexico, S.A. de C.V.,
Flextronics Holdings UK Limited, the Borrower and Astron Technologies Ltd.; (b)
the Charge Over Shares by Flextronics Singapore Pte Ltd. in Flextronics
International Marketing (L) Ltd.; (c) the Share Security Deed over the shares of
Flextronics Manufacturing (HK) Ltd. by FIL; (d) the Pledge Agreement regarding
the shares of Flextronics Holdings executed by Flextronics Holdings UK Limited;
(e) the Pledge Agreement regarding the shares of Flextronics Sweden executed by
Flextronics Holdings; and (f) the Charge over Shares in Astron Group Limited by
Flextronics Manufacturing (HK) Ltd, each dated as of a date on or prior to the
Closing Date and each in form and substance satisfactory to the Banks and the
Agent.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Synthetic Lease. Any lease or similar arrangements entered into by any
Person in connection with the acquisition or lease of real property, fixtures or
other Capital Assets which is treated in accordance with generally accepted
accounting principles as an operating for accounting purposes, but as a
Capitalized Lease for tax purposes.
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Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Total Funded Indebtedness. All Indebtedness of FIL and its Subsidiaries
for borrowed money (including without limitation, all guarantees by such Person
of Indebtedness of others for borrowed money), purchase money Indebtedness and
with respect to Capitalized Lease, determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however, for
purposes of the Leverage Ratio hereof, Total Funded Indebtedness shall not
include that portion of the purchase price owing to the Vendors payable entirely
by the Astron Consideration Shares and that portion of the Xxxx Payment which
is, as of the date of determination, payable entirely in FIL's ordinary shares.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 4.2.
Vendors. Collectively, Alberton Holding Limited and Omac Sales Limited.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
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(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of New York, have the
meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Revolving Credit Loan Maturity Date upon notice
by the Borrower to the Agent given in accordance with Section 2.6, such sums as
are requested by the Borrower up to a maximum aggregate amount outstanding
(after giving effect to all amounts requested) at any one time equal to such
Bank's Commitment minus such Bank's Commitment Percentage of the sum of the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided that
the sum of the outstanding amount of the Revolving Credit Loans (after giving
effect to all amounts requested) plus the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not at any time exceed the lesser of (a) the
Total Commitment and (b) the Borrowing Base. The Revolving Credit Loans shall be
made pro rata in accordance with each Bank's Commitment Percentage. Each request
for a Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in Section 10 and Section
11, in the case of the initial Revolving Credit Loans to be made on the Closing
Date, and Section 11, in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the applicable Commitment Fee Rate on the average
daily amount during each calendar quarter or portion thereof from the date
hereof to the Revolving Credit Loan Maturity Date by which the Total Commitment
minus the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the outstanding amount of Revolving Credit Loans during such
calendar quarter. The commitment fee shall be payable quarterly in arrears on
the first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final
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payment on the Revolving Credit Maturity Date or any earlier date on which the
Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT.
2.3.1. OPTIONAL REDUCTION. The Borrower shall have the right
at any time and from time to time upon seven (7) Business Days prior
written notice to the Agent to reduce by $1,000,000 or an integral
multiple of $500,000 in excess thereof or terminate entirely the Total
Commitment, whereupon the Commitments of the Banks shall be reduced pro
rata in accordance with their respective Commitment Percentages of the
amount specified in such notice or, as the case may be, terminated.
Promptly after receiving any notice of the Borrower delivered pursuant
to this Section 2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the
Banks the full amount of any commitment fee then accrued on the amount
of the reduction. No reduction or termination of the Commitments may be
reinstated.
2.3.2. MANDATORY REDUCTION. The Total Commitment shall be
automatically and irrevocable reduced pursuant to the requirements of
Section 4.3.2 and Section 10.5.2 of the FIL Credit Agreement on the
dates and in the amounts (the "Asset Reduction Amount") required by
such Section 4.3.2 and Section 10.5.2. Upon such a reduction in the
Total Commitment pursuant to such Section 4.3.2. or Section 10.5.2, the
Commitment of each Bank shall be reduced pro rata in accordance with
its Commitment Percentage of the Asset Reduction Amount. If, on the
date of such reduction, the sum of the outstanding amount of the
Revolving Credit Loans plus the Maximum Drawing Amount plus all Unpaid
Reimbursement Obligations exceeds the Total Commitment in effect after
giving effect to the reduction of the Total Commitment that occurred on
such date pursuant to this Section 2.3.2, then the Borrower shall
immediately pay the amounts of such excess to the Agent for the
respective accounts of the Banks for application first to the Unpaid
Reimbursement Obligations, second, to the Revolving Credit Loans, and
third to provide to the Agent cash collateral for Reimbursement
Obligations as contemplated by Section 4.2.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit A hereto (each a "Revolving Credit Note"), dated as of March 27, 1997
and completed with appropriate insertions. One Revolving Credit Note shall be
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Revolving
Credit
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Note Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Credit Note to make payments of principal of or
interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in Section 5.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the Base Rate plus the
Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the Eurodollar Rate
determined for such Interest Period plus the Applicable Margin.
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to
the Agent written notice in the form of Exhibit C hereto (or telephonic notice
confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") no less than (a) one (1) Business
Day prior to the proposed Drawdown Date of any Base Rate Loan and (b) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (i) the principal amount of the
Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such
Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan
(if comprising a Eurodollar Rate Loan) and (iv) the Type of such Revolving
Credit Loan. Promptly upon receipt of any such notice, the Agent shall notify
each of the Banks thereof. Each Revolving Credit Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (a) with respect to any such conversion of a Revolving
Credit Loan to a Base Rate Loan, the Borrower shall give the Agent at
least one (1) Business Day prior written notice of such election; (b)
with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrower shall give the Agent at least three (3)
Eurodollar Business Days prior written notice of such election; (c)
with respect to any such conversion of a Eurodollar Rate Loan into a
Revolving Credit Loan of another Type, such conversion shall only be
made on the last day of the Interest Period with respect thereto and
(d) no Revolving Credit Loan may be converted into a Eurodollar Rate
Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each
Bank shall take such action as is
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necessary to transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its Eurodollar Lending
Office, as the case may be. All or any part of outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided herein, provided that any partial
conversion shall be in an aggregate principal amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof. Each Conversion Request
relating to the conversion of a Revolving Credit Loan to a Eurodollar
Rate Loan shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in Section 2.7.1; provided that no Eurodollar Rate
Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a
Base Rate Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default of which officers of the Agent active upon the Borrower's
account have actual knowledge. In the event that the Borrower fails to
provide any such notice with respect to the continuation of any
Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto. The Agent shall notify the
Banks promptly when any such automatic conversion contemplated by this
Section 2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $1,000,000 or a whole multiple of
$500,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by Section 10 and Section 11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate
amount of such Revolving Credit Loans made available to the Agent by
the Banks. The failure or refusal of any Bank to make available to the
Agent at the aforesaid time and place on any Drawdown Date the amount
of its Commitment Percentage of the requested Revolving Credit Loans
shall not relieve any other Bank from its several obligation hereunder
to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Revolving Credit Loans.
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2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Revolving Credit Loans to
be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(b) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, times (c) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 365. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Agent shall be entitled to recover such amount from the Borrower on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
monthly by the Agent by reference to the Borrowing Base Report delivered to the
Banks and the Agent pursuant to Section 8.4(e).
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (a) Total
Commitment and (b) the Borrowing Base, then the Borrower shall immediately pay
the amount of such excess to the Agent for the respective accounts of the Banks
for application: first, to any Unpaid Reimbursement Obligations; second, to the
Revolving Credit Loans; and third, to provide to the Agent cash collateral for
Reimbursement Obligations as contemplated by Section 4.2(b) and (c). Each
payment of any Unpaid Reimbursement Obligations or prepayment of Revolving
Credit Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
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3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, but subject to Section 5.10. The Borrower shall give the Agent, no
later than 12:00 noon, Boston time, at least one (1) Business Day prior written
notice of any proposed prepayment pursuant to this Section 3.3 of Base Rate
Loans, and three (3) Eurodollar Business Days notice of any proposed prepayment
pursuant to this Section 3.3 of Eurodollar Rate Loans, in each case specifying
the proposed date of prepayment of Revolving Credit Loans and the principal
amount to be prepaid. Each such partial prepayment of the Revolving Credit Loans
shall be in an integral multiple of $1,000,000 or a whole multiple of $100,000
in excess thereof, shall be accompanied by the payment of accrued interest on
the principal prepaid to the date of prepayment and shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans. Each partial
prepayment shall be allocated among the Banks, in proportion, as nearly as
practicable, to the respective unpaid principal amount of each Bank's Revolving
Credit Note, with adjustments to the extent practicable to equalize any prior
repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
Section 4.1.4 and upon the representations and warranties of the
Borrower contained herein, agrees, in its individual capacity, to
issue, extend and renew for the account of the Borrower one or more
standby or documentary letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after
giving effect to such request, (a) the sum of the aggregate Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $5,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations, and (iii) the amount of all Revolving Credit Loans
outstanding shall not exceed the lesser of (A) the Total Commitment and
(B) the Borrowing Base.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (b) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed
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by a confirmer or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject
to the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to Section 4.2
(such agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under Section 4.2
in an amount equal to such payment. Each Bank shall share in accordance
with its participating interest in any interest which accrues pursuant
to Section 4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in Section 4.2(b)
and (c), on each date that any draft presented under such Letter of
Credit is honored by the Agent, or the Agent otherwise makes a payment
with respect thereto, (i) the amount paid by the Agent under or with
respect to such Letter of Credit, and (ii) without duplication for any
amounts owing pursuant to Section 5.7 and Section 15 hereof, the amount
of any taxes, fees, charges or other costs and expenses whatsoever
incurred by the Agent or any Bank in connection with any payment made
by the Agent or any Bank under, or with respect to, such Letter of
Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 12, an amount equal to the
then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the Banks and the Agent
as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this Section 4.2 one day after the Agent shall have provided
the Borrower with notice that such amounts have become due and payable (whether
as stated in this Section 4.2, by acceleration or otherwise)
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until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in Section 5.11 for overdue principal on
the Revolving Credit Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in Section 4.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (b) the amount equal to
such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, times
(c) a fraction, the numerator of which is the number of days that elapse from
and including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section
4.4, the Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy,
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telex or teletype message, statement, order or other document believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Credit Agreement
unless it shall first have received such advice or concurrence of the Majority
Banks as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Majority Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Banks and all future holders of the Revolving
Credit Notes or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEE. The Borrower shall pay quarterly in advance
on the date of issuance or any extension or renewal of any Letter of Credit, and
then on the last day of each calendar quarter for the next fiscal quarter and at
such other time or times as such charges are customarily made by the Agent, a
fee (in each case, a "Letter of Credit Fee") to the Agent (a) in respect of each
standby Letter of Credit equal to the Applicable Margin then in effect for
Letters of Credit times the aggregate available amount of such standby Letter of
Credit plus the Agent's customary issuance fee of 0.125% of the available amount
of such standby Letter of Credit, and (b) in respect of each documentary Letter
of Credit equal to (i) the Applicable Margin then in effect for Letters of
Credit times the aggregate available amount of such documentary Letter of
Credit, plus (ii) the Agent's customary issuance fee or amendment fee, as the
case may be, in an amount of 0.125% of the available amount of such documentary
Letter of Credit plus (iii) the Agent's customary time negotiation fee per
document examination, such Letter of Credit Fee (but not such issuance,
amendment, negotiation or document examination fee) to be for the accounts of
the Banks in accordance with their respective Commitment Percentages.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING FEE. The Borrower agrees to pay to the Agent for the
account of the Agent and the Arranger (as such term is defined in the Fee
Letter) on the Closing Date a closing fee in the amount set forth in the Fee
Letter.
5.2. AGENT'S FEE. The Borrower shall pay to the Agent for the Agent's
own account, an Agent's fee at the times and in the amounts set forth in the Fee
Letter.
5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, Commitment Fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent in Dollars, for the respective
accounts of the Banks and the Agent, at the Agent's Head Office or at
such other location in the Boston, Massachusetts, area that the Agent
may from time to time designate, in each case in immediately available
funds.
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5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, subject to Section 5.12 and Section 18.8 hereof, the
Borrower will pay to the Agent, for the account of the Banks or (as the
case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent would
have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
5.4. COMPUTATIONS. All computations of interests on the Base Rate Loans
shall be based on a 365-day year and paid for the actual number of days elapsed.
All computations of interest on the Eurodollar Rate Loans and of Commitment
Fees, Letter of Credit Fees or other fees shall, unless otherwise expressly
provided herein, be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Revolving
Credit Note Records from time to time shall be considered correct and binding on
the Borrower unless within five (5) Business Days after receipt of any notice by
the Agent or any of the Banks of such outstanding amount, the Agent or such Bank
shall notify the Borrower to the contrary.
5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
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5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's
Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any, shall
be converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this Section 5.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
5.7. ADDITIONAL COSTS, ETC. If any introduction, adoption or change in
any applicable law or regulation, which expression, as used herein, includes
statutes, rules and regulations thereunder or changes in the interpretations
thereof by any competent court or by any governmental or other regulatory body
or official charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Bank or the Agent by any central
bank or other fiscal, monetary or other authority (whether or not having the
force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Revolving Credit Loans (other
than taxes based upon or measured by the income or profits of such Bank
or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Bank or the Agent under this Credit Agreement or
any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity or other similar
requirements (whether or not having the force of law) against assets
held by, or deposits in or for the account of, or loans by, or letters
of credit issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such
Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
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(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Revolving Credit Loans or such Bank's Commitment or any
Letter of Credit if such Bank deems such cost to be material,
or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrower will promptly upon demand made by such
Bank or (as the case may be) the Agent at any time and from time to time and as
often as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts (but without duplication for amounts paid pursuant to another
provision of this Credit Agreement) as will be sufficient to compensate such
Bank or the Agent for such additional cost, reduction, payment or foregone
interest or Reimbursement Obligation or other sum.
5.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower and such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Borrower receives such notice, an adjustment payable hereunder that will
adequately compensate such Bank in light of these circumstances. If the Borrower
and such Bank are unable to agree to such adjustment within thirty (30) days of
the date on which the Borrower receives such notice, then commencing on the date
of such notice (but not earlier than the effective date of any such increased
capital requirement), the fees payable hereunder shall increase by an amount
that will, in such Bank's reasonable determination, provide adequate
compensation. Each Bank shall allocate such cost increases among its customers
in good faith and on an equitable basis.
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5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.7 or 5.8 and a brief explanation of such
amounts which are due and the basis upon which such amounts were calculated,
submitted by any Bank or the Agent to the Borrower, shall be conclusive, absent
manifest error, that such amounts are due and owing.
5.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing of a Eurodollar Rate Loan or conversion to
a Eurodollar Rate Loan after the Borrower has given (or is deemed to have given)
a Loan Request or a Conversion Request relating thereto in accordance with
Section 2.6, or Section 2.7 or (c) the making of any payment of a Eurodollar
Rate Loan or the making of any conversion of any such Revolving Credit Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Revolving Credit
Loans.
5.11. INTEREST AFTER DEFAULT. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and all
other overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest compounded monthly and payable on demand at a rate per annum
equal to two percent (2%) above the Base Rate until such amount shall be paid in
full (after as well as before judgment).
5.12. CERTAIN BANK OBLIGATIONS.
5.12.1. REPLACEMENT BANKS. Within thirty (30) days after (a)
any Bank has demanded compensation from the Borrower pursuant to
Sections 5.3.2, 5.7 or 5.8 hereof, or (b) there shall have
occurred a change in law with respect to any Bank as a consequence of
which it shall have become unlawful for such Bank to make a Eurodollar
Rate Loan on any Drawdown Date, as described in Section 5.6 hereof (any
such Bank described in the foregoing clauses (a) or (b) is hereinafter
referred to as an "Affected Bank"), the Borrower may request that the
other Banks (the "Non-Affected Banks") acquire all, but not less than
all, of the Affected Bank's outstanding Revolving Credit Loans and
assume all, but not less than all, of the Affected Bank's Commitment.
If the Borrower so requests, the Non-Affected Banks may elect to
acquire all or any portion of the Affected Bank's outstanding Revolving
Credit Loans and to assume all or any portion of the Affected Bank's
Commitment; provided, however, such Non-Affected Bank shall also be
required to acquire and assume all or a like pro rata portion of such
assignor's interests under the FIL Credit Agreement. If the
Non-Affected Banks do not elect to acquire and assume all of the
Affected Bank's outstanding Revolving Credit Loans and Commitment and
like interest and liabilities of the Affected Bank under the FIL Credit
Agreement, the Borrower may designate a replacement bank or banks
(which must be an Eligible Assignee), which must be reasonably
satisfactory to the Agent, to acquire and assume that portion of the
outstanding Revolving Credit Loans and Commitment of the Affected Bank
not being
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acquired and assumed by the Non-Affected Banks; provided, however, such
assignee shall also be required to acquire and assume all or a like pro
rata portion of such assignor's interests under the FIL Credit
Agreement. The provisions of Section 18 hereof shall apply to all
reallocations pursuant to this Section 5.12 (including, without
limitation, the provisions pertaining to pro rata allocations with the
FIL Credit Agreement), and the Affected Bank and any Non-Affected Banks
and/or replacement banks which are to acquire the Revolving Credit
Loans and Commitment of the Affected Bank shall execute and deliver to
the Agent, in accordance with the provisions of Section 18 hereof, such
Assignments and Acceptances and other instruments, as are required
pursuant to Section 18 hereof to give effect to such reallocations;
provided, however, the Borrower shall, or shall cause the assignee
Bank, pay the registration fee set forth in Section 18.3. Any
Non-Affected Banks which are to acquire the Revolving Credit Loans and
Commitment of the Affected Bank shall be deemed to be Eligible
Assignees for all purposes of Section 18 hereof. On the effective date
of the applicable Assignments and Acceptances, the Borrower shall pay
to the Affected Bank all interest accrued on its Revolving Credit Loans
up to but excluding such date, along with any fees payable to such
Affected Bank hereunder up to but excluding such date, including,
without limitation, any amounts that would have been payable pursuant
to Section 5.10 hereof in connection with a prepayment.
5.12.2. MITIGATION. If (a) any Bank shall request compensation
under Section 5.7 or Section 5.8 hereof, (b) any Bank delivers a notice
described in Section 5.6 or (c) the Borrower is required to pay any
additional amount to any Bank, or any governmental authority on account
of any Bank pursuant to Section 5.3 or Section 5.7, such Bank agrees to
use reasonable efforts (consistent with legal and regulatory
restrictions) to change its Domestic Lending Office or Eurodollar
Lending Office, as the case may be, to avoid or to minimize any amounts
otherwise payable under Sections 5.3, 5.7 or 6.8 or enable it to
withdraw a notice given pursuant to Section 5.6, in each case solely if
such change can be made in a manner so that such Bank, in its sole
determination, suffers no legal, economic or regulatory disadvantage
deemed by such Bank in its sole discretion to be significant. The
Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Bank in connection with any such change.
5.12.3. FILING REQUIREMENTS. Upon the written request of the
Borrower, each Bank shall, to the extent requested by the Borrower and
to the fullest extent that it lawfully may do so, deliver to the
Borrower and the Agent or file with the relevant taxing authority, such
form, certification or other evidence, as required by applicable law or
treaty, properly completed and duly executed by such Bank, establishing
that a payment by such Borrower is (x) not subject to withholding tax
under the law of such jurisdiction or (y) totally exempt from such
withholding tax or subject to a reduced rate of such tax under a
provision of an applicable tax treaty, and in any event not subject to
any back-up withholding so long as the completion, execution or
submission of such form, certification or other evidence would not
materially prejudice the legal or commercial position of such Bank. The
Borrower agrees to furnish to each Bank the applicable tax forms
promptly upon request therefor. Notwithstanding anything to the
contrary contained herein, such Bank will not be required to (a)
disclose information which in its reasonable judgment it deems
confidential or proprietary or (b) incur a disadvantage if such
disadvantage would, in
36
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its reasonable judgment, be substantial in comparison to any additional
amount otherwise payable the Borrower hereunder.
6. COLLATERAL SECURITY AND GUARANTIES.
6.1. SECURITY OF BORROWER. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in certain of the assets of the
Borrower, whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which the Borrower is a party.
6.2. GUARANTEES AND SECURITY OF SUBSIDIARIES. The Obligations shall
also be guaranteed pursuant to the terms of the Guarantees. The obligations of
the Guarantors under the Guarantees shall be in turn secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in certain of the assets of each such Guarantor,
whether now owned or hereafter acquired, pursuant to the terms of the Security
Documents to which such Guarantor is a party.
6.3. CHANGE OF STATUS. To the extent that any Excluded Subsidiary
requests at any time after the Closing Date to become a Guarantor hereunder,
such Person shall send a written notice of such request to the Agent. To the
extent the Agent and the Majority Banks consent to such a request, and provided
such Person delivers to the Agent an executed Guarantee, Security Agreement and
further Security Documents or other instruments and documents as the Agent may
require in order to grant to the Agent a first priority perfected security
interest (or a comparable interest in the case of a security interest being
taken outside of the United States of America) in such Person's inventory and
Accounts Receivable (including after acquired) as shall be required by Section
6.2, together with legal opinions in form and substance reasonably satisfactory
to the Agent, opining as to the authorization, validity and enforceability of
such Guarantee and Security Document and the perfection of such security
interests, such Person shall, after delivery of all such documents and
instruments, cease being an Excluded Subsidiary hereunder and shall be a
Guarantor hereunder. To the extent that in any relevant jurisdiction it is not
possible or reasonably practical for the Agent to obtain such security (or
comparable) interest solely in inventory and Accounts Receivable (including
after acquired), or the rights or remedies of the Agent with respect to
inventory or Accounts Receivable collateral (including after acquired) will be
significantly impaired, without the Agent also obtaining a security (or
comparable) interest in other assets of such Guarantor, the Security Documents
or other instruments or documents shall include a security (or comparable) first
priority interest in favor of the Agent in such other assets of such Guarantor,
subject only to Permitted Liens.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
its Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state or country of
incorporation, (b) has all requisite corporate
37
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power to own its property and conduct its business as now conducted and
as presently contemplated, and (c) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where a failure to be so
qualified would not have a Material Adverse Effect.
7.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by
all necessary corporate proceedings, (c) do not conflict with or result
in any breach or contravention of any provision of law, statute, rule
or regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Subsidiaries, (d) require any
waivers, consents or approvals by any of such Person's creditors which
have not been obtained, (e) do not require any consents or approvals by
any of such Person's shareholders (except such as will be duly obtained
on or prior to the date hereof and will be in full force and effect on
and as of such dates) and (f) do not conflict with any provision of the
corporate charter or bylaws (or similar charter and/or organization
documents) of, or any agreement or other instrument binding upon, the
Borrower or any of its Subsidiaries.
7.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it
in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby (including
but not limited to the making by the Borrower of the borrowings contemplated by
this Credit Agreement or the obtaining of the Letters of Credit) do not require
the approval, consent, order, authorization or license by, or giving notice to,
or taking any other action with respect to, or filing with, any governmental
agency or authority of any jurisdiction or other fiscal, monetary or other
authority, under any provisions of any laws or governmental rules, regulations,
orders or decrees of any jurisdiction or the central bank of any jurisdiction or
other fiscal, monetary or other authority, under any provisions of any laws or
governmental rules, regulations, orders or decrees of any jurisdictions
applicable to and binding on the Borrower or any Subsidiary, other than those
set forth on Schedule 7.14 or those already obtained or, if not so obtained,
could not reasonably be expected to have a Material Adverse Effect.
7.3 TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 7.3
hereto, the Borrower and its Subsidiaries own or lease all of the assets
reflected in the consolidating
38
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balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date
or acquired since that date (except property and assets sold or otherwise
disposed of in the ordinary course of business or in transactions permitted
hereunder since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
7.4. NO MATERIAL CHANGES, ETC; SOLVENCY
7.4.1. NO CHANGES. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or
business of the Borrower and its Subsidiaries as shown on or reflected
in the consolidating balance sheet of the Borrower and its Subsidiaries
as at the Balance Sheet Date, or the consolidated statement of income
for the fiscal year then ended, other than those disclosed in writing
to the Agent prior to the date hereof or in any other financial
statements provided to the Agent on or prior to the date hereof and
other than changes in the ordinary course of business that have not had
any Material Adverse Effect.
7.4.2. SOLVENCY. The Borrower and its Subsidiaries, on a
consolidated basis, both before and after giving effect to the
transactions contemplated by this Credit Agreement and the other Loan
Documents (a) are solvent, (b) have assets having a fair value in
excess of their liabilities, (c) have assets having a fair value in
excess of the amount required to pay their liabilities on existing
debts as such debts become absolute and matured, and (d) have, and
expects to continue to have, access to adequate capital for the conduct
of their business and the ability to pay their debts from time to time
incurred in connection with the operation of their business as such
debts mature.
7.5. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
7.6. LITIGATION. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Borrower or any of
its Subsidiaries before any court, tribunal or administrative agency or board
that could reasonably be expected to, either in any case or in the aggregate,
have a Material Adverse Effect or materially impair the right of the Borrower
and its Subsidiaries, considered as a whole, to carry on business substantially
as now conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrower and its Subsidiaries in accordance
with generally accepted accounting principles, or which question the validity of
this Credit Agreement or any of the other Loan Documents, or any action taken or
to be taken pursuant hereto or thereto.
7.7. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a Materially Adverse Effect. Neither the Borrower
nor any of its Subsidiaries is a party to any contract or
39
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agreement that has or is expected, in the judgment of the Borrower's officers,
to have any Materially Adverse Effect.
7.8. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or have a
Material Adverse Effect.
7.9. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
7.10. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing. The Borrower has no knowledge that any default has occurred
and is continuing.
7.11. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
7.12. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.13. PERFECTION OF SECURITY INTEREST. Except as disclosed to the Agent
in writing on or prior to the Closing Date, all filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect (or establish a comparable interest in the case of
Collateral located outside of the United States of America) the Agent's security
interest in the Collateral. The Collateral and the Agent's rights with respect
to the Collateral are not subject to any setoff, claims, withholdings or other
defenses other than rights of setoff, claims, withholdings and other defenses
arising in the ordinary course of business by purchasers of goods of the
Borrower in the ordinary course of business. The Borrower or a Subsidiary of the
Borrower party to one of the Security Agreements is the owner of the
40
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Collateral free from any lien, security interest, encumbrance and any other
claim or demand, except for Permitted Liens.
7.14. CERTAIN TRANSACTIONS. Except (a) as permitted by the FIL Credit
Agreement (b) for except for transactions involving annual payments of not more
than $500,000 in the aggregate, and (c) for arm's length transactions pursuant
to which the Borrower or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
7.15. EMPLOYEE BENEFIT PLANS.
7.15.1. IN GENERAL. The Borrower and each of its Subsidiaries
is in material compliance with any and all applicable laws, rules, and
regulations governing pension plans and employee benefit plans, except
where such noncompliance would not have a Material Adverse Effect. To
the extent applicable for the Borrower or any Subsidiary, each Employee
Benefit Plan and each Guaranteed Pension Plan has been maintained and
operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions
and the bonding of fiduciaries and other persons handling plan funds as
required by Section 412 of ERISA. To the extent applicable, the
Borrower has heretofore caused to be delivered to the Agent the most
recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.
7.15.2. TERMINABILITY OF WELFARE PLANS. To the extent
applicable for the Borrower or any Subsidiary, no Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of Section
3(1) or Section 3(2)(B) of ERISA provides benefit coverage subsequent
to termination of employment except as required by Title I, Part 6 of
ERISA or applicable state insurance laws. The Borrower or such
Subsidiary, as the case may be, may cause the termination of each such
Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of the Borrower
without liability to any Person other than for claims arising prior to
termination.
7.15.3. GUARANTEED PENSION PLANS. To the extent applicable,
each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of Section 302(f) of
ERISA, or otherwise, has been timely made. No waiver of an accumulated
funding deficiency or extension of amortization periods has been
41
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received with respect to any Guaranteed Pension Plan, and neither the
Borrower nor any ERISA Affiliate is obligated to or has posted security
in connection with an amendment of a Guaranteed Pension Plan pursuant
to Section 307 of ERISA or Section 401(a)(29) of the Code. No liability
to the PBGC (other than required insurance premiums, all of which have
been paid) has been incurred by the Borrower or any ERISA Affiliate
with respect to any Guaranteed Pension Plan and there has not been any
ERISA Reportable Event, or any other event or condition which presents
a material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA
(to the extent ERISA is applicable) did not exceed the aggregate value
of the assets of all such Guaranteed Pension Plans, disregarding for
this purpose the benefit liabilities and assets of any Guaranteed
Pension Plan with assets in excess of benefit liabilities, by more than
$500,000.
7.15.4. MULTIEMPLOYER PLANS. To the extent applicable, neither
the Borrower nor any ERISA Affiliate has incurred any material
liability (including secondary liability) to any Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer
Plan under Section 4201 of ERISA or as a result of a sale of assets
described in Section 4204 of ERISA. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of Section
4241 or Section 4245 of ERISA or is at risk of entering reorganization
or becoming insolvent, or that any Multiemployer Plan intends to
terminate or has been terminated under Section 4041A of ERISA.
7.16. REGULATIONS U AND X. The proceeds of the Revolving Credit Loans
shall be used for working capital and general corporate purposes. The Borrower
will obtain Letters of Credit solely for working capital and general corporate
purposes. No portion of any Revolving Credit Loan is to be used, and no portion
of any Letter of Credit is to be obtained, for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
7.17. ENVIRONMENTAL COMPLIANCE. Each of the Borrower and its
Subsidiaries, to the extent applicable to such Person, has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
located in the United States of America and the operations conducted thereon
and, based upon such diligent investigation, has determined that:
(a) none of the Borrower, its Subsidiaries or any operator of
such Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
as applicable or any applicable state or local statute, regulation,
ordinance, order or decree relating to health, safety
42
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or the environment (hereinafter "Environmental Laws"), which violation
would have a Material Adverse Effect;
(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part 000 Xxxxxxxx X; (ii) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substances as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42
U.S.C. Section 9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that any Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 7.17 attached hereto: (i)
no portion of such Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is
located on any portion of such Real Estate; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on such Real Estate except in accordance with applicable
Environmental Laws in all material respects or where such noncompliance
would not have a Materially Adverse Effect; (iii) there have been no
releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or, to its knowledge, threatened releases of
Hazardous Substances on, upon, into or from the properties of the
Borrower or its Subsidiaries, which releases would have a Material
Adverse Effect; (iv) to the best of the Borrower's knowledge, there
have been no releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, have come to be located on, and which would have a
Material Adverse Effect; and (v) in addition, any Hazardous Substances
that have been generated on any of such Real Estate located in the
United States of America have been transported offsite only by carriers
having an identification number issued by the EPA, treated or disposed
of only by treatment or disposal facilities maintaining valid permits
as required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrower's knowledge,
operating in compliance with such permits and applicable Environmental
Laws; and
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(d) None of the Borrower and its Subsidiaries or any Real
Estate located in the United States of America is subject to any
applicable United States environmental law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any United States or
state governmental agency or the recording or delivery to other Persons
of an environmental disclosure document or statement, in each case, by
virtue of the transactions set forth herein and contemplated hereby, or
as a condition to the effectiveness of any transactions contemplated
hereby.
7.18. SUBSIDIARIES, ETC. As of the date hereof, the only Subsidiaries
of the Borrower are as set forth on Schedule 7.18 (a) hereto. In addition, as of
the date hereof, the only Subsidiaries of any Subsidiary are as set forth on
Schedule 7.18 (b) hereto. Except as permitted by this Credit Agreement, neither
the Borrower nor any Subsidiary of the Borrower is engaged in any material joint
venture or partnership with any other Person.
7.19. CHIEF EXECUTIVE OFFICES. As of the date hereof, the Borrower's
chief executive office is at 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, at
which location its books and records are kept.
7.20. FISCAL YEAR. Each of the Borrower and its Subsidiaries has a
fiscal year which is the twelve (12) months ending on March 31 of each year.
7.21. NO AMENDMENTS TO CERTAIN DOCUMENTS. Except as disclosed to the
Agent in writing on or prior to the date hereof, each of the representations and
warranties made by the Borrower or any of its Subsidiaries in any of the Loan
Documents was true and correct in all material respects when made and continues
to be true and correct in all material respects on the date hereof, except to
the extent that any of such representations and warranties relate, by the
express terms thereof, solely to a date falling prior to the date hereof, and
except to the extent that any of such representations and warranties may have
been affected by the consummation of the transactions contemplated and permitted
or required by the Loan Documents.
7.22. DISCLOSURE No representation or warranty made by the Borrower in
this Credit Agreement or in any agreement, instrument, document, certificate,
statement or letter furnished to the Agent or any Bank by or on behalf of the
Borrower in connection with any of the transactions contemplated by any of the
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they are made;
provided that no representation or warranty is made by the Borrower as to any
budget (whether delivered to the Agent or any Bank prior to the Closing Date or
pursuant to Section 8.4(f)) other than that such budgets have been prepared in
good faith on the basis of assumptions and estimates that the Borrower believes
to be reasonable.
7.23. INSURANCE. The Borrower and each of its Subsidiaries maintains
with financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices, with the details of such coverage as
of the date hereof being more fully described on Schedule 7.23 hereto.
44
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8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the Commitment Fees, the
Agent's fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrower or any of its Subsidiaries is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in San Jose, California, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves as required by generally accepted accounting
principles and (c) at all times, engage Ernst & Young or a nationally recognized
independent certified public accounting firm that is currently known as a "Big
Six" accounting firm or by another independent certified public accountants as
shall be satisfactory to the Agent, as their independent certified public
accountants and will not permit more than thirty (30) days to elapse between the
cessation of such firm's (or any successor firm's) engagement as the independent
certified public accountants of the Borrower and the appointment to such
capacity of a successor firm as shall be satisfactory to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
forty-five days after the end of each of the first three (3) fiscal
quarters of the Borrower and not later than ninety (90) days after the
end of the last fiscal quarter of the Borrower, a statement certified
by the principal financial or accounting officer of FIL in
substantially the form of Exhibit D hereto (the "Compliance
Certificate") and setting forth in reasonable detail computations
evidencing the computation of the Leverage Ratio and (if applicable)
reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
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(b) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission, or sent to the stockholders of the Borrower;
(c) within fifteen (15) days after the end of each calendar
month, a Borrowing Base Report setting forth the Borrowing Base as at
the end of such calendar month or other date so requested by the Agent;
and
(d) from time to time such other financial data and
information (including accountants, management letters) as the Agent or
any Bank may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default under this Credit Agreement) under any other note,
evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower or any of its Subsidiaries is a
party or obligor, whether as principal, guarantor, surety or otherwise,
and such default either (a) relates to Indebtedness in an aggregate
amount in excess of $1,000,000 or (b) could reasonably be expected to
have a Material Adverse Effect, the Borrower shall forthwith give
written notice thereof to the Agent and each of the Banks, describing
the notice or action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any United
States federal, state or local environmental agency or any violation of
any law, rule, regulation or order pertaining to any environmental
matters in any jurisdiction outside of the United States, if such
violation could reasonably be expected to have a Material Adverse
Effect on the business, assets or financial condition of the Borrower
or any of its Subsidiaries and (b) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice
from any agency of potential environmental liability, of any United
States federal, state or local environmental agency or board, that
could reasonably be expected to have a Material Adverse Effect.
8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses (other than rights of setoffs, claims, withholdings and
other defenses arising in the ordinary course of business by purchasers
of goods of the Borrower in the ordinary course of business) to which
any of the Collateral, or the Agent's rights with respect to the
Collateral, are subject.
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8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of
its Subsidiaries to, give notice to the Agent and each of the Banks, in
writing, in form and detail satisfactory to the Agent, within ten (10)
days of any judgment not covered by insurance, final or otherwise,
against the Borrower or any of its Subsidiaries in an amount in excess
of $500,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries and, without the consent of the Agent, will not, and will not cause
or permit any of its Subsidiaries to, convert to a limited liability company. It
(a) will cause all of its properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment, (b) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (c) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this Section 8.6 shall prevent the Borrower from
dissolving, merging (to the extent permitted by the Loan Documents) or otherwise
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of the
Borrower, desirable in the conduct of its or their business and that do not have
a Material Adverse Effect.
8.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements.
8.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
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forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request. So long as no Default or Event of
Default has occurred and is continuing, the Borrower shall only be
required to pay the reasonable fees and expenses associated with one
such inspection in any twelve month period.
8.9.2. APPRAISALS. If an Event of Default shall have occurred
and be continuing, upon the request of the Agent, the Borrower will
obtain and deliver to the Agent appraisal reports in form and substance
and from appraisers satisfactory to the Agent, stating (a) the then
current fair market, orderly liquidation and forced liquidation values
of all or any portion of the equipment or real estate owned by the
Borrower or any of its Subsidiaries and (b) the then current business
value of each of the Borrower and its Subsidiaries. All such appraisals
shall be conducted and made at the expense of the Borrower.
8.9.3. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower
authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified public
accountants, after notice to the Borrower, and authorizes such
accountants to disclose to the Agent and the Banks any and all
financial statements and other supporting financial documents and
schedules including copies of any management letter with respect to the
business, financial condition and other affairs of the Borrower or any
of its Subsidiaries. At the request of the Agent, the Borrower shall
deliver a letter addressed to such accountants instructing them to
comply with the provisions of this Section 8.9.3.
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, (b) the provisions of its charter documents and by-laws,
(c) all agreements and instruments by which it or any of its properties may be
bound and (d) all applicable decrees, orders, and judgments except, other than
in the case of clause (b), where such noncompliance would not reasonably be
expected to have a Material Adverse Effect. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government or any central bank or other fiscal or monetary authority shall
become necessary or required in order that the Borrower or any of its
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which the Borrower or such Subsidiary is a party, the Borrower
will, or (as the case may be) will cause such Subsidiary to, immediately take or
cause to be taken all reasonable steps within the power of the Borrower or such
Subsidiary to obtain such
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authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. To the extent applicable, the Borrower
will (a) promptly upon the request of the Agent furnish to the Agent a copy of
the most recent actuarial statement required to be submitted under Section
103(d) of ERISA and Annual Report, Form 5500, with all required attachments, in
respect of each Guaranteed Pension Plan and (b) promptly upon receipt or
dispatch, furnish to the Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063,
4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under Sections
4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Revolving Credit Loans solely for the working capital and general corporate
purposes. The Borrower will obtain Letters of Credit solely for working capital
and general corporate purposes.
8.13. FAIR LABOR STANDARDS ACT. The Borrower will, and will cause each
of its Subsidiaries to, at all times operate its business in compliance with all
material applicable provisions of the Fair Labor Standards Act of 1938, as
amended. None of the inventory of the Borrower or any of its Subsidiaries are or
will be produced by employees of (a) the Borrower or any of its Subsidiaries or
(b) to the best knowledge of the Borrower and each of its Subsidiaries, by
employees of suppliers, who are, in each case, employed in violation of the
minimum wage or maximum hour provisions of the Fair Labor Standards Act (29
U.S.C. Sections 206 and 207) or any regulations promulgated thereunder, in each
case, as in effect from time to time.
8.14. RECORDATION OF CORPORATE MORTGAGE. If (a) an Event of Default has
occurred and is continuing or (b) at any time the Leverage Ratio as determined
at any time during any period described in the table set forth below is greater
than the ratio set forth opposite such period in such table, or (c) FIL has not
received cash proceeds from the Subordinated Notes (as such term is defined in
the FIL Credit Agreement) in an amount of not less than $100,000,000 (before
giving effect to underwriting commissions and expenses) or received net cash
proceeds from an equity issuance consummated after the Closing Date of not less
than $35,000,000 within forty-five days following the Closing Date, the Agent
shall be permitted to take all action necessary to perfect its security interest
in all the assets of Flextronics Sweden, including but not limited to filing the
Corporate Mortgage (or similar security agreement), which was executed and
delivered by Flextronics Sweden on or about the Closing Date (with the Borrower
hereby agreeing to pay all costs, fees, stamp taxes and any other amounts
associated with such recording), and the Borrower shall take all action which
the Agent shall request in order to perfect the Agent's security interest in all
the assets of Flextronics Sweden, including but not limited to causing the
Corporate Mortgage executed and delivered on or about the Closing Date to be
recorded (to the extent the Agent elects not to take the action to so record)
with the appropriate filing office (and paying all filing fees, stamp taxes or
any other sums due and payable in order to perfect the Agent's security interest
in all the assets of Flextronics Sweden) and causing
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Flextronics Sweden, to execute and deliver on the date requested by the Agent a
new Corporate Mortgage, as the case may be, in substantially the form as the
Corporate Mortgage delivered to the Agent on or about the Closing Date.
--------------------------------------------------------------------------------
PERIOD RATIO
------ -----
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Closing Date - 9/30/97 4.10:1.00
--------------------------------------------------------------------------------
12/31/97 3.60:1.00
--------------------------------------------------------------------------------
03/31/98 3.10:1.00
--------------------------------------------------------------------------------
06/30/98 - 09/30/98 2.85:1.00
--------------------------------------------------------------------------------
any fiscal quarter thereafter 2.60:1.00
--------------------------------------------------------------------------------
8.15. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligations to issue, extend or renew any Letters of
Credit:
9.1. DISTRIBUTIONS. The Borrower and its Subsidiaries will not make any
Distributions; provided, however, the Borrower and its Subsidiaries shall be
permitted to make Distributions to the FIL or to any other Guarantor.
9.2. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate
located in the United States of America or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, (b) cause or permit to
be located on any of such Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances, (c) generate any Hazardous
Substances on any of such Real Estate, (d) conduct any activity at such Real
Estate or use such Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into such Real Estate or (e) otherwise conduct
any activity at such Real Estate or use such Real Estate in any manner that
would violate any Environmental Law or bring such Real Estate in violation of
any Environmental Law unless such violation would not have a Material Adverse
Effect.
9.3. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
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(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could result
in a material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to Section
302(f) or Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posing of security pursuant to Section 307 of ERISA or
Section 401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess
of benefit liabilities, by more than $500,000.
9.4. CHANGE IN TERMS OF CAPITAL STOCK. The Borrower will not, and will
not permit any of its Subsidiaries to effect or permit any change in or
amendment to any document or instrument pertaining to the terms of such Person's
capital stock unless such change or amendment does not have a Materially Adverse
Effect.
9.5. FISCAL YEAR. Neither the Borrower nor any of its Subsidiaries will
change the date of the end of their respective fiscal years from that set forth
in Section 7.21 hereof.
9.6. TRANSACTIONS WITH AFFILIATES. The Borrower will not, nor will it
permit any of its Subsidiaries to, enter into, or cause, suffer or permit to
exist (a) any arrangement or contract with any of its other Affiliates of a
nature customarily entered into by Persons which are Affiliates of each other
(including management or similar contracts or arrangements relating to the
allocation of revenues, taxes and expenses or otherwise) requiring any payments
to be made by the Borrower or any of its Subsidiaries to any Affiliate unless
such arrangement is fair and equitable to the Borrower or such Subsidiary; or
(b) any other transaction, arrangement, contract with any of their other
Affiliates which would not be entered into by a prudent Person in the position
of the Borrower or such Subsidiary with, or which is on terms which are less
favorable than are obtainable from, any Person which is not one of its
Affiliates.
9.7. INCONSISTENT AGREEMENTS. The Borrower will not, nor will it permit
any of its Subsidiaries to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower or such
Subsidiary of its obligations hereunder or under any of the Loan Documents.
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9.8. CHANGE IN NATURE OF BUSINESS. Neither the Borrower nor any of its
Subsidiaries will make any material change in or addition to the nature of its
business as carried on at the date hereof.
9.9. CHARTER AMENDMENTS. Neither the Borrower nor any of its
Subsidiaries will amend its certificate of incorporation or bylaws, or similar
organizational documents, except in a manner which would not be reasonably
likely to have any Material Adverse Effect.
9.10. LIMITATIONS ON FOREIGN EXCHANGE ARRANGEMENTS. The Borrower will
not and will not permit any of its Subsidiary to enter into any interest rate
hedging or risk protection arrangements, foreign exchange risk protection
arrangements, or currency risk protection arrangements which are not in the
ordinary course of business or are for speculative purposes.
10. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and of the Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent:
10.1. LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks. Each Bank shall have received a fully executed copy of each such
document.
10.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower and each of the Guarantors a copy, certified by
a duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in effect
on such date of certification, and (b) its by-laws as in effect on such date.
10.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of the Guarantors
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
10.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from the Borrower and each of the Guarantors executing any Loan Document an
incumbency certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower or such Guarantor, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (a) to
sign, in the name and on behalf of each of the Borrower of such Guarantor, each
of the Loan Documents to which the Borrower or such Guarantor is or is to become
a party; (b) in the case of the Borrower, to make Loan Requests and Conversion
Requests and to apply for Letters of Credit; and (c) to give notices and to take
other action on its behalf under the Loan Documents.
10.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority
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under applicable law) security interest in and lien upon the Collateral. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve such security
interests shall have been duly effected. The Agent shall have received evidence
thereof in form and substance satisfactory to the Agent.
10.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall
have received from each of the Borrower and the Guarantors a completed and fully
executed Perfection Certificate and the results of UCC searches and other lien
searches with respect to the Collateral, indicating no liens other than
Permitted Liens or liens being discharged in connection with this transaction so
long as the Agent has received evidence satisfactory to it that the holder of
each such lien is prepared and obligated to discharge such lien on the Closing
Date and otherwise in form and substance satisfactory to the Agent.
10.7. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
10.8. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries, taken as a whole, following the
consummation of the transactions contemplated herein and in form and substance
satisfactory to the Banks.
10.9. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) Fenwick & West, counsel to the Borrower and its
Subsidiaries;
(b) Debevoise & Xxxxxxxx, New York counsel to the Borrower and
its Subsidiaries; and
(c) local counsel opinions with respect to the Security
Documents and other matters involving the laws in Singapore, Sweden,
Mexico, the United Kingdom, Hong Kong and Malaysia.
10.10. PAYMENT OF FEES. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the fees provided for in Sections 5.1 and 5.2.
10.11. PAYOFF LETTER. The Agent shall have received a payoff letter
from The First National Bank of Boston, as Facility Agent (in such capacity, the
"Facility Agent'), indicating the amount of the loan and other obligations of
FIL and the Borrower to FNBB and the lenders party to that certain Revolving
Credit Facility Agreement dated June 13, 1996 (the "Prior Loan Agreement") to be
discharged on the Closing Date and an acknowledgment by the Facility Agent that
upon receipt of such funds it will forthwith execute and deliver to the Agent
for filing all termination statements and take such other actions as may be
necessary to
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discharge all mortgages, deeds of trust and security interests granted by the
Borrower or any of its Subsidiaries in favor of The First National Bank of
Boston, as Security Agent under the Prior Loan Agreement.
10.12. DISBURSEMENT INSTRUCTIONS. The Agent shall have received
disbursement instructions from the Borrower, indicating that a portion of the
proceeds of the Revolving Credit Loans, in an amount equal to the aggregate
obligations of the Borrower pursuant to the Prior Loan Agreement, are to be paid
to the lenders thereunder.
10.13. BORROWING BASE REPORT. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of the Closing Date, which
Borrowing Base Report shall be based on the information contained in a balance
sheet delivered to the Agent on the Closing Date.
10.14. CONSENTS AND APPROVALS. The Agent shall have received evidence
that there shall have been obtained and shall be in full force and effect all
consents and approvals necessary to complete the transactions contemplated
hereby, including but not limited to the consent of the Vendors permitting the
pledge to the Agent for the benefit of the Agent and the Banks of the capital
stock of Astron Group Limited and Astron Technologies Limited.
11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan, and of
the Agent to issue, extend or renew any Letter of Credit, in each case whether
on or after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Revolving Credit Bank to make such
Loan or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for the
Agent to issue, extend or renew such Letter of Credit.
11.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
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11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
11.5. EXCHANGE LIMITATIONS. There exists no reason whatsoever,
including without limitation, by reason of the application of any so-called
"currency exchange" laws, rules or regulations (as in effect at the time of any
proposed borrowings hereunder) which could reasonably be expected to interfere
with the Borrower satisfying any of its Obligations hereunder in full at such
time as such Obligations become due and payable pursuant to the terms hereof.
11.6. BORROWING BASE REPORT. The Agent shall have received the most
recent Borrowing Base Report required to be delivered to the Agent in accordance
with Section 8.4(e) and, if requested by the Agent, an updated Borrowing Base
Report dated within five (5) days of the Drawdown Date of such Revolving Credit
Loan or the date of issuance, extension or renewal of such Letter of Credit.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Revolving Credit Loans or any Reimbursement Obligation when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay any interest on the
Revolving Credit Loans, the Commitment Fee, any Letter of Credit Fee,
the Agent's fee, or other sums due hereunder or under any of the other
Loan Documents, when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment within three (3) Business Days of when
the same shall become due and payable;
(c) the Borrower shall fail to comply with any of its
covenants contained in Section 8.1, 8.3, 8.4, 8.5.1, 8.5.4, 8.12, 8.14
- 8.17 , or 9;
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
Section 12.1) for fifteen (15) days after written notice of such
failure has been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower, any
Guarantor or any of their Subsidiaries in this Credit Agreement or any
of the other Loan Documents or in
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any other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;
(f) the Borrower or any of its Subsidiaries shall fail to
observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing borrowed
money or credit received or in respect of any Capitalized Leases for
such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(g) the Borrower, any Guarantor or any of their Subsidiaries
shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as they
mature or become due, or shall petition or apply for the appointment of
a trustee or other custodian, liquidator or receiver of the Borrower,
any Guarantor or any of their Subsidiaries or of any substantial part
of the assets of the Borrower, any Guarantor or any of their
Subsidiaries or shall commence any case or other proceeding relating to
the Borrower, any Guarantor or any of their Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against the Borrower, any Guarantor or any of their
Subsidiaries and the Borrower, any Guarantor or any of their
Subsidiaries shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition or application shall not have
been dismissed within forty-five (45) days following the filing
thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower, any
Guarantor or any of their Subsidiaries bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of the Borrower, any
Guarantor or any Subsidiary of the Borrower or a Guarantor in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of the Borrower
or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof;
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(j) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
thirty (30) days;
(k) (i) except for directors' qualifying shares in
jurisdictions where such qualifying shares are required, (i) FIL shall
at any time, legally or beneficially own less than one hundred percent
of the capital stock of the Borrower, Flextronics Holdings UK Limited,
Flextronics Singapore, Flextronics de Mexico, S.A. de C.V., Flextronics
Manufacturing (HK) Ltd., Astron Technologies Ltd. or Flextronics
International (UK) Limited; or (ii) Flextronics Holdings UK Limited
shall at any time, legally or beneficially own less than one hundred
percent of the capital stock of Flextronics Holdings; or (iii)
Flextronics Holdings shall at any time, legally or beneficially own
less than one hundred percent of the capital stock of Flextronics
Sweden; or (iv) until the date of its liquidation by FIUI, FIUI shall
at any time legally or beneficially own less than one hundred percent
of the capital stock of Flex Asia (UK) Limited; or (v) Flextronics
Singapore shall at any time, legally or beneficially own less than one
hundred percent of the capital stock of Flextronics Computer (Shekou)
Ltd., Flextronics Industrial (Shenshen) Co. Ltd., Flextronics Malaysia
Sdn Bhd and Flex International Marketing (L) Ltd.; or (vi) Flextronics
Manufacturing (HK) Ltd. shall at any time, legally or beneficially own
less than one hundred percent of the capital stock of Astron Group
Ltd.; or (vi) Astron Group Ltd. shall at any time, legally or
beneficially own less than one hundred percent of the capital stock of
Zhuhai Daomen Xxxx Xx Technology Co. Ltd; or (vii) Astron Group Ltd.
shall at any time, legally or beneficially own less than 95% of the
capital stock of Zhuhai Daomen Xxxx Xx Electronics Co. Ltd.;
(l) any default or event of default occurs under the FIL
Guaranty; or
(m) Flextronics Sweden or Flextronics Holdings takes any
actions to repay any intercompany Indebtedness if such a repayment
would in any manner impair the value of the Guarantee executed and
delivered by such Person.
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in the
event of any Event of Default specified in Sections 12.1(g) or 12.1(h), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 12.1(g) or Section 12.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all further obligations to make Revolving Credit Loans to
the Borrower and the Agent shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. If any other Event of Default shall
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have occurred and be continuing, or if on any Drawdown Date or other date for
issuing, extending or renewing any Letter of Credit the conditions precedent to
the making of the Revolving Credit Loans to be made on such Drawdown Date or (as
the case may be) to issuing, extending or renewing such Letter of Credit on such
other date are not satisfied, the Agent may and, upon the request of the
Majority Banks, shall, by notice to the Borrower, terminate the unused portion
of the credit hereunder, and upon such notice being given such unused portion of
the credit hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Revolving Credit Loans and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. No termination of the credit hereunder shall relieve the Borrower or
any of its Subsidiaries of any of the Obligations.
12.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section 12.1,
each Bank, if owed any amount with respect to the Revolving Credit Loans or the
Reimbursement Obligations, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
12.4. CURRENCY CONVERSION. If, for the purposes of obtaining judgment
in any court or obtaining an order enforcing a judgment, it becomes necessary to
convert any amount due under this Credit Agreement or the other Loan Documents
in Dollars (hereinafter in this Section 12.4 called the "first currency") into
any other currency (hereinafter in this Section 12.4 called the "second
currency"), then the conversion shall be made at the Agent's spot rate of
exchange (as conclusively determined by the Agent) for buying the first currency
with the second currency prevailing at the Agent's close of business on the
Business Day next preceding the day on which the judgment is given or, as the
case may be, the order is made. Any payment made to the Agent pursuant to this
Credit Agreement or the other Loan Documents in the second currency shall
constitute a discharge of the obligations of the Borrower to pay to the Agent
and the Banks any amount originally due to the Agent and the Banks in the first
currency under the Loan Documents only to the extent of the amount of the first
currency which the Agent is able, on the date of the receipt by it of such
payment in any second currency, to purchase, in accordance with the Agent's
normal banking procedures, with the amount of such second currency so received.
If the amount of the first currency falls short of the amount originally due to
the Agent and the Banks in the first currency under the Loan Documents, the
Borrower hereby agrees to indemnify the Agent and the Banks against and save the
Agent and the Banks harmless from any shortfall so arising. This indemnity shall
constitute an obligation of the Borrower separate and independent from the other
obligations contained in
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this Credit Agreement, shall give rise to a separate and independent cause of
action, shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum or sums in respect of amounts due to the Agent and
the Banks under this Credit Agreement or under any such judgment or order and
shall be secured by the Collateral. Any such shortfall shall be deemed to
constitute a loss suffered by the Agent and the Banks and the Borrower shall not
be entitled to require any proof or evidence of any actual loss. The covenant
contained in this Section 12.4 shall survive the payment in full of all of the
other obligations of the Borrower under this Credit Agreement.
12.5. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such
monies;
(b) Second, pro rata between the FIL Obligations guaranteed by
the Borrower and the Obligations and in such order or preference as the
Majority Banks may determine; provided, however, that distributions in
respect of such obligations shall be made (i) pro rata between the FIL
Obligations guaranteed by the Borrower and the Obligations; (ii) pari
passu among Obligations with respect to the Agent's fee payable
pursuant to Section 5.2 and all other Obligations and (iii) Obligations
owing to the Banks with respect to each type of Obligation such as
interest, principal, fees and expenses, shall be made among the Banks
pro rata; and provided, further, that the Agent may in its discretion
make proper allowance to take into account any Obligations not then due
and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent
of all of the Obligations, to the payment of any obligations required
to be paid pursuant to Section 9-504(1)(c) of the Uniform Commercial
Code of the State of New York; and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
13. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower
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and any securities or other property of the Borrower in the possession of such
Bank may be applied to or set off by such Bank against the payment of
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the
Borrower to such Bank. Each of the Banks agrees with each other Bank that (a) if
an amount to be set off is to be applied to Indebtedness of the Borrower to such
Bank, other than Indebtedness evidenced by the Revolving Credit Notes held by
such Bank or constituting Reimbursement Obligations owed to such Bank, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Revolving Credit Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Revolving Credit Notes held by, or constituting Reimbursement Obligations
owed to, such Bank by proceedings against the Borrower at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Revolving Credit Note or Revolving Credit Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Revolving Credit
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Revolving Credit Notes held by it or Reimbursement obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
14. THE AGENT.
14.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit Agreement nor the other
Loan Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions
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for the benefit of the Banks and the Agent with respect to all
collateral security and guaranties contemplated by the Loan Documents.
Such actions include the designation of the Agent as "secured party",
"mortgagee" or the like on all financing statements and other documents
and instruments, whether recorded or otherwise, relating to the
attachment, perfection, priority or enforcement of any security
interests, mortgages or deeds of trust in collateral security intended
to secure the payment or performance of any of the Obligations, all for
the benefit of the Banks and the Agent.
14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees, agents or affiliates and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Agent may utilize the services of such Persons as the Agent
in its sole discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Borrower.
14.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers, employees, affiliates nor any other Person assisting them
in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
14.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Revolving
Credit Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Revolving Credit Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Revolving Credit Notes, or for any recitals or
statements, warranties or representations made herein or in any of the other
Loan Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Revolving
Credit Notes or to inspect any of the properties, books or records of the
Borrower or any of its Subsidiaries. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or any holder of any of the Revolving Credit Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit worthiness or
financial conditions of the Borrower or any of its Subsidiaries. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
14.5. PAYMENTS.
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14.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
14.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay
over the same in such manner and to such Persons as shall be determined
by such court.
14.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of Section 13 with
respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Banks, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding
Revolving Credit Loans, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application
to, and reduction of, their respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent Banks in proportion to
their respective pro rata shares of all outstanding Revolving Credit
Loans and Unpaid Reimbursement Obligations. A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Revolving
Credit Loans and Unpaid Reimbursement Obligations of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding
Revolving Credit Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
14.6. HOLDERS OF REVOLVING CREDIT NOTES. The Agent may deem and treat
the payee of any Revolving Credit Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
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14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by Section 15), and liabilities of
every nature and character arising out of or related to this Credit Agreement,
the Revolving Credit Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence.
14.8. AGENT AS BANK. In its individual capacity, FNBB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Revolving Credit Loans made by it, and as the holder of any
of the Revolving Credit Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Agent.
14.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless an Event of Default shall have occurred and be continuing, such
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority 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 financial institution having a
rating of not less than A or its equivalent by Standard & Poor's Corporation.
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, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 14.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
15. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) subject to Sections 5.12 and
18.8 hereof, any taxes (including any interest and penalties in respect thereto)
payable by the Agent or any of the Banks (other than taxes based upon the
Agent's or any Bank's net income and without duplication for any taxes already
paid pursuant to Section 5.3) on or with respect to the transactions
contemplated by this Credit Agreement (the Borrower hereby agreeing to indemnify
the Agent and each Bank with respect thereto), (c) the reasonable fees, expenses
and disbursements of the Agent's Special Counsel
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or any local counsel to the Agent incurred in connection with the preparation,
administration or interpretation (with the Borrower's obligation to pay such
expenses relating to interpretation being subject, only prior to the occurrence
and continuation of a Default or Event of Default, to having received notice of
the Agent's intention to consult with counsel) of the Loan Documents and other
instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) without
duplication for the fees set forth and paid pursuant to the Fee Letter, the
reasonable fees, expenses and disbursements of the Agent or any of its
affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all appraisal charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent or its affiliates, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred by any
Bank or the Agent or its affiliates in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
any of its Subsidiaries or the administration thereof after the occurrence of a
Default or Event of Default and (ii) any litigation, proceeding or dispute
whether arising hereunder or otherwise, in any way related to any Bank's or the
Agent's relationship with the Borrower or any of its Subsidiaries; provided
however, in connection with any litigation by the Borrower against any Bank or
the Agent, to the extent a court of competent jurisdiction issues a final,
unappealable judgment in such litigation against the Bank or the Agent, as the
case may be, the Agent or such Bank, as the case may be, shall reimburse the
Borrower for any expenses paid by the Borrower to the Agent or such Bank, as the
case may be, in connection with such litigation, (f) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection with
UCC searches, UCC filings or mortgage recordings and (g) all reasonable fees,
expenses and disbursements of the Agent or its affiliates in connection with
syndication of the Credit Agreement. The covenants of this Section 15 shall
survive payment or satisfaction of all other Obligations.
16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent, its
affiliates and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by the Borrower or any of its Subsidiaries of the proceeds of any of the
Revolving Credit Loans or Letters of Credit, (b) the Borrower or any of its
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (c) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding unless, in any such case, losses
or liabilities resulted solely from the gross negligence or willful misconduct
of the party seeking
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to be indemnified. In litigation, or the preparation therefor, the Banks, the
Agent and its affiliates shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 16 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 16 shall survive payment
or satisfaction in full of all other Obligations.
17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Loans and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Revolving Credit
Notes or any of the other Loan Documents remains outstanding or any Bank has any
obligation to make any Loans or the Agent has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All factual statements contained
in any certificate or other paper delivered to any Bank or the Agent at any time
by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary hereunder.
18. ASSIGNMENT AND PARTICIPATION.
18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credit Notes
held by it and its participating interest in the risk relating to any Letters of
Credit); provided that (a) each of the Agent and, unless an Event of Default
shall have occurred and be continuing, the Borrower shall have given its prior
written consent to such assignment, which consent, in the case of the Borrower,
will not be unreasonably withheld, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Credit Agreement, (c) each assignment shall be in an
amount that is a minimum amount of $5,000,000 (or such lesser amount if it is
the assignors entire Commitment), (d) any Assignor making an assignment
hereunder shall, simultaneously with making any assignment hereunder, also
assign to the Eligible Assignee a pro rata portion of such assignor's interests,
rights and obligations under the FIL Credit Agreement, and (e) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an Assignment and Acceptance, substantially
in the form of Exhibit E hereto (an "Assignment and Acceptance"), together with
any Revolving Credit Notes subject to such assignment and the Security Trust
Deed. Upon such execution, delivery, acceptance and recording, from and
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after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in Section 18.3, be released from its obligations under this Credit
Agreement.
18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in Section 7.4 and Section 8.4 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
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(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
18.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,000.
18.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Revolving Credit
Note subject to such assignment, the Agent shall (a) record the information
contained therein in the Register, and (b) give prompt notice thereof to the
Borrower and the Banks (other than the assigning Bank). Within five (5) Business
Days after receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent, in exchange for each surrendered Revolving
Credit Note, a new Revolving Credit Note to the order of such Eligible Assignee
in an amount equal to the amount assumed by such Eligible Assignee pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained some
portion of its obligations hereunder, a new Revolving Credit Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Revolving Credit Notes shall provide that they are replacements for the
surrendered Revolving Credit Notes, shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Revolving Credit
Notes, shall be dated the effective date of such in Assignment and Acceptance
and shall otherwise be substantially the form of the assigned Revolving Credit
Notes. The surrendered Revolving Credit Notes shall be cancelled and returned to
the Borrower.
18.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$5,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Revolving Credit Loans, extend the term
or increase the amount of the Commitment of
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such Bank as it relates to such participant, reduce the amount of any commitment
fees or Letter of Credit Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest.
18.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 12.1 or Section
12.2, and the determination of the Majority Banks shall for all purposes of this
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Loans. If any Bank sells a participating interest
in any of the Revolving Credit Loans or Reimbursement Obligations to a
participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to Section 12.1 or Section 12.2 to the extent that such participation
is beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Revolving Credit Loans to the extent of such
participation.
18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 15 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes and comply
with any applicable requests under Section 5.12. If any Reference Bank transfers
all of its interest, rights and obligations under this Credit Agreement, the
Agent shall, in consultation with the Borrower and with the consent of the
Borrower and the Majority Banks, appoint another Bank to act as a Reference Bank
hereunder. Anything contained in this Section 18 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Revolving Credit Notes) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No
68
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such pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
18.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
19. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at 0000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000, Attention: Senior Vice President - Finance and
Administration, or at such other address for notice as the Borrower
shall last have furnished in writing to the Person giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: High Technology Division, with a
copy to 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx 00000,
Attention: Xxx X. Xxxxxx, Vice President, or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(b) if sent by registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
20. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE
69
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NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
21. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
22. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
23. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 25.
24. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party and the
Subordination Documents to which it is a party by, among other things, the
waivers and certifications contained herein.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or any of its Subsidiaries of any terms of this
70
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Credit Agreement, the other Loan Documents or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Borrower and the written consent of the
Majority Banks. Notwithstanding the foregoing, the rate of interest on the
Revolving Credit Notes (other than interest accruing pursuant to Section 5.11.2
following the effective date of any waiver by the Majority Banks of the Default
or Event of Default relating thereto), the term of the Revolving Credit Notes,
the amount of the Commitments of the Banks, and the amount of commitment fee or
Letter of Credit Fees hereunder may not be changed without the written consent
of the Borrower and the written consent of each Bank affected thereby; the
definition of Majority Banks may not be amended without the written consent of
all of the Banks; and the amount of the Agent's Fee or any Letter of Credit Fees
payable for the Agent's account and Section 14 may not be amended without the
written consent of the Agent. No waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of the Agent or any Bank in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
26. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
27. CONFIDENTIALITY.
The Agent and each Bank agrees to exercise reasonable efforts to keep
any confidential information delivered or made available by the Borrower to it
confidential from anyone other than persons employed or retained by the Agent,
its affiliates or such Bank or its affiliates, including legal counsel, who are
or are expected to become engaged in evaluating, approving, structuring or
administering the Loans; provided, however, that nothing herein shall prevent
the Agent or any Bank or any of their respective affiliates from disclosing such
information (a) to any replacement Agent or other Bank or their respective
affiliates, (b) upon the order of any court or administrative agency, (c) upon
the request or demand of any regulatory agency or authority having jurisdiction
over the Agent or such Bank or such affiliate, (d) which has been publicly
disclosed by or on behalf of the Borrower, (e) to the extent reasonably required
in connection with any litigation to which the Agent, any Bank or their
respective affiliates may be a party, (f) to the extent reasonably required in
connection with any audits or accountings and (g) to any actual or proposed
participant, assignee or other transferee of all or part of its rights hereunder
which has agreed in writing to be bound by the provisions of this Section 26;
provided, that, should disclosure of any such confidential information be
required by virtue of the foregoing clauses (b), (c) or (e), the party making
such disclosure shall promptly notify the Borrower as to allow the Borrower to
seek a protective order or to take any other appropriate action; provided,
further, that, neither the Agent nor any Bank
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shall be required to violate directive to disclose any such information so as to
allow the Borrower to effect any such action.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
FLEXTRONICS INTERNATIONAL USA, INC.
By: /s/ XXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/ XXX X. XXXXXX
-------------------------------------
Name: Xxx X. Xxxxxx
Vice President
73
FIUI REVOLVING CREDIT
AGREEMENT SCHEDULES
74
SCHEDULE 1
BANKS' COMMITMENTS
--------------------------------------------------------------------------------
Commitment
Percentage of Revolving
Revolving Credit Credit Loans and
Bank Loan Commitment Letters of Credit
--------------------------------------------------------------------------------
The First National
Bank of Boston.............. $20,000,000 100%
Domestic Lending Office:
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: High Technology Division
Eurodollar Lending Office: Same
--------------------------------------------------------------------------------
Totals: $20,000,000 100%
================================================================================
75
Schedule 7.3
Existing Liens
Attached is a list of all capital leases of FIUI. [Omitted]
76
Schedule 7.14
Government Approvals
Except as otherwise disclosed to the Agent in writing, none.
77
Schedule 7.17
Environmental Matters
None.
78
Schedule 7.18(a)
Subsidiaries
Flex Asia (UK) Ltd. (100%)
Flextronics de Mexico, S.A. de C.V. (1%)
79
Schedule 7.23
Insurance
See attached schedule of insurance policies held by FIUI.
80
FLEXTRONICS, ETAL
EVIDENCE OF PROPERTY AND CASUALTY INSURANCE
MARCH 27, 1997
POLICIES ISSUED IN THE USA
FLEXTRONICS TECHNOLOGY, A DIVISION OF FLEXTRONICS INTERNATIONAL USA, INC.
POLICY COVERAGES LIMITS DEDUCTIBLE INSURER NUMBER
------ --------- ------ ---------- ------- ------
Property Blanket Bldgs. 2,911,000 5,000 Federal Ins. Co. 35373062
0000 Xxxxx Xxx.
0000 X. Xxxxxxx Xxx.
Xxx Xxxx, XX
Business Personal 39,318,000 5,000
Property - Blanket USA
Locations
Business Income - Blanket 40,149,000 5,000
USA Locations
Accounts Receivable 5,000
0000 Xxxxx Xxxxxx 11,000,000
0000 Xxxxxxx Xxxxxx 2,900,000
Valuable Papers 100,000 5,000
Ea. Location
Domestic Transit 300,000 5,000
Ea. Claim
Energy Systems (Boiler and Machinery) Policy Limit
Property 5,000
Business Interruption 24 hr. waiting
period + ded.
1
Flextronics 4/4/97
81
POLICY COVERAGES LIMITS DEDUCTIBLE INSURER NUMBER
------ --------- ------ ---------- ------- ------
Domestic Bodily Injury and Property Damage 1,000,000
General Personal & Advertising Injury 1,000,000
Liability Fire Legal Liability Included
General Aggregate 2,000,000
Products/Completed Operations/Aggregate 1,000,000
Business Bodily Injury and Property - Ea. Accident 1,000,000 Federal Ins. Co. 73168484
Automobile Medical Payments - Ea Person 5,000
Uninsured Motorists 1,000,000
Comprehensive $1000 Ded.
Collision $1000 Ded.
2
Flextronics 4/4/97
82
EXHIBIT A
FORM OF BORROWING BASE REPORT
__________ __, 199_
To Each of the Banks Referred to Below
c/o The First National Bank of Boston, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement, dated as of March
27, 1997 (as amended and in effect from time to time, the "Credit Agreement"),
among the undersigned, the lending institutions listed on the signature pages
thereof and such other lending institutions as may become parties thereto from
time to time in accordance with the provisions thereof (the "Banks") and The
First National Bank of Boston, as agent for the Banks (the "Agent"). Capitalized
terms which are used herein without definition and which are defined in the
Credit Agreement shall have the same meanings herein as therein.
The undersigned hereby certifies as follows: (a) the information
furnished in the materials attached hereto was true, correct and complete as at
the last day of the calendar month immediately preceding the date of this
certificate; (b) as of the date hereof, there exists no Default or Event of
Default; and (c) the representations and warranties contained in Section 8 of
the Credit Agreement were correct when made and are correct at and as of the
date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base
Certificate on behalf of Flextronics International USA, Inc. as of the date
first written above.
FLEXTRONICS INTERNATIONAL USA, INC.
By:______________________________
Title:
00
-0-
XXXXXXXXX XXXX WORKSHEET
FLEXTRONICS INTERNATIONAL USA, INC.
As of___________ 19__
1. Eligible Accounts Receivable: $___________________
(a) Multiplied by 0.70 $___________________
2. Eligible Inventory: $___________________
(a) Multiplied by .20 $___________________
3. Total Borrowing Base Availability
a. Item 1(a) plus Item 2(a) $___________________
b. Total FIL Outstanding $___________________
c. Total Available
Item 3(a) minus Item 3(b) $___________________
4. FIUI Borrowing Base Availability:
lesser of (i) $20,000,000 and (ii) Item 3(c) $___________________
5. a. FIUI Revolving Credit Loans
Outstanding $___________________
b. Maximum Drawing Amount
of all FIUI Letters of Credit
outstanding $___________________
c. Total Outstanding
Item 5(a) plus Item 5(b) $___________________
6. Availability: Item 4 minus Item 5(c) $___________________
84
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
$_______________ as of March 27, 1997
FOR VALUE RECEIVED, the undersigned FLEXTRONICS INTERNATIONAL USA,
INC., a California corporation (the "Borrower"), hereby promises to pay to the
order of [INSERT NAME OF LENDER], (the "Bank") at the Agent's Head Office (as
such term is defined in the Credit Agreement referred to below):
(a) prior to or on the Revolving Credit Loan Maturity Date the
principal amount of [INSERT COMMITMENT AMOUNT] DOLLARS
($_______________) or, if less, the aggregate unpaid principal amount
of Revolving Credit Loans advanced by the Bank to the Borrower pursuant
to the Revolving Credit Agreement dated as of March 27, 1997 (as
amended and in effect from time to time, the "Credit Agreement"), among
the Borrower, the Bank and the other lending institutions which are or
may become parties thereto;
(b) the principal outstanding hereunder from time to time at
the times provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through
and including the maturity date hereof at the times and at the rate
provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Bank and any
holder hereof is entitled to the benefits of the Credit Agreement, the Security
Documents and the other Loan Documents, and may enforce the agreements of the
Borrower contained therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with respect to any
Revolving Credit Loans shall be prima facie evidence of the principal amount
thereof owing and unpaid to the Bank, but the failure to record, or any error in
so recording, any such amount on any such grid, continuation or other record
shall not limit or otherwise affect the obligation of the Borrower hereunder or
under the Credit Agreement to make payments of principal of and interest on this
Note when due.
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The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND THE
CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION 19 OF THE CREDIT AGREEMENT. THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the State of New York.
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IN WITNESS WHEREOF, the undersigned has caused this Revolving Credit
Note to be signed in its corporate name and its corporate seal to be impressed
thereon by its duly authorized officer as of the day and year first above
written.
[Corporate Seal]
FLEXTRONICS INTERNATIONAL USA, INC.
By: _______________________________
Title:
87
EXHIBIT C
FORM OF
LOAN REQUEST
FLEXTRONICS INTERNATIONAL LTD.
[INSERT ADDRESS]
[Insert Date of Request]
The First National Bank of Boston, as Agent
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: [___________________________]
Re: [LOAN] [CONVERSION] REQUEST UNDER REVOLVING CREDIT
AND TERM LOAN AGREEMENT DATED AS OF MARCH 27, 1997
Ladies and Gentlemen:
Reference is made to the Revolving Credit and Term Loan Agreement dated
as of March 27, 1997 (as amended and in effect from time to time, the "Credit
Agreement"), among the undersigned, the Banks named therein and The First
National Bank of Boston, as agent for itself and the other Banks. Capitalized
terms used herein without definition shall have the meanings assigned to such
terms in the Credit Agreement.
[Pursuant to Section [2.6] of the Credit Agreement, we hereby request
that a Revolving Credit Loan in the amount of $_____ be made on ______, ____,
that such Revolving Credit Loan be [a Base Rate Loan] [a Eurodollar Rate Loan
with an Interest Period of [1][2][3][6] months. [Pursuant to Section [4] of the
Credit Agreement, we hereby request that the Term Loan be made on March 27, 1997
and that the Term Loan be a Base Rate Loan.]* This Loan Request constitutes a
certification that the conditions precedent set forth in [Section [12]
and]**Section [13] of the Credit Agreement to the making of the Loans requested
hereby have been satisfied as of the date hereof.]
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[Pursuant to Section [2.7] of the Credit Agreement, we hereby request
that Revolving Credit Loans in an amount of $_________ which are currently
[Base][Eurodollar] Rate Loans be converted to [Base Rate Loans] [Eurodollar Rate
Loans with an Interest Period of [1][2][3][6] months on ____________ ___, ____.]
[Pursuant to Section [4.1.4(b)] of the Credit Agreement, we hereby
request that [a portion of] the Term Loan in an amount of $___ which is
currently a [Base][Eurodollar] Rate Loan be converted to a [Base Rate Loan]
[Eurodollar Rate Loan] on ______ __, ____.]
[Insert appropriate disbursement instructions.]*
We understand that this request is irrevocable and binding on us and
obligates us to accept the requested Loan on such date.
Very truly yours,
FLEXTRONICS INTERNATIONAL LTD.
By: _______________________________
Title: ____________________________
*denotes language to be included only in the request for the Term Loan to be
funded on the Closing Date.
89
EXHIBIT D
FORM OF
COMPLIANCE CERTIFICATE
[Date]
The First National Bank of Boston, as Agent
and the Banks referred to below
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is hereby made to that certain Revolving Credit Agreement
dated as of March 27, 1997, (as amended, modified, supplemented or restated and
in effect from time to time, the "Credit Agreement") among Flextronics
International USA, Inc., a California corporation (the "Borrower"), The First
National Bank of Boston and the other lending institutions which are, or may in
the future become, parties to the Credit Agreement (collectively, the "Banks")
and The First National Bank of Boston as agent for the Banks (the "Agent").
Capitalized terms used herein without definition shall have the same meanings
herein as in the Credit Agreement.
This is a certificate delivered pursuant to Section 8.4(a) of the
Credit Agreement with respect to calculations of certain components of the
criteria for determining the Applicable Margin. This certificate has been duly
executed by the principal financial or accounting officer of the undersigned.
To the best of the knowledge and belief of the undersigned: (a) each of
the representations and warranties of the Borrower contained in the Credit
Agreement and the other Loan Documents are true in all material respects as of
the date hereof, with the same effect as if made at and as of the date hereof
(except to the extent of any changes resulting from transactions contemplated or
permitted by the Credit Agreement and the other Loan Documents and to the extent
that such representations and warranties relate expressly to an earlier date);
(b) attached hereto as Appendix I and set forth in reasonable detail are
computations evidencing compliance with the covenants contained in the FIL
Guaranty as of the date and for the applicable period to which the financial
statements delivered herewith relate as well as calculations relating to the
Leverage Ratio component of the Applicable Margin criteria as of the date and
for the applicable period to which the financial statements delivered herewith
relate; (c) the information furnished in the calculations attached hereto was
true, accurate, correct, and complete as of the last day of such period
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and for such applicable period, as the case may be, subject to normal year end
adjustments; and (d) as of the date hereof, no Default or Event of Default has
occurred or is continuing.
IN WITNESS WHEREOF, the undersigned has executed this certificate as an
instrument under seal as of the date first written above.
FLEXTRONICS INTERNATIONAL USA, INC.
By: _________________________________
Title:
91
EXHIBIT E
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated as of __________, ______
Reference is made to the Revolving Credit Agreement, dated as of March
27, 1997 (as from time to time amended and in effect, the "Credit Agreement"),
by and among FLEXTRONICS INTERNATIONAL USA, INC., a California corporation (the
"Borrower"), the lending institutions referred to therein as Banks
(collectively, the "Banks"), and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association, as agent (in such capacity, the "Agent") for the Banks.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.
_________________________________ (the "Assignor") and
_________________________________ (the "Assignee") hereby agree as follows:
1. ASSIGNMENT. Subject to the terms and conditions of this Assignment
and Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$________________ interest in and to the rights, benefits, indemnities and
obligations of the Assignor under the Credit Agreement equal to ________% in
respect of the Total Commitment immediately prior to the Effective Date (as
hereinafter defined).
2. ASSIGNOR'S REPRESENTATIONS. The Assignor (a) represents and warrants
that (i) it is legally authorized to enter into this Assignment and Acceptance,
(ii) as of the date hereof, its Commitment is $________________, its Commitment
Percentage is ________%, the aggregate outstanding principal balance of its
Revolving Credit Loans equals $________________ and the aggregate amount of its
Letter of Credit Participations equals $________________ (in each case before
giving effect to the assignment contemplated hereby or to any contemplated
assignments which have not yet become effective), and (iii) immediately after
giving effect to all assignments which have not yet become effective, the
Assignor's Commitment Percentage will be sufficient to give effect to this
Assignment and Acceptance, (b) makes no representation or warranty, express or
implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or any of the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
thereto or the attachment, perfection or priority of
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any security interest or mortgage, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder free and clear
of any claim or encumbrance; (c) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower or any
of its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the
Borrower or any of its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of its obligations under the
Credit Agreement or any of the other Loan Documents or any other instrument or
document delivered or executed pursuant thereto; and (d) attaches hereto the
Revolving Credit Not delivered to it under the Credit Agreement.
The Assignor requests that the Borrower exchange the Assignor's
Revolving Credit Note for new Revolving Credit Notes payable to the Assignor and
the Assignee as follows:
Notes Payable to Amount of Revolving
the Order of: Credit Note
---------------- -------------------
Assignor $
----------------
Assignee $
----------------
3. ASSIGNEE'S REPRESENTATIONS. The Assignee (a) represents and warrants
that (i) it is duly and legally authorized to enter into this Assignment and
Acceptance, (ii) the execution, delivery and performance of this Assignment and
Acceptance do not conflict with any provision of law or of the charter or
by-laws of the Assignee, or of any agreement binding on the Assignee, (iii) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Assignment and
Acceptance, and to render the same the legal, valid and binding obligation of
the Assignee, enforceable against it in accordance with its terms, have been
done and performed and have occurred in due and strict compliance with all
applicable laws; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 7.4 and 8.4 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (d) represents and warrants that it is an
Eligible Assignee; (e) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (f) agrees that
it will perform in accordance with their terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank; and
(g) acknowledges that it has made arrangements with the Assignor satisfactory to
the Assignee with
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respect to its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
4. EFFECTIVE DATE. The effective date for this Assignment and
Acceptance shall be _________________ (the "Effective Date"). Following the
execution of this Assignment and Acceptance and the consent of the Borrower
hereto having been obtained, each party hereto shall deliver its duly executed
counterpart hereof to the Agent for acceptance by the Agent and recording in the
Register by the Agent. Schedule 1 to the Credit Agreement shall thereupon be
replaced as of the Effective Date by the Schedule 1 annexed hereto.
5. RIGHTS UNDER CREDIT AGREEMENT. Upon such acceptance and recording,
from and after the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Bank thereunder, and (b) the Assignor
shall, with respect to that portion of its interest under the Credit Agreement
assigned hereunder, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, however, that the Assignor shall retain
its rights to be indemnified pursuant to Section 16 of the Credit Agreement with
respect to any claims or actions arising prior to the Effective Date.
6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by
the Agent and such recording, from and after the Effective Date, the Agent shall
make all payments in respect of the rights and interests assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make any appropriate adjustments
in payments for periods prior to the Effective Date by the Agent or with respect
to the making of this assignment directly between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).
8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.
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IN WITNESS WHEREOF, intending to be legally bound, each of the
undersigned has caused this Assignment and Acceptance to be executed on its
behalf by its officer thereunto duly authorized, as of the date first above
written.
[ASSIGNOR]
By: _________________________________
Title:
[ASSIGNEE]
By: _________________________________
Title:
CONSENTED TO:
FLEXTRONICS INTERNATIONAL USA, INC.
By: _________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON, as Agent
By: _________________________________
Title:
