CREDIT AGREEMENT
DATED AS OF NOVEMBER 17, 2003
BY AND AMONG
SYMBOL TECHNOLOGIES, INC.
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
AND
THE LENDERS PARTY HERETO
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01
DEFINITIONS................................................................1
SECTION 1.02
TERMS GENERALLY...........................................................16
ARTICLE II LOANS
SECTION 2.01
REVOLVING CREDIT LOANS....................................................16
SECTION 2.02
REVOLVING CREDIT NOTE.....................................................17
SECTION 2.03
INCREASE IN COMMITMENTS...................................................18
SECTION 2.04
LETTERS OF CREDIT.........................................................20
ARTICLE III PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT; FEES AND PAYMENTS
SECTION 3.01
Interest Rate; Continuation and Conversion of Loans.......................23
SECTION 3.02
USE OF PROCEEDS ..........................................................25
SECTION 3.03
PREPAYMENTS...............................................................25
SECTION 3.04
FEES......................................................................26
SECTION 3.05
Inability to Determine Interest Rate......................................26
SECTION 3.06
ILLEGALITY................................................................27
SECTION 3.07
INCREASED COSTS...........................................................27
ii
SECTION 3.08
INDEMNITY.................................................................28
SECTION 3.09
TAXES.....................................................................29
SECTION 3.10
PRO RATA TREATMENT AND PAYMENTS...........................................31
SECTION 3.11
Funding and Disbursement of Loans.........................................31
SECTION 3.12
MITIGATION, OBLIGATIONS; REPLACEMENT OF LENDERS...........................32
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01
ORGANIZATION, POWERS ....................................................33
SECTION 4.02
Authorization of Borrowing, Enforceable
Obligations...............................................................33
SECTION 4.03
FINANCIAL CONDITION.......................................................34
SECTION 4.04
TAXES.....................................................................34
SECTION 4.05
TITLE TO PROPERTIES.......................................................34
SECTION 4.06
LITIGATION................................................................34
SECTION 4.07
AGREEMENTS................................................................35
SECTION 4.08
COMPLIANCE WITH ERISA ....................................................35
SECTION 4.09
Federal Reserve Regulations; Use of Proceeds..............................35
SECTION 4.10
APPROVAL..................................................................36
SECTION 4.11
SUBSIDIARIES AND AFFILIATES ............................................36
iii
SECTION 4.12
HAZARDOUS MATERIALS.......................................................36
SECTION 4.13
INVESTMENT COMPANY ACT....................................................36
SECTION 4.14
NO DEFAULT ..............................................................36
SECTION 4.15
SECURITY DOCUMENTS ......................................................36
SECTION 4.16
CREDIT ARRANGEMENTS .....................................................36
SECTION 4.17
PERMITS AND LICENSES ....................................................37
SECTION 4.18
COMPLIANCE WITH LAW .....................................................37
SECTION 4.19
DISCLOSURE ..............................................................37
SECTION 4.20
ACCOUNTS RECEIVABLE.......................................................37
SECTION 4.21
LABOR DISPUTES AND ACTS OF GOD............................................37
ARTICLE V CONDITIONS OF LENDING
SECTION 5.01
Conditions to Initial Extension of Credit..........................................38
SECTION 5.02
Conditions to All Extensions of Credit....................................40
ARTICLE VI AFFIRMATIVE COVENANTS
SECTION 6.01
EXISTENCE, PROPERTIES, INSURANCE...................................................41
SECTION 6.02
Payment of Indebtedness and Taxes.........................................42
SECTION 6.03
Financial Statements, Reports, etc. .....................................42
iv
SECTION 6.04
Books and Records; Access to Premises.....................................44
SECTION 6.05
NOTICE OF ADVERSE CHANGE..................................................45
SECTION 6.06
NOTICE OF DEFAULT.........................................................45
SECTION 6.07
Notice of Litigation and Investigations...................................45
SECTION 6.08
Notice of Default in Other Agreements ....................................45
SECTION 6.09
NOTICE OF ERISA EVENT.....................................................45
SECTION 6.10
Notice of Environmental Law Violations ..................................46
SECTION 6.11
COMPLIANCE WITH APPLICABLE LAWS...........................................46
SECTION 6.12
SUBSIDIARIES..............................................................46
SECTION 6.13
ENVIRONMENTAL LAWS ......................................................47
SECTION 6.14
MAINTENANCE OF ACCOUNTS...................................................47
SECTION 6.15
ADDITIONAL ENCUMBERED GUARANTORS..........................................50
ARTICLE VII NEGATIVE COVENANTS
SECTION 7.01
INDEBTEDNESS..............................................................47
SECTION 7.02
LIENS.....................................................................48
SECTION 7.03
GUARANTIES................................................................50
SECTION 7.04
SALE OF ASSETS............................................................50
v
SECTION 7.05
SALES OF RECEIVABLES .....................................................50
SECTION 7.06
LOANS AND INVESTMENTS ...................................................50
SECTION 7.07
NATURE OF BUSINESS........................................................51
SECTION 7.08
SALE AND LEASEBACK........................................................51
SECTION 7.09
FEDERAL RESERVE REGULATIONS...............................................51
SECTION 7.10
Accounting Policies and Procedures........................................51
SECTION 7.11
HAZARDOUS MATERIALS.......................................................51
SECTION 7.12
Limitations on Fundamental Changes........................................51
SECTION 7.13
FINANCIAL CONDITION COVENANTS.............................................52
SECTION 7.14
SUBORDINATED DEBT.........................................................53
SECTION 7.15
DIVIDENDS.................................................................53
SECTION 7.16
TRANSACTIONS WITH AFFILIATES..............................................53
SECTION 7.17
PROHIBITION ON NEGATIVE PLEDGE............................................57
ARTICLE VIII EVENTS OF DEFAULT..............................................................53
SECTION 8.01
EVENTS OF DEFAULT.........................................................53
ARTICLE IX THE ADMINISTRATIVE AGENT.........................................................56
SECTION 9.01
Appointment, Powers and Immunities........................................56
vi
SECTION 9.02
RELIANCE BY...............................................................57
SECTION 9.03
EVENTS OF DEFAULT.........................................................57
SECTION 9.04
RIGHTS AS A LENDER........................................................58
SECTION 9.05
INDEMNIFICATION...........................................................58
SECTION 9.06
Non-Reliance on Administrative Agent and Other Lenders....................58
SECTION 9.07
FAILURE TO ACT............................................................59
SECTION 9.08
Resignation of the Administrative Agent...................................59
SECTION 9.09
Sharing of Collateral and Payments........................................59
ARTICLE X
SECTION 10.01
Transfer of Accounts to Dominion Account..................................60
SECTION 10.02
Collection of Accounts, Proceeds of
Collateral................................................................60
ARTICLE XI MISCELLANEOUS
SECTION 11.01
NOTICES...................................................................62
SECTION 11.02
EFFECTIVENESS; SURVIVAL...................................................63
SECTION 11.03
EXPENSES..................................................................63
SECTION 11.04
AMENDMENTS AND WAIVERS....................................................64
SECTION 11.05
Successors and Assigns; Participations....................................64
vii
SECTION 11.06
NO WAIVER; CUMULATIVE REMEDIES............................................67
SECTION 11.07
APPLICABLE LAW............................................................67
SECTION 11.08
SUBMISSION TO JURISDICTION................................................67
SECTION 11.09
SEVERABILITY..............................................................68
SECTION 11.10
RIGHT OF SETOFF...........................................................68
SECTION 11.11
REPLACEMENT OF NOTE.......................................................69
SECTION 11.12
CONFIDENTIALITY...........................................................69
SECTION 11.13
HEADINGS..................................................................70
SECTION 11.14
CONSTRUCTION..............................................................70
SECTION 11.15
COUNTERPARTS..............................................................70
viii
SCHEDULES
Schedule 1.01 - Existing Letters of Credit
Schedule 4.03 - Financial Condition Disclosure
Schedule 4.05 - Matters Affecting Title to Properties
Schedule 4.06 - Litigation
Schedule 4.11 - Subsidiaries
Schedule 4.16 - Existing Credit Arrangements
Schedule 4.18 - Matters Affecting Compliance with Law
Schedule 7.01 - Existing Indebtedness
Schedule 7.02 - Existing Liens
Schedule 7.03 - Existing Guaranties
Schedule 7.05 - Sale of Receivables
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Guaranty
Exhibit C - Form of Assignment and Acceptance Agreement
Exhibit D - Form of Opinion of Counsel
Exhibit E - Form of Security Agreement
Exhibit F - Form of U.S. Tax Compliance Certificate
Exhibit G - Form of Borrowing Base Certificate
ix
CREDIT AGREEMENT dated as of November 17, 2003, by and among SYMBOL
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), the several
financial institutions which are from time to time party to this Agreement
(individually, a "Lender" and, collectively, the "Lenders") and FLEET NATIONAL
BANK, a national banking association organized and existing under the laws of
the United States of America, as Administrative Agent.
RECITALS
The Company has requested the Lenders to extend credit from time to time
and the Lenders are willing to extend such credit to the Company, subject to the
terms and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"Additional Lender" shall mean any financial institution which becomes a
Lender hereunder in accordance with Section 2.03(a) or Section 2.03(b) hereof.
"Adjusted Libor Loans" shall mean Revolving Credit Loans at such time as
they are made and/or being maintained at a rate of interest based upon Reserve
Adjusted Libor.
"Administrative Agent" or "Agent" shall mean Fleet National Bank, in its
capacity as Administrative Agent for the Lenders under this Agreement or its
successor Administrative Agent permitted pursuant to Section 9.08 hereof.
"Affiliate" shall mean with respect to a specified Person, another Person
which, directly or indirectly, controls or is controlled by or is under common
control with such specified Person. For the purpose of this definition,
"control" of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, membership
interests, by contract or otherwise.
"Aggregate Letters of Credit Outstandings" shall mean, on the date of
determination, the sum of (a) the aggregate maximum stated amount at such time
which is available to be drawn under all outstanding Letters of Credit and (b)
the aggregate amount of all payments on account of drawings under Letters of
Credit made by the Issuing Lender on behalf of the Lenders under any Letter of
Credit that has not been reimbursed by the Company.
"Aggregate Outstandings" shall mean, on the date of determination, the sum
of (a) the Aggregate Letters of Credit Outstandings at such time, and (b) the
aggregate outstanding principal amount of all Revolving Credit Loans at such
time.
"Agreement" shall mean this Credit Agreement dated as of November 17, 2003,
as it may hereafter be amended, restated, supplemented or otherwise modified
from time to time.
"Assignment and Acceptance Agreement" shall mean an Assignment and
Acceptance entered into by a Lender and an assignee and accepted by the
Administrative Agent, in the form attached hereto as Exhibit C or any other form
approved by the Administrative Agent.
"Available Commitment" shall mean, on the date of determination, the lesser
of (x) the Borrowing Base, as then in effect and (y) the Total Revolving Credit
Commitment.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.(Section)101, et seq.).
"Blocked Account" means a special account established by the Company and
each Encumbered Guarantor with a Blocked Account Bank which is subject to a
Blocked Account Agreement.
"Blocked Account Agreement" means one or more blocked account agreements
entered into between the Company or an Encumbered Guarantor, as applicable, the
Agent and a Blocked Account Bank, pursuant to which upon notice to the Blocked
Account Bank, the available funds in the Blocked Account shall be transferred to
the Designated Account.
"Blocked Account Bank" means one or more banks selected by the Company, but
acceptable to the Agent in its discretion at which the Company and each
Encumbered Guarantor shall maintain a Blocked Account.
"Borrowing Base" means:
(a) for the period from the Closing Date through completion of the
Initial Field Exam satisfactory to the Agent in its sole discretion, the lesser
of (i) $30,000,000 and (ii) fifty percent (50%) of Eligible Receivables;
(b) for the period following completion of the Initial Field Exam
satisfactory to the Agent in its sole discretion, but prior to the receipt by
the Agent of the 2002 and 2003 Financial Statements and Filings, the lesser of
(i) $40,000,000 and (ii) seventy percent (70%) of Eligible Receivables;
(c) for the period following completion of the Initial Field Exam
satisfactory to the Agent in its sole discretion and receipt by the Agent of the
2002 and 2003 Financial Statements and Filings, eighty-five percent (85%) of
Eligible Receivables.
"Borrowing Base Certificate" means a certificate signed by the Chief
Financial Officer or the Treasurer of the Company in the form annexed hereto as
Exhibit G with such changes as the Administrative Agent may reasonably require
from time to time.
2
"Borrowing Date" shall mean, with respect to any Revolving Credit Loan, the
date specified in any notice given pursuant to Section 2.01 on which such
Revolving Credit Loan is requested by the Company.
"Business Day" shall mean (a) any day not a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close, and (b) as it relates to any payment, determination, funding or
notice to be made or given in connection with any Adjusted Libor Loan, any day
specified in clause (a) on which trading is carried on by and between banks in
Dollar deposits in the London interbank eurodollar market.
"Capital Lease" shall mean with respect to any Person, as of the date of
determination any lease the obligations of which are required to be capitalized
on the balance sheet of such Person in accordance with Generally Accepted
Accounting Principles applied on a consistent basis.
"Cash Collateral" shall mean a deposit by the Company made in immediately
available funds to a cash collateral account at the Administrative Agent and the
taking of any and all action required to provide the Administrative Agent, for
the ratable benefit of the Lenders, a first priority perfected security interest
in such deposit.
"Change of Control" shall mean any event which results in (i) any Person,
or two or more Persons acting in concert, acquiring beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of securities of the
Company (or other securities convertible into such securities) representing 30%
or more of the combined voting power of all securities of the Company entitled
to vote in the election of directors; or (ii) during any period of up to 12
consecutive months, individuals who at the beginning of such 12-month period
were directors of the Company ceasing for any reason to constitute a majority of
the Board of Directors of the Company unless the Persons replacing such
individuals were nominated by the Board of Directors of the Company; or (iii)
any Person, or two or more Persons acting in concert, acquiring by contract or
otherwise, or entering into a contract or arrangement which upon consummation
will result in its or their acquisition of, or control over, securities of the
Company (or securities convertible into such securities) representing 30% or
more of the combined voting power of all securities of the Company entitled to
vote in the election of directors.
"Chief Financial Officer" shall mean the Chief Financial Officer of the
Company or in the event no such officership exists, the President of the
Company.
"Closing Date" shall mean November 17, 2003.
"Code" shall mean the Internal Revenue Code of 1986, and the regulations
promulgated thereunder, each as amended from time to time.
"Commitment Proportion" shall mean, with respect to each Lender at the time
of determination thereof, (a) the ratio, expressed as a percentage, which such
Lender's Revolving Credit Commitment bears to the Total Revolving Credit
Commitments, or (b) if the Revolving Credit Commitments have expired or have
been terminated, the ratio, expressed as a percentage,
3
which the aggregate principal amount of the Revolving Credit Loans outstanding
of such Lender plus the aggregate of such Lender's participations in Letters of
Credit bears to the Aggregate Outstandings.
"Company" shall have the meaning set forth in the preamble hereto.
"Consolidated Capital Expenditures" shall mean, for any period, to the
extent capitalized, the sum of all expenditures by the Company and its
Subsidiaries on a consolidated basis, in respect of the purchase or acquisition
of any fixed or capital assets, including, without limitation, obligations under
Capital Leases, determined in accordance with Generally Accepted Accounting
Principles applied on a consistent basis.
"Consolidated EBITDA" shall mean for the Company and its Subsidiaries for
any period the consolidated operating income (loss) of the Company and its
Subsidiaries for such period as reflected on a consolidated income statement of
the Company and its Subsidiaries plus depreciation and amortization expenses or
charges, determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis. For purposes of calculating Consolidated EBITDA
for the Company's fiscal quarter ending 12/31/2003 only, non-recurring
restructuring charges will be excluded for purposes of such calculation.
"Consolidated Interest Expense" shall mean the gross interest expense of
the Company and its Subsidiaries, on a consolidated basis less non-cash interest
expenses related to (a) the Mandatorily Exchangeable Securities Contract for
Shared Appreciation Income Linked Securities ("SAILS") between Credit Suisse
Group and the Company, dated January 4, 2001 and (b) fees or obligations of the
Company which are incurred pursuant to this Agreement and which are
characterized as a non-cash interest expense in accordance with Generally
Accepted Accounting Principles, consistently applied.
"Consolidated Unfunded Capital Expenditures" shall mean those Consolidated
Capital Expenditures of the Company and its Subsidiaries not funded by
Indebtedness; provided that, for purposes of this definition only,
"Indebtedness" shall not include Indebtedness arising under this Agreement.
"Contingent BofA Obligations" shall mean those obligations which may become
due and payable by the Company pursuant to that certain letter dated November
17, 2003 from Bank of America, N.A., as agent, to the Company relating to the
termination of the Prior Agreement.
"Default" shall mean any condition or event which upon notice, lapse of
time or both would constitute an Event of Default.
"Designated Account" shall have the meaning assigned to such term in
Section 10.01 hereof.
"Dollar" and the symbol "$" shall mean lawful currency of the United States
of America.
"Domestic Subsidiary" shall mean any Subsidiary of the Company organized
under the laws of any state of the United States of America.
4
"Eligible Receivables" means at any time the aggregate amount of the
Receivables of the Company and each Encumbered Guarantor, payable in cash and in
Dollars, net of applicable allowances, reserves, discounts, returns, credits or
offsets (including allowances or reserves for doubtful accounts), excluding the
following:
(i) Receivables for which the Company's or such Encumbered
Guarantor's right to receive payment has not been fully earned by
performance or is contingent upon the fulfillment of any condition
whatsoever or which otherwise do not arise from a bona fide completed
transaction;
(ii) Receivables against which constitute a contra account or
against which there are asserted any defenses, counterclaims, discounts
(other than normal trade discounts granted in the ordinary course of
business), credits or offsets of any nature, whether well-founded or
otherwise;
(iii) Receivables that do not comply with all applicable legal
requirements, including all laws, rules, regulations and orders of any
Governmental Authority;
(iv) Receivables which represent a prepayment or progress payment
or arising out of the placement of goods on consignment, guaranteed
sale or other arrangement by reason of which the payment by the
Receivable Debtor may be conditional or contingent;
(v) Receivables which are not owned by the Company or such
Encumbered Guarantor free and clear of all Liens (other than the Liens
in favor of the Agent on behalf of the Issuing Lender and the Lenders);
(vi) Receivables in which the Agent on behalf of the Issuing
Lender and the Lenders shall not have a valid and perfected
first-priority Lien;
(vii) Receivables owing by any officer, director, employee,
agent, partner, Subsidiary or Affiliate of the Company;
(viii) Receivables owing by the United States or any department,
agency or instrumentality thereof, unless the Agent has agreed to the
contrary in writing and the Company has complied with the Federal
Assignment of Claims Act with respect to such Receivables;
(ix) Receivables owing by any Receivable Debtor who is not a
resident of or located in the United States or not organized under the
laws of the United States or any state thereof;
(x) Receivables not paid in full within 60 days from invoice due
date;
(xi) Receivables owing by any Receivable Debtor who has failed to
make full payment within 60 days from the invoice due date on more than
50% of the aggregate amount of Receivables owing to the Company and the
Encumbered Guarantors by such Receivable Debtor;
5
(xii) that portion of Receivables owing by any single Receivable
Debtor which exceeds 20% of the aggregate amount of Receivables owing
to the Company and the Encumbered Guarantors by all Receivable Debtors;
(xiii) Receivables owing by any Receivable Debtor who is the
subject of an Insolvency Proceeding;
(xiv) Receivables which are evidenced by a promissory note or
other instrument;
(xv) Receivables with respect to which the terms or conditions
prohibit or restrict Liens, unless in the determination of the Agent
such prohibitions or restrictions are not enforceable under applicable
law;
(xvi) Receivables consisting of payments due under any servicing
contracts or agreements; and
(xvii) Receivables with respect to which the Agent, in its
reasonable discretion, deems the creditworthiness or financial
condition of the Receivable Debtor to be unsatisfactory or the prospect
of payment or performance to be impaired.
Criteria for eligibility may be fixed and revised from time to time in the
sole and absolute discretion of the Administrative Agent; provided, however,
that so long as no Default or Event of Default shall have occurred and be
continuing, the Administrative Agent shall provide the Company at least thirty
(30) days prior written notice of any such revision.
"Encumbered Guarantors" shall mean, collectively, @xxx.xxx, Inc., a
Delaware corporation, Telxon Corporation, a Delaware corporation and each other
Guarantor who, from time to time hereafter, is required to execute a Security
Agreement in accordance with Section 6.15 hereof.
"Environmental Law" shall mean any applicable law, ordinance, rule,
regulation, or policy having the force of law of any Governmental Authority
relating to pollution or protection of the environment or to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.) the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.) and the rules and regulations
promulgated pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or any Affiliate of the Company would be
deemed to be a member of the same "controlled group" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
6
"Eurocurrency Reserve Requirement" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves, under any regulations of the Board of Governors of the Federal Reserve
System or any other governmental authority having jurisdiction with respect
thereto) as from time to time in effect, dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "eurocurrency
liabilities" in Regulation D) maintained by any Lender.
"Event of Default" shall have the meaning set forth in Article VIII.
"Existing Indebtedness" shall mean all loans and other obligations of the
Company arising under the Prior Credit Agreement.
"Existing Letters of Credit" shall mean the Standby Letters of Credit
issued prior to the date hereof as set forth on Schedule 1.01.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal fund brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three Federal fund brokers of recognized standing
selected by the Administrative Agent.
"Generally Accepted Accounting Principles" shall mean those generally
accepted accounting principles in the United States of America, as in effect
from time to time.
"Governmental Authority" shall mean any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board or similar
body, whether federal, state, provincial, territorial, local or foreign.
"Guarantors" shall mean, collectively, each Domestic Subsidiary of the
Company listed on Schedule 4.11 and each other Domestic Subsidiary who, from
time to time hereafter, is required to execute a Guaranty in accordance with
Section 6.12 hereof.
"Guaranty" shall mean the Guaranty in the form attached hereto as Exhibit B
to be executed and delivered by each Guarantor on the Closing Date and
thereafter by any Subsidiaries of the Company required to deliver a Guaranty
pursuant to Section 6.12 hereof, as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Hazardous Materials" shall mean any explosives, radioactive materials, or
other materials, wastes, substances, or chemicals regulated as toxic, hazardous
or as a pollutant, contaminant or waste under any applicable Environmental Law.
"Hedging Agreement" shall mean any interest rate swap, collar, cap, floor
or forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed in
7
connection with hedging the interest rate exposure of the Company and any
confirming letter executed pursuant to such agreement, all as amended,
supplemented, restated or otherwise modified from time to time.
"Increased Commitment Date" shall have the meaning set forth in Section
2.03(a) hereof.
"Increasing Lender" shall mean any Lender which increases its Revolving
Credit Commitment in accordance with Section 2.03(a) or Section 2.03(b) hereof.
"Indebtedness" shall mean, without duplication, as to any Person or Persons
(a) indebtedness for borrowed money; (b) indebtedness for the deferred purchase
price of property or services; (c) indebtedness evidenced by bonds, debentures,
notes or other similar instruments; (d) obligations and liabilities secured by a
Lien upon property owned by such Person, whether or not owing by such Person and
even though such Person has not assumed or become liable for the payment
thereof; (e) obligations and liabilities of the types described in clauses (a)
through (d) above, directly or indirectly guaranteed by such Person; (f)
obligations or liabilities created or arising under any conditional sales
contract or other title retention agreement with respect to property used and/or
acquired by such Person; (g) the capitalized portion of obligations of such
Person as lessee under Capital Leases; (h) net liabilities of such Person under
Hedging Agreements and foreign currency exchange agreements, as calculated in
accordance with accepted practice; and (i) all obligations, contingent or
otherwise of such Person as an account party or applicant in respect of letters
of credit created for the account of such Person.
"Initial Field Exam" means, the field examination of the Company and its
Subsidiaries commenced prior to the Closing Date by representatives of the
Agent, which field examination shall include, but not be limited to, reviews of
accounts receivable, inventory, accounts payable, taxes and insurance.
"Insolvency Proceeding" means, with respect to any Person, (a) any case,
action or proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or (b)
any general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" shall mean (a) as to any Prime Rate Loan, the first
day of each calendar month during the term hereof; (b) as to any Adjusted Libor
Loan, the last day of the Interest Period applicable thereto; and (c) as to any
Revolving Credit Loan, on the date such Revolving Credit Loan is paid in full or
in part; provided, however, that if any Interest Period for an Adjusted Libor
Loan exceeds three months, the date that falls three months after the beginning
of such Interest Period shall also be an Interest Payment Date.
"Interest Period" shall mean with respect to any Adjusted Libor Loan:
(a) initially, the period commencing on the date such Adjusted Libor Loan
is made and ending one, two, three or six months thereafter, as selected by the
Company in its notice of
8
borrowing or in its notice of conversion from a Prime Rate Loan, in each case,
in accordance with the terms of Articles II and III hereof; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Adjusted Libor Loan and ending one,
two, three or six months thereafter, as selected by the Company by irrevocable
written notice to the Administrative Agent not later than 11:00 a.m. New York,
New York time three Business Days prior to the last day of the then current
Interest Period with respect to such Adjusted Libor Loan and the Administrative
Agent shall promptly notify each of the Lenders of such notice; provided,
however, that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business
Day;
(ii) if the Company shall fail to give notice as provided in
clause (b) above, the Company shall be deemed to have requested
conversion of the affected Adjusted Libor Loan to a Prime Rate Loan on
the last day of the then current Interest Period with respect thereto;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iv) no more than (A) five (5) Interest Periods may exist at any
one time during such time as the Total Revolving Credit Commitments are
$60,000,000 or less, and (B) ten (10) Interest Periods may exist at any
one time during such time as the Total Revolving Credit Commitments are
in excess of $60,000,000; and
(v) the Company shall select Interest Periods so as not to
require a payment or prepayment of any Adjusted Libor Loan during an
Interest Period for such Adjusted Libor Loan.
"Issuing Lender" shall mean the entity which is the Administrative Agent,
in its capacity as the issuer of Letters of Credit hereunder or its successor
Issuing Lender permitted pursuant to Section 2.03(e) hereof.
"LC Fee" shall mean one and one-half percent (1.50%) per annum.
"Lenders" shall have the meaning set forth in the preamble hereto and shall
include the Issuing Lender.
"Lending Office" shall mean, for each Lender, the office specified under
such Lender's name on the signature pages hereof with respect to each Type of
Loan, or such other office as a
9
Lender may designate in writing from time to time to the Company and the
Administrative Agent with respect to such Type of Loan.
"Letter of Credit" shall mean a standby letter of credit, as defined in the
International Chamber of Commerce Uniform Customs and Practice for Documentary
Credit Publication No. 500 (or any successor publication thereof), issued by the
Issuing Lender for the account of the Company pursuant to a Letter of Credit
Agreement and the terms of this Agreement as such terms may be amended from time
to time. All Letters of Credit shall be denominated in Dollars.
"Letter of Credit Agreement" shall mean the Issuing Lender's then effective
form of Application for Letter of Credit, as such form may be amended from time
to time. If there are any conflicts between the provisions of any Letter of
Credit Agreement and this Agreement, the provisions of this Agreement shall
govern.
"LIBOR Margin" shall mean, with respect to each Adjusted Libor Loan, the
percentage set forth below under the heading "LIBOR Margin" opposite the
relevant period, as follows:
Period LIBOR Margin (360 day basis)
------ ----------------------------
At all times prior to delivery of the
2003 Financial Statements 2.00%
At all times from and after delivery
of the 2003 Financial Statements 1.75%
"Lien" shall mean any mortgage, pledge, security interest, hypothecation,
assignment, deposit arrangement, encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, the interest of a lessor under any Capital Lease and any financing
lease having substantially the same economic effect as any of the foregoing).
"Loan Documents" shall mean, collectively, this Agreement, the Revolving
Credit Notes, the Security Documents, the Guaranties, the Hedging Agreements and
each other agreement executed in connection with the transactions contemplated
hereby or thereby, as each of the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Lockbox" shall have the meaning set forth in Section 10.02 hereof.
"Material Adverse Effect" shall mean a material adverse effect upon (a) the
business, operations, performance, property or condition (financial or
otherwise) of the Company and the Guarantors, taken as a whole, or the Company
and its Subsidiaries taken as a whole, or (b) the ability of the Company or any
Guarantor to perform in any material respect any material obligations under any
Loan Document to which it is a party.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA).
10
"Non-Excluded Taxes" shall have the meaning set forth in Section 3.09
hereof.
"Obligations" shall mean all obligations, liabilities and indebtedness of
the Company and any of its Subsidiaries to the Lenders, the Issuing Lender and
the Administrative Agent, whether now existing or hereafter created, absolute or
contingent, direct or indirect, due or not, whether created directly or acquired
by assignment or otherwise, including, without limitation, all obligations,
liabilities and indebtedness of the Company and its Subsidiaries arising under
this Agreement, the Revolving Credit Notes or any other Loan Document including,
without limitation, all obligations, liabilities and indebtedness of the Company
with respect to the principal of and interest on the Revolving Credit Loans,
reimbursement of Letters of Credit, obligations under any Hedging Agreement, and
all fees, costs, expenses and indemnity obligations of the Company and any of
its Subsidiaries hereunder or under any other Loan Document (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, and interest
that but for the filing of a petition in bankruptcy with respect to any Company,
would accrue on such obligations, whether or not a claim is allowed against such
Company for such interest in the related bankruptcy proceeding).
"Participant" shall have the meaning set forth in Section 11.05 hereof.
"Payment Office" shall mean the Administrative Agent's office located at
000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 or such other office as the
Administrative Agent may designate from time to time in writing.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean any acquisition (whether by merger or
otherwise) by the Company or any Subsidiary of the Company of more than 50% of
the outstanding capital stock, membership interest, partnership interest or
other similar ownership interest of a Person which is engaged in a line of
business similar to the business of the Company, or such Subsidiary (or
reasonable extensions thereof) or the purchase of all or substantially all of
the assets owned by such Person; provided that (a) with respect to such Person
which is the subject of an acquisition, such acquisition has been (i) approved
by the board of directors or other appropriate governing body of such Person or
(ii) recommended for approval by such board of directors or governing body to
the shareholders, member, partners, or other owner of such Person, as required
under applicable law or by the certificate of incorporation and by-laws or other
organizational documents of such Person or (iii) otherwise agreed by the
requisite shareholders, members, partners or owners of such Person, as required
under applicable law or by the certificate of incorporation and by-laws or other
organizational documents of such Person; (b) no acquisition shall be a Permitted
Acquisition if a Default or Event of Default shall have occurred and be
continuing or would result after giving effect to such acquisition; (c) prior to
the closing of any such acquisition, the Company shall have delivered evidence
to the Administrative Agent that, on a pro forma basis, the Company will be in
compliance with the financial condition covenants of Section 7.13 hereof upon
completion of such acquisition; (d) prior to the closing of any such
acquisition, the Company shall have delivered to the Administrative Agent notice
of the proposed acquisition, including the name of the Person which is the
subject of an acquisition, structure of the transaction and the purchase price
and all other consideration payable in
11
connection therewith; (e) such acquisition is undertaken in accordance with all
applicable requirements of law; and (f) after giving effect to such acquisition,
the Permitted Acquisition Consideration for such acquisition when aggregated
with the Permitted Acquisition Consideration paid by the Company and its
Subsidiaries from all acquisitions occurring after the Closing Date shall not
exceed, subject to the next sentence, (i) $50,000,000 prior to the delivery by
the Company of the 2002 and 2003 Financial Statements and Filings, and (ii)
$100,000,000 after the delivery of the by the Company of the 2002 and 2003
Financial Statements and Filings. If on any date during the Revolving Credit
Commitment Period the Company raises funds through the issuance of Subordinated
Indebtedness or equity, the amount of Permitted Acquisition Consideration paid
as of such date shall be deemed to be reduced in an amount equal to the net
proceeds of such issuance, provided that such proceeds have been applied to
reduce the outstanding principal balance of Revolving Credit Loans hereunder.
"Permitted Acquisition Consideration" shall mean, with respect to any
Permitted Acquisition, collectively, without duplication, (a) all cash paid by
the Company or any of its Subsidiaries in connection with such Permitted
Acquisition, including transaction costs, fees and other expenses incurred by
the Company or such Subsidiary in connection with such Permitted Acquisition,
(b) all Indebtedness created, and all Indebtedness assumed, by the Company or
any of its Subsidiaries in connection with such Permitted Acquisition,
including, without limitation, the maximum amount of any purchase price to be
paid pursuant to any "earn out" provision contained in the applicable purchase
agreements related to such Permitted Acquisition, and (c) the deferred portion
of the purchase price or any other costs paid by the Company or any of its
Subsidiaries in connection with such Permitted Acquisition, including, but not
limited to, consulting agreements and non-compete agreements. For purposes of
this definition, if any "earn out" provision in any purchase agreement for any
Permitted Acquisition does not provide for a maximum payment, the amount to be
calculated pursuant to subsection (b) of this definition with respect to the
maximum amount of any purchase price to be paid pursuant to any "earn out"
provision, shall be determined by the Administrative Agent, on a reasonable
basis, on the basis of the projections provided to the Administrative Agent.
"Permitted Investments" shall mean (a) direct obligations of the United
States of America or any governmental agency thereof which are fully guaranteed
or insured by the United States of America, provided that such obligations
mature within one year from the date of acquisition thereof; or (b) dollar
denominated certificates of time deposit maturing within one year issued by any
bank organized and existing under the laws of the United States or any state
thereof and having aggregate capital and surplus in excess of $1,000,000,000; or
(c) money market mutual funds having assets in excess of $2,500,000,000; or (d)
commercial paper rated P-1 or A-1, or better, or their equivalent by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Ratings Group, respectively; or (e)
tax exempt securities of a U.S. issuer rated AA or better by Standard & Poor's
Ratings Group or rated Aa or better by Xxxxx'x Investors Service, Inc.
"Permitted Liens" shall mean the Liens specified in clauses (a) through (k)
of Section 7.02 hereof.
"Person" shall mean any natural person, corporation, limited liability
company, limited liability partnership, business trust, joint venture,
association, company, partnership, unincorporated trade or business enterprise
or Governmental Authority.
12
"Plan" shall mean any multi-employer or single-employer plan defined in and
subject to Section 4001 of ERISA, which covers, or at any time during the five
calendar years preceding the date of this Agreement covered, employees of the
Company, any Guarantor or an ERISA Affiliate on account of such employees'
employment by the Company, any Guarantor or an ERISA Affiliate.
"Prime Rate" shall mean the rate per annum announced by the Administrative
Agent from time to time as its prime rate in effect at its principal office.
Each change in the Prime Rate shall be effective on the date such change is
announced to become effective and shall take place immediately without notice or
demand of any kind. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate of interest being charged by the
Administrative Agent to any customer.
"Prime Rate Loans" shall mean Revolving Credit Loans at such times as they
are being made and/or maintained at a rate of interest based upon the Prime
Rate.
"Prior Credit Agreement" shall mean the 2000 Amended and Restated Credit
Agreement, dated as of August 3, 2000, by and among the Company, Bank of
America, N.A., as agent and the several financial institutions from time to time
party thereto, as such agreement has been amended, modified or supplemented.
"Purchasing Lender" shall have the meaning set forth in Section 11.05(c)
hereof.
"Receivable Debtor" means any Person obligated on a Receivable.
"Receivables" means all rights to payment arising out of the sale or lease
of goods or the performance of services in the ordinary and usual course of
business, however evidenced.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30 day notice requirement has not
been waived by the PBGC.
"Required Lenders" shall mean Lenders owed at least 51% of the sum of the
aggregate unpaid principal amount of the Revolving Credit Loans or, if no
Revolving Credit Loans are outstanding, Lenders having at least 51% of the Total
Revolving Credit Commitments.
"Reserve Adjusted Libor" shall mean, with respect to the Interest Period
pertaining to an Adjusted Libor Loan, a rate per annum equal to the product
(rounded upwards to the next higher 1/16 of one percent) of (a) the annual rate
of interest for Dollar deposits of an amount equal to the amount of the portion
of the Adjusted Libor Loan allocable to the Administrative Agent and for a
period of time equal to the Interest Period applicable thereto which appears on
the Telerate Page 3750 as of 11:00 a.m. (London time) on the day that is two
Business Days prior to the commencement of such Interest Period, multiplied by
(b) the Eurocurrency Reserve Requirement.
13
If the rate described in clause (a) above does not appear on the Telerate System
on any applicable interest determination date, then the rate described in clause
(a) shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) determined on the basis of the offered
rates for deposits in Dollars for a period of time comparable to such applicable
Interest Period which are offered by four major banks selected by the
Administrative Agent in the London interbank market at approximately 11:00 a.m.
(London time) on the day that is two Business Days prior to the commencement of
such Interest Period. The principal London office of each of the four major
London banks will be requested to provide a quotation of its Dollar deposit
offered rate. If at least two such quotations are provided, the rate described
in clause (a) for that date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate described in
clause (a) for that date will be determined on the basis of the rates quoted for
loans in U.S. dollars to leading European banks for a period of time comparable
to such Interest Period offered by major banks in New York City at approximately
11:00 a.m. New York City time, on the day that is two Business Days prior to the
commencement of such Interest Period. In the event that the Administrative Agent
is unable to obtain any such quotation as provided above, it will be deemed that
Reserve Adjusted Libor for an Adjusted Libor Loan cannot be determined.
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
obligation of such Lender to make Revolving Credit Loans to the Company and to
acquire participations in Letters of Credit issued hereunder in an aggregate
amount not to exceed the amount set forth opposite such Lender's name on the
signature pages hereof under the caption Revolving Credit Commitment or in the
Assignment and Acceptance Agreement executed by such Lender or, with respect to
an Additional Lender, in an aggregate amount not to exceed the amount set forth
in the agreement executed pursuant to Section 2.03(a) or Section 2.03 (b)
hereof, in each case, as such amounts may be adjusted in accordance with the
terms of this Agreement.
"Revolving Credit Commitment Period" shall mean the period from and
including the Closing Date to, but not including, the Revolving Credit
Commitment Termination Date or such earlier date as the Revolving Credit
Commitment to extend Revolving Credit Loans shall terminate as provided herein.
"Revolving Credit Commitment Termination Date" shall mean May 31, 2006.
"Revolving Credit Loans" shall have the meaning set forth in Section
2.01(a) hereof.
"Revolving Credit Notes" shall have the meaning set forth in Section 2.02
hereof.
"Second Stage Increased Commitment Date" shall have the meaning set forth
in Section 2.03(b) hereof.
"Security Agreement" shall mean, the Security Agreement in substantially
the form of Exhibit E attached hereto, to be executed and delivered by the
Company and each Encumbered Guarantor pursuant to the terms of this Agreement,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"Security Documents" shall mean the Security Agreement and each other
collateral security document delivered to the Administrative Agent hereunder.
14
"Solvent" shall mean with respect to any Person as of the date of
determination thereof that (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required on its debts as such debts become absolute
and matured, (c) such Person will not have as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such Person
will be able to pay its debts as they mature in each case after giving effect to
any right of indemnification and contribution of such Person from or to any
Affiliate.
"Subordinated Debt" or "Subordinated Indebtedness" shall mean all debt
which is subordinated in right of payment to the prior final payment in full of
the obligations of the Company and/or of its Subsidiaries to the Lenders
hereunder and under any other Loan Document on subordination terms satisfactory
to and approved in writing by the Administrative Agent.
"Subsidiaries" shall mean, with respect to any Person, any corporation,
association or other business entity 50% or more of the voting stock or other
ownership interests (including, without limitation, membership interests in a
limited liability company) of which is, at the time, owned or controlled,
directly or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
"Telerate Page 3750" shall mean the display designated as "Page 3750" on
the Associated Press-Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on the Associated Press-Dow Xxxxx Telerate Service or such
other service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest settlement rates for Dollar deposits). Each Reserve Adjusted Libor rate
based on the rate displayed on Telerate Page 3750 shall be subject to
corrections, if any, made in such rate and displayed by the Associated Press-Dow
Xxxxx Telerate Service within one hour of the time when such rate is first
displayed by such service.
"Telxon/Smart Media Litigation" shall mean the litigation involving Telxon
Corporation, a wholly owned subsidiary of the Company, and Smart Media of
Delaware, Inc., as more fully described on Schedule 4.06 attached hereto.
"Total Revolving Credit Commitment" shall mean, at any time, the aggregate
of the Revolving Credit Commitments in effect at such time, which, initially,
shall be $30,000,000.
"2002 and 2003 Financial Statements and Filings" shall mean the audited
amended consolidated financial statements for Company and its Subsidiaries for
the fiscal year ended December 31, 2002, all quarterly unaudited consolidated
financial statements for the Company and its Subsidiaries for fiscal year 2003
through and including the quarter ended September 30, 2003, and all Securities
and Exchange Commission filings by the Company for such periods, all of which
shall be consistent in all material respects with unaudited financial
information provided to the Agent by the Company prior to the Closing Date.
15
"2003 Financial Statements" shall mean the audited consolidated financial
statements for Company and its Subsidiaries for the fiscal year ended December
31, 2003.
"Type" shall mean as to any Revolving Credit Loan its status as a Prime
Rate Loan or an Adjusted Libor Loan.
"UCP" shall mean the International Chamber of Commerce Uniform Customs and
Practice for Documentary Credits, 1993 Revision, ICC Publication No. 500 or any
successor publication thereof.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Unused Fee Rate" shall mean three-eighth of one percent (.375%) per annum.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and the neuter. Except as otherwise herein
specifically provided, each accounting term used herein shall have the meaning
given to it under Generally Accepted Accounting Principles. The term "including"
shall not be limited or exclusive, unless specifically indicated to the
contrary. The word "will" shall be construed to have the same meaning in effect
as the word "shall". The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole, including the
exhibits and schedules hereto and any amendments thereof, all of which are by
this reference incorporated into this Agreement.
ARTICLE II
LOANS
SECTION 2.01. REVOLVING CREDIT LOANS. (a) Subject to the terms and
conditions, and relying upon the representations and warranties, set forth
herein, each Lender severally agrees to make loans (individually a "Revolving
Credit Loan" and, collectively, the "Revolving Credit Loans") to the Company
from time to time during the Revolving Credit Commitment Period up to, but not
exceeding, at any one time outstanding the amount of its Revolving Credit
Commitment; provided, however, that no Revolving Credit Loan shall be made if,
after giving effect to such Revolving Credit Loan, the Aggregate Outstandings
would exceed the Available Commitment in effect at such time. During the
Revolving Credit Commitment Period, the Company may from time to time borrow,
repay and re-borrow Revolving Credit Loans on or after the date hereof and prior
to the Revolving Credit Commitment Termination Date, subject to the terms,
provisions and limitations set forth herein. The Revolving Credit Loans may be
(i) Adjusted Libor Loans, (ii) Prime Rate Loans or (iii) a combination thereof.
(b) The Company shall give the Administrative Agent irrevocable written
notice (or telephonic notice promptly confirmed in writing) not later than 11:00
a.m. New York, New York time, three Business Days prior to the date of each
proposed Adjusted Libor Loan under this
16
Section 2.01 or prior to 11:00 a.m. New York, New York time on the date of each
proposed Prime Rate Loan under this Section 2.01. Such notice shall be
irrevocable and shall specify (i) the amount and Type of the proposed borrowing,
(ii) the initial Interest Period if an Adjusted Libor Loan, and (iii) the
proposed Borrowing Date. Upon receipt of such notice from the Company, the
Administrative Agent shall promptly notify each Lender thereof. Except for
borrowings which utilize the full remaining amount of the Total Revolving Credit
Commitment, each borrowing of a Prime Rate Loan shall be in an amount not less
than $1,000,000 or, if greater, whole multiples of $1,000,000 in excess thereof.
Each borrowing of an Adjusted Libor Loan shall be in an amount not less than
$5,000,000 or whole multiples of $1,000,000 in excess thereof. Funding of all
Revolving Credit Loans shall be made in accordance with Section 3.11 of this
Agreement.
(c) The Company shall have the right, upon not less than five (5) Business
Days' prior written notice to the Administrative Agent, to terminate the Total
Revolving Credit Commitment or from time to time to permanently reduce the
amount of the Total Revolving Credit Commitment; provided, however, that no such
termination or reduction shall be permitted if, after giving effect thereto and
to any payments of the Revolving Credit Loans made on the effective date
thereof, the Aggregate Outstandings would exceed the Total Revolving Credit
Commitment as then reduced; provided, further, that any such termination or
reduction requiring prepayment of any Adjusted Libor Loan shall be made only on
the last day of the Interest Period with respect thereto or on the date of
payment in full of all amounts owing pursuant to Section 3.08 hereof as a result
of such termination or reduction. The Administrative Agent shall promptly notify
each Lender of each notice from the Company to terminate or permanently reduce
the amount of the Total Revolving Credit Commitment pursuant to this Section
2.01(c). Any such reduction shall be in the amount of $5,000,000 or whole
multiples of $1,000,000 in excess thereof, and shall reduce permanently the
amount of the Total Revolving Credit Commitment then in effect.
(d) The several agreements of the Lenders to make Revolving Credit Loans
pursuant to this Section 2.01 shall automatically terminate on the Revolving
Credit Commitment Termination Date. Upon such termination, the Company shall
immediately repay in full the principal amount of the Revolving Credit Loans
then outstanding, together with all accrued interest thereon and all other
amounts due and payable hereunder.
SECTION 2.02. REVOLVING CREDIT NOTE. The Revolving Credit Loans made by
each Lender may be evidenced by a promissory note of the Company (individually a
"Revolving Credit Note" and, collectively, the "Revolving Credit Notes"),
substantially in the form attached hereto as Exhibit A, upon the request of such
Lender. Each Revolving Credit Note shall be appropriately completed, duly
executed and delivered on behalf of the Company and payable to the order of such
requesting Lender in a principal amount equal to the Revolving Credit Commitment
of such Lender. Each Revolving Credit Note shall (a) be dated the Closing Date,
(b) be stated to mature on the Revolving Credit Commitment Termination Date, and
(c) bear interest from the date thereof until paid in full on the unpaid
principal amount thereof from time to time outstanding as provided in Section
3.01 hereof; except that any Revolving Credit Notes issued to an Increasing
Lender or an Additional Lender pursuant to Section 2.03 hereof shall be dated
the Increased Commitment Date. Each Lender is authorized to record the date,
Type and amount of each Revolving Credit Loan and the date and amount of each
payment or prepayment of principal of each Revolving Credit Loan in such
Lender's records or on the grid schedule
17
annexed to the Revolving Credit Note; provided, however, that the failure of a
Lender to set forth each such Revolving Credit Loan, payment and other
information shall not in any manner affect the obligation of the Company to
repay each Revolving Credit Loan made by such Lender in accordance with the
terms of its Revolving Credit Note and this Agreement. The Revolving Credit
Note, the grid schedule and the books and records of each Lender shall
constitute presumptive evidence of the information so recorded absent
demonstrable error.
SECTION 2.03. INCREASE IN COMMITMENTS.
(a) The Agent, with the consent of the Company, shall have the right at any
time and from time to time to increase the Total Revolving Credit Commitment
hereunder by an amount which is less than or equal to $30,000,000 in the
aggregate by (i) requesting (which request may be agreed to or declined by such
Lender in its sole discretion) that one or more Lenders increase its respective
Revolving Credit Commitment or (ii) by adding to this Agreement one or more
financial institutions as a Lender; provided, however, that each such financial
institution shall be approved by the Company and the Agent. Such increase in the
Total Revolving Credit Commitment shall be effectuated pursuant to an agreement
with an Increasing Lender or Additional Lender, as applicable, in form and
substance satisfactory to the Company and the Agent pursuant to which (x) in the
case of an Additional Lender, such Additional Lender shall undertake a Revolving
Credit Commitment, which Revolving Credit Commitment shall be in an amount at
least equal to $7,500,000 or any integral multiple of $500,000 in excess
thereof, (y) in the case of an Increasing Lender, such Increasing Lender shall
increase its Revolving Credit Commitment, which increase in its Revolving Credit
Commitment shall be at least equal to $5,000,000 or in integral multiple of
$500,000 in excess thereof, and (z) in each case, such Person shall agree to be
bound as a Lender under the terms and conditions of this Agreement and the other
Loan Documents. Upon the effectiveness of any such agreement and its
acknowledgement by the Company and the Agent (the date of any such effectiveness
and acknowledgement, an "Increased Commitment Date"), such Additional Lender
shall thereupon become a "Lender" for all purposes of this Agreement with a
Revolving Credit Commitment in the amount set forth in such agreement or, as
applicable, the Revolving Credit Commitment of such Increasing Lender shall be
increased in the amount set forth in such agreement, and this Agreement
(including the signature page of such Increasing Lender) shall be deemed amended
to the extent, but only to the extent, necessary to reflect the addition of such
Additional Lender or the increased Revolving Credit Commitment of such
Increasing Lender, the resulting adjustment of the Revolving Credit Commitments
arising therefrom and the adjustments described in subsection 2.03(e).
(b) In the event the Total Revolving Credit Commitment has been increased
to $60,000,000 pursuant to Section 2.03(a) hereof, the Company shall have the
right at any time and from time to time (provided, that such right may not be
exercised by the Company more than twice after the Closing Date) to increase the
Total Revolving Credit Commitment hereunder by an amount which is less than or
equal to $40,000,000 by (i) requesting (which request may be agreed to or
declined by such Lender in its sole discretion) that one or more Lenders
increase its respective Revolving Credit Commitment or (ii) by adding to this
Agreement one or more financial institutions as a Lender; provided, however,
that each such financial institution shall be approved by the Company and the
Agent. Such increase in the Total Revolving Credit Commitment shall be
effectuated pursuant to an agreement with an Increasing Lender or Additional
Lender, as applicable, in form and substance satisfactory to the Company and the
18
Agent pursuant to which (x) in the case of an Additional Lender, such Additional
Lender shall undertake a Revolving Credit Commitment, which Revolving Credit
Commitment shall be in an amount at least equal to $7,500,000 or any integral
multiple of $500,000 in excess thereof, (y) in the case of an Increasing Lender,
such Increasing Lender shall increase its Revolving Credit Commitment, which
increase in its Revolving Credit Commitment shall be at least equal to
$5,000,000 or in integral multiple of $1,000,000 in excess thereof, and (z) in
each case, such Person shall agree to be bound as a Lender under the terms and
conditions of this Agreement and the other Loan Documents. Upon the
effectiveness of any such agreement and its acknowledgement by the Company and
the Agent (the date of any such effectiveness and acknowledgement, a "Second
Stage Increased Commitment Date"), such Additional Lender shall thereupon become
a "Lender" for all purposes of this Agreement with a Revolving Credit Commitment
in the amount set forth in such agreement or, as applicable, the Revolving
Credit Commitment of such Increasing Lender shall be increased in the amount set
forth in such agreement, and this Agreement (including the signature page of
such Increasing Lender) shall be deemed amended to the extent, but only to the
extent, necessary to reflect the addition of such Additional Lender or the
increased Revolving Credit Commitment of such Increasing Lender, the resulting
adjustment of the Revolving Credit Commitments arising therefrom and the
adjustments described in Section 2.03(e) hereof.
(c) Any increase in the Total Revolving Credit Commitment pursuant to
Section 2.03(b) shall not be effective unless:
(i) the Company shall given the Agent notice of such increase at least
15 Business Days (or such shorter period as the Agent may agree to in the given
instance) prior to any such proposed Increased Commitment Date;
(ii) no Default or Event of Default shall have occurred and be
continuing as of the date of the notice referred to in the foregoing clause (i)
or on the Second Stage Increased Commitment Date; and
(iii) the representations and warranties of the Company in Article IV
hereof and of the Guarantors in the Guaranty shall be true and correct on and as
of the date of the notice referred to in clause (i) and on and as of the Second
Stage Increased Commitment Date with the same effect as if made on and as of
such notice date or Second Stage Increased Commitment Date (except to the extent
such representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of such earlier date).
Each notice given by the Company pursuant to subsection 2.03(c)(i) shall
constitute a representation and warranty by the Company hereunder, as of the
date of each such notice and as of each Second Stage Increased Commitment Date,
and after giving effect to the increase in the Total Revolving Credit Commitment
effective thereon, that the conditions in this subsection 2.03(c) are satisfied.
(d) Effective on each Increased Commitment Date and each Second Stage
Increased Commitment Date, (i) the amount of each Lender's risk participation in
all outstanding Letters of Credit shall be deemed to be automatically increased
or decreased, as applicable, to reflect any changes in such Lender's Commitment
Proportion after giving effect to the increase in the Total Revolving Credit
Commitment effective thereon, and (ii) the amount of the Revolving Credit Loans
then outstanding and held by each Lender shall be adjusted to reflect any such
changes in such Lender's Commitment Proportion. Each Lender having Revolving
Credit Loans then outstanding and whose Commitment Proportion has been decreased
as a result of the increase in
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the Total Revolving Credit Commitment shall be deemed to have assigned, without
recourse, such portion of such Revolving Credit Loans as shall be necessary to
effectuate such adjustment to the Additional Lenders and Increasing Lenders.
Each Additional Lender and Increasing Lender shall (x) be deemed to have assumed
such portion of such Revolving Credit Loans and (y) fund on the Increased
Commitment Date or Second Stage Increased Commitment Date, as applicable, such
assumed amounts to the Agent for the account of the assigning Lender in
accordance with the provisions hereof.
(e) The Agent shall promptly notify the Lenders and the Company of any
increase in the Total Revolving Credit Commitment under this Section 2.03 and of
each Lender's Commitment Proportion after giving effect to any such increase.
(f) The Company agrees to execute Revolving Credit Notes in favor of each
Additional Lender and each Increasing Lender upon the request of such Lender to
evidence such Lender's Revolving Credit Commitment after giving effect to such
increase to the Total Revolving Credit Commitment and to execute such other
documents as the Agent shall deem necessary and appropriate to give effect to
this Section 2.03; provided that any Increasing Lender who has requested a new
Revolving Credit Note in an amount equal to its increased Revolving Credit
Commitment shall have returned for cancellation any other Revolving Credit Notes
previously issued to it under this Agreement.
SECTION 2.04. LETTERS OF CREDIT.
(a) Generally. Subject to the terms and conditions set forth in this
Agreement, upon the written request of the Company in accordance herewith, the
Issuing Lender shall issue Letters of Credit at any time during the Revolving
Credit Commitment Period with pro rata participation by all of the Lenders in
accordance with their respective Commitment Proportions. Notwithstanding the
foregoing, at no time shall the Aggregate Letters of Credit Outstandings exceed
$5,000,000, and no Letter of Credit shall be issued if, after giving effect to
the same, the Aggregate Outstandings would exceed the Available Commitment. Each
request for issuance of a Letter of Credit shall be in writing and shall be
received by the Issuing Lender by no later than 12:00 noon, New York, New York
time, on the day which is at least two Business Days prior to the proposed date
of issuance or creation. Such issuance shall occur by no later than 5:00 p.m. on
the proposed date of issuance (assuming proper prior notice as aforesaid).
Subject to the terms and conditions contained herein, the expiry date and the
amount and beneficiary of the Letters of Credit will be as designated by the
Company. The Issuing Lender shall promptly notify the Administrative Agent and
the Lenders of the amounts of all Letters of Credit issued hereunder and of any
extension, reduction, termination or amendment of any Letter of Credit. Each
Letter of Credit issued by the Issuing Lender hereunder shall identify: (i) the
dates of issuance and expiry of such Letter of Credit, (ii) the amount of such
Letter of Credit (which shall be a sum certain), (iii) the beneficiary of such
Letter of Credit, and (iv) the drafts and other documents necessary to be
presented to the Issuing Lender upon drawing thereunder. In no event shall any
Letter of Credit expire (or by its terms be required to be paid or extended,
renewed, financed or refinanced to a date) after the Revolving Credit Commitment
Termination Date. The Company agrees to execute and deliver to the Issuing
Lender such further documents and instruments in connection with any Letter of
Credit issued hereunder (including without limitation, applications therefor) as
the Issuing Lender in accordance with its customary practices may reasonably
request.
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(b) Drawings Under Letters of Credit. The Company hereby absolutely and
unconditionally promises to pay the Issuing Lender not later than 12:00 noon
(New York, New York time) the amount of each drawing under a Letter of Credit if
the Company receives notice of such drawing prior to 10:00 a.m., New York, New
York time, on the date of such drawing, or if such notice has not been received
by the Company prior to such time on such date, then not later than 12:00 noon
(New York, New York time), on the Business Day immediately following the day
that the Company receives such notice; provided, however, if any drawing was in
an amount not less than $1,000,000, the Company may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.01 hereof
that such payment be financed with a Revolving Credit Loan which is a Prime Rate
Loan in an equivalent amount, and, to the extent so financed, the Company's
obligation to make such payment shall be discharged and replaced by such a Prime
Rate Loan. Such request shall be made by the Company on the date of receipt of
notice from the Issuing Lender of a drawing under a Letter of Credit. The
Issuing Lender shall notify the Administrative Agent and each Lender of such
request in accordance with Section 2.01 hereof. If the Company has not requested
that such payment be financed with a Prime Rate Loan and the Company fails to
make such payment when due, the Issuing Lender shall notify each Lender of the
amount of the drawing under the applicable Letter of Credit. Each Lender agrees
that on the first Business Day after receipt of such notice, it will immediately
make available by no later than 12:00 noon New York, New York time, to the
Issuing Lender at its office located at the Payment Office in immediately
available funds, its Commitment Proportion of such drawing, provided (i) each
Lender's obligation shall be reduced by its Commitment Proportion of any
reimbursement by the Company in respect of any such drawing pursuant to this
Section 2.04 and (ii) no Lender shall be required to make payments to the
Issuing Lender with respect to a drawing or payment which the Company reimbursed
with the proceeds of a Revolving Credit Loan, as contemplated above, if such
Lender fully funded its Commitment Proportion of such Revolving Credit Loan in
accordance with Section 3.11 hereof. Any payment made by a Lender pursuant to
this Section 2.04(b) to reimburse the Issuing Lender for any drawing under a
Letter of Credit (other than a Prime Rate Loan as contemplated above) shall not
constitute a Revolving Credit Loan and shall not relieve the Company of its
obligation to reimburse the Issuing Lender for such drawing. Each drawing under
a Letter of Credit which is not paid on the date such drawing is made, shall
accrue interest for each day from and including the date of such drawing, to but
excluding the date that the Company reimburses the Issuing Lender in full for
such drawing, at the rate per annum then applicable to Revolving Credit Loans
which are Prime Rate Loans; provided, however, that if the Company fails to
reimburse such drawing when due pursuant to this paragraph (b), then the Company
shall pay to the Issuing Lender interest on the amount of such drawing at the
rate per annum set forth in Section 3.01(c) hereof. Interest accruing pursuant
to the preceding sentence shall be for the account of the Issuing Lender, except
that interest accrued on and after the date of payment by any Lender pursuant to
this Section 2.04(b) to reimburse the Issuing Lender shall be for the account of
such Lender to the extent of such payment. The Issuing Lender shall promptly
notify the Administrative Agent and the Company of each drawing under a Letter
of Credit.
(c) Letter of Credit Obligations Absolute.
(i) The obligation of the Company to reimburse the Issuing Lender as
provided hereunder in respect of drawings under Letters of Credit shall rank
pari passu with the obligation of the Company to repay the Revolving Credit
Loans hereunder, and shall be absolute and unconditional under any and all
circumstances subject to subsection (ii) below. Without
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limiting the generality of the foregoing, the obligation of the Company to
reimburse the Issuing Lender in respect of drawings under Letters of Credit
shall not be subject to any defense based on the non-application or
misapplication by the beneficiary of the proceeds of any such drawing or the
legality, validity, regularity or enforceability of the Letters of Credit or any
related document, even though such document shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Company, the
beneficiary of any Letter of Credit, or any financial institution or other party
to which any Letter of Credit may be transferred. The Issuing Lender may accept
or pay any draft presented to it under any Letter of Credit regardless of when
drawn or made and whether or not negotiated, if such draft, accompanying
certificate or documents and any transmittal advice are presented or negotiated
on or before the expiry date of such Letter of Credit or any renewal or
extension thereof then in effect, and is in substantial compliance with the
terms and conditions of such Letter of Credit. Furthermore, neither the Issuing
Lender nor any of its correspondents nor any Lender shall be responsible, as to
any document presented under a Letter of Credit which appears to be regular on
its face, and appears on its face to be in substantial compliance with the terms
of the Letter of Credit, for the validity or sufficiency of any signature or
endorsement, for delay in giving any notice or failure of any instrument to bear
adequate reference to the Letter of Credit, or for failure of any Person to note
the amount of any draft on the reverse of the Letter of Credit. The Issuing
Lender shall have the right, in its sole discretion, to decline to accept any
documents and to decline to making payment under any Letter of Credit if the
documents presented are not in strict compliance with the terms of such Letter
of Credit.
(ii) Any action, inaction or omission on the part of the Issuing Lender
or any of its correspondents under or in connection with any Letter of Credit or
the related instruments, documents or property, if in good faith and in
conformity with such laws, regulations or customs as are applicable, shall be
binding upon the Company and shall not place the Issuing Lender or any of its
correspondents or any Lender under any liability to the Company in the absence
of (x) gross negligence or willful misconduct by the Issuing Lender or its
correspondents or (y) the failure by the Issuing Lender to pay under a Letter of
Credit after presentation of a draft and documents strictly complying with such
Letter of Credit unless the Issuing Lender is prohibited from making such
payment pursuant to a court order. The Issuing Lender's rights, powers,
privileges and immunities specified in or arising under this Agreement are in
addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract. All Letters of Credit
issued hereunder will, except to the extent otherwise expressly provided
hereunder, be governed by the UCP to the extent applicable and not inconsistent
with the laws of the State of New York.
(d) Obligations of Lenders in Respect of Letters of Credit. Each Lender
acknowledges that each Letter of Credit issued by the Issuing Lender pursuant to
this Agreement is issued by the Issuing Lender on behalf of and with the ratable
participation of all of the Lenders (i.e., in accordance with their respective
Commitment Proportions), and each Lender agrees to make the payments required by
subsection (b) above and agrees to be responsible for its pro rata share of all
liabilities incurred by the Issuing Lender with respect to each Letter of Credit
issued, established, opened or extended by the Issuing Lender pursuant to this
Agreement for the account of the Company hereunder. Each Lender agrees with the
Issuing Lender and the other Lenders that its obligation to make the payments
required by subsection (b) above shall not be affected in any way by any
circumstances (other than the gross negligence or willful misconduct of the
Issuing Lender) occurring before or after the making of any payment by the
22
Issuing Lender pursuant to any Letter of Credit, including, without limitation:
(i) any modification or amendment of, or any consent, waiver, release or
forbearance with respect to, any of the terms of this Agreement or any other
instrument or document referred to herein; (ii) the existence of any Default or
Event of Default; or (iii) any change of any kind whatsoever in the financial
position or credit worthiness of the Company.
(e) Replacement of the Issuing Lender. The Issuing Lender may be replaced
at any time by written agreement among the Company, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Lender. At
the time any such replacement shall become effective, the Company shall pay all
unpaid fees accrued for the account of the replaced Issuing Lender pursuant to
Section 3.04 hereof. From and after the effective date of any such replacement,
(i) the successor Issuing Lender shall have all the rights and obligations of
the Issuing Lender under this Agreement with respect to Letters of Credit to be
issued thereafter, and (ii) references herein to the term "Issuing Lender" shall
be deemed to refer to such successor or to any previous Issuing Lender, or to
such successor and all previous Issuing Lenders, as the context shall require.
After the replacement of an Issuing Lender hereunder, the replaced Issuing
Lender shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Lender under this Agreement with respect to Letters of
Credit issued prior to such replacement, but shall not be required to issue
additional Letters of Credit.
(f) Existing Letters of Credit. The Company and the Lenders agree that from
and after the time when the Total Revolving Credit Commitments equal or exceed
$45,000,000, subject to the satisfaction of the conditions set forth in Section
5.02, the Existing Letters of Credit, other than the Existing Letter of Credit
described on Schedule 1.01 as LOC# S00038469 with The Bank of New York, shall be
Letters of Credit for all purposes of this Agreement (other than with respect to
opening or transaction fees and the payment commission made or accrued prior to
the date hereof, which fees and commissions shall be for the sole account of the
financial institution issuing the same). The Lenders hereby affirm that on and
after such time, they will accept their pro rata participation in the Existing
Letters of Credit in accordance with their respective Commitment Proportions.
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
SECTION 3.01. INTEREST RATE; CONTINUATION AND CONVERSION OF LOANS.
(a) Each Prime Rate Loan shall bear interest for the period from the
date thereof on the unpaid principal amount thereof at a fluctuating rate per
annum equal to the Prime Rate.
(b) Each Adjusted Libor Loan shall bear interest for the Interest
Period applicable thereto on the unpaid principal amount thereof at a rate per
annum equal to the Reserve Adjusted Libor determined for each Interest Period
thereof in accordance with the terms hereof plus the applicable LIBOR Margin.
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(c) Upon the occurrence and during the continuance of an Event of
Default, the outstanding principal amount of the Revolving Credit Loans shall,
at the option of the Agent and the Required Lenders, bear interest payable on
demand at a rate of 2% per annum in excess of the interest rate otherwise then
in effect.
(d) The Company may elect from time to time to convert outstanding
Revolving Credit Loans from Adjusted Libor Loans to Prime Rate Loans by giving
the Administrative Agent (i) with respect to conversions occurring on a day
other than the last day of an Interest Period with respect thereto, at least
three Business Days' prior irrevocable written notice of such election or (ii)
with respect to conversions occurring on the last day of an Interest Period with
respect thereto, prior to 11:00 a.m. New York, New York time on the date of such
conversion; provided that any such conversion of Adjusted Libor Loans made on a
day other than the last day of an Interest Period with respect thereto shall
only be made upon payment in full of any amounts owing pursuant to Section 3.08
hereof as a result of such conversion. Upon receipt of such notice, the
Administrative Agent shall promptly notify each Lender thereof. The Company may
elect from time to time to convert outstanding Revolving Credit Loans from Prime
Rate Loans to Adjusted Libor Loans by giving the Administrative Agent
irrevocable written notice of such election not later than 11:00 a.m. New York,
New York time, three Business Days prior to the date of the proposed conversion.
Upon receipt of such notice the Administrative Agent shall promptly notify each
Lender thereof. All or any part of outstanding Prime Rate Loans may be converted
as provided herein, provided that each conversion shall be in the principal
amount of $5,000,000 or whole multiples of $1,000,000 in excess thereof, and
further provided that no Default or Event of Default shall have occurred and be
continuing. Any conversion to or from Adjusted Libor Loans hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of all Adjusted Libor Loans having the
same Interest Period shall not be less than $5,000,000.
(e) Any Adjusted Libor Loan in a minimum principal amount of $5,000,000
may be continued as such upon the expiration of an Interest Period with respect
thereto by compliance by the Company with the notice provisions contained in the
definition of Interest Period; provided, that no Adjusted Libor 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 Prime Rate Loan on the
last day of the Interest Period in effect when the Administrative Agent is
notified, or otherwise has actual knowledge, of such Default or Event of
Default.
(f) If the Company shall fail to select the duration of any Interest
Period for any Adjusted Libor Loan in accordance with the definition of
"Interest Period" set forth in Section 1.01 hereof, the Company shall be deemed
to have selected an Interest Period of one month.
(g) No Revolving Credit Loan may be converted to or continued as an
Adjusted Libor Loan with an Interest Period that extends beyond the Revolving
Credit Commitment Termination Date.
(h) Anything in this Agreement or in any Revolving Credit Note to the
contrary notwithstanding, the obligation of the Company to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be paid to a Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws
24
applicable to such Lender limiting the rates of interest that may be charged or
collected by such Lender. In each such event payments of interest required to be
paid to such Lender shall be calculated at the highest rate permitted by
applicable law until such time as the rates of interest required hereunder may
lawfully be charged and collected by such Lender. If the provisions of this
Agreement or any Revolving Credit Note would at any time otherwise require
payment by the Company to any Lender of any amount of interest in excess of the
maximum amount then permitted by applicable law, the interest payments to such
Lender shall be reduced to the extent necessary so that such Lender shall not
receive interest in excess of such maximum amount.
(i) Interest on each Revolving Credit Loan shall be payable in arrears
on each Interest Payment Date and shall be calculated on the basis of a year of
three hundred sixty (360) days and shall be payable for the actual number of
days elapsed. Any rate of interest on the Revolving Credit Loans or other
Obligations which is computed on the basis of the Prime Rate shall change when
and as the Prime Rate changes in accordance with the definition thereof. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall, absent demonstrable error, be conclusive and binding for all purposes.
SECTION 3.02. USE OF PROCEEDS. The proceeds of the Revolving Credit Loans
shall be used (a) to pay the Existing Indebtedness, (b) for general working
capital of the Company and other corporate purposes in the ordinary course of
business, and (c) to finance the purchase price of Permitted Acquisitions,
capital expenditures, stock repurchases and other corporate purchases not
otherwise prohibited hereunder. Letters of Credit shall be issued by the Issuing
Lender for the account of the Company and shall be issued for purposes in
connection with, and in the ordinary course of, the business of the Company and
its Subsidiaries consistent with historical purposes of standby letters of
credit issued for the Company prior to the date hereof.
SECTION 3.03. PREPAYMENTS. (a) Voluntary. The Company may, at any time and
from time to time, prepay the then outstanding Revolving Credit Loans, in whole
or in part, without premium or penalty, except as provided in Section 3.08
hereof, upon written notice to the Administrative Agent (or telephonic notice
promptly confirmed in writing) not later than 11:00 a.m. New York, New York
time, three Business Days before the date of prepayment with respect to
prepayments of Adjusted Libor Loans, or 11:00 a.m. New York, New York time one
Business Day before the date of prepayment with respect to Prime Rate Loans.
Each notice shall be irrevocable and shall specify the date and amount of
prepayment and whether such prepayment is of Adjusted Libor Loans or Prime Rate
Loans or a combination thereof, and if a combination thereof, the amount of
prepayment allocable to each. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Lender thereof. If such notice is given, the
Company shall make such prepayment, and the amount specified in such notice
shall be due and payable, on the date specified therein. Each partial prepayment
pursuant to this Section 3.03 hereof shall be in a principal amount of (i)
$5,000,000 or whole multiples of $1,000,000 in excess thereof with respect to
Adjusted Libor Loans and (ii) $1,000,000 or whole multiples of $500,000 in
excess thereof with respect to Prime Rate Loans.
(b) Mandatory. To the extent that the Aggregate Outstandings exceed the
Available Commitment, then the Company shall immediately prepay the Revolving
Credit Loans to the extent necessary to cause compliance with the foregoing. To
the extent that such prepayments are insufficient to cause such compliance, the
Company shall pledge to the
25
Administrative Agent for the ratable benefit of the Lenders, Cash Collateral in
an amount equal to the amount of such shortfall, which Cash Collateral shall
secure the reimbursement obligations of the Company to the Issuing Lender with
respect to drawings under Letters of Credit.
All prepayments shall be applied, first, to Prime Rate Loans outstanding
and second, to Adjusted Libor Loans outstanding, in such order as the
Administrative Agent shall determine in its sole and absolute discretion. All
prepayments shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment.
SECTION 3.04. FEES.
(a) The Company agrees to pay to the Administrative Agent for the
account of, and pro rata distribution to, each Lender a commitment fee on the
average daily unused portion of the Total Revolving Credit Commitment from the
Closing Date until the Revolving Credit Commitment Termination Date at a rate
per annum equal to the Unused Fee Rate, based on a year of 360 days, payable in
arrears on the last Business Day of each calendar quarter commencing December
31, 2003, on the Revolving Credit Commitment Termination Date, and on each date
the Total Revolving Credit Commitment is permanently reduced in whole or in
part.
(b) The Company shall pay to the Administrative Agent for the account
of, and pro rata distribution to, the Lenders, an annual commission with respect
to the Lenders' participation in Letters of Credit equal to the LC Fee
multiplied by the face amount of each Letter of Credit issued hereunder. Such
fees with respect to Letters of Credit shall be payable in advance on the date
of issuance of each Letter of Credit and, if still outstanding, on each
anniversary of the date of issuance thereafter. All commissions and fees shall
be computed on the basis of a year of three hundred and sixty (360) days and
shall be payable for the actual number of days elapsed.
(c) The Company shall pay to the Issuing Lender, upon its demand and
for its own account, the customary fees charged by the Issuing Lender with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or the processing of drawings thereunder.
(d) The Company agrees to pay such other fees as separately agreed to
between the Agent and the Company.
SECTION 3.05. INABILITY TO DETERMINE INTEREST RATE. In the event that the
Administrative Agent shall have determined in good faith (which determination
shall be conclusive and binding upon the Company, absent demonstrable error)
that, by reason of circumstances affecting the London interbank market, adequate
and reasonable means do not exist for ascertaining the Reserve Adjusted Libor
applicable pursuant to Section 3.01(b) hereof for any requested Interest Period
with respect to (a) the making of an Adjusted Libor Loan, (b) an Adjusted Libor
Loan that will result from the requested conversion of a Prime Rate Loan into an
Adjusted Libor Loan, or (c) the continuation of an Adjusted Libor Loan beyond
the expiration of the then current Interest Period with respect thereto, the
Administrative Agent shall forthwith give notice by telephone of such
determination, promptly confirmed in writing, to the Company
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and each Lender of such determination. Until the Administrative Agent notifies
the Company that the circumstances giving rise to the suspension described
herein no longer exist, the Company shall not have the right to request or
continue an Adjusted Libor Loan or to convert a Prime Rate Loan to an Adjusted
Libor Loan.
SECTION 3.06. ILLEGALITY. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Adjusted Libor Loans as contemplated by this Agreement, such
Lender shall forthwith give notice by telephone of such circumstances, promptly
confirmed in writing, to the Administrative Agent, which notice the
Administrative Agent shall promptly transmit to the Company and the other
Lenders and (a) the commitment of such Lender to make and to allow conversion to
or continuations of Adjusted Libor Loans shall forthwith be cancelled for the
duration of such illegality and (b) the Revolving Credit Loans then outstanding
as Adjusted Libor Loans, if any, shall be converted automatically to Prime Rate
Loans on the next succeeding last day of each Interest Period applicable to such
Adjusted Libor Loans or within such earlier period as may be required by law.
The Company shall pay to such Lender, upon demand, any additional amounts
required to be paid pursuant to Section 3.08 hereof.
SECTION 3.07. INCREASED COSTS. (a) In the event that any introduction of or
change in, after the date hereof, any applicable law, regulation, treaty, order,
directive or in the interpretation or application thereof (including, without
limitation, any request, guideline or policy, whether or not having the force of
law, of or from any central bank or other governmental authority, agency or
instrumentality and including, without limitation, Regulation D), by any
authority charged with the administration or interpretation thereof shall occur,
which:
(i) shall subject any Lender or the Issuing Lender to any tax of
any kind whatsoever with respect to this Agreement, any Revolving
Credit Note, any Revolving Credit Loan, or any Letter of Credit or
change the basis of taxation of payments to such Lender or the Issuing
Lender of principal, interest, fees or any other amount payable
hereunder (other than any tax that is measured with respect to the
overall net income of such Lender or the Issuing Lender or Lending
Office of such Lender or the Issuing Lender and that is imposed by the
United States of America, or any political subdivision or taxing
authority thereof or therein, or by any jurisdiction in which such
Lender's Lending Office or the Issuing Lender's lending office is
located, or by any jurisdiction in which such Lender is organized, has
its principal office or is managed and controlled); or
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement (whether or not having
the force of law) against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of
any Lender or the Issuing Lender; or
(iii) shall impose on any Lender or the Issuing Lender any other
condition, or change therein;
27
and the result of any of the foregoing is to increase the cost to such Lender or
the Issuing Lender of making, renewing or maintaining or participating in
advances or extensions of credit hereunder or to reduce any amount receivable
hereunder, in each case by an amount which such Lender or the Issuing Lender
deems material, then, in any such case, the Company shall pay such Lender or the
Issuing Lender, such additional amount or amounts as such Lender or the Issuing
Lender shall have determined will compensate such Lender or the Issuing Lender
for such increased costs or reduction.
(b) If any Lender or the Issuing Lender shall have determined that the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
or the Issuing Lender (or any lending office of any Lender or the Issuing Lender
which funds Revolving Credit Loans hereunder) or any Lender's or the Issuing
Lender's holding company, with any request or directive regarding capital
adequacy (whether or not having the force of the law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Lender's capital or on the
capital of such Lender's or the Issuing Lender's holding company as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or the Issuing Lender's policies and the policies of
such Lender's or the Issuing Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing Lender to be
material, then from time to time, the Company shall pay to such Lender or the
Issuing Lender the additional amount or amounts as such Lender or the Issuing
Lender shall have determined will compensate such Lender or such Lender's or the
Issuing Lender's holding company for such reduction. Such Lender's or the
Issuing Lender's determination of such amounts shall be conclusive and binding
on the Company absent demonstrable error.
(c) A certificate of a Lender setting forth the amount or amounts
payable pursuant to Sections 3.07(a) and 3.07(b) hereof shall be conclusive
absent demonstrable error. Notwithstanding anything to the contrary set forth in
this Section 3.07, the Company shall not be required to compensate a Lender
pursuant to this Section for any amounts incurred more than fifteen (15) months
prior to the date that such Lender notifies the Company of such Lender's
intention to claim compensation therefor. The Company shall pay such Lender or
the Issuing Lender the amount shown as due on any such certificate within 30
days after receipt thereof.
(d) In the event any Lender or the Issuing Lender shall be entitled to
compensation pursuant to Section 3.07(a) or Section 3.07(b) hereof, it shall
promptly notify the Administrative Agent and the Company of the event by reason
of which it has become so entitled; provided, however, no failure on the part of
any Lender or the Issuing Lender to demand compensation under clause (a) or
clause (b) above on one occasion shall constitute a waiver of its right to
demand compensation on any other occasion.
SECTION 3.08. INDEMNITY.
The Company agrees to indemnify each Lender and to hold each Lender
harmless from any loss, cost or expense which such Lender may sustain or incur,
including, without limitation,
28
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain Adjusted Libor Loans hereunder, as a consequence of (a)
default by the Company in payment of the principal amount of or interest on any
Adjusted Libor Loan, (b) default by the Company to accept or make a borrowing of
an Adjusted Libor Loan or a conversion into or continuation of an Adjusted Libor
Loan after the Company has requested such borrowing, conversion or continuation,
(c) default by the Company in making any prepayment of any Adjusted Libor Loan
after the Company gives a notice in accordance with Section 3.03 hereof and/or
(d) the making of any payment or prepayment (whether as a mandatory or optional
prepayment or by acceleration or otherwise) of an Adjusted Libor Loan or the
making of any conversion of an Adjusted Libor Loan to a Prime Rate Loan on a day
which is not the last day of the applicable Interest Period with respect
thereto. A certificate of a Lender setting forth such amounts shall be
conclusive absent demonstrable error. The Company shall pay such Lender the
amount shown as due on any certificate within ten days after receipt thereof.
SECTION 3.09. TAXES. (a) All payments made by the Company under this
Agreement shall be made free and clear of, and without reduction for or on
account of, any present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding (i) income and
franchise taxes (imposed in lieu of income taxes) imposed on the Administrative
Agent, the Issuing Lender or a Lender as a result of a present, former or future
connection between the jurisdiction of the government or the taxing authority
imposing such tax and the Administrative Agent, Issuing Lender or Lender or the
lending office of the Administrative Agent, Issuing Lender or Lender (excluding
a connection arising solely from the Administrative Agent, Issuing Lender or
Lender having executed this Agreement, the Revolving Credit Notes or the Loan
Documents) or any political subdivision or taxing authority thereof or therein,
and (ii) taxes (including withholding taxes) imposed by reason of the failure of
the Administrative Agent, Issuing Lender or Lender, if organized outside of the
United States, to comply with Section 3.09(c) hereof (or the inaccuracy at any
time of the certificates, documents or other evidence delivered thereunder)
(such non-excluded taxes being called "Non-Excluded Taxes"). If any Non-Excluded
Taxes are required to be withheld from any amounts payable to the Administrative
Agent, the Issuing Lender or any Lender hereunder, or under the Revolving Credit
Notes, the amount so payable to the Administrative Agent, the Issuing Lender or
such Lender shall be increased to the extent necessary to yield to the
Administrative Agent, the Issuing Lender or such Lender (after payment of all
Non-Excluded Taxes and free and clear of all liability in respect of such
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Revolving Credit
Notes provided, however, that the Company shall not be required to increase any
such amounts payable to any Lender with respect to any Non-Excluded Taxes (i)
that are United States withholding taxes imposed (or branch profits taxes
imposed in lieu thereof) on amounts payable to such Lender at the time the
Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Company with respect to such Non-Excluded Taxes
pursuant to this Section 3.09(a), or (ii) that are imposed as a result of any
event occurring after the Lender becomes a Lender other than a change in law or
regulation or the introduction of any law or regulation or a change in
interpretation or administration of any law. Whenever any Non-Excluded Taxes are
payable by the Company, within 30 days after payment therefor, the Company shall
send to the Administrative Agent for its own account or for the account of the
Issuing Lender or such Lender, as the case may be, a certified copy of an
original official receipt showing payment
29
thereof. If the Company fails to pay Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Company shall
indemnify the Administrative Agent, the Issuing Lender and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent, the Issuing Lender or such Lender as a result of any such
failure together with any expenses payable by the Administrative Agent, the
Issuing Lender or such Lender in connection therewith; provided that the
Administrative Agent, Issuing Lender or Lender has provided the Company with
notice thereof as required by Section 11.01, accompanied by a demand for
payment.
(b) If a Lender or the Administrative Agent becomes aware that it is
entitled to claim a refund from a governmental authority in respect of any
Non-Excluded Taxes as to which it has been indemnified by the Company or with
respect to which the Company has paid additional amounts pursuant to this
Section 3.09, it promptly shall notify the Company in writing of the
availability of such refund claim and shall make a timely claim to such taxation
authority for such refund at the Company's expense. If a Lender or the
Administrative Agent receives a refund (including pursuant to a claim for refund
made pursuant to the preceding sentence) or a permanent net tax benefit in
respect of any Non-Excluded Taxes as to which it has been indemnified by the
Company or with respect to which the Company has paid additional amounts
pursuant to this Section 3.09, it shall within 30 days from the date of such
receipt pay over the amount of such refund or permanent net tax benefit to the
Company, net of all reasonable out-of-pocket expenses of such Lender or the
Administrative Agent and without interest (other than interest paid by the
relevant taxation authority with respect to such refund); provided that the
Company, upon the request of such Lender or the Administrative Agent, agrees to
repay the amount paid over to the Company (plus penalties, interest or other
reasonable charges) to such Lender or the Administrative Agent in the event such
Lender or the Administrative Agent is required to repay such refund to such
taxation authority or loses such net tax benefit.
(c) On or before the date on which it becomes a party to this Agreement,
each Lender that is not organized under the laws of the United States or a state
thereof agrees that it will deliver to the Company and the Administrative Agent
(i) two duly completed copies of United States Internal Revenue Service Form
W-8BEN or W-8ECI or successor applicable form, as the case may be, certifying in
each case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, an Internal Revenue Service Form W-8BEN or successor applicable
form, and a statement in the form of Exhibit F hereto. Each Lender which
delivers to the Company and the Administrative Agent a Form W-8BEN or W-8ECI
pursuant to the preceding sentence further undertakes to deliver to the
Administrative Agent two further copies of the said statement and Form W-8BEN or
W-8ECI, or successor applicable forms, or other manner of certification, as the
case may be, on or before the date that any such statement or form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent statement or form previously delivered by it to the Administrative
Agent, and such extensions or renewals thereof as may be requested by the
Administrative Agent, certifying in the case of a Form W-8BEN or W-8ECI that
such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. Each Lender
shall promptly notify the Company and the Administrative Agent at any time it
determines that it is no longer in a position
30
to provide any previously delivered above-mentioned form or statement (or
successor thereto) to the Company and the Administrative Agent.
(d) For any period with respect to which a Lender has failed to provide the
Company with the appropriate form described in subsection 3.09(c) above (other
than if such failure is due to a change in law occurring subsequent to the date
on which a form originally was required to be provided, or if such form
otherwise is not required under subsection 3.09(c) above), such Lender shall not
be entitled to indemnification under Section 3.09 with respect to Non-Excluded
Taxes imposed by reason of such failure; provided, however, that should a Lender
become subject to Non-Excluded Taxes because of its failure to deliver a form
required hereunder, the Company shall take such steps as the Lender reasonably
shall request to assist the Lender in recovering such Non-Excluded Taxes.
SECTION 3.10. PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Company from the Lenders, each conversion of a Revolving Credit Loan pursuant to
Section 3.01(d) hereof or continuation of a Revolving Credit Loan pursuant to
Section 3.01(e) hereof, each payment by the Company on account of any fee (other
than with respect to fees which are expressly payable to the Administrative
Agent or the Issuing Lender for its own account), reimbursements by the Company
to the Issuing Lender with respect to drawings under Letters of Credit pursuant
to Section 2.04 hereof, and any reduction of the Revolving Credit Commitments of
the Lenders hereunder shall be made pro rata according to the respective
relevant Commitment Proportions of the Lenders. Each payment (including each
prepayment) by the Company on account of principal of and interest on each
Revolving Credit Loan shall be made pro rata according to the respective
outstanding principal amounts of such Revolving Credit Loans held by each
Lender. All payments (including prepayments) to be made by the Company on
account of principal, interest, fees and reimbursement obligations shall be made
without set-off or counterclaim and, with respect to payments of the Revolving
Credit Loans shall be made to the Administrative Agent, for the account of the
Lenders (except as specified above), at the Payment Office of the Administrative
Agent in Dollars in immediately available funds. The Administrative Agent shall
distribute such payments with respect to Revolving Credit Loans to the Lenders
promptly upon receipt in like funds by wire transfer of each Lender's portion of
such payment to such Lender for the account of its Lending Office. The
Administrative Agent may, in its sole discretion, directly charge principal and
interest payments due in respect of the Revolving Credit Loans to the Company's
accounts at the Payment Office or other office of the Administrative Agent, if
any. Except as otherwise provided in the definition of "Interest Period", if any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
SECTION 3.11. FUNDING AND DISBURSEMENT OF LOANS. (a) Each Lender shall make
each Revolving Credit Loan to be made by it hereunder available to the
Administrative Agent at the Payment Office for the account of such office and
the Administrative Agent by 1:00 p.m. New York, New York time on the Borrowing
Date in Dollars in immediately available funds. Unless any applicable condition
specified in Article V has not been satisfied, the amount so received by the
Administrative Agent will be made available to the Company at the Payment Office
by crediting the account of the Company with such amount and in like funds as
received by the Administrative Agent; provided, however, that if the proceeds of
any Revolving Credit
31
Loan or any portion thereof are to be used to prepay outstanding Revolving
Credit Loans or Letter of Credit obligations, then the Administrative Agent
shall apply such proceeds for such purpose to the extent necessary and credit
the balance, if any, to the Company's account.
(b) Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a proposed Borrowing Date that such Lender will not make the
amount which would constitute its Commitment Proportion of the borrowing on such
Borrowing Date available to the Administrative Agent, the Administrative Agent
may assume that such Lender has made such amount available to the Administrative
Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon
such assumption, make available to the Company a corresponding amount. If such
amount is not made available to the Administrative Agent until a date after such
Borrowing Date, such Lender shall pay to the Administrative Agent on demand
interest on such Lender's Commitment Proportion of such borrowing at a rate
equal to the greater of (i) the daily average Federal Funds Effective Rate and
(ii) a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation during such period, from and including
such Borrowing Date to the date on which such Lender's Commitment Proportion of
such borrowing shall have become immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts due pursuant to this Section 3.11(b) shall be conclusive
absent demonstrable error. Nothing herein shall be deemed to relieve any Lender
from its obligations to fulfill its commitment hereunder or to prejudice any
right which the Company may have against any Lender as a result of any default
by such Lender hereunder.
SECTION 3.12. MITIGATION, OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Each Lender agrees to use reasonable efforts to designate an alternate
Lending Office with respect to any Type of Revolving Credit Loan affected by the
events or circumstances described in Section 3.07 or Section 3.09 hereof to
avoid or minimize the Company's liability thereunder; provided, however, that
such efforts shall not cause the imposition on such Lender of any additional
cost or legal, regulatory or administrative burdens deemed by such Lender, in
its sole discretion, to be material.
(b) If any Lender is affected by the events or circumstances described in
Sections 3.07 or 3.09 and requests additional compensation pursuant to the terms
of this Agreement, or if any Lender defaults in its obligation to fund Revolving
Credit Loans hereunder, then the Company may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (and in accordance with the restrictions
set forth in Section 11.05 hereof), all its interests, rights, and obligations
under this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if such Lender accepts such assignment);
provided, that (i) the Company shall have received the prior written consent of
the Administrative Agent, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal amount of its Revolving Credit Loans,
accrued interest thereon, accrued fees and other amounts payable to it hereunder
from the assignee (to the extent of the outstanding principal and accrued
interest and fees) or the Company (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation
pursuant to Section 3.07 hereof or payments required to be made pursuant to
Section 3.09, such assignment will result in a reduction of such compensation or
payments. A Lender shall not be required to make any such assignment or
delegation if, prior
32
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Company to require such assignment and delegations cease to apply.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make the
Revolving Credit Loans herein provided for, the Company represents and warrants
to the Administrative Agent and each Lender that:
SECTION 4.01. ORGANIZATION, POWERS. The Company and each Guarantor (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (b) has the corporate power and
authority to own its assets and to carry on its business as now being conducted,
and (c) is duly qualified to do business in every jurisdiction wherein the
conduct of its business or the ownership of its properties are such as to
require such qualification except those jurisdictions in which the failure to be
so qualified could not reasonably be expected to have a Material Adverse Effect,
and (d) has the corporate power to execute, deliver and perform each of the Loan
Documents to which it is a party, including, without limitation, with respect to
the Company, the power to obtain extensions of credit hereunder and to execute
and deliver the Revolving Credit Notes.
SECTION 4.02. AUTHORIZATION OF BORROWING, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by the Company of this Agreement, and the
other Loan Documents to which it is a party, the borrowings and the other
extensions of credit to the Company hereunder, and the execution, delivery and
performance by each Guarantor of the Loan Documents to which such Guarantor is a
party, (a) have been duly authorized by all requisite corporate action, (b) will
not violate or require any consent under (i) any provision of law applicable to
the Company or any Guarantor or any applicable rule or regulation of any
Governmental Authority, or (ii) the certificate of incorporation or by-laws of
the Company or the certificate of incorporation, by-laws, or other
organizational documents, as applicable, of any Guarantor, or (iii) any order of
any court or other Governmental Authority binding on the Company or any
Guarantor, except to the extent such violation or failure to obtain such consent
could not reasonably be expected to have a Material Adverse Effect, and (c) will
not be in conflict with, result in a breach of, require any consent under or
constitute (with due notice and/or lapse of time) a default under, any
indenture, agreement or other instrument to which the Company or any Guarantor
is a party, or by which the Company or any Guarantor or any of their respective
properties are bound, which conflict, breach, failure to obtain consent or
default could reasonably be expected to have a Material Adverse Effect or result
in the creation or imposition of any Lien, of any nature whatsoever upon any of
the property or assets of the Company or any Guarantor of the Company other than
as contemplated by this Agreement or the other Loan Documents. This Agreement
and each other Loan Document to which the Company or any Guarantor is a party
constitutes a legal, valid and binding obligation of the Company and each such
Guarantor, as the case may be, enforceable against the Company and each such
Guarantor, as the case may be, in accordance with its terms except to the extent
that enforcement may be limited by applicable bankruptcy, reorganization,
moratorium, insolvency and similar laws affecting creditors' rights generally or
by equitable principles of general application, regardless of whether considered
in a proceeding in equity or at law.
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SECTION 4.03. FINANCIAL CONDITION.
(a) The Company has heretofore furnished to each Lender (i) the
Company-prepared draft unaudited consolidated balance sheet of the Company and
its Subsidiaries and the related draft consolidated statements of income of the
Company and its Subsidiaries for the fiscal year ended December 31, 2002 and
(ii) the Company-prepared draft unaudited consolidated balance sheet of the
Company and its Subsidiaries and the related draft consolidated statements of
income of the Company and its Subsidiaries for the fiscal quarters ended March
31, 2003 and June 30, 2003 and for the six month period ended June 30, 2003.
Such draft financial statements were prepared in conformity with Generally
Accepted Accounting Principles, applied on a consistent basis, and, subject to
adjustments to be determined by Deloitte & Touche, independent certified public
accountants in connection with the Company's issuance of its amended audited
consolidated financial statements for the fiscal year ended December 31, 2002,
fairly present the financial condition and results of operations of the Company
as of the date of such financial statements and for the periods to which they
relate and, except as set forth on Schedule 4.03, since June 30, 2003, no event
or condition has occurred which could reasonably be expected to have a Material
Adverse Effect. Other than obligations and liabilities arising in the ordinary
course of business since June 30, 2003, there are no obligations or liabilities
contingent or otherwise, of the Company or any of its Subsidiaries which are not
reflected or disclosed on such unaudited draft statements.
(b) The Company and each of the Guarantors is Solvent.
SECTION 4.04. TAXES.
The Company and each Subsidiary of the Company has filed or has caused to
be filed all tax returns (foreign, federal, state and local) required to be
filed (including, without limitation, with respect to payroll and sales taxes)
and the Company and each Subsidiary of the Company has paid all taxes
(including, without limitation, all payroll and sales taxes), assessments and
governmental charges and levies shown thereon to be due, including interest and
penalties, except (a) where the failure to file such tax returns or pay such
taxes, charges or levies could not reasonably be expected to have a Material
Adverse Effect and (b) taxes, assessments and governmental charges and levies
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves in conformity with Generally Accepted Accounting
Principles, consistently applied, shall have been provided on the books of the
Company and its Subsidiaries.
SECTION 4.05. TITLE TO PROPERTIES. Except as may result from matters set
forth on Schedule 4.05, the Company and each Subsidiary of the Company has good
title to all of its respective real properties except for such properties as
have been disposed of as no longer used or useful in the conduct of their
respective businesses or as have been disposed of in the ordinary course of
business and except for such defects in title that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, and all
such properties are free and clear of all Liens other than Permitted Liens.
SECTION 4.06. LITIGATION. (a) Except as set forth on Schedule 4.06, there
are no actions, suits or proceedings (whether or not purportedly on behalf of
the Company or any
34
Subsidiary of the Company) pending or threatened against or affecting the
Company or any Subsidiary of the Company at law or in equity or before or by any
Governmental Authority, which involve any of the transactions contemplated
herein or which could reasonably be expected to result in a Material Adverse
Effect; and (b) neither the Company nor any Subsidiary of the Company is in
default with respect to any judgment, writ, injunction, decree, rule or
regulation of any Governmental Authority which could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.07. AGREEMENTS. Neither the Company nor any Subsidiary of the
Company is a party to any agreement, indenture, loan or credit agreement or any
lease or other agreement or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or
regulation which could reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary of the Company is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect.
SECTION 4.08. COMPLIANCE WITH ERISA. Each Plan is in compliance in all
material respects with ERISA; no Plan is insolvent or in reorganization (as
defined in Section 4241 of ERISA), no Plan has an Unfunded Current Liability,
and no Plan has an accumulated or waived funding deficiency within the meaning
of Section 412 of the Code; neither the Company, any Subsidiary of the Company
nor any ERISA Affiliate has incurred any material liability to or on account of
a Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or
reasonably expects to incur any liability under any of the foregoing Sections on
account of the prior termination of participation in or contributions to any
such Plan; no proceedings have been instituted to terminate any Plan; no
condition exists which could reasonably be expected to present a risk to the
Company, any Subsidiary of the Company or any ERISA Affiliate of incurring a
material liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; and no lien imposed under the Code or ERISA on
the assets of the Company, any Subsidiary of the Company or any of their
respective ERISA Affiliates exists or is likely to arise on account of any Plan.
SECTION 4.09. FEDERAL RESERVE REGULATIONS; USE OF PROCEEDS. (a) Neither the
Company nor any Subsidiary of the Company is engaged principally in, nor has as
one of its important activities, the business of extending, maintaining or
arranging credit for the purpose of purchasing or carrying any "margin stock"
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System of the United States, as amended from time to time).
(b) No part of the proceeds of any Revolving Credit Loan and no other
extension of credit hereunder will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or to carry
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock, or to refund indebtedness originally incurred for such
purposes, or (ii) for any purpose which violates or is inconsistent with the
provisions of Regulation T, U, or X of the Board of Governors of the Federal
Reserve System.
(c) The proceeds of each Revolving Credit Loan, and each other extension of
credit hereunder shall be used solely for the purposes permitted under Section
3.02 hereof.
35
SECTION 4.10. APPROVALS. No registration with or consent or approval of, or
other action by, any Governmental Authority or any other Person is required in
connection with the execution, delivery and performance of this Agreement by the
Company or any Guarantor, or with the execution and delivery of other Loan
Documents to which it is a party or, with respect to the Company, the borrowings
and each other extension of credit hereunder other than registrations, consents
and approvals received prior to the date hereof and disclosed to the Lenders and
which are in full force and effect or such registrations, consents and approvals
required pursuant to Section 5.01 hereof.
SECTION 4.11. SUBSIDIARIES. Attached hereto as Schedule 4.11 is a correct
and complete list of each of the Company's Subsidiaries as of the Closing Date
showing as to each Subsidiary, its name, the jurisdiction of its incorporation,
its shareholders or other owners of an interest in each Subsidiary and the
number of outstanding shares or other ownership interest owned by each
shareholder or other owner of an interest.
SECTION 4.12. HAZARDOUS MATERIALS. The Company and each Subsidiary of the
Company are in compliance in all material respects with all applicable
Environmental Laws and neither the Company nor any Subsidiary of the Company has
used Hazardous Materials on, from, or affecting any property now owned or
occupied or hereafter owned or occupied by the Company or any such Subsidiary in
any manner which violates in any material respect any applicable Environmental
Law. To the knowledge of the Company, no prior owner of any such property or any
tenant, subtenant, prior tenant or prior subtenant have used Hazardous Materials
on, from, or affecting such property in any manner which violates any applicable
Environmental Law.
SECTION 4.13. INVESTMENT COMPANY ACT. Neither the Company nor any
Subsidiary of the Company is an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.14. NO DEFAULT. No Default or Event of Default has occurred and
is continuing.
SECTION 4.15. SECURITY DOCUMENTS. Each Security Document executed by the
Company and the Guarantors shall constitute a valid and continuing lien on and
security interest in the collateral referred to in such Security Documents to
the extent provided therein and under applicable law in favor of the
Administrative Agent for the ratable benefit of the Lenders, prior to all other
Liens, claims and right of all other Persons, other than Permitted Liens, and
shall be enforceable as such against all other Persons.
SECTION 4.16. CREDIT ARRANGEMENTS. Schedule 4.16 is a complete and correct
list of all credit agreements, indentures, purchase agreements (other than
purchase orders), guaranties, Capital Leases and other investments, agreements
and arrangements in effect on the Closing Date providing for or relating to
extensions of credit in excess of $2,500,000 to the Company or any Subsidiaries
of the Company, or any of them (including agreements and arrangements for the
issuance of letters of credit or for acceptance financing) in respect of which
the Company or any Subsidiaries of the Company, or any of them, are in any
manner directly or contingently obligated; and the maximum principal or face
amounts of the credit in question,
36
outstanding and which can be outstanding, are correctly stated, and all Liens of
any nature given or agreed to be given as security therefor are correctly
described or indicated in such Schedule.
SECTION 4.17. PERMITS AND LICENSES. The Company and each Subsidiary of the
Company each has all permits, licenses, certifications, authorizations and
approvals required for it lawfully to own and operate their respective
businesses except those the failure of which to have could not reasonably be
expected to have a Material Adverse Effect.
SECTION 4.18. COMPLIANCE WITH LAW. Except as may result from matters set
forth on Schedule 4.18 or may result from the Company's failure to timely file
the 2002 and 2003 Financial Statements and Filings with the Securities and
Exchange Commission, the Company and each Subsidiary of the Company are each in
compliance, with all laws, rules, regulations, orders and decrees which are
applicable to the Company or any such Subsidiary, or to any of their respective
properties, which the failure to comply with could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.19. DISCLOSURE. No statement or information contained in this
Agreement, any other Loan Document, or any other document, report, certificate,
financial statement or other written statement furnished to the Administrative
Agent, the Issuing Lender, or any Lender by or on behalf of the Company or any
of its Subsidiaries for use in connection with the transactions contemplated by
this Agreement contained as of the date such document, report, certificate,
financial statement or other written statement was so furnished any untrue
statement of material fact or omitted to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances in which they were made.
SECTION 4.20. ACCOUNTS RECEIVABLE. Each Receivable shown on each Borrowing
Base Certificate is based upon an actual bona fide sale and shipment of delivery
of goods or rendition of services to customers, made by the Company and each
Guarantor in the ordinary course of their business; the goods and inventory sold
and the Receivables thereby created and created by services being rendered are
the exclusive property of the Company and the Guarantors, as applicable, and are
not and shall not be subject to any Lien (other than Permitted Liens); and
except as consistent with past practice in the ordinary course of business or as
the Company may otherwise advise the Administrative Agent, the customers of the
Company and the Guarantors have accepted such goods or services and owe and are
obligated to pay the full amount stated in the invoices according to their
terms, without dispute, offset, defense or counterclaim. The Receivables owing
to the Company and the Encumbered Guarantors constitute on a consolidated basis
at least ninety-nine percent (99%) of all gross Receivables owing to the Company
and the Guarantors.
SECTION 4.21. LABOR DISPUTES AND ACTS OF GOD. Neither the business nor the
properties of the Company or any Subsidiary of the Company are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
37
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01. CONDITIONS TO INITIAL EXTENSION OF CREDIT. The obligation of
each Lender to make its initial Revolving Credit Loan hereunder, and the
obligation of the Issuing Lender to issue the initial Letter of Credit, are
subject to the following conditions precedent:
(a) NOTES. On or prior to the Closing Date, the Administrative Agent shall
have received for the account of each Lender who has requested a Revolving
Credit Note, a Revolving Credit Note duly executed by the Company.
(b) GUARANTIES. On or prior to the Closing Date, the Administrative Agent
shall have received, with a counterpart for each Lender, a Guaranty duly
executed by each Guarantor.
(c) SECURITY AGREEMENT. On or prior to the Closing Date, the Administrative
Agent shall have received, with a counterpart for each Lender, the Security
Agreement duly executed by the Company and each Encumbered Guarantor, together
with financing statements, in proper form for filing under the Uniform
Commercial Code in all jurisdictions necessary, in the opinion of the
Administrative Agent, to perfect the security interests created by the Security
Agreement for the ratable benefit of the Lenders.
(d) OPINION OF COUNSEL. On or prior to the Closing Date, the Administrative
Agent shall have received a written opinion of counsel for the Company and the
Guarantors dated the Closing Date and addressed to the Agent and each Lender,
substantially in the form of Exhibit D attached hereto.
(e) SUPPORTING DOCUMENTS. On or prior to the Closing Date, the
Administrative Agent shall have received, (i) a certificate of good standing for
the Company and each Guarantor from the secretary of state of the states of
their organizational jurisdiction dated as of a recent date; (ii) certified
copies of the Certificate of Incorporation of the Company and each Guarantor;
and (iii) a certificate of the Secretary or an Assistant Secretary or, where
there is no such officer,, any other authorized officer, in each case, of the
Company and each Guarantor dated the Closing Date and certifying: (x) that
neither the Certificate of Incorporation nor the By-laws, in the form attached
to such certificate, of the Company or the Guarantor, as applicable, has been
amended since the date of their certification (or if there has been any such
amendment, attaching a certified copy thereof); (y) that attached thereto is a
true and complete copy of resolutions adopted by the Board of Directors of the
Company or by the board of directors of the Guarantor, as applicable,
authorizing the execution, delivery and performance of each Loan Document to
which it is a party and, with respect to the Company, the borrowings and other
extensions of credit hereunder; and (z) the incumbency and specimen signature of
each officer of the Company or of each officer of the Guarantor, as applicable,
executing each Loan Document to which the Company or the Guarantor is a party
and any certificates or instruments furnished pursuant hereto or thereto, and a
certification by another officer of the Company and each Guarantor as to the
incumbency and signature of the Secretary or Assistant Secretary or such other
authorized officer of the Company or such Guarantor, as applicable.
(f) OFFICER'S CERTIFICATE. On the Closing Date, the Administrative Agent
shall have received a certificate of a duly authorized officer of the Company,
dated the Closing Date,
38
stating that the representations and warranties in Article IV hereof are true
and correct on such date as though made on and as of such date and that no event
has occurred and is continuing which constitutes a Default or Event of Default.
(g) INSURANCE. On or prior to the Closing Date, the Administrative Agent
shall have received a certificate or certificates of insurance from an
independent insurance broker or brokers or other evidence confirming the
insurance required to be maintained pursuant to Section 6.01 hereof.
(h) BORROWING BASE CERTIFICATE. On or prior to the Closing Date, the
Administrative Agent shall have received a Borrowing Base Certificate dated as
of the Closing Date, in form and substance satisfactory to the Administrative
Agent.
(i) ACCOUNTS RECEIVABLE EVIDENCE. On or prior to the Closing Date, the
Administrative Agent shall have received evidence, in form, substance and detail
satisfactory to the Administrative Agent, that the Receivables owing to the
Company and the Encumbered Guarantors constitute at least ninety-nine percent
(99%) of the Receivables owing to the Company and the Guarantors on a
consolidated basis.
(j) ASSETS FREE FROM LIENS. Prior to the Closing Date, the Administrative
Agent shall have received UCC, tax, judgment and lien searches evidencing that
the Company's and each Encumbered Guarantor's assets are free and clear of all
Liens except (i) Permitted Liens and (ii) liens to be satisfied on the Closing
Date pursuant to the terms hereof.
(k) FEES AND EXPENSES. On or prior to the Closing Date, the Lenders shall
have received all fees that may be payable to them pursuant to this Agreement
(including any fees payable pursuant to separate fee letters with the Company)
and reimbursement of expenses in accordance with Section 11.03(b) hereof for
which invoices have been presented on or before the Closing Date.
(l) LITIGATION. The Administrative Agent shall have performed to its
satisfaction a review of all existing litigation currently pending against the
Company and the Guarantors and, except as set forth on Schedule 4.06, there
shall exist no action, suit, investigation, litigation or proceeding affecting
the Company or any Guarantor pending or threatened before any court,
governmental agency or arbiter that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(m) NO JUDGMENT. On the Closing Date, no judgment, award, order, or
combination thereof, shall exist against the Company, any Subsidiary of the
Company, or collectively against the Company and its Subsidiaries in an
aggregate amount in excess of $50,000,000.
(n) CONSENTS AND APPROVALS. All governmental and third party consents and
approvals necessary in connection with the transactions contemplated by this
Agreement and the other Loan Documents shall have been obtained (without the
imposition of any conditions that are not reasonably acceptable to the Required
Lenders) and shall remain in effect, and no law or regulation shall be
applicable in the reasonable judgment of the Required Lenders that imposes
materially adverse conditions upon the transactions contemplated hereby.
39
(o) NO MATERIAL ADVERSE CHANGES. There shall not have occurred any material
adverse change in the business, operations, properties, performance or condition
(financial or otherwise) of the Company and the Guarantors, taken as a whole, or
the Company and its Subsidiaries, taken as a whole, since September 30, 2003,
except as may result from the Telxon/Smart Media Litigation.
(p) EXISTING INDEBTEDNESS. The Administrative Agent shall have received,
prior to or concurrently with the extension of the initial Revolving Credit
Loans, evidence that the Existing Indebtedness, other than the Contingent BofA
Obligations, has been paid in full and that all commitments to make loans and
other extensions of credit under the agreements giving rise to such Existing
Indebtedness have been terminated. In furtherance of the foregoing, the
Administrative Agent shall have received a payoff letter from Bank of America,
N.A., as administrative agent with respect to all amounts due and owing under
the Prior Credit Agreement, together with UCC termination statements with
respect to all filings against the Company and the Guarantors, which payoff
letter shall include a statement that upon payment in full of the amounts set
forth therein, the commitments under the Prior Credit Agreement are terminated.
(q) FULL DOMINION AND CONTROL DOCUMENTS. On or prior to the Closing Date,
the Administrative Agent shall have received all documents, including without
limitation, all Blocked Account Agreements and all necessary third party
agreements, duly executed by the Company and each Encumbered Guarantor, required
by the Agent in order to permit the Agent to have the Blocked Accounts
transferred to the Designated Account upon notice to the Blocked Account Banks.
(r) DUE DILIGENCE. The Administrative Agent and the Lenders shall have
received results satisfactory to them with respect to (i) judgment, tax,
bankruptcy and lien searches against the Company and each of the Encumbered
Guarantors, and (ii) to the extent completed through the Closing Date, the
Initial Field Exam.
(s) OTHER INFORMATION, DOCUMENTATION. The Administrative Agent and the
Lenders shall have received such other and further information and documentation
as any of them may reasonably require, including, but not limited to, any
information or documentation relating to compliance by the Company and each
Guarantor in all material respects with the requirements of all Environmental
Laws applicable to the Company and each Guarantor.
SECTION 5.02. CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligation of
each Lender to make each Revolving Credit Loan hereunder and the obligation of
the Issuing Lender to issue, amend, renew or extend any Letter of Credit,
including, without limitation, the initial Revolving Credit Loan and initial
Letter of Credit, are further subject to the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties by
the Company and each Guarantor pursuant to this Agreement and the other Loan
Documents to which each is a party shall be true and correct in all material
respects on and as of the Borrowing Date or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, with the same
effect as though such representations and warranties had been made on
40
and as of such date unless such representation is as of a specific date, in
which case, as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and be
continuing on the Borrowing Date or on the date of issuance, amendment, renewal
or extension of a Letter of Credit or will result after giving effect to the
Revolving Credit Loan requested or the requested issuance, amendment, renewal or
extension of a Letter of Credit.
(c) LETTER OF CREDIT DOCUMENTATION. With respect to the issuance,
amendment, renewal or extension of any Letter of Credit, the Issuing Lender
shall have received the documents and instruments requested by the Issuing
Lender in accordance with Section 2.04(a) hereof.
(d) AVAILABILITY. After giving effect to any requested Revolving Credit
Loan or the issuance of any requested Letter of Credit, the Aggregate
Outstandings shall not exceed the Available Commitment.
Each borrowing hereunder and each issuance, amendment, renewal or extension
of a Letter of Credit shall constitute a representation and warranty of the
Company that the statements contained in clauses (a), (b), (c) and (d) of
Section 5.02 hereof are true and correct on and as of the Borrowing Date or as
of the date of issuance, amendment, renewal or extension of a Letter of Credit,
as applicable, as though such representation and warranty had been made on and
as of such date.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Lenders that so long as the
Revolving Credit Commitments remain in effect, or any of the principal of or
interest on the Revolving Credit Notes or any other Obligation hereunder shall
be unpaid it will, and will cause each of its Subsidiaries to:
SECTION 6.01. EXISTENCE, PROPERTIES, INSURANCE. Do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate,
partnership or limited liability company, as applicable, existence, rights and
franchises necessary for the normal conduct of its business (other than as
expressly permitted herein) and comply in all material respects with all laws
applicable to it; at all times maintain, preserve, protect and renew all trade
names, patents, trademarks and service marks, the non-preservation of which
could reasonably be expected to have a Material Adverse Effect and preserve all
of its property and keep the same in good repair, working order and condition
(normal wear and tear excepted) and from time to time make, or cause to be made,
all necessary repairs, renewals, replacements, betterments and improvements
thereto, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; at all times preserve and maintain in full force
and effect all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary for the normal conduct of its business (other
than as expressly permitted herein); and at all times maintain insurance
covering its assets and its businesses with financially sound and reputable
41
insurance companies or associations in such amounts and against such risks as
are usually carried by companies engaged in the same or similar business.
SECTION 6.02. PAYMENT OF INDEBTEDNESS AND TAXES. (a) Pay all indebtedness
and obligations, now existing or hereafter arising, as and when due and payable
and (b) pay and discharge or cause to be paid and discharged promptly all taxes,
assessments and government charges or levies imposed upon it or upon its income
and profits, or upon any of its property, real, personal or mixed, or upon any
part thereof, as and when due and payable, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid, might become a lien
or charge upon such properties or any part thereof; provided, however, that
neither the Company nor any Subsidiary of the Company shall be required to pay
and discharge or cause to be paid and discharged any such obligation, tax,
assessment, charge, levy or claim so long as the validity thereof shall be
contested in good faith by appropriate proceedings, and the Company or such
Subsidiary, as the case may be, shall have set aside on its books adequate
reserves determined in accordance with Generally Accepted Accounting Principles,
applied on a consistent basis, with respect to any such tax, assessment, charge,
levy or claim so contested; further, provided that, subject to the foregoing
proviso, the Company and each Subsidiary of the Company will pay or cause to be
paid all such taxes, assessments, charges, levies or claims upon the
commencement of proceedings to foreclose any lien which has attached as security
therefor.
SECTION 6.03. FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the
Administrative Agent and each Lender:
(a) During the period after the Closing Date, but prior to delivery of the
2002 and 2003 Financial Statements and Filings:
(i) as soon as available and in any event within sixty (60) days after
the end of each of the first, second and third fiscal quarters of the Company
and the fiscal quarter ending December 31, 2003, the unaudited consolidated
financial statements of the Company and its Subsidiaries, which shall include
the unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of each such quarter, together with the consolidated statement of
income and statement of cash flows of the Company and its Subsidiaries for each
such quarter and for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail stating
in comparative form the respective figures for the corresponding date and period
in the previous fiscal year, all prepared by or under the supervision of the
President or Chief Financial Officer of the Company in accordance with Generally
Accepted Accounting Principles, applied on a consistent basis (subject to
year-end adjustments and except for the absence of notes thereto);
(ii) a certificate prepared and signed by the President or Chief
Financial Officer of the Company with each delivery required by clause (a)(i)
above, stating whether the President or the Chief Financial Officer, as the case
may be, shall have obtained knowledge of any Default or Event of Default
hereunder, together with a compliance certificate of the President or Chief
Financial Officer of the Company demonstrating (with all appropriate
calculations) that as of the last day of the relevant fiscal quarter the Company
was in compliance with the financial condition covenants set forth in Section
7.13 hereof;
(iii) on or before the 15th day following the last day of each calendar
month, (A) a duly completed and executed Borrowing Base Certificate showing in
detail the
42
Company's calculations of the Borrowing Base current as of the last day of the
immediately preceding month, certified by the Chief Financial Officer, President
or Treasurer of the Company and reasonably satisfactory to the Administrative
Agent, and (B) evidence in form, substance and detail reasonably satisfactory to
the Administrative Agent that the representation set forth in the last sentence
of Section 4.20 is true and correct;
(iv) promptly after filing thereof, copies of all financial statements
and reports that the Company sends to its shareholders, and copies of all
regular, periodic and special financial information, proxy materials and other
information and reports which the Company or any Guarantor shall file with the
Securities and Exchange Commission; provided, that the foregoing shall be deemed
to have been delivered on the date on which the Company notifies the Agent that
it has posted the foregoing on the Company's website on the internet or when
Company notifies the Agent that such document has been posted on the website of
the Securities and Exchange Commission; and
(v) promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of the
Company or the Guarantors as any Lender may reasonably request.
(b) During the period after delivery of the 2002 and 2003 Financial
Statements and Filings:
(i) as soon as available and in any event within ninety (90) days of
the end of each fiscal year of the Company, audited consolidated financial
statements of the Company and its Subsidiaries which shall include the
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such fiscal year, together with the consolidated statement of income and
statement of cash flows for the Company and its Subsidiaries for such fiscal
year and as of the end of and for the prior fiscal year, all prepared in
accordance with Generally Accepted Accounting Principles, applied on a
consistent basis, and accompanied by an unqualified opinion thereon of Deloitte
& Touche or other independent certified public accountants of nationally
recognized standing acceptable to the Administrative Agent (the "Auditor") which
opinion shall not include a "going concern" explanatory paragraph, a
qualification as to Generally Accepted Accounting Principles or like
qualification or exception or a qualification or exception as to the scope of
the audit;
(ii) as soon as available and in any event within sixty (60) days after
the end of each of the first, second, and third fiscal quarters of the Company,
the unaudited consolidated financial statements of the Company and its
Subsidiaries, which shall include the unaudited consolidated balance sheet of
the Company and its Subsidiaries as of the end of each such quarter, together
with the consolidated statement of income and statement of cash flows of the
Company and its Subsidiaries for each such quarter and for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
all in reasonable detail stating in comparative form the respective figures for
the corresponding date and period in the previous fiscal year, all prepared by
or under the supervision of the President or Chief Financial Officer of the
Company in accordance with Generally Accepted Accounting Principles, applied on
a consistent basis (subject to year-end adjustments and except for the absence
of notes thereto);
(iii) a certificate prepared and signed by the President or Chief
Financial Officer of the Company with each delivery required by clause (b)(i)
and (b)(ii) above,
43
stating whether the President or the Chief Financial Officer, as the case may
be, shall have obtained knowledge of any Default or Event of Default hereunder,
together, in each case, with a compliance certificate of the President or Chief
Financial Officer of the Company demonstrating (with all appropriate
calculations) that as of the last day of the relevant fiscal year or quarter, as
applicable, the Company was in compliance with the financial condition covenants
set forth in Section 7.13 hereof;
(iv) at all times indicated in clause (b)(i) above, a copy of the
management letter, if any, prepared by the Auditor;
(v) on or before the 15th day following the last day of each calendar
month, (A) a duly completed and executed Borrowing Base Certificate showing in
detail the Company's calculations of the Borrowing Base current as of the last
day of the immediately preceding month, certified by the Chief Financial
Officer, President or Treasurer of the Company and reasonably satisfactory to
the Administrative Agent, and (B) evidence in form, substance and detail
reasonably satisfactory to the Administrative Agent that the representation set
forth in the last sentence of Section 4.20 is true and correct;
(vi) promptly after filing thereof, copies of all financial statements
and reports that the Company sends to its shareholders, and copies of all
regular, periodic and special financial information, proxy materials and other
information and reports which the Company or any Guarantor shall file with the
Securities and Exchange Commission; provided, that the foregoing shall be deemed
to have been delivered on the date on which the Company notifies the Agent that
it has posted the foregoing on the Company's website on the internet or when
Company notifies the Agent that such document has been posted on the website of
the Securities and Exchange Commission; and
(vii) promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of the
Company or any Subsidiary of the Company as any Lender may reasonably request in
writing.
SECTION 6.04. BOOKS AND RECORDS; ACCESS TO PREMISES.
(a) Maintain adequate records and proper books of record and accounts
in which full, true and correct entries will be made in a manner to enable the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles, and which shall reflect all financial transactions of the
Company and each of its Subsidiaries and matters involving the assets and
business of the Company and such Subsidiaries in accordance with Generally
Accepted Accounting Principles.
(b) At any time and from time to time upon reasonable advance notice to
the Company during normal business hours permit any Lender or any agents or
representatives thereof (coordinating through the Agent) to examine and make
copies of and abstracts from the books and records of such information which
such Person deems is reasonably necessary or desirable (including, without
limitation, the financial records of the Company and its Subsidiaries) and to
visit the properties of the Company or any of its Subsidiaries and to discuss
the affairs, finances and accounts of the Company or any of its Subsidiaries
with any executive
44
officers or the Company's independent accountants at such Lender's expense
(unless an Event of Default has occurred and is continuing).
(c) At least twice during any twelve (12) month period (including the
Initial Field Examination) during normal business hours, and at any time and
from time to time following the occurrence and during the continuance of an
Event of Default, permit the Administrative Agent or any agents or
representatives thereof to conduct such field audits of the Company's and each
Guarantor's assets (including, without limitation, reviews of accounts
receivable, inventory, accounts payable, taxes and insurance) as the
Administrative Agent shall deem reasonably necessary or appropriate, the expense
of which shall be paid by the Company and the results of which shall be
satisfactory to the Administrative Agent in its sole and absolute discretion.
SECTION 6.05. NOTICE OF ADVERSE CHANGE. Promptly notify the Administrative
Agent in writing of (a) any change in the business or the operations of the
Company or its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, and (b) any information which indicates that any
financial statements which are the subject of any representation contained in
this Agreement, or which are furnished to the Administrative Agent or the
Lenders pursuant to this Agreement, fail to present fairly, as of the date
thereof and for the period covered thereby, the financial condition and results
of operations purported to be presented therein in accordance with Generally
Accepted Accounting Principles, disclosing the nature thereof.
SECTION 6.06. NOTICE OF DEFAULT. Promptly notify the Administrative Agent
of any Default or Event of Default which shall have occurred or the occurrence
or existence of any event or circumstance that in the reasonable judgment of the
Company is likely to become a Default or Event of Default, which notice shall
include a written statement as to such occurrence, specifying the nature thereof
and the action (if any) which is proposed to be taken with respect thereto.
SECTION 6.07. NOTICE OF LITIGATION AND INVESTIGATIONS. Promptly notify the
Administrative Agent of any action, suit, investigation or proceeding at law or
in equity or by or before any governmental instrumentality or other agency which
could reasonably be expected to have a Material Adverse Effect.
SECTION 6.08. NOTICE OF DEFAULT IN OTHER AGREEMENTS. Promptly notify the
Administrative Agent of any default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Company or any Subsidiary of the Company is
a party which default could reasonably be expected to have a Material Adverse
Effect.
SECTION 6.09. NOTICE OF ERISA EVENT. Promptly, and in any event within ten
(10) days after the Company or any Guarantor knows any of the following, deliver
to the Administrative Agent a certificate of the Chief Financial Officer of the
Company setting forth details as to the occurrence and the action, if any, which
the Company, such Guarantor or any ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Company, such Guarantor, such ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator, with respect thereto: that a Reportable
Event
45
has occurred with respect to a Plan, that an accumulated funding deficiency (as
defined in Section 412 of the Code) has been incurred or an application may be
or has been made to the Secretary of the Treasury for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan that is a Single Employer Plan (within the meaning of Section
4001(a)(15) of ERISA), that a Plan has been terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA, that one or more Plans that are
Single Employer Plans (within the meaning of Section 4001(a)(15) of ERISA) have
an Unfunded Current Liability, that proceedings may be or have been instituted
to terminate a Plan, that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Plan, or that the
Company, any Guarantor or any ERISA Affiliate will incur any liability
(including any contingent or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4201 or
4204 of ERISA. Upon request of any Lender, the Company will deliver to each
Lender a complete copy of the annual report (Form 5500) of each Plan that is a
Single Employer Plan (within the meaning of Section 4001(a)(15) of ERISA), filed
with the Internal Revenue Service. In addition to any certificates or notices
delivered to each Lender pursuant to the first sentence hereof, copies of any
other notices received by the Company or any Guarantor required to be delivered
to each Lender hereunder shall be delivered to each Lender no later than ten
days after the later of the date such report or notice has been filed with the
Internal Revenue Service or the PBGC, given to Plan participants or received by
the Company or any Guarantor.
SECTION 6.10. NOTICE OF ENVIRONMENTAL LAW VIOLATIONS. Promptly notify the
Administrative Agent of the receipt of any notice of an action, suit, and
proceeding before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending against the
Company or any Subsidiary of the Company relating to any alleged violation of
any Environmental Law which could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.11. COMPLIANCE WITH APPLICABLE LAWS. Comply with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority, the breach of which could reasonably be expected to have a Material
Adverse Effect, including, without limitation, the rules and regulations of the
Board of Governors of the Federal Reserve System and the Federal Deposit
Insurance Corporation.
SECTION 6.12. SUBSIDIARIES. Give the Administrative Agent prompt written
notice of the creation, establishment or acquisition, in any manner, of any
Subsidiary of the Company not existing on the Closing Date. The Company shall
cause each such Domestic Subsidiary to execute a Guaranty and, to the extent
needed to comply with the last sentence of Section 4.20 hereof, a Security
Agreement in favor of the Administrative Agent, as agent for the Lenders, in
each case, within thirty (30) days after the creation, establishment or
acquisition of such Subsidiary and in connection therewith shall deliver or
cause to be delivered to the Administrative Agent such proof of corporate
action, incumbency of officers, opinions of counsel and other documents as are
consistent with those delivered as to each Guarantor pursuant to Section 5.01
hereof on the Closing Date, or as the Administrative Agent may reasonably
request, each in form and substance reasonably satisfactory to the
Administrative Agent.
46
SECTION 6.13. ENVIRONMENTAL LAWS. Comply in all material respects with the
requirements of all applicable Environmental Laws, provide to the Lenders all
documentation in connection with such compliance that the Lenders may reasonably
request, and defend, indemnify, and hold harmless the Administrative Agent and
each Lender and their respective employees, agents, officers, and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs, or expenses of whatever kind or nature, known or
unknown, contingent or otherwise, arising out of, or in any way related to, (a)
the presence, disposal, or release of any Hazardous Materials on any Subsidiary
of the Company property at any time owned or occupied by the Company or any; (b)
any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Materials; (c) any lawsuit
brought or threatened, settlement reached, or government order relating to such
Hazardous Materials, and/or (d) any violation of applicable Environmental Laws,
including, without limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses.
SECTION 6.14. MAINTENANCE OF ACCOUNTS. Subject to Article X hereof,
maintain, at all times, all accounts into which proceeds of Receivables of the
Company and each Encumbered Guarantor are deposited in a Blocked Account.
SECTION 6.15. ADDITIONAL ENCUMBERED GUARANTORS. Promptly, following a
determination by the Agent that the representation in the last sentence of
Section 4.20 hereof is not true and correct (i.e. the Receivables owing to the
Company and the Encumbered Guarantors do not constitute on a consolidated basis
at least ninety-nine percent (99%) of all gross Receivables owing to the Company
and the Guarantors), deliver to the Administrative Agent Security Agreements
executed by such additional Guarantors as shall be necessary to cause the
Company to be in compliance with such representation.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees with the Lenders that so long as the
Revolving Credit Commitments remain in effect or any of the principal of or
interest on any Revolving Credit Note or any other Obligations hereunder shall
be unpaid, it will not, and will not cause or permit any of its Subsidiaries,
directly or indirectly, to:
SECTION 7.01. INDEBTEDNESS. Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:
(a) Indebtedness incurred prior to the date hereof as described in
Schedule 7.01 attached hereto and any refinancing of such indebtedness, provided
that the aggregate principal amount of such Indebtedness is not increased;
(b) Indebtedness to the Agent and the Lenders under this Agreement, the
Revolving Credit Notes or any other Loan Document;
(c) Indebtedness for trade payables incurred in the ordinary course of
business; provided such payables shall be paid or discharged when due;
47
(d) Indebtedness consisting of guarantees permitted pursuant to Section
7.03 hereof;
(e) Subordinated Indebtedness; provided, however, that no Default or
Event of Default shall have occurred and be continuing at the time of incurrence
thereof or would occur after giving effect to the incurrence of such
Subordinated Indebtedness, and provided further, that the proceeds of such
Subordinated Indebtedness shall be utilized to reduce the outstanding principal
balance of Revolving Credit Loans outstanding hereunder without reducing the
Revolving Credit Commitments;
(f) Indebtedness secured by purchase money liens as permitted under
Section 7.02(h) hereof and Indebtedness arising under Capital Leases; provided
that the aggregate amount of such Indebtedness incurred in any fiscal year of
the Company shall not exceed $20,000,000, and, further, provided no Default or
Event of Default shall have occurred and be continuing or would occur after
giving effect to the incurrence of such Indebtedness;
(g) Indebtedness with respect to Hedging Agreements entered into by the
Company, provided that such Hedging Agreements shall be entered into in the
ordinary course of its business with respect to its business needs and not for
speculative purposes;
(h) Indebtedness arising under or with respect to foreign exchange
contracts entered into by the Company for the purchase or sale of foreign
currency for the account of the Company, provided that such foreign exchange
contracts shall be entered into in the ordinary course of its business with
respect to its business needs and not for speculative purposes;
(i) Indebtedness owing by the Company to any Subsidiary of the Company,
or by any Subsidiary of the Company to the Company, or by any Subsidiary of the
Company to any other Subsidiary of the Company;
(j) Indebtedness assumed in connection with a Permitted Acquisition;
provided, however, that (i) if such indebtedness is unsecured such indebtedness
shall be terminated within six (6) months of the closing of such Permitted
Acquisition, or (ii) such indebtedness, if secured, is secured solely by
specific equipment or real property acquired through such Permitted Acquisition
and the aggregate of all indebtedness described in this clause (ii) does not
exceed $15,000,000 at any time outstanding;
(k) the Existing Letters of Credit; and
(l) Indebtedness for capital expenditures related to the Company's
software upgrade and related software maintenance program with SAP AG, or an
Affiliate thereof, in an amount not to exceed $13,800,000, provided such
Indebtedness is and remains unsecured.
SECTION 7.02. LIENS. Incur, create, make, assume or suffer to exist any
Lien on any of their respective assets (including, without limitation, the
capital stock of any Subsidiary of the Company) now or hereafter owned, other
than:
48
(a) Liens existing on the date hereof as set forth on Schedule 7.02
attached hereto; provided that any extension, renewal or replacement of such
Lien shall be limited to the property encumbered by the existing Lien and the
principal amount of the Indebtedness being extended, renewed or refinanced does
not increase;
(b) Liens for taxes, assessments or other governmental charges or
levies not yet delinquent or which are being contested in good faith by
appropriate proceedings; provided, however, that adequate reserves with respect
thereto are maintained on the books of the Company in accordance with Generally
Accepted Accounting Principles, and provided further that no notice of lien has
been filed or recorded under the Code;
(c) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers or other similar Liens, in each case, arising in the
ordinary course of business and not overdue for a period of more than thirty
(30) days or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto;
(d) Liens incurred or deposits to secure (i) the non-delinquent
performance of tenders, bids, trade contracts (other than for borrowed money),
leases, statutory obligations, (ii) contingent obligations on surety,
performance and appeal bonds, and (iii) other non-delinquent obligations of
similar nature; in each case, incurred in the ordinary course of business;
(e) any attachment, judgment or similar Lien which does not constitute
an Event of Default;
(f) easements, rights of way, restrictions and other similar charges or
encumbrances incurred in the ordinary course of business which, in the
aggregate, do not interfere in any material respect with the occupation, use and
enjoyment by the Company or any Subsidiary of the Company of the property or
assets encumbered thereby in the normal course of their respective business or
materially impair the value of the property subject thereto;
(g) deposits or pledges required in the ordinary course of business in
connection with workmen's compensation, unemployment insurance and other social
security laws;
(h) any interest or title of a lessor under any lease entered into by
the Company or any Subsidiary in the ordinary course of its business and
covering only the assets so leased;
(i) purchase money Liens for fixed or capital assets acquired or held
by the Company or its Subsidiaries in the ordinary course of business, securing
Indebtedness permitted pursuant to Section 7.01(f) hereof; provided in each case
(i) no Default or Event of Default shall have occurred and be continuing at the
time such Lien is created or shall occur after giving effect to such Lien, (ii)
such purchase money lien does not exceed 100% of the purchase price of, and
encumbers only, the property acquired, and (iii) such purchase money Lien does
not secure any Indebtedness other than in respect of the purchase price of the
asset acquired;
49
(j) Liens granted to the Lenders or the Administrative Agent, for the
ratable benefit of the Lenders, under this Agreement or any other Loan Document;
and
(k) Liens in favor of banks or other depository institutions upon
property or assets of the Company arising under the common law or pursuant to
contractual rights of set off.
SECTION 7.03. GUARANTIES. Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any Person, whether by agreement to maintain working capital or
equity capital or otherwise maintain the net worth or solvency of any Person or
by agreement to purchase the Indebtedness of any other Person, or agreement for
the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any
other Person or otherwise, or enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such contract
provides that payment for such merchandise, materials, supplies or other
property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:
(a) guaranties executed or committed prior to the date hereof (which
are not described in Sections 7.03(b) and 7.03(c) hereof) as described on
Schedule 7.03 attached hereto including any renewals or extension thereof
provided that such renewals or extension do not increase the maximum exposure
pursuant to the guaranty;
(b) endorsements of negotiable instruments for collection or deposit in
the ordinary course of business;
(c) guaranties by the Company of any obligations of any Subsidiary, or
by any Subsidiary of any obligations of the Company or any other Subsidiary (to
the extent such obligations are otherwise permitted by the terms and conditions
of this Agreement); and
(d) guaranties of any Indebtedness under this Agreement or any other
Loan Document.
SECTION 7.04. SALE OF ASSETS. Except as set forth on Schedule 7.05, sell,
assign, lease, transfer or otherwise dispose of their respective properties and
assets, whether or not pursuant to an order of a federal agency or commission,
except for (a) the sale of inventory disposed of in the ordinary course of
business, (b) the sale or other disposition of properties or assets no longer
used or useful in the conduct of their respective businesses or (c) the sale or
disposition of assets in arms length transactions.
SECTION 7.05. SALES OF RECEIVABLES. Except as set forth on Schedule 7.05,
sell, transfer, discount or otherwise dispose of notes, accounts receivable or
other obligations owing to the Company or any Domestic Subsidiary of the
Company, with or without recourse, except for collection in the ordinary course
of business.
SECTION 7.06. LOANS AND INVESTMENTS. Make or commit to make any advance,
loan, extension of credit, or capital contribution to, or purchase or hold
beneficially any stock or other securities, or evidence of Indebtedness of,
purchase or acquire all or a substantial part of the assets of, make or permit
to exist any interest whatsoever in, any other Person except for (a)
50
Permitted Investments, (b) Permitted Acquisitions, provided that the Company has
complied with its obligations under Section 6.12, if applicable, (c) loans and
advances by the Company to any Subsidiary and loans and advances by any
Subsidiary to the Company or any Subsidiary, (d) trade credit to customers,
provided that such credit is extended in the ordinary course of the business of
the Company or such Subsidiary, and (e) the ownership of stock of any
Subsidiaries existing as of the Closing Date or of any Subsidiary created, or
acquired pursuant to a Permitted Acquisition, after the Closing Date, provided
that the Company has complied with its obligations under Section 6.12 with
respect to such Subsidiary; and further provided all of the outstanding equity
interests of such Subsidiary are owned by the Company and/or the Guarantors.
SECTION 7.07. NATURE OF BUSINESS. Change or alter, in any material respect,
the nature of its business from the nature of the business engaged in by it on
the date hereof (or reasonable extension thereof).
SECTION 7.08. SALE AND LEASEBACK. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, used or useful in its business, whether now owned or
hereafter acquired, if at the time of such sale or disposition it intends to
lease or otherwise acquire the right to use or possess (except by purchase) such
property or like property for a substantially similar purpose.
SECTION 7.09. FEDERAL RESERVE REGULATIONS. Permit any Revolving Credit Loan
or the proceeds of any Revolving Credit Loan to be used for any purpose which
violates or is inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
SECTION 7.10. ACCOUNTING POLICIES AND PROCEDURES. Permit any change in the
accounting policies and procedures of the Company or any of its Subsidiaries,
including a change in fiscal year, provided, however, that any policy or
procedure required to be changed by the Financial Accounting Standards Board (or
other board or committee thereof) in order to comply with Generally Accepted
Accounting Principles may be so changed.
SECTION 7.11. HAZARDOUS MATERIALS. Cause or permit any of its properties or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance in all material respects with all applicable federal, state and local
laws or regulations, or cause or permit, as a result of any intentional or
negligent act or omission on the part of the Company or any of its Subsidiaries,
a release of Hazardous Materials onto such property or asset or onto any other
property, except in compliance with such laws and regulations.
SECTION 7.12. LIMITATIONS ON FUNDAMENTAL CHANGES, LIMITATIONS ON
CONSIDERATION. Except for Permitted Acquisitions, merge or consolidate with, or
sell, assign, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now or
hereafter acquired) to, any Person, or, acquire all of the stock or all or
substantially all of the assets or the business of any Person or liquidate, wind
up or dissolve or suffer any liquidation or dissolution. Notwithstanding the
foregoing, (a) any Subsidiary of the Company may merge with or into the Company
or any Domestic Subsidiary of the Company, provided that (i) the Company shall
notify the Administrative Agent not less than thirty (30) days prior to such
event and (ii) the surviving entity shall, if applicable, assume the
51
obligations of the merged entity pursuant to this Agreement or any of the other
Loan Documents and shall execute such documents and agreements as may be
reasonably required by the Administrative Agent, and (b) any non-Domestic
Subsidiary may merge into any other non-Domestic Subsidiary.
SECTION 7.13. FINANCIAL CONDITION COVENANTS.
(a) Minimum EBITDA. Permit, as of the end of each fiscal quarter, its
Consolidated EBITDA to be less than the amounts set forth below for the periods
set forth below:
Period Minimum EBITDA
Quarter ending $25,000,000
12/31/2003
Quarter ending $20,000,000
3/31/2004 and
each fiscal quarter
thereafter
; provided, however that minimum Consolidated EBITDA for the two consecutive
fiscal quarters ending 3/31/2004 shall not be less than $50,000,000 and for the
two consecutive fiscal quarters ending 6/30/2004 shall not be less than
$55,000,000.
In addition to the foregoing requirements, beginning with the fiscal quarter
ending 9/30/2004 and at the end of each fiscal quarter thereafter, the Company
shall not permit Consolidated EBITDA for the twelve-month period ending at such
quarter end date to be less than $120,000,000.
(b) Minimum Interest Coverage. Permit the ratio of (i) Consolidated
EBITDA minus Consolidated Unfunded Capital Expenditures minus income taxes
actually paid in cash by the Company and its Subsidiaries during the relevant
period to (ii) Consolidated Interest Expense to be less than the amounts set
forth below for the periods set forth below:
Period Ratio
Closing Date through
Z3/31/2004 3.00:1.00
Thereafter 4.00:1.00
From and after 12/31/2004, compliance with this covenant shall be measured at
the end of each fiscal quarter, for the twelve-month period ending as of such
quarter-end date.
For the fiscal quarter ending 12/31/2003 and each of the next three fiscal
quarters, compliance with this covenant will be measured at the end of each such
fiscal quarter, for the period commencing with the fiscal quarter ended
12/31/2003 and ending on such quarter-end date.
52
(c) Minimum Unencumbered Cash. Maintain less than $75,000,000 of
unencumbered cash until the following conditions have been satisfied: (i)
sub-clause (c) of the definition of Borrowing Base shall be in effect and (ii)
the Agent shall have received evidence that the Telxon/Smart Media Litigation
described in Schedule 4.06 shall have been concluded with the Company and its
Subsidiaries collectively being obligated to pay no more than $50,000,000 in the
aggregate to any party in such litigation or such litigation having been stayed
pending appeal with the Company and/or the Company's Subsidiaries posting a bond
of not more than $50,000,000.
SECTION 7.14. SUBORDINATED DEBT. (i) Directly or indirectly prepay,
defease, purchase, redeem, or otherwise acquire any Subordinated Debt or (ii)
amend, supplement or otherwise modify any of the terms thereof without (other
than any such amendment, supplement or modification that (A) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon and (B) does not involve
the payment of a consent fee) the prior written consent of the Required Lenders.
SECTION 7.15. DIVIDENDS. If an Event of Default shall have occurred and is
continuing or would result therefrom, declare any dividend on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of stock of the Company or any Guarantor, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash, securities or property or in
obligations of the Company or any Guarantor or in any combination thereof;
provided that, notwithstanding the foregoing, the Company may at any time
declare and make dividend payments or other distributions solely in the form of
its common stock.
SECTION 7.16. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Company's or any of its
Subsidiaries' business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than they would obtain in a comparable
arms-length transaction with a Person not an Affiliate.
SECTION 7.17. PROHIBITION ON NEGATIVE PLEDGE. Enter into any agreement,
arrangement or understanding with any Person (other than the Lenders pursuant to
this Agreement or any of the other Loan Documents) which prohibits or limits the
ability of the Company or any of its Domestic Subsidiaries to create, incur,
assume or suffer to exist any Lien upon its property, assets or revenues,
whether now owned or hereafter acquired.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. EVENTS OF DEFAULT. In the case of the happening of any of the
following events (each an "Event of Default"):
(a) failure to pay (i) the principal of any Revolving Credit Loan as
and when due and payable or (ii) interest on any Revolving Credit Loan, any
reimbursement obligations
53
with respect to a drawing under any Letter of Credit, or any fees under this
Agreement, as and when due and payable and, in the case of this sub-clause (ii)
only, such failure shall continue unremedied for a period of three (3) Business
Days;
(b) any representation or warranty made or deemed made in this
Agreement or any other Loan Document shall prove to be false or misleading in
any material respect when made or given or when deemed made or given;
(c) default shall be made in the due observance or performance of any
covenant, condition or agreement of the Company or any Subsidiary of the Company
to be performed pursuant to Section 6.03, Section 6.04(b) or Article VII of this
Agreement;
(d) except as otherwise provided in sub-clauses (a), (b) and (c) above,
default shall be made in the due observance or performance of any covenant,
condition or agreement of the Company or any Subsidiary of the Company to be
performed pursuant to any other provision of this Agreement or any other Loan
Document and such default shall continue unremedied for a period of thirty (30)
consecutive days; provided, that with respect to a default under Section 6.02
hereof, such 30-day period shall begin following the Company's or such
Subsidiary of the Company's receipt of notice of its failure to comply with the
payment and discharge obligations thereunder;
(e) default in the performance or compliance in respect of any
agreement or condition relating to any Indebtedness of the Company or any
Guarantor in excess of $5,000,000 individually or in the aggregate (other than
the Revolving Credit Notes), if the effect of such default is to accelerate the
maturity of such Indebtedness or to permit the holder or obligee thereof (or a
trustee on behalf of such holder or obligee) to cause such Indebtedness to
become due prior to the stated maturity thereof, or, any such Indebtedness shall
not be paid when due;
(f) the Company or any Guarantor of the Company shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code or any other federal or state bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to controvert in a
timely and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the employment of a receiver, trustee,
custodian, sequestrator or similar official for the Company or such Guarantor or
for a substantial part of its property; (iv) file an answer admitting the
material allegations of a petition filed against it in such proceeding, (v) make
a general assignment for the benefit of creditors, or (vi) take corporate action
for the purpose of effecting any of the foregoing; or the Company or such
Guarantor, becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due;
(g) any non-Domestic Subsidiary of the Company shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code or any other federal or state bankruptcy, insolvency or
similar law, (ii) consent to the institution of, or fail to controvert in a
timely and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the employment of a receiver, trustee,
custodian, sequestrator or similar official for the Company or such non-Domestic
Subsidiary or for a substantial part of its property; (iv) file an answer
admitting the material allegations of a petition filed against it in such
proceeding, (v) make a general assignment for the benefit of
54
creditors, or (vi) take corporate action for the purpose of effecting any of the
foregoing; or the Company or such non-Domestic Subsidiary, becomes unable or
admits in writing its inability or fails generally to pay its debts as they
become due; provided that the occurrence of any event described in this
sub-clause (g) shall not be an Event of Default unless the Required Lenders have
agreed in writing to make such occurrence an Event of Default;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company or any Subsidiary of the Company or of a substantial
part of their respective property, under Title 11 of the United States Code or
any other federal or state bankruptcy insolvency or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for the Company or any Subsidiary of the Company or for a substantial part of
their property, or (iii) the winding-up or liquidation of the Company or any
Subsidiary of the Company and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for 60 days;
(i) excluding the Telxon/Smart Media Litigation described in Schedule
4.06, one or more orders, judgments or decrees for the payment of money in
excess of $10,000,000 in the aggregate shall be rendered against the Company or
any Subsidiary of the Company and the same shall not have been paid in
accordance with such judgment, order or decree or settlement and either (i) an
enforcement proceeding shall have been commenced by any creditor upon such
judgment, order or decree and shall have not been dismissed, vacated or stayed
pending appeal within 60 days after the commencement of such proceeding, or (ii)
there shall have been a period of sixty (60) days during which a stay of
enforcement of such judgment, order or decree, by reason of pending appeal or
otherwise, was not in effect;
(j) including the Telxon/Smart Media Litigation described in Schedule
4.06, one or more orders, judgments or decrees for the payment of money in
excess of $110,000,000 in the aggregate shall be rendered against the Company or
any Subsidiary of the Company;
(k) any Plan shall fail to maintain the minimum funding standard
required under Section 412 of the Code for any Plan year or part thereof or a
waiver of such standard or extension of any amortization period is applied for
or granted under Section 412 of the Code, any Plan is terminated by the Company,
any Subsidiary of the Company or any ERISA Affiliate or the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a Reportable Event shall have occurred with respect to a Plan or the
Company, any Subsidiary of the Company, or any ERISA Affiliate shall have
incurred a liability to or on account of a Plan under Section 515, 4062, 4063,
4201 or 4204 of ERISA, and there shall result from any such event or events the
imposition of a lien upon the assets of the Company or any Subsidiary of the
Company, the granting of a security interest on such assets, or a liability to
the PBGC or a Plan or a trustee appointed under ERISA or a penalty under Section
4971 of the Code, and in each case, such event or condition, together with all
such events or conditions, if any, could reasonably be expected to result in
liability of the Company and the Subsidiaries of the Company in an aggregate
amount exceeding $10,000,000;
(l) any material provision of any Loan Document shall for any reason
cease to be in full force and effect in accordance with its terms or the Company
or any Guarantor shall so assert in writing;
55
(m) a Change of Control shall have occurred;
(n) any of the Liens purported to be granted pursuant to any Security
Document shall fail or cease for any reason to be legal, valid and enforceable
liens on the collateral purported to be covered thereby or shall fail or cease
to have the priority purported to be created thereby, except as permitted under
the Security Agreement; or
(o) the Company shall fail to deliver its audited consolidated
financial statements for the fiscal year ended December 31, 2002, on or before
March 31, 2004;
then, at any time thereafter during the continuance of any such event, the
Administrative Agent may, and, upon the request of the Required Lenders, shall,
by written or telephonic notice to the Company, take either or both of the
following actions, at the same or different times, (a) terminate the Revolving
Credit Commitments and (b) declare (i) the Revolving Credit Notes, both as to
principal and interest, (ii) an amount equal to the Aggregate Letters of Credit
Outstandings and (iii) all other Obligations, to be forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the Revolving
Credit Notes to the contrary notwithstanding; provided, however, that if an
event specified in Section 8.01(f) or (g) hereof shall have occurred, the
Revolving Credit Commitments shall automatically terminate and interest,
principal and amounts referred to in the preceding clauses (i), (ii) and (iii)
shall be immediately due and payable without presentment, demand, protest, or
other notice of any kind, all of which are expressly waived, anything contained
herein or in the Revolving Credit Notes to the contrary notwithstanding. With
respect to all Letters of Credit that shall not have matured or presentment for
honor shall not have occurred, the Company shall provide the Administrative
Agent with Cash Collateral in an amount equal to the aggregate undrawn amount of
such Letters of Credit. Such Cash Collateral shall be applied by the
Administrative Agent to reimburse the Issuing Lender for drawings under Letters
of Credit for which the Issuing Lender has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Company at such time or, if the maturity of the Revolving
Credit Loans has been accelerated, be applied to satisfy other Obligations, with
any amount remaining after such satisfactions to be returned to the Company or
paid to such other party as may legally be entitled to the same.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder, under the Security Documents and the other Loan Documents with such
powers as are specifically delegated to the Administrative Agent by the terms of
this Agreement, the Security Documents and the other Loan Documents together
with such other powers as are reasonably incidental thereto. The Administrative
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement, the Security Documents and the other Loan Documents and shall
not be a trustee for any Lender, nor is the Administrative Agent acting in a
fiduciary capacity of any kind under this Agreement, the Security Documents or
the other Loan Documents or in respect
56
thereof or in respect of any Lender. The Administrative Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement, the Security Documents, or the other
Loan Documents, in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement, the Security Documents or
the other Loan Documents, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the Security
Documents or the other Loan Documents or any other document referred to or
provided for herein or therein or for the collectibility of the Revolving Credit
Loans or for the validity, effectiveness or value of any interest or security
covered by the Security Documents or for the value of any collateral or for the
validity or effectiveness of any assignment, mortgage, pledge, security
agreement, financing statement, document or instrument, or for the filing,
recording, re-filing, continuing or re-recording of any thereof or for any
failure by the Company or any Guarantor to perform any of its obligations
hereunder or under the other Loan Documents. The Administrative Agent may take
all actions by itself and/or it may employ agents and attorneys-in-fact, and
shall not be responsible to any Lender, except as to money or the securities
received by it or its authorized agents, for the negligence or misconduct of
itself or its employees or of any such agents or attorneys-in-fact, if such
agents or attorneys-in-fact are selected by it with reasonable care. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken by it
or them hereunder, under the Security Documents or under the other Loan
Documents or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct.
SECTION 9.02. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely upon, and shall not incur any liability to any
Lender for relying upon, any certification, notice or other communication
(including any thereof by telephone, telex, facsimile, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this
Agreement, the Security Documents or the other Loan Documents, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder, under the Security Documents or under the
other Loan Documents in accordance with instructions signed by the Required
Lenders, or such other number of Lenders as is specified in Section 11.04
hereof, and such instructions of the Required Lenders or other number of Lenders
as aforesaid and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.
SECTION 9.03. EVENTS OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default or Event of Default
(other than the non-payment of principal of or interest on the Revolving Credit
Loans or of fees to the extent the same is required to be paid to the
Administrative Agent for the account of the Lenders) unless the Administrative
Agent has received notice from a Lender or the Company specifying such Default
or Event of Default and stating that such notice is a "Notice of Default". In
the event that the Administrative Agent receives such a notice of the occurrence
of a Default, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall (subject to Section 9.07 hereof) take
such action with respect to such Default as shall be directed by the Required
Lenders, except as otherwise provided in Section 11.04 hereof; provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but is not obligated to) take such action, or
refrain from taking such
57
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
SECTION 9.04. RIGHTS AS A LENDER. With respect to its Revolving Credit
Commitment and the Revolving Credit Loans made by it, the Administrative Agent,
in its capacity as a Lender hereunder, shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include each entity which is the
Administrative Agent in its individual capacity. The Administrative Agent and
its Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Company or its Affiliates, as if it were not acting
as the Administrative Agent, and, except to the extent otherwise herein
specifically set forth, the Administrative Agent may accept fees and other
consideration from the Company or its Affiliates, for services in connection
with this Agreement, the Security Documents or any of the other Loan Documents
or otherwise without having to account for the same to the Lenders.
SECTION 9.05. INDEMNIFICATION. The Lenders shall indemnify the
Administrative Agent (to the extent not reimbursed by the Company under Section
11.03 hereof), ratably in accordance with the aggregate outstanding principal
amount of the Revolving Credit Loans made by the Lenders (or, if no Revolving
Credit Loans are at the time outstanding, ratably in accordance with their
respective Revolving Credit Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Administrative Agent in its capacity as
the Administrative Agent in any way relating to or arising out of this
Agreement, the Security Documents or any of the other Loan Documents or any
other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby and thereby (including, without limitation, the
costs and expenses which the Company is obligated to pay under Section 11.03
hereof or under the applicable provisions of any other Loan Document) or the
enforcement of any of the terms hereof or of the Security Documents, or of any
other Loan Document, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Administrative Agent.
SECTION 9.06. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement, the Security Documents or the other Loan
Documents. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Company of this Agreement,
the Security Documents or the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Company. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or under the Security Documents, or the other
Loan Documents, or furnished to the Administrative Agent with
58
counterparts or copies for the Lenders, the Administrative Agent shall not have
any duty or ability to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Company, which
may come into the possession of the Administrative Agent or any of its
Affiliates.
SECTION 9.07. FAILURE TO ACT. Except for actions expressly required of
the Administrative Agent hereunder or under any other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder or thereunder unless it shall be indemnified to its
satisfaction by the Lenders against any and all liability (except gross
negligence and willful misconduct) and expense which may be incurred by it by
reason of taking or continuing to take any such action.
SECTION 9.08. RESIGNATION OF THE ADMINISTRATIVE AGENT. Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section 9.08, the Administrative Agent may resign at any time by notifying
the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right, with the approval of the Company provided no Default or
Event of Default shall have occurred and be continuing, and such approval not to
be unreasonably withheld, delayed or conditioned, to appoint a successor to the
Administrative Agent. If no successor shall have been so appointed by the
Required Lenders (with the approval of the Company) and shall have accepted such
appointment within 30 days after the resigning Administrative Agent gives notice
of its resignation, then the resigning Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be a bank of
similar standing with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Administrative
Agent, and the resigning Administrative Agent shall be discharged from its
duties and obligations hereunder as of such date. The fees payable by the
Company to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Company and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 11.03 hereof shall continue in effect for
the benefit of such resigning Administrative Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.
SECTION 9.09. SHARING OF COLLATERAL AND PAYMENTS. In the event that at
any time any Lender shall obtain payment in respect of the Obligations, or
receive any collateral in respect thereof, whether voluntarily or involuntarily,
through the exercise of a right of banker's lien, set-off or counterclaim
against the Company or otherwise, which results in it receiving more than its
pro rata share of the aggregate payments with respect to all of the Obligations
(other than any payment expressly provided hereunder to be distributed on other
than a pro rata basis), then such Lender shall be deemed to have simultaneously
purchased from the other Lenders a share in their Obligations so that the amount
of the Obligations held by each of the Lenders shall be pro rata; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from the Lender which received the proportionate
over-payment, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Company agrees, to the extent it may do so under applicable law, that each
Lender so purchasing a portion of another Lender's Revolving Credit Loan or
participation in any Letter of Credit may exercise all rights of payment
(including, without
59
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
ARTICLE X
FULL DOMINION AND CONTROL
SECTION 10.01. TRANSFER OF ACCOUNTS TO ACCOUNT OF AGENT. Upon the
occurrence and during the continuance of an Event of Default, the Agent may, and
at the request of the Required Lenders shall, notify the Blocked Account Banks
to transfer the available funds in the Blocked Account and all future payments
and other remittances received into the Blocked Account to an account designated
by the Administrative Agent (such account, together with any other account into
which such amounts may be deposited, as designated by the Administrative Agent
from time to time, the "Designated Account") over which the Administrative
Agent, for the benefit of the Lenders, shall have full dominion and control and
sole and exclusive access and control for withdrawal purposes. All funds
deposited in the Designated Account shall immediately become the property of the
Agent, for the benefit of the Lenders. Neither the Agent nor any Lender assumes
any responsibility for any Blocked Account, including, without limitation, any
claim of accord and satisfaction or release with respect to deposits accepted by
any bank thereunder.
SECTION 10.02. COLLECTION OF ACCOUNTS, PROCEEDS OF COLLATERAL.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Company will, at its own cost and expense, promptly deposit all
payments received by the Company or any of its Subsidiaries on account of
Receivables, whether in the form of cash, checks, notes, drafts, bills of
exchange, money orders or otherwise, into the Designated Account, in precisely
the form received (but with any endorsements of the Company or any of its
Subsidiaries as is necessary for deposit or collection), subject to withdrawal
by the Administrative Agent only, as hereinafter provided, and until such
payments are deposited, such payments shall be deemed to be held in trust by the
Company and its Subsidiaries for and as the Lenders' property and shall not be
commingled with the Company's or any of its Subsidiaries' other funds. All
remittances and payments that are deposited in the Designated Account will be
applied by the Administrative Agent to reduce the outstanding principal balance
of Revolving Credit Loans and to pay any other Obligations owing to the
Administrative Agent and the Lenders (or if such Obligations are reduced to
zero, to be held by the Administrative Agent as cash collateral for the benefit
of the Lenders), subject to final collection in cash of the item deposited and
subject to the assessment of a one day collection charge. The Administrative
Agent may charge the Company's account for the amount of any item of payment
which is returned to Administrative Agent unpaid or otherwise dishonored. The
Administrative Agent shall not be required to deposit any check which bears the
legend "Payment in Full" or words of similar import, unless the Company shall
have previously informed the Administrative Agent to accept such check.
To expedite collection, the Company shall endeavor in the first instance to
make collection of its Receivables for the Lenders, but the Agent retains the
right at all times following the occurrence and during the continuance of an
Event of Default to notify Receivable Debtors that the Receivables have been
assigned to the Agent, for the benefit of the Lenders, and to
60
collect Receivables directly in its own name and to charge the collection costs
and expenses, including reasonable attorneys' fees to the Company. Neither the
Company nor any Subsidiary of the Company shall, without the Administrative
Agent's prior written consent, grant any extension of the time of payment of any
Receivable, compromise or settle any Receivable for less than the full amount
thereof, release, in whole or in part, any person or property liable for the
payment thereof, or allow any credit or discount whatsoever thereon except in
the ordinary course of business. In the event that at any time following and
during the continuance of an Event of Default, a "lockbox" is not maintained
with each Blocked Account Bank, the Company shall promptly thereafter arrange
for all remittances with respect to Receivables to be made directly to a post
office box under the Administrative Agent's sole dominion and control
established by the Company.
(b) (i) The Company hereby constitutes the Administrative Agent or the
Administrative Agent's designee as its attorney-in-fact with power to endorse
the Company's name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment that may come into the Administrative Agent's
possession; to sign the Company's name on any invoice or xxxx of lading relating
to any Receivables, drafts against Receivable Debtors, assignments and
verifications of Receivables and notices to Receivable Debtors; to send
verifications of Receivables; and to do all other acts and things necessary to
carry out this Agreement; provided that none of the foregoing actions may be
taken unless an Event of Default has occurred and is continuing. All acts of
said attorney or designee, so long as such acts are taken following the
occurrence and during the continuance of an Event of Default, are hereby
ratified and approved, and said attorney or designee shall not be liable for any
acts of omission or commission, for any error of judgment or for any mistake of
fact or law. This power of attorney being coupled with an interest is
irrevocable until all of the Obligations are finally and indefeasibly paid in
full and this Agreement and the right to request Revolving Credit Loans
hereunder is terminated.
(ii) Upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent, without notice to or consent of the
Company, (A) may xxx upon or otherwise collect, extend the time of payment of,
or compromise or settle for cash, credit or otherwise upon any terms, any of the
Receivables or any securities, instruments or insurance applicable thereto
and/or release the obligor thereon; (B) is authorized and empowered to accept
the return of the goods represented by any of the Receivables; and (C) shall
have the right to receive, endorse, assign and/or deliver in its name or the
name of the Company or any of its Subsidiaries, or any of them, any and all
checks, drafts and other instruments for the payment of money relating to the
Receivables, and the Company hereby waives notice of presentment, protest and
non-payment of any instrument so endorsed.
(c) Nothing herein contained shall be construed to constitute the
Company, the Company's Subsidiaries, or any of them, as agent of the
Administrative Agent for any purpose whatsoever, and the Administrative Agent
assumes no responsibility with respect to any account maintained by it for the
benefit of the Lenders. The Administrative Agent and the Lenders shall not,
under any circumstances or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Receivables or any instrument received in payment
thereof or for any damage resulting therefrom. The Administrative Agent and the
Lenders do not, by anything herein or in any assignment or otherwise, assume the
obligations of the Company, the Company's Subsidiaries,
61
or any of them, under any contract or agreement assigned to the Administrative
Agent or the Lenders, and the Administrative Agent and the Lenders shall not be
responsible in any way for the performance by the Company, the Company's
Subsidiaries, or any of them, of any of the terms and conditions thereof.
(d) If any of the Receivables includes a charge for any tax payable to
any governmental tax authority, the Administrative Agent is hereby authorized
(but in no event obligated) in its discretion, for the benefit of the Lenders,
to pay the amount thereof to the proper taxing authority for the account of the
Company, the Company's Subsidiaries, or any of them, and to charge any account
maintained by the Administrative Agent for the benefit of the Lenders therefor.
The Company shall notify the Administrative Agent if any Receivables include any
tax due to any such taxing authority and, in the absence of such notice, the
Administrative Agent, for the benefit of the Lenders, shall have the right to
retain the full proceeds of such Receivables and shall not be liable for any
taxes that may be due from the Company, the Company's Subsidiaries, or any of
them, by reason of the sale and delivery creating such Receivables.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including
telecopy), and unless otherwise expressly provided herein, shall be conclusively
deemed to have been received by a party hereto and to be effective on the day on
which delivered by hand to such party or one Business Day after being sent by
overnight mail to the address set forth below, or, in the case of telecopy
notice, when acknowledged as received, or if sent by registered or certified
mail, three (3) Business Days after the day on which mailed in the United
States, addressed to such party at such address:
(a) if to the Administrative Agent, at:
Fleet National Bank
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Relationship Manager - Symbol Technologies, Inc.
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxx, P.C.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to the Company, at:
62
Symbol Technologies, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000-0000
Attention: Treasurer
Telecopy: (000) 000-0000
(c) if to any Lender, to its address set forth in the signature page
of this Agreement and to the person so designated
- and -
(d) as to each such party at such other address as such party shall
have designated to the other in a written notice complying as to
delivery with the provisions of this Section 11.01.
SECTION 11.02. EFFECTIVENESS; SURVIVAL. This Agreement shall become
effective on the date on which all parties hereto shall have signed a
counterpart copy hereof and shall have delivered the same to the Administrative
Agent. All representations and warranties made herein and in the other Loan
Documents and in the certificates delivered pursuant hereto or thereto shall
survive the making by the Lenders of the Revolving Credit Loans and the issuance
by the Issuing Lender of Letters of Credit, in each case, as herein contemplated
and the execution and delivery to the Lenders of the Revolving Credit Notes
evidencing the Revolving Credit Loans and shall continue in full force and
effect so long as the Obligations hereunder are outstanding and unpaid and the
Revolving Credit Commitments are in effect. The obligations of the Company
pursuant to Section 3.07, Section 3.08, Section 3.09 and Section 11.03 hereof
shall survive termination of this Agreement and payment of the Obligations.
SECTION 11.03. EXPENSES. The Company agrees (a) to indemnify, defend and
hold harmless the Administrative Agent, the Issuing Lender and each Lender and
their respective officers, directors, employees, and affiliates (each, an
"indemnified person") from and against any and all losses, claims, damages,
liabilities or judgments to which any such indemnified person may be subject and
arising out of or in connection with the Loan Documents, the financings
contemplated hereby, the use of any proceeds of such financings or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any of such indemnified persons is a party thereto, and to
reimburse each of such indemnified persons upon demand for any reasonable legal
or other expenses incurred in connection with the investigation or defending any
of the foregoing; provided that the foregoing indemnity will not, as to any
indemnified person, apply to losses, claims, damages, liabilities, judgments or
related expenses to the extent arising from the wilful misconduct or gross
negligence of such indemnified person, (b) to pay or reimburse the
Administrative Agent for all its out-of-pocket costs and expenses for which
invoices are presented incurred in connection with the preparation and execution
of and any amendment, supplement or modification to this Agreement, the
Revolving Credit Notes any other Loan Documents, and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including without limitation, the
reasonable fees and disbursements of Xxxxxxx Xxxxx, P.C., counsel to the
Administrative Agent, and (c) to pay or reimburse each Lender and the
Administrative Agent for all their costs and expenses incurred in connection
with the enforcement and preservation of any
63
rights under this Agreement, the Revolving Credit Notes, the other Loan
Documents, and any other documents prepared in connection herewith or therewith,
including, without limitation, the reasonable fees and disbursements of counsel
(including, without limitation, in-house counsel) to the Administrative Agent
and to the several Lenders, including all such out-of-pocket expenses incurred
during any work-out, restructuring or negotiations in respect of the
Obligations.
SECTION 11.04. AMENDMENTS AND WAIVERS. With the written consent of the
Required Lenders, the Administrative Agent and the Company may, from time to
time, enter into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or the Revolving Credit Notes
or any of the other Loan Documents or changing in any manner the rights of the
Lenders or of the Company hereunder or thereunder, and with the written consent
of the Required Lenders the Administrative Agent on behalf of the Lenders may
execute and deliver to the Company a written instrument waiving, on such terms
and conditions as the Administrative Agent or the Required Lenders may specify
in such instrument, any of the requirements of this Agreement or the Revolving
Credit Notes or any of the other Loan Documents or any Default or Event of
Default; provided, however, that no such waiver and no such amendment, or
supplement or modification shall release any Guarantor from its Guaranty, or
limit any Guarantor's liability with respect to its Guaranty without the written
consent of the Administrative Agent and the Required Lenders or (a) extend the
maturity of any Revolving Credit Note, or any installment thereof; (b) reduce
the rate or extend the time of payment of interest on any Revolving Credit Note
or any fees payable to the Lenders hereunder; (c) reduce the principal amount of
any Revolving Credit Note or the amount of any reimbursement due in respect of
any Letter of Credit; (d) amend, modify or waive any provision of this Section
11.04; (e) reduce the percentage specified in the definition of Required Lenders
or amend or modify any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination granting consent hereunder; (f) consent to the assignment
or transfer by the Company or any Guarantor of any of its rights or obligations
under this Agreement or any other Loan Document to which it is a party; or (g)
except as expressly permitted pursuant to this Agreement or any other Loan
Document, release any collateral security granted to the Administrative Agent,
in each case specified in clauses (a) through (g) above without the written
consent of all the Lenders; and provided, further, that no such waiver and no
such amendment, supplement or modification shall (i) amend, modify, supplement
or waive any provision of Article IX with respect to the Administrative Agent
without the written consent of the Administrative Agent or (ii) increase the
amount of any Lender's Revolving Credit Commitment without the written consent
of such Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Company, the Lenders, the Administrative Agent and all future holders
of the Revolving Credit Notes.
SECTION 11.05. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) This Agreement
shall be binding upon and inure to the benefit of the Company, the Lenders, the
Administrative Agent, all future holders of the Revolving Credit Notes and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other financial institutions ("Participants") participating interests
in any Revolving Credit Loan owing to such
64
Lender, any Revolving Credit Note held by such Lender, any Revolving Credit
Commitment of such Lender or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under this Agreement to the other parties under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Revolving Credit Note for all purposes under this Agreement, and the Company and
the Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. The Company agrees that each Participant shall be entitled to the
benefits of Sections 3.07, 3.08 and 3.09 with respect to its participation in
the Revolving Credit Commitments and in the Revolving Credit Loans and Letters
of Credit outstanding from time to time; provided, however, that no Participant
shall be entitled to receive any greater amount pursuant to such Sections than
the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred. No Participant shall have the right
to consent to any amendment to, or waiver of, any provision of this Agreement,
except the transferor Lender may provide in its agreement with the Participant
that such Lender will not, without the consent of the Participant, agree to any
amendment or waiver described in clause (a) through clause (h) of Section 11.04.
(c) Subject to the last sentence of this paragraph (c) any Lender may, in
the ordinary course of its commercial banking business and in accordance with
applicable law, at any time sell to any Lender or any domestic banking affiliate
thereof, and, with the consent of the Administrative Agent, and, so long as no
Default or Event of Default shall have occurred and be continuing, the Company
(which in each case shall not be unreasonably withheld, delayed or conditioned)
to one or more additional banks or financial institutions ("Purchasing Lenders")
all or any part of its rights and obligations under this Agreement and the
Revolving Credit Notes pursuant to an Assignment and Acceptance Agreement,
executed by such Purchasing Lender, such transferor Lender and the
Administrative Agent (and, in the case of an Assignment and Acceptance Agreement
relating to a Purchasing Lender that is not then a Lender or a domestic banking
affiliate thereof, also executed by the Company), and delivered to the
Administrative Agent for its acceptance. Upon such execution, delivery and
acceptance from and after the effective date specified in such Assignment and
Acceptance Agreement, (i) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance Agreement,
have the rights and obligations of a Lender hereunder with Revolving Credit
Commitments as set forth therein and (ii) the transferor Lender thereunder
shall, to the extent provided in such Assignment and Acceptance Agreement, be
released from its obligations under this Agreement arising after such transfer
(and, in the case of an Assignment and Acceptance Agreement covering all or the
remaining portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party hereto except as to
Sections 3.07, 3.08, 3.09 and 11.03 for the period prior to the effective date).
Such Assignment and Acceptance Agreement shall be deemed to amend this Agreement
to the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Proportions arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under or in respect of this Agreement
and the Revolving Credit Notes. Upon the request of the Purchasing Lender, the
Company shall execute and deliver to the Administrative Agent, in exchange for
any surrendered Revolving Credit Notes, new Revolving Credit Notes to the order
of such Purchasing Lender in an amount equal to the Revolving Credit Commitments
assumed by it
65
pursuant to such Assignment and Acceptance Agreement and, if the transferor
Lender has retained any Revolving Credit Commitment hereunder, upon the request
of such transferor Lender a new Revolving Credit Note to the order of the
transferor Lender in an amount equal to such Revolving Credit Commitment
retained by it hereunder. Any new Revolving Credit Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Revolving Credit Notes, shall be dated the effective date specified
in the Assignment and Acceptance Agreement and shall otherwise be in the form of
the Revolving Credit Notes replaced thereby. The Revolving Credit Notes
surrendered by the transferor Lender shall be returned by the Administrative
Agent to the Company marked "cancelled". Anything in this Section 11.05 to the
contrary notwithstanding, (i) no transfer to a Purchasing Lender shall be made
pursuant to this paragraph (c) if such transfer by any one transferor Lender to
any one Purchasing Lender (other than a Purchasing Lender which is a Lender
hereunder prior to such transfer) (x) is in respect of less than $7,500,000 of
the Revolving Credit Commitments of such transferor Lender or (y) if less than
all of the Revolving Credit Commitment of such transferor Lender is transferred,
after giving effect to such transfer the amount held by any Transferor Lender
would be less than $5,000,000 and (ii) each transfer to a Purchasing Lender
shall be made in the same pro-rata portion with respect to the Revolving Credit
Commitment.
(d) The Administrative Agent shall maintain at its address referred to in
Section 11.01 a copy of each Assignment and Acceptance Agreement delivered to it
and a register (the "Register") for the recordation of the names and addresses
of the Lenders and the commitments of, and principal amount of the Revolving
Credit Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of demonstrable error, and the
Company, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Revolving Credit Loans
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance Agreement executed by
a transferor Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by the Company)
together with payment by the Purchasing Lender to the Administrative Agent of a
registration and processing fee of $3,500 if the Purchasing Lender is not a
Lender prior to the execution of an Assignment and Acceptance Agreement and
$2,500 if the Purchasing Lender is a Lender prior to the execution of an
Assignment and Acceptance Agreement, the Administrative Agent shall (i) accept
such Assignment and Acceptance Agreement, (ii) record the information contained
therein in the Register, and (iii) give prompt notice of such acceptance and
recordation to the Lenders and the Company.
(f) Subject to Section 11.12 hereof, the Company authorizes each Lender to
disclose to any Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning the Company and its Affiliates which has been delivered to
such Lender by or on behalf of the Company pursuant to this Agreement or which
has been delivered to such Lender by the Company in connection with such
Lender's credit evaluation of the Company and its Subsidiaries prior to entering
into this Agreement.
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(g) If, pursuant to this Section 11.05, any interest in this Agreement, a
participation agreement, or any Revolving Credit Note is transferred to any
transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Lender (for the benefit of the transferor Lender,
the Administrative Agent and the Company) that under applicable law and treaties
no taxes will be required to be withheld by the Administrative Agent, the
Company, or the transferor Lender with respect to any payments to be made to
such Transferee in respect of the Revolving Credit Loans, (ii) to furnish to the
Administrative Agent, the transferor Lender and the Company either U.S. Internal
Revenue Service Form W-8ECI or U.S. Internal Revenue Service Form W-8BEN
(wherein such Transferee claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder) and (iii) to agree
(for the benefit of the Administrative Agent, the transferor Lender and the
Company) to provide the Administrative Agent, the transferor Lender and the
Company a new Form W-8ECI or Form W-8BEN upon the expiration or obsolescence of
any previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and completed
by such Transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.
(h) Any Lender may at any time pledge or assign or grant a security
interest in all or any part of its rights under this Agreement and the other
Loan Documents, including any portion of its Revolving Credit Notes, to any of
the twelve (12) Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341, provided that no such assignment shall
release the transferor Lender from its Revolving Credit Commitments or its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party to this Agreement.
SECTION 11.06. NO WAIVER; CUMULATIVE REMEDIES. Neither any failure nor any
delay on the part of any Lender, the Issuing Lender or the Administrative Agent
in exercising any right, power or privilege hereunder or under any Revolving
Credit Note or any other Loan Document shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege. The rights, remedies, powers
and privileges herein provided or provided in the other Loan Documents are
cumulative and not exclusive of any rights, remedies powers and privileges
provided by law.
SECTION 11.07. APPLICABLE LAW. THIS AGREEMENT AND THE REVOLVING CREDIT
NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
SECTION 11.08. SUBMISSION TO JURISDICTION; JURY WAIVER. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE
XXXXX XX XXX XXXX, XXXXXX XX XXX XXXX, XXXXXX OF NASSAU OR COUNTY OF SUFFOLK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY HEREBY
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WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN
ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF SUCH FEDERAL OR STATE COURTS, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN OR
THE SUBJECT MATTER HEREOF THEREOF MAY NOT BE LITIGATED IN OR BY SUCH FEDERAL OR
STATE COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY AGREES NOT
TO (I) SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY
SUCH COURT BY ANY FEDERAL OR STATE COURT OF ANY OTHER NATION OR JURISDICTION
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT OR (II) ASSERT
ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE COMPANY AGREES THAT
SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE
ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE
LAWS OF NEW YORK. EACH PARTY HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE REVOLVING CREDIT
NOTES OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING THERETO,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE AGENT RELATING TO THE ADMINISTRATION
OF THE REVOLVING CREDIT LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREES
THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY
LAW, THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE COMPANY CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY
LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THEY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDERS TO ENTER INTO THIS AGREEMENT
AND TO MAKE THE REVOLVING CREDIT LOANS.
SECTION 11.09. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement, any Revolving Credit Note or any other Loan
Document should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby.
SECTION 11.10. RIGHT OF SETOFF. The Company hereby grants to the
Administrative Agent, the Issuing Lender and each Lender, a continuing lien,
security interest
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and right of setoff as security for all liabilities and obligations to any of
them, whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Administrative Agent, the Issuing Lender, each
Lender or any entity under the control of FleetBoston Financial Corporation and
their respective successors and assigns or in transit to any of them. The
Administrative Agent, the Issuing Lender and each Lender are each hereby
authorized at any time and from time to time following the occurrence and during
the continuance of an Event of Default, to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Administrative Agent, the Issuing Lender or any Lender to or for the
credit or the account of the Company against any and all of the Obligations of
the Company now and hereafter existing under this Agreement and the Revolving
Credit Notes held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or any Revolving Credit Note and
although such obligations may be unmatured. The rights of the Administrative
Agent, the Issuing Lender and each Lender under this Section 11.10 are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which they may have. ANY AND ALL RIGHTS TO REQUIRE THE
ADMINISTRATIVE AGENT, THE ISSUING LENDER OR ANY LENDER TO EXERCISE THEIR RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING THEIR RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE COMPANY OR ANY GUARANTOR, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
SECTION 11.11. REPLACEMENT OF NOTE. Upon receipt of an affidavit of an
officer of any of the Lenders as to loss, theft, destruction or mutilation of
any of the Revolving Credit Notes and, in the case of any such loss, theft,
destruction or mutilation, upon cancellation of such Revolving Credit Note the
Company will issue, in lieu thereof, a replacement note in the same principal
amount thereof and otherwise of like tenor.
SECTION 11.12. CONFIDENTIALITY. The Administrative Agent and each Lender
agrees to keep confidential all non-public information, materials and documents
furnished by the Company to the Administrative Agent and the Lenders pursuant to
this Agreement (the "Confidential Information"). Notwithstanding the foregoing,
such party shall be permitted to disclose Confidential Information (a) to such
of its officers, directors, employees, agents, representatives and professional
advisors in any of the transactions contemplated by, or the administration of,
this Agreement; (b) to the extent required by applicable laws and regulations or
by any subpoena or similar legal process, or requested by any governmental
agency or authority; (c) to the extent such Confidential Information (i) becomes
publicly available other than as a result of a breach of this Section 11.12 by
the disclosing party, or (ii) becomes available to such party on a
non-confidential basis from a source other than the Company or its Subsidiaries
which to such party's knowledge is not prohibited from disclosing such
Confidential Information to such party by a contractual or other legal
obligation; (d) to the extent the Company or any of its Subsidiaries shall have
consented to such disclosure in writing; or (e) to any prospective transferee or
participant in connection with any contemplated transfer of the Revolving Credit
Notes or any interest therein provided such transferee or participant agrees to
treat the Confidential Information in a manner consistent with this Section
11.12. Nothing herein shall prohibit the disclosure of Confidential Information
in connection with any litigation or
69
where such disclosure is pursuant to applicable laws, regulations, court order
or similar legal process; provided, however, in the event that such party is
requested or required by law to disclose any of the Confidential Information,
such party shall provide the Company with prior written notice, unless notice is
prohibited by law, of any such request or requirement so that the Company may
seek a protective order or other appropriate remedy; provided that no such
notification shall be required in respect of any disclosure to regulatory
authorities having jurisdiction over such party.
SECTION 11.13. HEADINGS. Section headings used herein are for convenience
of reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 11.14. CONSTRUCTION. This Agreement is the result of negotiations
between, and has been reviewed by, each of the Company, the Administrative
Agent, the Lenders and their respective counsel. Accordingly, this Agreement
shall be deemed to be the product of each party hereto, and no ambiguity shall
be construed in favor of or against either the Company, the Administrative
Agent, or any Lender.
SECTION 11.15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute one and the same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the Company, the Administrative Agent and the Lenders
have caused this Agreement to be duly executed by their duly authorized
officers, as of the day and year first above written.
SYMBOL TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
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REVOLVING CREDIT FLEET NATIONAL BANK
COMMITMENT: $30,000,000 AS ADMINISTRATIVE AGENT, AS A LENDER AND AS
ISSUING LENDER
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxxx
Title: Vice President
Lending Office for Prime Rate Loans and for
Adjusted Libor Loans:
Fleet National Bank
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Relationship Manager -
Symbol Technologies, Inc.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Address for Notices:
Fleet National Bank
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Relationship Manager -
Symbol Technologies, Inc.
Telecopy: (000) 000-0000
Telephone: (000)000-0000
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