EXHIBIT 10.13
Amended and Restated Credit Agreement, dated September 18, 1996,
among Registrant, ADS Acquisition, Inc., Tri-Star Holdings, Inc.,
Tri-Star Electronics International, Inc., Tri-Star Technologies,
inc., Tri-Star Technologies, Tri-Star Electronics Europe S.A.,
Mezzovico, Xxxx Holdings, Inc., Xxxx Components, Inc., Hollinsead
International, Inc., Xxxxxxxxxxx International Limited, The
Provident Bank, and Internationale Nederlanden (U.S.) Capital
Corporation.
[EXECUTION COPY]
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XxXXXXX AIRCRAFT HOLDINGS, INC.
and
SUBSIDIARY GUARANTORS
______________________________
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 18, 1996
_______________________________
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION,
as Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
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Section 1. Definitions and Accounting Matters . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . 29
1.03 Classes and Types of Loans . . . . . . . . . . . . . . . . . 30
Section 2. Commitments, Loans, Notes and Prepayments . . . . . . . . . 30
2.01 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.02 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.03 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 33
2.04 Changes of Commitments . . . . . . . . . . . . . . . . . . . 38
2.05 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . 38
2.06 Lending Offices . . . . . . . . . . . . . . . . . . . . . . 39
2.07 Several Obligations; Remedies Independent . . . . . . . . . 39
2.08 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.09 Optional Prepayments and Conversions or Continuations
of Loans . . . . . . . . . . . . . . . . . . . . . . . . 40
2.10 Mandatory Prepayments and Reductions of Commitments . . . . 40
2.11 Prepayment Fees. . . . . . . . . . . . . . . . . . . . . . . 43
Section 3. Payments of Principal and Interest . . . . . . . . . . . . 43
3.01 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . 43
3.02 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4. Payments; Pro Rata Treatment; Computations; Etc. . . . . . . 45
4.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . 46
4.03 Computations . . . . . . . . . . . . . . . . . . . . . . . . 47
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . . . . . . 47
4.05 Certain Notices . . . . . . . . . . . . . . . . . . . . . 47
4.06 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . 48
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . 49
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . . . . . . . 51
5.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . 51
5.02 Limitation on Types of Loans . . . . . . . . . . . . . . . . 54
5.03 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.04 Treatment of Affected Loans . . . . . . . . . . . . . . . . 55
5.05 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 55
5.06 Additional Costs in Respect of Letters of Credit . . . . . . 56
5.07 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(i)
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Section 6. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.01 The Guarantee . . . . . . . . . . . . . . . . . . . . . . . 58
6.02 Obligations Unconditional . . . . . . . . . . . . . . . . . 58
6.03 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 59
6.04 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . 60
6.05 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.06 Instrument for the Payment of Money . . . . . . . . . . . . 60
6.07 Continuing Guarantee . . . . . . . . . . . . . . . . . . . . 60
6.08 Rights of Contribution . . . . . . . . . . . . . . . . . . . 61
6.09 General Limitation on Guarantee Obligations . . . . . . . . 62
6.10 Limitation on Xxxxxx'x Liability . . . . . . . . . . . . . . 62
6.11 Limitation on Gutermann's Liability . . . . . . . . . . . . 62
Section 7. Conditions Precedent . . . . . . . . . . . . . . . . . . . . 62
7.01 Effectiveness of Amendment and Restatement . . . . . . . . . 62
7.02 Initial and Subsequent Extensions of Credit . . . . . . . . 66
Section 8. Representations and Warranties . . . . . . . . . . . . . . . 66
8.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . 66
8.02 Financial Condition . . . . . . . . . . . . . . . . . . . . 67
8.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.05 Action . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.06 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.07 Use of Credit . . . . . . . . . . . . . . . . . . . . . . . 68
8.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.10 Investment Company Act . . . . . . . . . . . . . . . . . . . 69
8.11 Public Utility Holding Company Act . . . . . . . . . . . . . 69
8.12 Material Agreements and Liens . . . . . . . . . . . . . . . 69
8.13 Environmental Matters . . . . . . . . . . . . . . . . . . . 70
8.14 Capitalization . . . . . . . . . . . . . . . . . . . . . . . 72
8.15 Subsidiaries, Etc. . . . . . . . . . . . . . . . . . . . . . 72
8.16 Title to Assets . . . . . . . . . . . . . . . . . . . . . . 73
8.17 True and Complete Disclosure . . . . . . . . . . . . . . . . 73
8.18 Legal Form . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 9. Covenants of the Company . . . . . . . . . . . . . . . . . . 74
9.01 Financial Statements, Etc. . . . . . . . . . . . . . . . . . 74
9.02 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.03 Existence, Etc . . . . . . . . . . . . . . . . . . . . . . . 79
9.04 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.05 Prohibition of Fundamental Changes . . . . . . . . . . . . . 83
9.06 Limitation on Liens . . . . . . . . . . . . . . . . . . . . 83
9.07 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 85
9.08 Investments . . . . . . . . . . . . . . . . . . . . . . . . 85
9.09 Dividend Payments . . . . . . . . . . . . . . . . . . . . . 86
9.10 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . 86
9.11 EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . . . 87
(ii)
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9.12 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.13 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . 87
9.14 Fixed Charges Ratio . . . . . . . . . . . . . . . . . . . . 88
9.15 Capital Expenditures . . . . . . . . . . . . . . . . . . . . 88
9.16 Interest Coverage Ratio; Selling, General and
Administrative Expense Ratio . . . . . . . . . . . . . . . 89
9.17 Accounts Payable Ratio . . . . . . . . . . . . . . . . . . . 89
9.18 Interest Rate and Commodity Price Protection Agreements . . 90
9.19 Subordinated Indebtedness; Xxxxxx Non-Compete . . . . . . . 90
9.20 Lines of Business . . . . . . . . . . . . . . . . . . . . . 90
9.21 Transactions with Affiliates . . . . . . . . . . . . . . . . 90
9.22 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 91
9.23 Certain Obligations Respecting Subsidiaries. . . . . . . . . 91
9.24 Modifications of Certain Documents . . . . . . . . . . . . . 92
9.25 Vendor Payables . . . . . . . . . . . . . . . . . . . . . . 92
9.26 Governmental Approvals . . . . . . . . . . . . . . . . . . . 92
9.27 Swiss Receivables . . . . . . . . . . . . . . . . . . . . . 92
9.28 Intercompany Note . . . . . . . . . . . . . . . . . . . . . 92
9.29 ADS Financial Statements . . . . . . . . . . . . . . . . . . 93
9.30 Deal Costs . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 10. Events of Default . . . . . . . . . . . . . . . . . . . . . 93
Section 11. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.01 Appointment, Powers and Immunities . . . . . . . . . . . . . 98
11.02 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . 99
11.03 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.04 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . 99
11.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . 100
11.06 Non-Reliance on Agent and Other Lenders. . . . . . . . . . . 100
11.07 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . 101
11.08 Resignation or Removal of Agent. . . . . . . . . . . . . . . 101
11.09 Agency Fee; Cash Management Fee. . . . . . . . . . . . . . . 101
11.10 Consents under Other Basic Documents . . . . . . . . . . . . 102
11.11 Collateral Sub-Agents. . . . . . . . . . . . . . . . . . . . 102
11.12 Resignation of Cash Collateral Agent; Etc. . . . . . . . . . 103
Section 12. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 103
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . 104
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . 105
12.05 Successors and Assigns . . . . . . . . . . . . . . . . . . . 106
12.06 Assignments and Participations . . . . . . . . . . . . . . . 106
12.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 108
12.08 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 108
12.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 108
12.10 Governing Law; Submission to Jurisdiction . . . . . . . . . 108
(iii)
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12.11 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . 109
12.12 Treatment of Certain Information;
Confidentiality . . . . . . . . . . . . . . . . . . . . . 109
12.13 Judgment Currency . . . . . . . . . . . . . . . . . . . . . 110
SCHEDULE I - Litigation
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Environmental Matters
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Capitalization
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term Loan Note
EXHIBIT B - Form of Borrowing Base
Certificate
EXHIBIT C-1 - Form of Security Agreement
EXHIBIT C-2 - Form of Security Agreement Amendment
EXHIBIT D - Form of Cash Management Agreement
EXHIBIT E - Form of Opinion of Counsel to the Obligors
EXHIBIT F - Form of Opinion of Special
Swiss Counsel to the Obligors
EXHIBIT G - Form of Opinion of Special U.K. Counsel to
the Obligors
EXHIBIT H-1 - Form of Annual Budget of the Company and its
Subsidiaries
EXHIBIT H-2 - Form of Monthly Report of the Company and its
Subsidiaries
EXHIBIT H-3 - Form of Compliance Certificate
EXHIBIT I - Form of Confidentiality Agreement
(iv)
AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 18, 1996,
between: XxXXXXX AIRCRAFT HOLDINGS, INC., a corporation duly organized and
validly existing under the laws of the State of Ohio (the "COMPANY"); each of
the Subsidiaries of the Company identified under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereto (individually, a "SUBSIDIARY
GUARANTOR" and, collectively, the "SUBSIDIARY GUARANTORS" and, together with
the Company, the "OBLIGORS"); each of the lenders that is a signatory hereto
identified under the caption "LENDERS" on the signature pages hereto or that,
pursuant to Section 12.06(b) hereof, shall become a "Lender" hereunder
(individually, a "LENDER" and, collectively, the "LENDERS"); THE PROVIDENT
BANK, an Ohio banking corporation, as Cash Management Agent (in such
capacity, together with its successors in such capacity, the "CASH MANAGEMENT
ACCENT"); and INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, a
Delaware corporation, as agent for the Lenders (in such capacity, together
with its successors in such capacity, the "AGENT").
The Company, the Subsidiary Guarantors, the Lenders, the Cash Management
Agent and the Agent are parties to a Credit Agreement, dated as of November
2, 1994 (as amended heretofore, the "ORIGINAL CREDIT AGREEMENT"), and the
parties to the Original Credit Agreement wish to amend and restate the terms
of the Original Credit Agreement for the purpose of providing additional
credit to the Company to finance certain capital expenditures and the
operations of the Company and for other purposes. Accordingly, the Company,
the Subsidiary Guarantors, the Lenders, the Cash Management Agent and the
Agent agree that, subject to the terms and conditions of this Agreement, the
Original Credit Agreement is hereby amended and restated in its entirety to
read as follows:
Section 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and VICE VERSA):
"ACCOUNTS PAYABLE" shall mean, as at any date, the sum for the Obligors
(determined on a consolidated basis without duplication in accordance with
GAAP) of all amounts that should be classified as accounts payable on a
balance sheet.
"ACCOUNTS PAYABLE RATIO" shall mean, as at any date, the ratio of:
(a) the product of (i) Accounts Payable on such date TIMES (ii) 360, TO
(b) for any date occurring:
(i) on or after December 31, 1996, Cost of Goods Sold for the period
of four consecutive fiscal quarters ending on, or most recently ended
prior to, such date, and
(ii) prior to December 31, 1996, the product of (x) Cost of
Goods Sold for the period commencing on January 1, 1996 and ending on
the last day of the fiscal quarter ending on, or most recently ended
prior to, such date, times (y) the Applicable Annualization Factor.
"ADS" shall mean the Aerospace Display Systems Division of Xxxxxx.
"ADS PURCHASE" shall mean the purchase by the Company of substantially
all of the assets of ADS pursuant to the ADS Purchase Agreement.
"ADS PURCHASE AGREEMENT" shall mean the Asset Purchase and Sale
Agreement, dated July 23, 1996, by and among Xxxxxx, ADS Acquisition, Inc.,
the Company and the other parties named therein.
"ADS SUBSIDIARY" shall mean ADS Acquisition, Inc.
"AFFILIATE" shall mean any Person that directly or indirectly controls,
or is under common control with, or is controlled by, the Company and, if
such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust
whose principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or
trust. As used in this definition, "CONTROL" (including, with its
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise).
Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely
by reason of his or her being a director, officer or employee of the Company
or any of its Subsidiaries, (b) none of the Wholly Owned Subsidiaries of the
- 2 -
Company shall be Affiliates and (c) neither the Agent nor any Lender shall be
an Affiliate.
"APPLICABLE ANNUALIZATION FACTOR" shall mean:
(a) for the fiscal quarter ending on March 31, 1996, 4.0;
(b) for the fiscal quarter ending on June 30, 1996, 2.0; and
(c) for the fiscal quarter ending on September 30, 1996, 1.33.
"XXXXXX" shall mean Xxxxxx Industries, Inc.
"XXXXXX NON-COMPLETE DOCUMENTATION" shall mean the covenant not to
compete referred to in Section 5.2.8 of the ADS Purchase Agreement.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Company as the
office by which its Loans of such Type are to be made and maintained.
"APPLICABLE MARGIN" shall mean:
(a) with respect to Term Loans that are Base
Rate Loans, 3-1/2% per annum;
(b) with respect to Term Loans that are
Eurodollar Loans, 5% per annum;
(c) with respect to Revolving Credit Loans
that are Base Rate Loans and with
respect to Swingline Loans, 3-1/4% per
annum; and
(d) with respect to Revolving Credit Loans
that are Eurodollar Loans, 4-1/2% per
annum.
"BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"BASE RATE" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day
- 3 -
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change in any
interest rate provided for herein based upon the Base Rate resulting from a
change in the Base Rate shall take effect at the time of such change in the
Base Rate.
"BASE RATE LOANS" shall mean Loans that bear interest at rates based
upon the Base Rate.
"BASIC DOCUMENTS" shall mean, collectively, this Agreement, the Notes,
the Cash Management Agreement, the Letter of Credit Documents, the
Intercompany Note, the Security Documents and any agreement evidencing any
Interest Rate Protection Agreement entered into between any Obligor and any
Lender.
"BOEING" shall mean The Boeing Company, a corporation organized under
the laws of the State of Delaware.
"BORROWING BASE" shall mean, as at any date, the sum of (a) 85% of the
aggregate amount of Eligible Receivables at said date (other than Eligible
Foreign Receivables) PLUS (b) 65% of Eligible Foreign Receivables at said
date PLUS (c) 50% of the Eligible Inventory (other than Eligible Foreign
Inventory) at said date PLUS (d) 35% of Eligible Foreign Inventory at said
date. The "VALUE" of Eligible Inventory shall be determined at the lower of
cost or market in accordance with GAAP, except that cost shall be determined
on a first-in-first-out basis.
"BORROWING BASE CERTIFICATE" shall mean a certificate of the chief
financial officer of the Company, substantially in the form of Exhibit B
hereto and appropriately completed.
"BUSINESS DAY "shall mean (a) any day on which commercial banks are not
authorized or required to close in New York City and (b) if such day relates
to a borrowing of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment,
prepayment, Conversion or Interest Period, any day on which dealings in
Dollar deposits are carried out in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
- 4 -
"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) Property to the extent such obligations
are required to be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP, and, for purposes of this Agreement,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"CASH FLOW" shall mean, for any period, the sum, for the Obligors
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (a) EBITDA for such period MINUS (b) cash taxes
based on or measured by income that are paid during such period (including
penalties with respect thereto and interest thereon) MINUS (c) Capital
Expenditures made during such period to the extent permitted by Section 9.15
hereof.
"CASH MANAGEMENT AGREEMENT" shall mean a Lock Box Service Contract
between the Company and Provident, substantially in the form of Exhibit D
hereto, as the same shall be modified and supplemented and in effect from
time to time.
"CASUALTY EVENT" shall mean, with respect to any Property of any Person,
any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.
"CLAIRCOM" shall mean AT&T Wireless Services.
"CLASS" shall have the meaning assigned to such term in Section 1.03
hereof.
"CLOSING DATE" shall mean the date, no later than September 23, 1996, on
which the conditions precedent specified in Section 7 hereof shall have been
satisfied and on which the initial extensions of credit hereunder are made.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL ACCOUNT" shall have the meaning assigned to such term in
Section 4.1 of the Security Agreement.
"COLLATERAL AUDITOR" shall mean Provident.
"COMMITMENTS" shall mean the Revolving Credit Commitments, the Term Loan
Commitments and the Swingline Commitment.
- 5 -
"COMMODITY PRICE PROTECTION AGREEMENT" shall mean, for any Person, an
exchange-traded or over-the-counter commodity (including, without limitation,
foreign exchange) forward, future, option, swap, swaption, cap, collar, floor
or similar arrangement to which such Person is a party, providing for the
transfer or mitigation of commodity (including foreign exchange) risks either
generally or under specific contingencies.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 2.09 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion
pursuant to Section 2.09 hereof of one Type of Loans --into another Type of
Loans, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"CONVERTIBLE SUBORDINATED NOTES" shall mean, collectively, the Nassau
Note and the Electra Note, as those terms are defined in the 1996 (September)
Securities Purchase Agreement.
"CONVERTIBLE SUBORDINATED NOTE DOCUMENTATION" shall mean all documents
and agreements executed and delivered in connection with the original
issuance of the Convertible Subordinated Notes, including the Convertible
Subordinated Notes and the 1996 (September) Securities Purchase Agreement.
"XXXX" shall mean Xxxx Components, Inc., a corporation organized under
the laws of the State of California.
"XXXX HOLDINGS" shall mean Xxxx Holdings, Inc., a corporation organized
under the laws of the State of Ohio.
"XXXX PURCHASE AGREEMENT" shall mean the Stock purchase Agreement, dated
January 1, 1995, between the Company, Xxxx and Xxxxxxx.
"XXXX REPURCHASE" shall mean the purchase by the Company from Xxxxxxx of
25% of the outstanding capital stock of Xxxx pursuant to Xxxx Purchase
Agreement.
"COST OF GOODS SOLD" shall mean, for any period, the sum for the
Obligors (determined on a consolidated basis without duplication in
accordance with GAAP) of all costs, excluding depreciation and amortization,
that should be classified as cost of goods sold on an income statement.
- 6 -
"COVERED TAXES" shall mean all present and future income, stamp,
registration and other taxes and levies, imposts, deductions, charges,
compulsory loans and withholdings whatsoever, and all interest, penalties and
similar amounts with respect thereto, now or hereafter imposed, assessed,
levied or collected by any authority of or in any jurisdiction (other than
Switzerland or the United Kingdom) from or through which payments to or for
the account of the Lenders hereunder are made as a result or consequence of
such payments (excluding, however, income or franchise taxes imposed on a
Lender by a jurisdiction as a result of such Lender being organized under the
laws of such jurisdiction or of its Applicable Lending Office being located
in such jurisdiction).
"DEAL COSTS" shall mean all costs and expenses incurred by the Company
in connection with the ADS Purchase, the 1996 (September) Securities Purchase
Agreement, and the other transactions contemplated by this Agreement to occur
on the Closing Date, including (without limitation) the following: (a) fees
and expenses paid to the Lenders, the Lenders' counsel, the Agent and the
Agent's counsel, (b) fees and expenses paid to Nassau and its counsel, (c)
fees and expenses paid to Electra and its counsel, (d) fees and expenses paid
to environmental, aerospace industry and other consultants and (e) all other
fees, commissions and expenses relating to any of the foregoing (including,
without limitation, investment banking, independent accountants, depository,
brokerage, publicity, legal, arrangement and commitment fees, commissions and
expenses).
"DEBT SERVICE" shall mean, for any period, the sum, for the Obligors
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (a) all payments of principal of Indebtedness
(including, without limitation, the principal component of any payments in
respect of Capital Lease Obligations) scheduled to be made during such period
PLUS (b) all Interest Expense that is payable in cash for such period.
"DEFAULT" shall mean an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition of any Property sold or disposed of
in the ordinary course of business and on ordinary business terms.
- 7 -
"DIVIDEND PAYMENT" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom
stock" payments, where the amount thereof is calculated with reference to the
fair market or equity value of the Company or any of its Subsidiaries), but
excluding dividends payable solely in shares of common stock of the Company.
"DOLLARS" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for any period, the sum of the following for the
Obligors (determined without duplication in accordance with GAAP):
(a) net income for such period, PLUS
(b) the aggregate amount of depreciation, amortization
(including, without limitation, amortization of
intangibles), taxes based on or measured by income and
Interest Expense for such period, PLUS
(c) any accretion expense with respect to the Warrants
(or any other Equity Rights with respect to any Obligor) for
such period, PLUS
(d) any non-cash expense related to any minority
interests, PLUS
(e) any non-cash expense related to foreign currency
translation.
"EBITDA RATIO" shall mean, as of any date, the ratio of:
(a) all Indebtedness of the Obligors at such date, TO
(b) for any date occurring:
(i) on or after December 31, 1996, EBITDA for the
period of four consecutive fiscal quarters ended
on, or most recently ended prior to, such date,
and
- 8 -
(ii) prior to December 31, 1996, the product of
(x) EBITDA for the period commencing on January 1,
1996 and ending on the last day of the fiscal
quarter ending on, or most recently ended prior
to, such date, and (y) the Applicable
Annualization Factor.
"ELECTRA" shall mean Electra Investment Trust P.L.C., a
corporation organized under the laws of England, and Electra
Associates, Inc., a corporation organized under the laws of the
State of Delaware.
"ELIGIBLE FOREIGN INVENTORY" shall mean Eligible Inventory
that is located in the United Kingdom.
"ELIGIBLE INVENTORY" shall mean, as at any date, all Inventory
(i) that is owned by an Obligor and, as at such date, is in the
possession or under the control of an Obligor, (ii) that is located
in a jurisdiction in any of the United States of America or the
United Kingdom, (iii) as to which appropriate Uniform Commercial
Code financing statements have been filed naming such Obligor as
"debtor" and the Agent as "secured party" (or, with respect to
inventory located in the United Kingdom, as to which the Lenders'
security interest therein shall have been duly perfected by the
filing of the Security Agreement pursuant to the Companies Act
1985), (iv) that is in good condition, (v) that meets all standards
imposed by any governmental agency or department or division
thereof having regulatory authority over such Inventory, its use or
sale and (vi) that is either currently usable or currently saleable
in the normal course of such Obligor's business without any notice
to, or consent of, any governmental agency or department or
division thereof, PROVIDED THAT (x) in no event shall Inventory
that the Company or any Subsidiary Guarantor characterizes as
obsolete or unsalable be "Eligible Inventory" and (y) the Majority
Lenders (through the Agent) may at any time exclude from Eligible
Inventory any type of Inventory that the Majority Lenders (in their
sole discretion) determine to be unmarketable.
"ELIGIBLE FOREIGN RECEIVABLES" shall mean Eligible Receivables
owing from an account debtor whose principal place of business is
located outside of the United States of America.
"ELIGIBLE RECEIVABLES" shall mean, as at any date, the
aggregate amount of all Receivables at such date payable to an
Obligor other than the following (determined without duplication):
(a) any Receivable not payable in Dollars or the
lawful currencies of any of Japan, the United Kingdom,
- 9 -
Switzerland, the Republic of France, The Kingdom of The
Netherlands or the Federal Republic of Germany,
(b) any Receivable owing from a Subsidiary or
Affiliate of such Obligor or by an officer, director or
employee of any Obligor,
(c) any Receivable owing from an account debtor (other
than Matsushita) whose principal place of business is
located outside of a country that is a member of the
Organization for Economic Cooperation and Development,
(d) any Receivable owing from an account debtor that
the Majority Lenders (through the Agent) have notified the
Company does not have a satisfactory credit standing (as
determined in the sole discretion of the Majority Lenders),
(e) any Receivable that, at the date of issuance of
the invoice therefor, is payable more than 90 days after
shipment of the related Inventory,
(f) any Receivable that remains unpaid for more than
90 days after the date of the issuance of the original
invoice therefor or is more than 60 days past due,
(g) all Receivables of any account debtor if more than
25% of the aggregate amount of the Receivables owing from
such account debtor shall at the time have remained unpaid
for more than 90 days after the date of the issuance of the
original invoices therefor or are more than 60 days past
due,
(h) Receivables owing from any account debtor (other
than Boeing, Claircom, Honeywell, IFT or Matsushita) to the
extent that the Receivables owing from such account debtor
and its Affiliates exceed 15% of all Receivables then
payable to the Obligors,
(i) any Receivable as to which there is any unresolved
dispute with the respective account debtor (but only to the
extent of the amount thereof in dispute),
(j) any Receivable owed by an account debtor to the
extent of any amounts owed by any Obligor to such account
debtor,
(k) any Receivable evidenced by an Instrument (as
defined in the Security Agreement) not pledged to and in the
possession of the Agent,
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(l) any Receivable as to which the Agent does not have
a first priority perfected security interest for the benefit
of the Lenders, and
(m) any Receivable representing an obligation for
goods sold on consignment, approval or a sale-or-return
basis or subject to any other repurchase or return
arrangement (other than any Receivable subject to repurchase
pursuant to a distributor's exchange program PROVIDED THAT
such Receivables may not exceed 10% of the aggregate
Receivables attributable to any account debtor per annum).
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person,
any written or oral notice, claim, demand or other communication
(collectively, a "CLAIM") by any other Person alleging or asserting
such Person's liability for investigatory costs, cleanup costs,
governmental response costs, damages to natural resources or other
Property, personal injuries, fines or penalties arising out of,
based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or
not owned by such Person, or (ii) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law.
The term "Environmental Claim" shall include, without limitation,
any claim by any governmental authority for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to
any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"ENVIRONMENTAL LAWS" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and
any orders or decrees, in each case as now or hereafter in effect,
relating to the regulation or protection of human health, safety or
the environment or to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata,
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes.
"EQUITY ISSUANCE" shall mean (a) any issuance or sale by any
Obligor after the Original Closing Date of (i) any capital stock,
(ii) any warrants or options exercisable in respect of capital
stock (other than any warrants or options issued to directors,
officers or employees of such Obligor pursuant to
- 11 -
employee benefit plans established in the ordinary course of
business and any capital stock issued upon the exercise of such
warrants or options) or (iii) any other security or instrument
representing an equity interest (or the right to obtain any equity
interest) in the issuing or selling Person or (b) the receipt by
the Obligor after the Original Closing Date of any capital
contribution (whether or not evidenced by any equity security
issued by the recipient of such contribution); PROVIDED that Equity
Issuance shall not include (A) any such issuance or sale by any
Subsidiary of the Company to the Company or any Wholly Owned
Subsidiary of the Company, (B) any capital contribution by the
Company or any Wholly Owned Subsidiary of the Company to any
Subsidiary of the Company, (C) any warrants, options or other
equity rights issued to directors, officers or employees of any
Obligor and any capital stock of the Company issued upon the
exercise of such warrants, or (D) the issuance of the Warrants or
any capital stock, options or equity rights of the Company issued
upon the exercise of the Warrants.
"EQUITY RIGHTS" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any
stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ERISA AFFILIATE" shall mean any corporation or trade or
business that is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the Company
is a member and (ii) solely for purposes of potential liability
under Section 302(c)(11) of ERISA and Section 412(c)(11) of the
Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code
of which the Company is a member.
"EURODOLLAR LOANS" shall mean Loans that bear interest at
rates based on rates referred to in the definition of "Eurodollar
Rate" in this Section 1.01.
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) reported, at
11:00 a.m. (London time) on the date two Business Days prior to the
first day of such Interest Period, on Telerate Access Service Page
3750 (British Bankers Association Settlement
- 12 -
Rate) as the London Interbank Offered Rate for Dollar deposits having a term
comparable to such Interest Period and in an amount equal to or greater than
$1,000,000.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Section 10 hereof.
"EXCESS CASH FLOW" shall mean, for any period, the excess of:
(a) the sum of the following (without duplication):
Cash Flow for such period, PLUS proceeds of business
interruption or similar insurance during such period, plus
decreases, to the extent occurring in the ordinary course of
business, in Working Capital of the Obligors for such
period, PLUS all tax refunds received by Obligors in cash
during such period, MINUS
(b) the sum of the following (without duplication):
Debt Service for such period, PLUS increases, to the extent
occurring in the ordinary course of business, in Working
Capital of the Obligors for such period.
For purposes of this definition of "Excess Cash Flow", "WORKING CAPITAL"
shall have the meaning given to that term by GAAP, PROVIDED that Working
Capital shall not include any Revolving Credit Loans, Swingline Loans or the
Convertible Subordinated Notes.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next
succeeding such day, PROVIDED that (a) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day and (b) if such rate is not so published for any
Business Day, the average of quotations for such day on such
transactions received by the Agent (or any of its Affiliates) from
three federal funds brokers of recognized standing selected by it.
"FEE LETTER" shall mean that certain fee letter, dated
September 18, 1996, from ING to the Company.
- 13 -
"FIXED CHARGES RATIO" shall mean, as at any date, the ratio of:
(a) for any date occurring:
(i) on or after December 31, 1996, Cash Flow for
the period of four consecutive fiscal quarters ending
on, or most recently ended prior to, such date, and
(ii) prior to December 31, 1996, the product of
(x) Cash Flow for the period commencing on January 1,
1996 and ending on the last day of the fiscal quarter
ending on, or most recently ended prior to, such date,
times (y) the Applicable Annualization Factor, TO
(b) Debt Service for such period.
"FOREIGN TAXES" shall mean all present and future income,
stamp, registration and other taxes and levies, imposts,
deductions, charges, compulsory loans and withholdings whatsoever,
and all interest, penalties or similar amounts with respect
thereto, now or hereafter imposed, assessed, levied or collected by
the United Kingdom or Switzerland or any political subdivision or
taxing authority thereof or therein, or by any federation or
association of or with which the United Kingdom or Switzerland may
be a member or associated, on or in respect of this Agreement, the
Loans, the Notes, the Letters of Credit, the Reimbursement
Obligations or the other Basic Documents, the recording,
registration, notarization or other formalization of any thereof,
the enforcement thereof or the introduction thereof in any judicial
proceedings, on or in respect of any payments of principal,
interest, premiums, charges, fees or other amounts made on, under
or in respect of any thereof.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with
the last sentence of Section 1.02(a) hereof, are to be used in
making the calculations for purposes of determining compliance with
this Agreement.
"XXXXXXX" shall mean Xxxxx Xxxxxxx.
"XXXXXXX DOCUMENTS" shall mean that certain Employment
Agreement, between Xxxx and Xxxxxxx, dated as of October 2, 1991,
that certain Put Option Agreement, dated as of October 2, 1991,
between Xxxx Holdings and Xxxxxxx, and that certain Guaranty, dated
October 2, 1991, by the Company in favor of Xxxxxxx.
"GUARANTEE" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
- 14 -
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or
an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial
institution to issue a letter of credit or other similar instrument
for the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The
terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a
correlative meaning.
"HAZARDOUS MATERIAL" shall mean, collectively, (a) any
petroleum or petroleum products, flammable materials, explosives,
radioactive materials, asbestos, urea formaldehyde foam insulation,
and transformers or other equipment that contain polychlorinated
biphenyls ("PCB'S"), (b) any chemicals or other materials or
substances that are now or hereafter become defined as or included
in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any
Environmental Law and (c) any other chemical or other material or
substance, exposure to which is now or hereafter prohibited,
limited or regulated under any Environmental Law.
"XXXXXXXXXXX" shall mean Xxxxxxxxxxx International Limited, a
company organized under the laws of England.
"XXXXXXXXXXX INTERNATIONAL" shall mean Xxxxxxxxxxx
International, Inc., a corporation organized under the laws of
California.
"HONEYWELL" shall mean Honeywell Inc.
"IFT" shall mean International Flight Technologies, Inc., a
Delaware corporation, or any successor thereto.
"IMPERMISSIBLE QUALIFICATION" shall mean any qualification,
exception or other statement in any opinion or certification of any
independent public accountants which either (a) is of a "going
concern" or similar nature; or (b) relates to the limited scope of
examination of matters relevant to the financial statements
referred to in such opinion or certificate.
"INDEBTEDNESS" shall mean, for any Person (which shall be
calculated for any Person without duplication): (a)
- 15 -
obligations created, issued or incurred by such Person for borrowed
money (whether by loan, the issuance and sale of debt securities or
the sale of Property to another Person subject to an understanding
or agreement, contingent or otherwise, to repurchase such Property
from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services,
other than trade accounts payable (other than for borrowed money)
arising, and accrued expanses incurred, in the ordinary course of
business so long as such trade accounts payable are payable within
90 days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not
the respective indebtedness so secured has been assumed by such
Person; (d) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other
financial institutions for account of such Person; (e) Capital
Lease Obligations of such Person; and (f) Indebtedness of others
Guaranteed by such Person; PROVIDED that "Indebtedness" shall not
include any of the Company's obligations in respect of the Warrants.
"ING" shall mean Internationale Nederlanden (U.S.) Capital
Corporation.
"INTERCOMPANY NOTE" shall mean a promissory note of Xxxx to
the Company, in an aggregate principal amount not to exceed
$1,500,000, evidencing a loan made by the Company (with the
proceeds of Loans) to Xxxx solely to permit Xxxx to repay existing
Indebtedness of Xxxx identified in Part A of Schedule II hereto,
which promissory note shall contain such terms and provisions as
shall be acceptable to the Lenders.
"INTEREST COVERAGE RATIO" shall mean, as of any date, the
ratio of:
(a) for any date occurring:
(i) on or after December 31, 1996, Cash Flow for
the period of four consecutive fiscal quarters ending
on, or most recently ended prior to, such date, and
(ii) prior to December 31, 1996, the product of
(x) Cash Flow for the period commencing on January 1,
1996 and ending on the last day of the fiscal quarter
ending on, or most recently ended prior to, such date,
times (y) the Applicable Annualization Factor, to
(b) Interest Expense that is payable in cash for such
period.
- 16 -
"INTEREST EXPENSE" shall mean, for any period, all interest
expense less interest income for such period for the Obligors
(determined on a consolidated basis without duplication in
accordance with GAAP), including (without limitation) the
following: (a) all interest in respect of Indebtedness (including,
without limitation, the interest component of any payments in
respect of Capital Lease Obligations) accrued or capitalized during
such period (whether or not actually paid during such period), (b)
the aggregate amount payable by the Company pursuant to Section
11.09 hereof (whether or not actually paid) during such period, and
(c) the net amounts payable (or MINUS the net amount receivable)
under Interest Rate and/or Commodity Price Protection Agreements
during such period (whether or not actually paid or received during
such period).
"INTEREST PERIOD" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is
made or Converted from a Base Rate Loan or the last day of the next
preceding Interest Period for such Loan and ending on the
numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Company may select as provided in
Section 4.05 hereof (or such longer period as may be agreed to by
all of the Lenders), except that each Interest Period that
commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Revolving Credit Loan would otherwise end after the Revolving
Credit Commitment Termination Date such Interest Period shall end
on the Revolving Credit Commitment Termination Date; (ii) no
Interest Period for any Term Loan may commence before and end after
any Principal Payment Date unless, after giving effect thereto, the
aggregate principal amount of the Term Loans having Interest
Periods that end after such Principal Payment Date shall be equal
to or less than the aggregate principal amount of the Term Loans
scheduled to be outstanding after giving effect to the payments of
principal required to be made on such Principal Payment Date; (iii)
each Interest Period that would otherwise end on a day that is not
a Business Day shall end on the next succeeding Business Day (or,
if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (iv)
notwithstanding clauses (i) and (ii) and (iii) above, no Interest
Period for any Loan shall have a duration of less than one month
and, if the Interest Period for any Eurodollar Loan would otherwise
be a shorter period, such Loan shall not be available hereunder for
such period.
"INTEREST RATE PROTECTION AGREEMENT" shall mean, for any
Person, an interest rate swap, cap or collar agreement or
- 17 -
similar arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"INVENTORY" shall mean readily marketable materials, including
raw materials, of a type manufactured or consumed by an Obligor in
the ordinary course of business as presently conducted before any
deduction by the Obligors for purposes of percentage of completion
accounting (but excluding, in any event, all work-in-process EXCEPT
for work-in-process inventory of Xxxxxxxxxxx International or the
ADS Subsidiary).
"INVESTMENT" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities of any other Person or any
agreement to make any such acquisition (including, without
limitation, any "short sale" or any sale of any securities at a
time when such securities are not owned by the Person entering into
such sale); (b) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such
Property to such Person), but excluding any such advance, loan or
extension of credit having a term not exceeding 90 days
representing the purchase price of inventory or supplies sold by
such Person in the ordinary course of business); (c) the entering
into of any Guarantee of, or other contingent obligation with
respect to, Indebtedness or other liability of any other Person and
(without duplication) any amount committed to be advanced, lent or
extended to such Person; or (d) the entering into of any Interest
Rate Protection Agreement or any Commodity Price Protection
Agreement.
"ISSUING BANK" shall mean Provident, as the issuer of Letters
of Credit under Section 2.03 hereof, together with its successors
and assigns in such capacity.
"XXXXXX EMPLOYMENT AGREEMENT" shall mean the Employment
Agreement dated January 24, 1985 between Tri-Star Electronics, Inc.
and Xxxx Xxxxxx, as amended by a letter agreement dated October 1,
1991 between Xxxx Xxxxxx and the Company.
"LETTER OF CREDIT" shall have the meaning assigned to such
term in Section 2.03 hereof.
"LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any
Letter of Credit, collectively, any application therefor and any
other agreements, instruments, guarantees or other documents
(whether general in application or applicable only to such Letter
of Credit) governing or providing for (a) the rights
- 18 -
and obligations of the parties concerned or at risk with respect to
such Letter of Credit or (b) any collateral security for any of
such obligations, each as the same may be modified and supplemented
and in effect from time to time.
"LETTER OF CREDIT INTEREST" shall mean, for each Lender, such
Lender's participation interest (or, in the case of the Issuing
Bank, the Issuing Bank's retained interest) in the Issuing Bank's
liability under Letters of Credit and such Lender's rights and
interests in Reimbursement Obligations and fees, interest and other
amounts payable in connection with Letters of Credit and
Reimbursement Obligations.
"LETTER OF CREDIT LIABILITY" shall mean, without duplication,
at any time and in respect of any Letter of Credit, the sum of (a)
the undrawn face amount of such Letter of Credit PLUS (b) the
aggregate unpaid principal amount of all Reimbursement Obligations
of the Company at such time due and payable in respect of all
drawings made under such Letter of Credit. For purposes of this
Agreement, a Lender (other than the Issuing Bank) shall be deemed
to hold a Letter of Credit Liability in an amount equal to its
participation interest in the related Letter of Credit under
Section 2.03 hereof, and the Issuing Bank shall be deemed to hold a
Letter of Credit Liability in an amount equal to its retained
interest in the related Letter of Credit after giving effect to the
acquisition by the Lenders other than the Issuing Bank of their
participation interests under said Section 2.03.
"LEVERAGE RATIO" shall mean, at any time, the ratio of Total
Liabilities to Net Worth of the Company at such time.
"LIEN" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind
in respect of such Property. For purposes of this Agreement and
the other Basic Documents, a Person shall be deemed to own subject
to a Lien any Property that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other
than an operating lease) relating to such Property.
"LOANS" shall mean the Revolving Credit Loans, the Term Loans
and the Swingline Loans.
"MAJORITY LENDERS" shall mean Lenders holding at least 66 2/3%
of the sum of (a) the aggregate unpaid principal amount of the
Loans PLUS (b) the aggregate amount of all Letter of Credit
Liabilities OR, if no Loans or Letter of Credit Liabilities are
outstanding, Lenders having at least 66 2/3% of the aggregate
amount of the Commitments; PROVIDED THAT, at all
- 19 -
times during which there are two or fewer Lenders, "Majority
Lenders" shall mean all Lenders.
"MARGIN STOCK" shall mean "margin stock" within the
meaning of Regulations G, U and X.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse
effect on (a) the Property, business, operations, customer
relations, competitive position, financial condition, prospects,
liabilities or capitalization of the Obligors taken as a whole,
(b) the ability of any Obligor to perform its obligations under
any of the Basic Documents to which it is a party, (c) the
validity or enforceability of any of the Basic Documents, (d) the
rights and remedies of the Lenders and the Agent under any of the
Basic Documents or (e) the timely payment of the principal of or
interest on the Loans or the Reimbursement Obligations or other
amounts payable in connection therewith.
"MATSUSHITA" shall mean, collectively, Matsushita
Electric Industrial Company Limited, a Japanese corporation,
Matsushita Electric Corporation of America, a Delaware
corporation, Matsushita Avionics Systems Corporation, a Delaware
corporation, and M.A.D.C., Inc., a Delaware corporation.
"MONTHLY DATE" shall mean the last Business Day of each
calendar month.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and that is
covered by Title IV of ERISA.
"NASSAU" shall mean Nassau Capital Partners L.P., a
Delaware limited partnership, and NAS Partners I L.L.C., a
Delaware limited liability company.
"NASSAU EQUITY INFUSION" shall mean the purchase by
Nassau for cash, on or about the date of Amendment No. 3 hereto,
of shares of preferred stock of the Company and 1996 (February)
Warrants for a purchase price equal to $6,500,000 pursuant to the
1996 (February) Securities Purchase Agreement.
"NET AVAILABLE PROCEEDS" shall mean:
(i) in the case of any Disposition, the amount of Net
Cash Payments received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate
amount of proceeds of insurance, condemnation awards and
other compensation received by any Obligor in respect of
such Casualty Event net of (A) reasonable expenses incurred
- 20 -
by the Obligors in connection therewith and (B)
contractually required repayments of Indebtedness to the
extent secured by a Lien on such Property and any income
and transfer taxes payable by any Obligor in respect of
such Casualty Event; and
(iii) in the case of any Equity Issuance, the aggregate
amount of all cash received by the Obligors in respect of
such Equity Issuance net of reasonable expenses incurred
by the Company and its Subsidiaries in connection
therewith.
"NET CASH PAYMENTS" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments, and the
fair market value of any non-cash consideration, received by any
Obligor directly or indirectly in connection with such
Disposition (other than Property that is intended to replace the
Property that was the subject of the Disposition (which
replacement Property must be subject to a purchase contract or
other commitment to purchase within three months of the relevant
Disposition)); PROVIDED that (a) Net Cash Payments shall be net
of (i) the amount of any legal, title and recording tax expenses,
commissions and other fees and expenses paid by any Obligor in
connection with such Disposition and (ii) any Federal, state and
local income or other taxes estimated to be payable by any
Obligor as a result of such Disposition (but only to the extent
that such estimated taxes are in fact paid to the relevant
Federal, state or local governmental authority within six months
of the date of such Disposition) and (b) Net Cash Payments shall
be net of any repayments by any Obligor of Indebtedness to the
extent that (i) such Indebtedness is secured by a Lien on the
Property that is the subject of such Disposition and (ii) the
transferee of (or holder of a Lien on) such Property requires
that such Indebtedness be repaid as a condition to the purchase
of such Property.
"NET SALES" shall mean, for any period, the sum for the
Obligors (determined on a consolidated basis without duplication
in accordance with GAAP) of all revenues that should be
classified as net sales on an income statement.
"NET WORTH" shall mean, as at any date for any Person,
the sum for such Person and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
of the following:
(a) the amount of paid-in capital (both in respect
of common equity and preferred equity), PLUS
- 21 -
(b) the amount of surplus and retained earnings
(or, in the case of a surplus or retained earnings
deficit, MINUS the amount of such deficit), MINUS
(c) the cost of treasury shares; PLUS
(d) the value ascribed to the Warrants and the
cumulative effect of any change in the valuation of the
Warrants.
PROVIDED that the following shall be disregarded in calculating
"Net Worth":
(i) any predecessor basis adjustment required under
GAAP; and
(ii) any foreign currency translation adjustments
permitted under GAAP.
"1996 (FEBRUARY) WARRANTS" shall mean the warrants
acquired by Nassau, pursuant to the terms of the 1996 (February)
Securities Purchase Agreement.
"1996 (SEPTEMBER) WARRANTS" shall mean the warrants to
be acquired by Nassau and Electra, pursuant to the terms of the
1996 (September) Securities Purchase Agreement.
"1994 SECURITIES PURCHASE AGREEMENT" shall mean the
Securities Purchase Agreement, dated November 2, 1994, among the
Company and Electra.
"1996 (FEBRUARY) SECURITIES PURCHASE AGREEMENT" shall
mean the Securities Purchase Agreement, dated as of February 20,
1996, among the Company and Nassau.
"1996 (SEPTEMBER) SECURITIES PURCHASE AGREEMENT" shall
mean the Securities Purchase Agreement, dated as of September 18,
1996, among the Company, Nassau and Electra.
"NOTES" shall mean the Revolving Credit Notes and the
Term Loan Notes.
"ORIGINAL CLOSING DATE" shall mean the date of the
Original Credit Agreement.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
- 22 -
"PERMITTED INVESTMENTS" shall mean: (a) Dollars;
(b) direct obligations of the United States of America, or of any
agency thereof, or obligations guaranteed as to principal and
interest by the United States of America, or of any agency
thereof, in either case maturing not more than six months from
the date of acquisition thereof; (c) certificates of deposit or
bankers' acceptances maturing not more than six months from the
date of acquisition thereof and overnight bank deposits, in each
case with any Lender or any bank or trust company organized under
the laws of the United States of America or any state thereof and
having capital, surplus and undivided profits of at least
$500,000,000; (d) repurchase obligations with a term of not more
than seven days for underlying obligations of the types described
in clauses (b) and (c) above and entered into with any financial
institution meeting the qualifications described in clause (c)
above; and (d) commercial paper of any Lender or that is rated
A-1 or better or P-1 by Standard & Poor's Corporation or Xxxxx'x
Investors Services, Inc., respectively, maturing not more than
six months from the date of acquisition thereof.
"PERSON" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"PLAN" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"POST-DEFAULT RATE" shall mean, during any period
during which any Event of Default shall be continuing, and in
respect of any principal of any Loan, any Reimbursement
Obligation or any other amount payable under this Agreement, any
Note or any other Basic Document, a rate per annum equal to 2%
PLUS the Applicable Margin for Base Rate Loans PLUS the Base Rate
as in effect from time to time (PROVIDED that, with respect to
principal of a Eurodollar Loan, the "Post-Default Rate" for such
principal shall be, during the period to but excluding the last
day of the then current Interest Period therefor, 2% PLUS the
interest rate for such Loan as provided in Section 3.02 hereof
and, thereafter, the rate provided for above in this definition).
"PRIME RATE" shall mean the arithmetic average of the
rates of interest publicly announced by The Chase Manhattan Bank,
Citibank, N.A. and Xxxxxx Guaranty Trust Company of New York (or
their respective successors) as their respective prime commercial
lending rates (or, as to any such bank that does not announce
such a rate, such bank's "base" or other rate determined by the
Agent to be the equivalent rate announced by such bank), EXCEPT
THAT, if any such bank shall, for any period, cease to announce
- 23 -
publicly its prime commercial lending (or equivalent) rate, the
Agent shall, during such period, determine the "Prime Rate" based
upon the prime commercial lending (or equivalent) rates announced
publicly by the other such banks.
"PRINCIPAL PAYMENT DATES" shall mean the Quarterly
Dates, commencing with September 30, 1995 through and including
September 30, 2001.
"PROCESS AGENT" shall have the meaning specified in
Section 12.10(b) hereof.
"PROPERTY" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"PROVIDENT" shall mean The Provident Bank, a banking
corporation organized under the laws of the State of Ohio.
"QUALIFIED PUBLIC OFFERING" shall mean an underwritten
public offering of the common stock of the Company registered
under the Securities Act of 1933, as amended.
"QUARTERLY DATES" shall mean the last Business Day of
March, June, September and December in each year, the first of
which shall be the first such day after the date of this
Agreement.
"RECEIVABLES" shall mean, as at any date, the unpaid
portion of the obligation, as stated on the respective invoice,
of a customer of any Obligor in respect of Inventory or services
sold and shipped by such Obligor to such customer, net of any
credits, rebates or offsets owed to such customer (and for
purposes hereof, a credit or rebate paid by check or draft of the
Obligor shall be deemed to be outstanding until such check or
draft shall have been debited to the account of such Obligor on
which such check or draft was drawn).
"REGULATIONS A, D, G, U AND X" shall mean,
respectively, Regulations A, D, G, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as
the same may be modified and supplemented and in effect from time
to time.
"REGULATORY CHANGE" shall mean, with respect to any
Lender, any change after the date of this Agreement in Federal,
state or foreign law or regulations (including, without
limitation, Regulation D) or the adoption or making after such
date of any interpretation, directive or request applying to a
class of financial institutions including such Lender of or under
any Federal, state or foreign law or regulations (whether or not
- 24 -
having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof.
"REIMBURSEMENT OBLIGATIONS" shall mean, at any time,
the obligations of the Company then outstanding, or that may
thereafter arise in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by the Issuing Bank in
respect of any drawings under a Letter of Credit.
"RELEASE" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment, including, without limitation, the movement of
Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"REVOLVING CREDIT COMMITMENT" shall mean, for each
Lender, the obligation of such Lender to make Revolving Credit
Loans in an aggregate principal amount at any one time
outstanding up to but not exceeding (a) in the case of a Lender
that is a party to this Agreement on the date hereof, the amount
set opposite the name of such Lender on the signature pages
hereof under the caption "Revolving Credit Commitment" and (b) in
the case of any other Lender, the aggregate amount of Revolving
Credit Commitments of other Lenders acquired by it pursuant to
Section 12.06(b) hereof (in each case, as the same may be reduced
from time to time pursuant to Section 2.04 hereof). The
aggregate principal amount of the Revolving Credit Commitments as
of the date hereof is $12,500,000.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean,
with respect to any Lender, the ratio of (a) the amount of the
Revolving Credit Commitment of such Lender to (b) the aggregate
amount of the Revolving Credit Commitments of all of the Lenders.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall
mean the third anniversary of the date hereof.
"REVOLVING CREDIT LOANS" shall mean the loans provided
for by Section 2.01(a) hereof, which may be Base Rate Loans
and/or Eurodollar Loans.
"REVOLVING CREDIT NOTES" shall mean the promissory
notes provided for by Section 2.08(a) hereof and all promissory
notes delivered in substitution or exchange therefor, in each
case as the same shall be modified and supplemented and in effect
from time to time.
- 25 -
"SECURITY AGREEMENT" shall mean a Security Agreement
substantially in the form of Exhibit C-1 hereto between each
Obligor and the Agent, as the same shall be modified and
supplemented and in effect from time to time.
"SECURITY AGREEMENT AMENDMENT" shall mean a Security
Agreement Amendment substantially in the form of Exhibit C-2
hereto between each Obligor and the Agent.
"SECURITY DOCUMENTS" shall mean, collectively, the
Security Agreement, the Security Agreement Amendment and all
Uniform Commercial Code financing statements required by this
Agreement or the Security Agreement to be filed with respect to
the security interests in personal Property and fixtures created
pursuant to the Security Agreement.
"SELLING, GENERAL AND ADMINISTRATIVE EXPENSES" shall
mean, for any period, the sum for the Obligors (determined on a
consolidated basis without duplication in accordance with GAAP)
of all expenses (excluding depreciation and amortization) that
should be classified as selling, general and administrative
expenses on an income statement.
"SELLING, GENERAL AND ADMINISTRATIVE EXPENSES RATIO"
shall mean, as at any date, the ratio of:
(a) for any date occurring:
(i) on or after December 31, 1996, Selling,
General and Administrative Expenses for the period of
four consecutive fiscal quarters ending on, or most
recently ended prior to, such date, and
(ii) prior to December 31, 1996, the product of
(x) Selling, General and Administrative Expenses for
the period commencing on January 1, 1996 and ending on
the last day of the fiscal quarter ending on, or most
recently ended prior to, such date, times (y) the
Applicable Annualization Factor, TO
(b) Net Sales for such period.
"SENIOR SUBORDINATED DEBT" shall mean the Indebtedness
of the Company in respect of the 12% Senior Subordinated Notes of
the Company due December 31, 2001 issued pursuant to the 1994
Securities Purchase Agreement.
"SENIOR SUBORDINATED DEBT AMENDMENTS" shall mean (i)
Amendment No. 1, dated as of February 20, 1996, to the 1994
Securities Purchase Agreement and (ii) Amendment No. 1, dated as
- 26 -
of February 20, 1996, to the Advisory Agreement among the Company
and Electra Inc.
"SENIOR SUBORDINATED DEBT DOCUMENTS" shall mean all
documents and agreements executed and delivered in connection
with the original issuance of the Senior Subordinated Debt,
including the 1994 Securities Purchase Agreement, the promissory
notes evidencing Indebtedness thereunder and the Related
Agreements referred to in the 1994 Securities Purchase Agreement,
in each case, as the same shall, subject to Section 9.24 hereof,
be modified and supplemented and in effect from time to time.
"SERIES E PREFERRED STOCK" shall mean the preferred
stock of the Company issued on September 18, 1996, and designated
as Series E Preferred.
"SERIES E PREFERRED STOCK DOCUMENTATION" shall mean
all documents and agreements executed and delivered in connection
with the original issuance of the Series E Preferred Stock,
including the shares of Series E Preferred Stock and the 1996
(September) Securities Purchase Agreement.
"SUBSIDIARY" shall mean, with respect to any Person,
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"SWINGLINE COMMITMENT" shall mean the obligation of the
Cash Management Agent to make Swingline Loans in an aggregate
principal amount at any one time outstanding up to the lesser of
$1,000,000 and the aggregate amount of the Revolving Credit
Commitments as then in effect.
"SWINGLINE LOANS" shall have the meaning given to that
term in Section 2.01(c) hereof.
"SWITZERLAND" shall mean the Swiss Confederation.
"TERM LOAN COMMITMENT" shall mean, for each Lender, the
obligation of such Lender to make a Term Loan in an aggregate
amount up to but not exceeding the amount set opposite the name
of such Lender on the signature page hereof under the caption
- 27 -
"Term Loan Commitment". The aggregate principal amount of the
Term Loan Commitments is $15,000,000.
"TERM LOAN NOTES" shall mean the promissory notes
provided for by Section 2.08(b) hereof and all promissory notes
delivered in substitution or exchange therefor, in each case as
the same shall be modified and supplemented and in effect from
time to time.
"TERM LOANS" shall mean the loans provided for by
Section 2.01(b) hereof, which may be Base Rate Loans and/or
Eurodollar Loans.
"TOTAL LIABILITIES" shall mean, as at any date, the
sum, for the Obligors (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all
Indebtedness and (b) all other liabilities that should be
classified as liabilities on a balance sheet, including, without
limitation, all reserves (other than general contingency
reserves) and all deferred taxes and other deferred items.
"TRI-STAR TECHNOLOGIES" shall mean Tri-Star
Technologies, a general partnership organized under the laws of
the State of California.
"TST PARTNERSHIP AGREEMENT" shall mean the General
Partnership Agreement dated June 18, 1994 among Tri-Star
Electronics, Inc., Xxxx Xxxxxx and Andrei Grombchevsky, as
amended by that certain agreement dated December 3, 1987 between
Tri-Star Electronics, Inc. and Andrei Grombchevsky, and as
further amended by a letter agreement dated October 1, 1991
between Xxxx Xxxxxx and the Company.
"TYPE" shall have the meaning assigned to such term in
Section 1.03 hereof.
"UNIDEC" shall mean Tri-Star Electronics Europe S.A.,
Mezzovico (formerly Unidec, S.A. Mezzovico), a corporation
organized under the laws of Switzerland.
"WARRANTS" shall mean the following:
(a) the warrants described in Schedule V hereto,
(b) the warrants issued under the Senior Subordinated
Loan and Warrant Purchase Agreement, dated October 15, 1991 among
Banc One Capital Partners Corporation, the Company and certain
Obligors,
(c) the 1994 Warrants,
- 28 -
(d) the warrants issued under the Senior Lender Warrant
Agreement, dated as of November 2, 1994 among the Company, ING
and Provident,
(e) the 1996 (February) Warrants,
(f) the 1996 (September) Warrants, and
(g) the warrants issued under the Senior Lender Warrant
Agreement, dated as of September 18, 1996 among the Company, ING
and Provident.
"WHOLLY OWNED SUBSIDIARY" shall mean, with respect to
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"ZERO BALANCE ACCOUNT" shall mean an account of the
Company at the Cash Management Agent designated by the Cash
Management Agent as the "Zero Balance Account."
1.02 ACCOUNTING TERMS AND DETERMINATIONS.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial
matters required to be delivered to the Lenders hereunder shall
(unless otherwise disclosed to the Lenders in writing at the time
of delivery thereof in the manner described in subsection (b)
below) be prepared, in accordance with generally accepted
accounting principles applied on a basis consistent with those
used in the preparation of the latest financial statements
furnished to the Lenders hereunder (which, prior to the delivery
of the first financial statements under Section 9.01 hereof,
shall mean the audited financial statements as at December 31,
1993 referred to in Section 8.02 hereof). All calculations made
for the purposes of determining compliance with this Agreement
shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied
on a basis consistent with those used in the preparation of the
latest annual or monthly financial statements furnished to the
Lenders pursuant to Section 9.01 hereof (or, prior to the
delivery of the first financial statements under Section 9.01
hereof, used in the preparation of the audited financial
statements as at December 31, 1993 referred to in Section 8.02
hereof) unless (i) the Company shall have objected to determining
such compliance on such basis at the time of delivery of such
financial statements or (ii) the Majority Lenders shall so object
- 29 -
in writing within 30 days after delivery of such financial
statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of
the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the
first financial statements delivered under Section 9.01 hereof,
shall mean the audited financial statements referred to in
Section 8.02 hereof).
(b) The Company shall deliver to the Lenders at the
same time as the delivery of any annual or monthly financial
statement under Section 9.01 hereof (i) a description in
reasonable detail of any material variation between the
application of accounting principles employed in the preparation
of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or
monthly financial statements as to which no objection has been
made in accordance with the last sentence of subsection (a) above
and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination
of compliance with the covenants set forth in Section 9 hereof,
the Company will not change the last day of its fiscal year from
December 31 of each year, or the last days of the first three
fiscal quarters in each of its fiscal years from March 31,
June 30 and September 30 of each year, respectively.
1.03 CLASSES AND TYPES OF LOANS. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan
(or of a Commitment to make a Loan) refers to whether such Loan
is a Revolving Credit Loan or a Term Loan, each of which
constitutes a Class. The "Type" of a Loan refers to whether such
Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type. Loans may be identified by both Class and
Type.
Section 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS.
2.01 LOANS.
(a) REVOLVING CREDIT LOANS. Each Lender severally
agrees, on the terms and conditions of this Agreement, to make
loans to the Company in Dollars during the period from and
including the Original Closing Date to but not including the
Revolving Credit Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not
exceeding the amount of the Revolving Credit Commitment of such
Lender as in effect from time to time, PROVIDED that in no event
shall the aggregate principal amount of all Revolving Credit
Loans, together with the aggregate amount of all Letter of Credit
- 30 -
Liabilities and the aggregate amount of all Swingline Loans,
exceed the aggregate amount of the Revolving Credit Commitments
as in effect from time to time. Subject to the terms and
conditions of this Agreement, during such period the Company may
borrow, repay and reborrow the amount of the Revolving Credit
Commitments by means of Base Rate Loans and Eurodollar Loans and
may Convert Revolving Credit Loans of one Type into Revolving
Credit Loans of the other Type (as provided in Section 2.09
hereof) or Continue Revolving Credit Loans that are Eurodollar
Loans (as provided in Section 2.09 hereof).
(b) TERM LOANS. Each Lender severally agrees, on the
terms and conditions of this Agreement, to make a term loan to
the Company in Dollars on the Original Closing Date in an
aggregate principal amount up to but not exceeding the amount of
the Term Loan Commitment of such Lender. Thereafter the Company
may Convert Term Loans of one Type into Term Loans of the other
Type (as provided in Section 2.09 hereof) or Continue Term Loans
that are Eurodollar Loans (as provided in Section 2.09 hereof).
(c) SWINGLINE LOANS.
(i) The Cash Management Agent hereby agrees, on the
terms and conditions of this Agreement, to make loans
("SWINGLINE LOANS") to the Company in Dollars during the
period from and including the Original Closing Date to
but excluding the Revolving Credit Termination Date in an
aggregate principal amount at any one time outstanding up
to but not exceeding the amount of the Swingline
Commitment, PROVIDED that the aggregate unpaid principal
amount of all Swingline Loans, all Letter of Credit
Liabilities and all Revolving Credit Loans at any one
time outstanding may not exceed the aggregate amount of
the Revolving Credit Commitments. Subject to the terms
of this Agreement, the Company may borrow, repay and
reborrow the amount of the Swingline Commitment by means
of Base Rate Loans.
(ii) The Obligors shall at all times maintain with
the Cash Management Agent one or more lockboxes
(collectively, the "LOCKBOXES") pursuant to the Cash
Management Agreement and, except to the extent otherwise
required under the Security Agreement, shall instruct all
account debtors on all of the accounts of the Obligors to
remit payments to be made by checks or other drafts to
the Lockboxes and to remit all payments to be made by
wire transfer to the Zero Balance Account. Except as
otherwise required under the Security Agreement, all
amounts received by the Obligors from any account debtor,
in addition to all cash received from any other source
(including but not limited to proceeds from the sale of
collateral for the Loans and judgments) shall be
deposited in the Zero Balance Account upon receipt by an
- 31 -
Obligor. All receipts received in the Lockboxes shall be
deposited on the day of receipt by the Cash Management
Agent to the Zero Balance Account. As a matter of
administrative convenience, the Cash Management Agent
shall transmit all funds received in the Lockboxes twice
each Business Day to the Zero Balance Account prior to
10:00 a.m., New York time, and 4:00 p.m., New York time,
and any funds will be automatically applied at the end of
each day to reduce the outstanding principal amount of
Swingline Loans.
(d) LIMIT ON EURODOLLAR LOANS. No more than five
separate Interest Periods in respect of Eurodollar Loans from
each Lender may be outstanding at any one time.
2.02 BORROWINGS.
(a) The Company shall give the Agent notice of each
borrowing of Loans (other than Swingline Loans) hereunder as
provided in Section 4.05 hereof. Not later than 1:00 p.m. New
York time on the date specified for each borrowing of such Loans
hereunder, each Lender shall make available the amount of the
Loan or Loans to be made by it on such date to (a) in the case of
the borrowing of the Term Loans, the Agent, at account number
000-0-000000 (ABA No. 0210-000-21) maintained by the Agent with
The Chase Manhattan Bank, and (b) in the case of borrowings of
Revolving Credit Loans, the Cash Management Agent, at an account
at Provident designated by the Cash Management Agent, in each
case, in immediately available funds, for account of the Company.
The amount so received by the Agent or the Cash Management Agent
(as the case may be) shall, subject to the terms and conditions
of this Agreement, be made available to the Company by depositing
the same, in immediately available funds, in an account of the
Company (designated by the Company) at the Cash Management Agent.
(b) Swingline Loans shall be borrowed by the Company
by means of writing checks drawn on the Cash Management Agent.
(c) In the event that the Company does not repay any
Swingline Loan by 11:00 a.m. (Cincinnati time) on the last
Business Day of the week in which such Swingline Loan was made,
at any time thereafter until the unpaid principal amount of such
Swingline Loan shall have been paid in full, the Cash Management
Agent may, and the Company hereby irrevocably authorizes and
empowers (which power is coupled with an interest) the Cash
Management Agent to, deliver, on behalf of the Company, to the
Agent under Section 2.02(a) hereof a notice of borrowing of
Revolving Credit Loans in an amount equal to the then unpaid
principal amount of such Swingline Loan. Each Lender shall, not
later than 2:00 p.m. (New York time), make available the amount
of the Revolving Credit Loan to be made by it to the Cash
Management Agent at the account specified in Section 2.02(a)
- 32 -
hereof and the amount so received by the Cash Management
Agent shall be applied to such Swingline Loan.
2.03 LETTERS OF CREDIT. Subject to the terms and
conditions of this Agreement, the Revolving Credit Commitments
may be utilized, upon the request of the Company, in addition to
the Revolving Credit Loans provided for by Section 2.01(a)
hereof, by the issuance by the Issuing Bank of letters of credit
(collectively, "LETTERS OF CREDIT") for account of the Company or
any of its Subsidiaries (as specified by the Company), PROVIDED
that in no event shall (i) the aggregate amount of all Letter of
Credit Liabilities, together with the aggregate principal amount
of the Revolving Credit Loans, exceed the aggregate amount of the
Revolving Credit Commitments as in effect from time to time, and
(ii) the expiration date of any Letter of Credit extend beyond
the earlier of the Revolving Credit Commitment Termination Date
and the date 12 months following the issuance of such Letter of
Credit. The following additional provisions shall apply to
Letters of Credit:
(a) The Company shall give the Agent at least three
Business Days' irrevocable prior notice (effective upon
receipt) specifying the Business Day (which shall be no
later than 30 days preceding the Revolving Credit Commitment
Termination Date) each Letter of Credit is to be issued and
the account party or parties therefor and describing in
reasonable detail the proposed terms of such Letter of
Credit (including the beneficiary thereof) and the nature of
the transactions or obligations proposed to be supported
thereby (including whether such Letter of Credit is to be a
commercial letter of credit or a standby letter of credit).
Upon receipt of any such notice, the Agent shall advise the
Issuing Bank of the contents thereof.
(b) On each day during the period commencing with the
issuance by the Issuing Bank of any Letter of Credit and
until such Letter of Credit shall have expired or been
terminated, the Revolving Credit Commitment of each Lender
shall be deemed to be utilized for all purposes of this
Agreement in an amount equal to such Lender's Revolving
Credit Commitment Percentage of the then undrawn face amount
of such Letter of Credit. Each Lender (other than the
Issuing Bank) agrees that, upon the issuance of any Letter
of Credit hereunder, it shall automatically acquire a
participation in the Issuing Bank's liability under such
Letter of Credit in an amount equal to such Lender's
Revolving Credit Commitment Percentage of such liability,
and each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be
unconditionally obligated to the Issuing Bank to pay and
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discharge when due, its Revolving Credit Commitment
Percentage of the Issuing Bank's liability under such Letter
of Credit.
(c) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify the Company
(through the Agent) of the amount to be paid by the Issuing
Bank as a result of such demand and the date on which
payment is to be made by the Issuing Bank to such
beneficiary in respect of such demand. Notwithstanding the
identity of the account party of any Letter of Credit, the
Company hereby unconditionally agrees to pay and reimburse
the Agent for account of the Issuing Bank for the amount of
each demand for payment under such Letter of Credit at or
prior to the date on which payment is to be made by the
Issuing Bank to the beneficiary thereunder, without
presentment, demand, protest or other formalities of any
kind.
(d) Forthwith upon its receipt of a notice referred to
in clause (c) of this Section 2.03, the Company shall advise
the Agent whether or not the Company intends to borrow
hereunder to finance its obligation to reimburse the Issuing
Bank for the amount of the related demand for payment and,
if it does, submit a notice of such borrowing as provided in
Section 4.05 hereof. In the event that the Company fails to
so advise the Agent, or if the Company fails to reimburse
the Issuing Bank for a payment under a Letter of Credit by
the date of such payment, the Agent shall give each Lender
prompt notice of the amount of the demand for payment,
specifying such Lender's Revolving Credit Commitment
Percentage of the amount of the related demand for payment.
(e) Each Lender (other than the Issuing Bank) shall
pay to the Agent for account of the Issuing Bank at account
number 000-0-000000 (ABA No. 0210-000-21) maintained by the
Agent with The Chase Manhattan Bank, in Dollars and in
immediately available funds, the amount of such Lender's
Revolving Credit Commitment Percentage of any payment under
a Letter of Credit upon notice by the Issuing Bank (through
the Agent) to such Lender requesting such payment and
specifying such amount. Each such Lender's obligation to
make such payment to the Agent for account of the Issuing
Bank under this clause (e), and the Issuing Bank's right to
receive the same, shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever,
including, without limitation, the failure of any other
Lender to make its payment under this clause (e), the
financial condition of the Company (or any other account
party), the existence of any Default or the termination of
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the Commitments. Each such payment to the Issuing Bank shall be made without
any offset, abatement, withholding or reduction whatsoever. If any Lender
shall default in its obligation to make any such payment to the Agent for
account of the Issuing Bank, for so long as such default shall continue the
Agent may at the request of the Issuing Bank withhold from any payments
received by the Agent under this Agreement or any Note for account of such
Lender the amount so in default and, to the extent so withheld, pay the same
to the Issuing Bank in satisfaction of such defaulted obligation.
(f) Upon the making of each payment by a Lender to the Issuing Bank
pursuant to clause (e) above in respect of any Letter of Credit, such Lender
shall, automatically and without any further action on the part of the Agent,
the Issuing Bank or such Lender, acquire (i) a participation in an amount
equal to such payment in the Reimbursement Obligation owing to the Issuing
Bank by the Company hereunder and under the Letter of Credit Documents
relating to such Letter of Credit and (ii) a participation in a percentage
equal to such Lender's Revolving Credit Commitment Percentage in any interest
or other amounts payable by the Company hereunder and under such Letter of
Credit Documents in respect of such Reimbursement Obligation (other than the
commissions, charges, costs and expenses payable to the Issuing Bank pursuant
to clause (g) of this Section 2.03). Upon receipt by the Issuing Bank from
or for account of the Company of any payment in respect of any Reimbursement
Obligation or any such interest or other amount (including by way of setoff
or application of proceeds of any collateral security) the Issuing Bank shall
promptly pay to the Agent for account of each Lender entitled thereto, such
Lender's Revolving Credit Commitment Percentage of such payment, each such
payment by the Issuing Bank to be made in the same money and funds in which
received by the Issuing Bank. In the event any payment received by the
Issuing Bank and so paid to the Lenders hereunder is rescinded or must
otherwise be returned by the Issuing Bank, each Lender shall, upon the
request of the Issuing Bank (through the Agent), repay to the Issuing Bank
(through the Agent) the amount of such payment paid to such Lender, with
interest at the rate specified in clause (j) of this Section 2.03.
(g) The Company shall pay to the Agent for account of each Lender
(ratably in accordance with their respective Commitment Percentages) a letter
of credit fee in respect of each Letter of Credit in an amount equal to
2-1/2% per annum of the daily average undrawn face amount of such Letter of
Credit for the period from and including the date of
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issuance of such Letter of Credit (i) in the case of a Letter of Credit that
expires in accordance with its terms, to and including such expiration date
and (ii) in the case of a Letter of Credit that is drawn in full or is
otherwise terminated other than on the stated expiration date of such Letter
of Credit, to but excluding the date such Letter of Credit is drawn in full
or is terminated (such fee to be non-refundable, to be paid in arrears on
each Monthly Date and on the Revolving Credit Commitment Termination Date and
to be calculated for any day after giving effect to any payments made under
such Letter of Credit on such day). In addition, the Company shall pay to
the Agent for account of the Issuing Bank a fronting fee in respect of each
Letter of Credit in an amount equal to 1/4 of 1% per annum of the daily
average undrawn face amount of such Letter of Credit for the period from and
including the date of issuance of such Letter of Credit (i) in the case of a
Letter of Credit that expires in accordance with its terms, to and including
such expiration date and (ii) in the case of a Letter of Credit that is drawn
in full or is otherwise terminated other than on the stated expiration date
of such Letter of Credit, to but excluding the date such Letter of Credit is
drawn in full or is terminated (such fee to be refundable to the extent such
Letter of Credit is not outstanding for the entire period for which such fee
was paid or the face amount of such Letter of Credit is reduced during such
period, to be paid in advance on each Monthly Date and to be calculated for
any day after giving effect to any payments made under such Letter of Credit
on such day) plus all charges, costs and expenses in the amounts customarily
charged by the Issuing Bank from time to time in like circumstances with
respect to the issuance of each Letter of Credit (including, without
limitation, with respect to each Letter of Credit, an origination fee in an
amount equal to the greater of (x) 1/4 of 1% of the face amount of such
Letter of Credit and (y) $500, payable on the date of issuance thereof) and
drawings and other transactions relating thereto.
(h) Promptly following the end of each calendar month, the Issuing Bank
shall deliver (through the Agent) to each Lender and the Company a notice
describing the aggregate amount of all Letters of Credit outstanding at the
end of such month. Upon the request of any Lender from time to time, the
Issuing Bank shall deliver any other information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding.
(i) The issuance by the Issuing Bank of each Letter of Credit shall, in
addition to the conditions precedent set forth in Section 7 hereof, be
subject to the conditions precedent that (i) such Letter of Credit shall be
in such
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form, contain such terms and support such transactions as shall be
satisfactory to the Issuing Bank consistent with its then current practices
and procedures with respect to letters of credit of the same type, (ii) the
Company shall have executed and delivered such applications, agreements and
other instruments relating to such Letter of Credit as the Issuing Bank shall
have reasonably requested consistent with its then current practices and
procedures with respect to letters of credit of the same type, PROVIDED that
in the event of any conflict between any such application, agreement or other
instrument and the provisions of this Agreement or any Security Document, the
provisions of this Agreement and the Security Documents shall control, and
(iii) no Event of Default shall have occurred and be continuing (and the
Issuing Bank shall not issue any Letter of Credit after it has received
notification from the Agent or any Lender that any Event of Default is
continuing); PROVIDED THAT the Agent, upon the request of the Majority
Lenders, may instruct the Issuing Bank to issue a Letter of Credit
notwithstanding the occurrence and continuation of an Event of Default.
(j) To the extent that any Lender shall fail to pay any amount required
to be paid pursuant to clause (e) or (f) of this Section 2.03 on the due date
therefor, such Lender shall pay interest to the Issuing Bank (through the
Agent) on such amount from and including such due date to but excluding the
date such payment is made (i) during the period from and including such due
date to but excluding the date three Business Days thereafter, at a rate per
annum equal to the Federal Funds Rate (as in effect from time to time) and
(ii) thereafter, at a rate per annum equal to the Base Rate (as in effect
from time to time) plus 2%.
(k) The issuance by the Issuing Bank of any modification or supplement
to any Letter of Credit hereunder shall be subject to the same conditions
applicable under this Section 2.03 to the issuance of new Letters of Credit,
and no such modification or supplement shall be issued hereunder unless
either (i) the respective Letter of Credit affected thereby would have
complied with such conditions had it originally been issued hereunder in such
modified or supplemented form or (ii) each Lender shall have consented
thereto.
The Company hereby indemnifies and holds harmless each Lender and the Agent
from and against any and all claims and damages, losses, liabilities, costs
or expenses that such Lender or the Agent may incur (or that may be claimed
against such Lender or the Agent by any Person whatsoever) by reason of or in
connection with the execution and delivery or transfer of or payment or
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refusal to pay by the Issuing Bank under any Letter of Credit; PROVIDED that
the Company shall not be required to indemnify any Lender or the Agent for
any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (x) the willful misconduct or negligence of
the Issuing Bank in determining whether a request presented under any Letter
of Credit complied with the terms of such Letter of Credit or (y) in the case
of the Issuing Bank, the Issuing Bank's failure to pay under any Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit. Nothing in this Section 2.03
is intended to limit the other obligations of the Company, any Lender or the
Agent under this Agreement.
2.04 CHANGES OF COMMITMENTS.
(a) The aggregate amount of the Revolving Credit Commitments shall
be automatically reduced to zero on the Revolving Credit Commitment
Termination Date.
(b) The Company shall have the right at any time or from time to
time (i) so long as no Revolving Credit Loans, Swingline Loans or Letter of
Credit Liabilities are outstanding, to terminate the Revolving Credit
Commitments and (ii) to reduce the aggregate unused amount of the Revolving
Credit Commitments (for which purpose use of the Revolving Credit Commitments
shall be deemed to include the aggregate amount of Letter of Credit
Liabilities and Swingline Loans); PROVIDED that (x) the Company shall give
notice of each such termination or reduction as provided in Section 4.05
hereof, (y) each partial reduction shall be in an aggregate amount at least
equal to $100,000 (or a larger multiple of $100,000) and, (z) the same shall
not result in a breach of any provision of the Senior Subordinated Debt
Documents.
(c) Any portion of the Term Loan Commitments not used on the
Original Closing Date shall be automatically terminated.
(d) The Commitments once terminated or reduced may not be
reinstated.
2.05 COMMITMENT FEE. The Company shall pay to the Agent for
account of each Lender a commitment fee on the daily average unused amount of
such Lender's Revolving Credit Commitment (for which purpose the aggregate
amount of any Letter of Credit Liabilities and any Swingline Loans shall be
deemed to be a pro rata (based on the Revolving Credit Commitments) use of
each Lender's Revolving Credit Commitment), for the period from and including
the Original Closing Date to but not including the earlier of the date such
Revolving Credit Commitment is terminated and the Revolving Credit Commitment
Termination Date,
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at a rate per annum equal to 1/2 of 1%. Accrued commitment fees shall be
payable in arrears on each Monthly Date and on the earlier of the date the
Revolving Credit Commitments are terminated and the Revolving Credit
Commitment Termination Date.
2.06 LENDING OFFICES. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.07 SEVERAL OBLIGATIONS: REMEDIES INDEPENDENT. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but neither any Lender nor the Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such other Lender,
and no Lender shall have any obligation to the Agent or any other Lender for
the failure by such Lender to make any Loan required to be made by such
Lender. Without prejudice to Section 10 hereof, the amounts payable by the
Company at any time hereunder and under the Notes to each Lender shall be a
separate and independent debt and each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and the Notes, and it
shall not be necessary for any other Lender or the Agent to consent to, or be
joined as an additional party in, any proceedings for such purposes.
2.08 NOTES.
(a) The Revolving Credit Loans made by each Lender shall be
evidenced by a single promissory note of the Company substantially in the
form of Exhibit A-1 hereto, dated the Original Closing Date, payable to such
Lender in a principal amount equal to the amount of its Revolving Credit
Commitment as originally in effect and otherwise duly completed.
(b) The Term Loans made by each Lender shall be evidenced by a
single promissory note of the Company substantially in the form of Exhibit
A-2 hereto, dated the Original Closing Date, payable to such Lender in a
principal amount equal to the amount of its Term Loan Commitment and
otherwise duly completed.
(c) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan of each Class made by each Lender to the
Company, and each payment made on account of the principal thereof, shall be
recorded by such Lender on its books and, prior to any transfer of the Note
evidencing the Loans of such Class held by it, endorsed by such Lender on the
schedule attached to such Note or any continuation thereof; PROVIDED that the
failure of such Lender to make any such recordation or endorsement shall not
affect the obligations
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of the Company to make a payment when due of any amount owing hereunder or
under such Note in respect of the Loans to be evidenced by such Note.
(d) No Lender shall be entitled to have its Notes subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Lender's
relevant Commitment, Loans and Notes pursuant to Section 12.06(b) hereof.
2.09 OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF
LOANS. Subject to Section 4.04 hereof, the Company shall have the right to
prepay Loans, or to Convert Loans of one Type into Loans of the other Type or
Continue Eurodollar Loans, at any time or from time to time, PROVIDED that:
(a) the Company shall give the Agent notice of each such prepayment,
Conversion or Continuation as provided in Section 4.05 hereof (and, upon the
date specified in any such notice of prepayment, the amount to be prepaid
shall become due and payable hereunder); (b) prepayments of the Term Loans
shall be applied to the installments of the Term Loans in the inverse order
of their maturities; and (c) Swingline Loans may only be Base Rate Loans.
Notwithstanding the foregoing, and without limiting the rights and remedies
of the Lenders under Section 10 hereof, in the event that any Event of
Default shall have occurred and be continuing, the Agent may (and at the
request of the Majority Lenders shall) suspend the right of the Company to
Convert any Loan into a Eurodollar Loan, or to Continue any Loan as a
Eurodollar Loan, in which event all Loans shall be Converted (on the last
day(s) of the respective Interest Periods therefor) or Continued, as the case
may be, as Base Rate Loans.
2.10 MANDATORY PREPAYMENTS AND REDUCTIONS OF COMMITMENTS.
(a) BORROWING BASE. Until the Revolving Credit Commitment
Termination Date, the Company shall from time to time prepay the Revolving
Credit Loans (and/or provide cover for Letter of Credit Liabilities as
specified in clause (g) below) in such amounts as shall be necessary so that
at all times the aggregate outstanding amount of the Revolving Credit Loans
together with the outstanding Letter of Credit Liabilities shall not exceed
the Borrowing Base, such amount to be applied, first, to Revolving Credit
Loans outstanding and, second, as cover for Letter of Credit Liabilities
outstanding.
(b) CASUALTY EVENTS. Upon the date 15 days following the receipt
by any Obligor of the proceeds of insurance (other than business interruption
or similar insurance unless (x) at the time of such receipt any amount owing
by any Obligor hereunder or under the Notes shall be due and unpaid and (y)
immediately prior
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to the Casualty Event giving rise to the receipt of such insurance proceeds,
the Obligors were not in compliance with their obligations under Section
9.10, 9.11, 9.12, 9.13, 9.14, 9.15, 9.16 or 9.17 hereof), condemnation award
or other compensation in respect of any Casualty Event affecting any Property
of any Obligor (or upon such earlier date as such Obligor shall have
determined not to repair or replace the Property affected by such Casualty
Event), the Company shall prepay the Loans (and/or provide cover for Letter
of Credit Liabilities as specified in clause (g) below), and the Revolving
Credit Commitments shall be subject to automatic reduction, in an aggregate
amount, if any, equal to 100% of the Net Available Proceeds of such Casualty
Event not theretofore applied to or designated for the repair or replacement
of such Property, such prepayment and reduction to be effected in each case
in the manner and to the extent specified in clause (f) of this Section 2.10.
Notwithstanding the foregoing, to the extent that Net Available Proceeds of
any Casualty Event have been designated for the repair or replacement of
Property affected by a Casualty Event and a purchase order or other
commitment in respect of purchase or repair of such Property has not been
entered into within 90 days of receipt of the proceeds of insurance, the
amount of Net Available Proceeds designated for such repair or replacement
shall be applied to prepay the Loans (and/or provide cover for Letter of
Credit Liabilities as specified in clause (g) below) and reduce the Revolving
Credit Commitments as specified in clause (f) of this Section 2.10. Nothing
in this clause (b) shall be deemed to limit any obligation of an Obligor
pursuant to any of the Security Documents to remit to a collateral or similar
account (including, without limitation, the Collateral Account) maintained by
the Agent pursuant to any of the Security Documents the proceeds of
insurance, condemnation award or other compensation received in respect of
any Casualty Event.
(c) EQUITY ISSUANCE. Upon any Equity Issuance, the Company shall
prepay the Loans (and/or provide cover for Letter of Credit Liabilities as
specified in clause (g) below), and the Revolving Credit Commitments shall be
subject to automatic reduction, in an aggregate amount equal to 100% of the
Net Available Proceeds thereof, such prepayment and reduction to be effected
in each case in the manner and to the extent specified in clause (f) of this
Section 2.10.
(d) EXCESS CASH FLOW. Not later than the date 90 days after the
end of each fiscal year of the Company, beginning with the fiscal year
commencing on January 1, 1995, the Company shall prepay the Loans (and/or
provide cover for Letter of Credit Liabilities as specified in clause (g)
below), and the Revolving Credit Commitments shall be subject to automatic
reduction, in an aggregate amount equal to the excess of (A) 70% of Excess
Cash Flow for such fiscal year over (B) the aggregate amount of
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prepayments of Term Loans made during such fiscal year pursuant to Section
2.09 hereof and, after the payment in full of the Term Loans, the aggregate
amount of voluntary reductions of Revolving Credit Commitments made during
such fiscal year pursuant to Section 2.09 hereof, such prepayment and
reduction to be effected in each case in the manner and to the extent
specified in clause (f) of this Section 2.10.
(e) SALE OF ASSETS. Without limiting the obligation of the
Company to obtain the consent of the Majority Lenders pursuant to Section
9.05 hereof to any Disposition not otherwise permitted hereunder, in the
event that the Net Available Proceeds of any Disposition (a "CURRENT
DISPOSITION"), and of all prior Dispositions on an annual basis as to which a
prepayment has not yet been made under this Section 2.10(e), shall exceed
$250,000 then, no later than five Business Days prior to the occurrence of
such Current Disposition, the Company will deliver to the Lenders a
statement, certified by the chief financial officer of the Company, in form
and detail satisfactory to the Agent, of the amount of the Net Available
Proceeds of the Current Disposition and of all such prior Dispositions and
will prepay the Loans (and/or provide cover for Letter of Credit Liabilities
as specified in clause (g) below), and the Revolving Credit Commitment shall
be subject to automatic reduction, in an aggregate amount equal to 100% of
the Net Available Proceeds of the Current Disposition and such prior
Dispositions, such prepayment and reduction to be effected in each case in
the manner and to the extent specified in clause (f) of this Section 2.10.
(f) APPLICATION. Prepayments and reductions of Commitments
described in the above clauses of this Section 2.10 (other than in clause (a)
above) shall be effected as follows:
(i) first, the amount of the prepayment specified in such clauses
shall be applied to the installments of the Term Loans then outstanding
in the inverse order of the maturity thereof; and
(ii) second, the Revolving Credit Commitments shall be
automatically reduced in an amount equal to any excess over the amount
referred to in the foregoing clause (i) (and to the extent that, after
giving effect to such reduction, the aggregate principal amount of
Revolving Credit Loans, together with the aggregate amount of all Letter
of Credit Liabilities, would exceed the Revolving Credit Commitments,
the Company shall, first, prepay Revolving Credit Loans and, second,
provide cover fox Letter of Credit Liabilities as specified in clause
(g) below, in an aggregate amount equal to such excess).
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(g) COVER FOR LETTER OF CREDIT LIABILITIES. In the event that the
Company shall be required pursuant to this Section 2.10 to provide cover for
Letter of Credit Liabilities, the Company shall effect the same by paying to
the Agent immediately available funds in an amount equal to the required
amount, which funds shall be retained by the Agent in the Collateral Account
(as provided therein as collateral security in the first instance for Letter
of Credit Liabilities) until such time as all Letters of Credit shall have
been terminated and all of the Letter of Credit Liabilities paid in full.
2.11 PREPAYMENT FEES. The Company agrees to pay the following
prepayment fees:
(a) A prepayment fee of $400,000 shall be due and payable by the
Company to the Agent, for account of the Lenders, upon repayment of all
principal and interest on the Loans and termination of the Commitments
hereunder pursuant to Section 2.09 or Section 2.10 hereof or otherwise
(exclusive, however, of repayment pursuant to paragraphs (a), (b) or (d)
of Section 2.10), if the same shall occur on or prior to February 20, 1997.
(b) A prepayment fee of $200,000 shall be due and payable by the
Company to the Agent, for account of the Lenders, upon repayment of all
principal and interest on the Loans and termination of the Commitments
hereunder pursuant to Section 2.09 or Section 2.10 hereof or otherwise
(exclusive, however, or repayment pursuant to paragraphs (a), (b) or (d) of
Section 2.10), if the same shall occur after February 20, 1997 and on or
prior to February 20, 1998.
Notwithstanding the foregoing, no such prepayment fee shall be
payable upon repayment of all principal and interest on the Loans and
termination of the Commitments hereunder pursuant to Section 2.10(c) hereof
in connection with a Qualified Public Offering.
Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.
3.01 REPAYMENT OF LOANS.
(a) The Company hereby promises to pay to the Agent for account of
each Lender the entire outstanding principal amount of such Lender's
Revolving Credit Loans, and each Revolving Credit Loan shall mature, on the
Revolving Credit Commitment Termination Date.
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(b) The Company hereby promises to pay to the Agent for account of
each Lender the principal of such Lender's Term Loans in 26 installments
payable on the Principal Payment Dates as follows:
PRINCIPAL PAYMENT DATE AMOUNT OF INSTALLMENT ($)
---------------------- -------------------------
September 30, 1995 $ 500,000
December 31, 1995 1,000,000
March 31, 1996
through (and including)
December 31, 1996 375,000
March 31, 1997
through (and including)
December 31, 1997 468,750
March 31, 1998
through (and including)
December 31, 1998 562,500
March 31, 1999
through (and including)
June 30, 2001 656,250
September 30, 2001 1,312,500
If the Company does not borrow the full amount of the aggregate Term Loan
Commitments on the Original Closing Date, the shortfall shall be applied to
reduce the foregoing installments ratably.
(c) The Company hereby promises to pay to the Cash Management
Agent the principal of each Swingline Loan, and each Swingline Loan shall
mature, on the Revolving Credit Commitment Termination Date.
3.02 INTEREST. The Company hereby promises to pay to the Agent
for account of each Lender interest on the unpaid principal amount of each
Loan made by such Lender for the period from and including the date of such
Loan to but excluding the date such Loan shall be paid in full, at the
following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the Base
Rate (as in effect from time to time) PLUS the Applicable Margin;
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the
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Eurodollar Rate for such Loan for such Interest Period plus the
Applicable Margin.
Notwithstanding the foregoing, during the continuance of any Event of
Default, the Company hereby promises to pay to the Agent for account of each
Lender interest at the applicable Post-Default Rate on any principal of any
Loan made by such Lender, on any Reimbursement Obligation held by such Lender
and on any other amount payable by the Company hereunder or under the Notes
held by such Lender to or for account of such Lender. Accrued interest on
each Loan shall be payable (i) in the case of a Base Rate Loan, monthly on
the Monthly Dates, (ii) in the case of a Eurodollar Loan, on the last day of
each Interest Period therefor and, if such Interest Period is longer than
three months, at three-month intervals following the first day of such
Interest Period, and (iii) in the case of any Loan, upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of the other Type
(but only on the principal amount so paid, prepaid or Converted), except that
interest payable at the Post-Default Rate shall be payable from time to time
on demand. Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall give notice thereof to the
Lenders to which such interest is payable and to the Company.
Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
4.01 PAYMENTS.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest, Reimbursement Obligations and other amounts to be
made by the Company under this Agreement and the Notes and the Fee Letter,
and, except to the extent otherwise provided therein, all payments to be made
by the Obligors under any other Basic Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to
the Cash Management Agent at an account maintained at Provident designated by
the Cash Management Agent, not later than 1:00 p.m. New York time on the date
on which such payment shall become due (each such payment made after such
time on such due date to be deemed to have been made on the next succeeding
Business Day).
(b) Any Lender for whose account any such payment is to be made
may (but shall not be obligated to) debit the amount of any such payment that
is not made by such time to any ordinary deposit account of the Company with
such Lender (with notice to the Company and the Agent). The Cash Management
Agent may (but shall not be obligated to) debit the amount of any payment to
be
- 45 -
made by the Company hereunder or under any other Basic Document to the Zero
Balance Account (with notice to the Company).
(c) The Company shall, at the time of making each payment under
this Agreement or any Note for account of any Lender, specify to the Agent
(which shall so notify the intended recipient(s) thereof) the Loans,
Reimbursement Obligations or other amounts payable by the Company hereunder
to which such payment is to be applied (and in the event that the Company
fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may distribute such payment to the Lenders for
application in such manner as it or the Majority Lenders, subject to Section
4.02 hereof, may determine to be appropriate). In no event shall an Event of
Default be designated to have occurred as a result of, nor shall the Company
be liable for any costs resulting from, the failure of the Agent to apply any
payment in the manner specified by the Company.
(d) Except to the extent otherwise provided in the last sentence
of Section 2.03(e) hereof, each payment received by the Agent or the Cash
Management Agent under this Agreement or any Note for account of any Lender
shall be paid by the Agent or the Cash Management Agent (as the case may be)
promptly to such Lender, in immediately available funds, for account of such
Lender's Applicable Lending Office for the Loan or other obligation in
respect of which such payment is made.
(e) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such date
shall be extended to the next succeeding Business Day, and interest shall be
payable for any principal so extended for the period of such extension.
4.02 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each borrowing of Loans of a particular Class from the Lenders
under Section 2.01 hereof shall be made from the Lenders, each payment of
commitment fee under Section 2.05 hereof in respect of the Revolving Credit
Commitments shall be made for account of the Lenders, and each termination or
reduction of the amount of the Revolving Credit Commitments under Section
2.04 hereof shall be applied to the respective Commitments of such Class of
the Lenders, pro rata according to the amounts of their respective
Commitments of such Class; (b) the making, Conversion and Continuation of
Revolving Credit Loans and Term Loans of a particular Type (other than
Conversions provided for by Section 5.04 hereof) shall be made pro rata among
the Lenders according to the amounts of their respective Revolving Credit and
Term Loan Commitments (in the case of making of Loans) or their respective
Revolving Credit and Term Loans (in the case of Conversions and Continuations
of Loans) and the then current Interest Period for each Loan of such
- 46 -
Type shall be coterminous; (c) each payment or prepayment of principal of
Revolving Credit Loans or Term Loans by the Company shall be made for account
of the Lenders pro rata in accordance with the respective unpaid principal
amounts of the Loans of such Class held by them; and (d) each payment of
interest on Revolving Credit Loans and Term Loans by the Company shall be
made for account of the Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective Lenders.
4.03 COMPUTATIONS. Except as otherwise provided herein, interest
on Loans, letter of credit fees and commitment fees shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable.
4.04 MINIMUM AMOUNTS. Except for mandatory prepayments made
pursuant to Section 2.10 hereof and Conversions or prepayments made pursuant
to Section 5.04 hereof, each borrowing, Conversion and partial prepayment of
principal of Loans shall be in an aggregate amount at least equal to $100,000
or a larger multiple of $50,000 (borrowings, Conversions or prepayments of or
into Loans of different Types or, in the case of Eurodollar Loans, having
different Interest Periods at the same time hereunder to be deemed separate
borrowings, Conversions and prepayments for purposes of the foregoing, one
for each Type or Interest Period).
4.05 CERTAIN NOTICES. Notices by the Company to the Agent of
terminations or reductions of the Revolving Credit Commitments, of
borrowings, Conversions, Continuations and optional prepayments of Loans and
of Classes of Loans, of Types of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if received by the
Agent not later than 12 noon New York time on the number of Business Days
prior to the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or prepayment or the first day of such Interest
Period specified below:
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NUMBER OF
BUSINESS
NOTICE DAYS PRIOR
------ ----------
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount of the
Revolving Credit Commitments to be terminated or reduced. Each such notice
of borrowing, Conversion, Continuation or optional prepayment shall specify
the Class of Loans to be borrowed, Converted, Continued or prepaid and the
amount (subject to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each
such notice of the duration of an Interest Period shall specify the Loans to
which such Interest Period is to relate. The Agent shall promptly notify the
Lenders of the contents of each such notice. In the event that the Company
fails to select the Type of Loan, or the duration of any Interest Period for
any Eurodollar Loan, within the time period and otherwise as provided in this
Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Base Rate Loan)
will remain as, or (if not then outstanding) will be made as, a Base Rate
Loan.
4.06 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified by a Lender or the Company (the "PAYOR") prior to the date
on which the Payor is to make payment to the Agent of (in the case of a
Lender) the proceeds of a Loan to be made by such Lender hereunder or (in the
case of the Company) a payment to the Agent for account of one or more of the
Lenders hereunder (such payment being herein called the "REQUIRED PAYMENT"),
which notice shall be effective upon receipt, that the Payor does not intend
to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made
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the Required Payment to the Agent, the recipient(s) of such payment shall, on
demand, repay to the Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the
date (the "ADVANCE DATE") such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to
the Federal Funds Rate for such day and, if such recipient(s) shall fail
promptly to make such payment, the Agent shall be entitled to recover such
amount, on demand, from the Payor, together with interest as aforesaid,
PROVIDED that if neither the recipient(s) nor the Payor shall return the
Required Payment to the Agent within three Business Days of the Advance Date,
then, retroactively to the Advance Date, the Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be made
by the Company to the Lenders, the Company and the recipient(s) shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the Post-Default Rate (and, in case
the recipient(s) shall return the Required Payment to the Agent, without
limiting the obligation of the Company under Section 3.02 hereof to pay
interest to such recipient(s) at the Post-Default Rate in respect of the
Required Payment) and
(ii) if the Required Payment shall represent proceeds of a Loan to
be made by the Lenders to the Company, the Payor and the Company shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the rate of interest provided for
such Required Payment pursuant to Section 3.02 hereof (and, in case the
Company shall return the Required Payment to the Agent, without limiting
any claim the Company may have against the Payor in respect of the
Required Payment).
4.07 SHARING OF PAYMENTS. ETC.
(a) Each Obligor agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender
may otherwise have, each Lender shall be entitled, at its option, to offset
balances held by it for account of such Obligor at any of its offices, in
Dollars or in any other currency, against any principal of or interest on any
of such Lender's Loans, Reimbursement Obligations or any other amount payable
to such Lender hereunder, that is not paid when due (regardless of whether
such balances are then due to such Obligor), in which case it shall promptly
notify such Obligor and the Agent thereof, PROVIDED that such Lender's
failure to give such notice shall not affect the validity thereof.
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(b) If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Loan or Letter of Credit Liability owing to
it or payment of any other amount under this Agreement or any other Basic
Document through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (other than from the Agent as
provided herein), and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans or
Letter of Credit Liabilities or such other amounts then due hereunder or
thereunder by such Obligor to such Lender than the percentage received by any
other Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans or Letter of Credit Liabilities or such other
amounts, respectively, owing to such other Lenders (or in interest due
thereon, as the case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the Lenders
shall share the benefit of such excess payment (net of any expenses that may
be incurred by such Lender in obtaining or preserving such excess payment)
pro rata in accordance with the unpaid principal of and/or interest on the
Loans or Letter of Credit Liabilities or such other amounts, respectively,
owing to each of the Lenders. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or
other amounts (as the case may be) owing to such Lender in the amount of such
participation.
(d) Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.07 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on such
secured claim.
- 50 -
Section 5. YIELD PROTECTION. ETC.
5.01 ADDITIONAL COSTS.
(a) The Company shall pay directly to each Lender from time to time
such amounts as such Lender may determine to be necessary to compensate such
Lender for any costs that such Lender determines are attributable to its
making or maintaining of any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in
respect of such Loans or its Notes or changes the basis of taxation of
any amounts payable to such Lender under this Agreement or its Notes in
respect of any of such Loans (excluding changes in the rate of tax on
the overall net income of such Lender or of such Applicable Lending
Office by the jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than, in the case of any Lender for any
period as to which the Company is required to pay any amount under
paragraph (e) below, the reserves against "Eurocurrency Liabilities"
under Regulation D therein referred to) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of,
such Lender (including, without limitation, any of such Loans or any
deposits referred to in the definition of "Eurodollar Rate" in Section
1.01 hereof), or any commitment of such Lender (including, without
limitation, the Commitments of such Lender hereunder); or
(iii) imposes any other condition affecting this Agreement or
its Notes (or any of such extensions of credit or liabilities) or its
Commitments.
If any Lender requests compensation from the Company under this Section
5.01(a), the Company may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender thereafter to make or Continue
Loans of the Type with respect to which such compensation is requested, or to
Convert Loans of any other Type into Loans of such Type, until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable),
- 51 -
PROVIDED that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(b) Without limiting the effect of the provisions of paragraph (a) of
this Section 5.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Lender that
includes Eurodollar Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may hold, then, if
such Lender so elects by notice to the Company (with a copy to the Agent),
the obligation of such Lender to make or Continue, or to Convert Loans of any
other Type into, Loans of such Type hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 5.04 hereof shall be applicable).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company or foreign bank of which such Lender is a
subsidiary) for any costs that it determines are attributable to the
maintenance by such Lender (or any Applicable Lending Office or such bank
holding company or foreign bank), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority (i) following any Regulatory
Change or (ii) implementing any risk-based capital guideline or other
requirement (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) heretofore or hereafter issued
by any government or governmental or supervisory authority implementing at
the national level the Basle Accord (including, without limitation, the
Risk-Based Capital Guidelines of the Board of Governors of the Federal
Reserve System (12 C.F.R. Part 208, Appendix A; 00 X.X.X. Xxxx 000, Xxxxxxxx
X) and the Risk-Based Capital Guidelines of the Office of the Comptroller of
the Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect of its
Commitments or Loans (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of
such Lender (or any Applicable Lending Office or such bank holding company or
foreign bank) to a level below that which such Lender (or any Applicable
Lending Office or such bank holding company or foreign bank) could have
achieved but for such law,
- 52 -
regulation, interpretation, directive or request). For purposes of this
Section 5.01(c) and Section 5.06 hereof, "BASLE ACCORD" shall mean the
risk-based capital framework described by the Base Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to time or any
replacement thereof.
(d) Each Lender shall notify the Company of any event occurring after
the date of this Agreement entitling such Lender to compensation under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in
any event within 45 days, after such Lender obtains actual knowledge thereof;
PROVIDED that (i) if any Lender fails to give such notice within 45 days
after it obtains actual knowledge of such an event, such Lender shall, with
respect to compensation payable pursuant to this Section 5.01 in respect of
any costs resulting from such event, only be entitled to payment under this
Section 5.01 for costs incurred from and after the date 45 days prior to the
date that such Lender does give such notice and (ii) each Lender will
designate a different Applicable Lending Office for the Loans of such Lender
affected by such event if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender, except that such Lender shall have
no obligation to designate an Applicable Lending Office located in the United
States of America. Each Lender will furnish to the Company a certificate
setting forth the basis and amount of each request by such Lender for
compensation under paragraph (a) or (c) of this Section 5.01. Determinations
and allocations by any Lender for purposes of this Section 5.01 of the effect
of any Regulatory Change pursuant to paragraph (a) or (b) of this Section
5.01, or of the effect of capital maintained pursuant to paragraph (c) of
this Section 5.01, on its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in respect of Loans,
and of the amounts required to compensate such Lender under this Section
5.01, shall be conclusive, PROVIDED that such determinations and allocations
are made on a reasonable basis.
(e) Without limiting the effect of the foregoing, the Company shall pay
to each Lender on the last day of each Interest Period so long as such Lender
is maintaining reserves against "Eurocurrency liabilities" under Regulation D
(or, unless the provisions of paragraph (b) above are applicable, so long as
such Lender is, by reason of any Regulatory Change, maintaining reserves
against any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or against any category of extensions of credit or
other assets of such Lender
- 53 -
which includes any Eurodollar Loans) an additional amount (determined by such
Lender and notified to the Company through the Agent) equal to the product of
the following for each Eurodollar Loan for each day during such Interest
Period:
(i) the principal amount of such Eurodollar Loan outstanding
on such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest accrues on
such Eurodollar Loan for such Interest Period as provided in this
Agreement (less the Applicable Margin) and the denominator of which is
one MINUS the effective rate (expressed as a decimal) at which such
reserve requirements are imposed on such Lender on such day MINUS (y)
such numerator; and
(iii) 1/360.
5.02 LIMITATION ON TYPES OF LOANS. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Rate
for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that the quotations of interest rates referred to in the
definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for Eurodollar Loans as
provided herein; or
(b) if the Majority Lenders determine which determination
shall be conclusive, and notify the Agent that the relevant rates of
interest referred to in the definition of "Eurodollar Rate" in Section
1.01 hereof upon the basis of which the rate of interest for Eurodollar
Loans for such Interest Period is to be determined are not likely
adequately to cover the cost to such Lenders of making or maintaining
such Type of Loans for such Interest Period;
then the Agent shall give the Company and each Lender prompt notice thereof
and, so long as such condition remains in effect, the Lenders shall be under
no obligation to make additional Loans of such Type, to Continue Loans of
such Type or to Convert Loans of any other Type into Loans of such Type, and
the Company shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Loans of such Type, either prepay such Loans or Convert
such Loans into another Type of Loan in accordance with Section 2.09 hereof.
5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any
- 54 -
Lender or its Applicable Lending Office to honor its obligation to make or
maintain Eurodollar Loans hereunder, then such Lender shall promptly notify
the Company thereof (with a copy to the Agent) and such Lender's obligation
to make or Continue, or to Convert Loans of any other Type into, Eurodollar
Loans shall be suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of Section 5.04
hereof shall be applicable).
5.04 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to
make Eurodollar Loans or to Continue, or to Convert Loans of any other Type
into, Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03
hereof (Loans of such Type being herein called "AFFECTED LOANS"), such
Lender's Affected Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for Affected Loans
(or, in the case of a Conversion required by Section 5.01(b) or 5.03 hereof,
on such earlier date as such Lender may specify to the Company with a copy to
the Agent) and, unless and until such Lender gives notice as provided below
that the circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made or Continued instead as
Base Rate Loans, and all Loans of such Lender that would otherwise be
Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted,
on the first day(s) of the next succeeding Interest Period(s) for such
outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.
5.05 COMPENSATION. The Company shall pay to the Agent for account of
each Lender, upon the request of such Lender
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through the Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense that such Lender determines is attributable to:
(a) any payment, mandatory or optional prepayment or Conversion
of a Eurodollar Loan made by such Lender for any reason (including,
without limitation, the acceleration of the Loans pursuant to Section 10
hereof) on a date other than the last day of the Interest Period for
such Loan; or
(b) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 hereof to be satisfied) to borrow a Eurodollar
Loan from such Lender on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so paid,
prepaid, Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan that would have commenced on the
date specified for such borrowing) at the applicable rate of interest for
such Loan provided for herein over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
5.06 ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT. Without limiting
the obligations of the Company under Section 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based
capital guideline or other requirement heretofore or hereafter issued by any
government or governmental or supervisory authority implementing at the
national level the Basle Accord there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit, capital adequacy or similar
requirement against or with respect to or measured by reference to Letters of
Credit issued or to be issued hereunder and the result shall be to increase
the cost to any Lender or Lenders of issuing (or purchasing participations
in) or maintaining its obligation hereunder to issue (or purchase
participations in) any Letter of Credit hereunder or reduce any amount
receivable by any Lender hereunder in respect of any
- 56 -
Letter of Credit (which increases in cost, or reductions in amount
receivable, shall be the result of such Lender's or Lenders' reasonable
allocation of the aggregate of such increases or reductions resulting from
such event), then, upon demand by such Lender or Lenders (through the Agent),
the Company shall pay immediately to the Agent for account of such Lender or
Lenders, from time to time as specified by such Lender or Lenders (through
the Agent), such additional amounts as shall be sufficient to compensate such
Lender or Lenders (through the Agent) for such increased costs or reductions
in amount. A statement as to such increased costs or reductions in amount
incurred by any such Lender or Lenders, submitted by such Lender or Lenders
to the Company shall be conclusive in the absence of manifest error as to the
amount thereof.
5.07 TAXES.
(a) All payments on account of the principal of and interest on
the Loans, the Letters of Credit, Reimbursement Obligations, fees and other
amounts payable hereunder by the Obligors to or for the account of the Agent
or any Lender, including, without limitation, amounts payable under Section
5.07(b) hereof, shall be made free and clear of and without reduction or
liability for Foreign Taxes and Covered Taxes. Each Obligor will pay all
Foreign Taxes and Covered Taxes for their own respective accounts, prior to
the date on which penalties attach thereto, except for any Foreign Taxes
(other than Foreign Taxes imposed on or in respect of any amount payable
hereunder, under the Notes or under any other Basic Document) the payment of
which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained, so long as no claim for such
Foreign Taxes is made on the Agent or any Lender.
(b) Each Obligor shall indemnify the Agent and each Lender
against, and reimburse the Agent and each Lender on demand for, any Foreign
Taxes and any Covered Taxes and any loss, liability, claim or expense,
including interest, penalties and legal fees, which the Agent or such Lender
(as the case may be) may incur at any time arising out of or in connection
with any failure of such Obligor to make any payment of Foreign Taxes or
Covered Taxes when due.
(c) In the event that any Obligor is required by applicable law,
decree or regulation to deduct or withhold Foreign Taxes or Covered Taxes
from any amounts payable on, under or in respect of this Agreement or the
Loans, Letters of Credit or Reimbursement Obligations, such Obligor shall
promptly pay the Person entitled to such amount such additional amounts as
may be required, after the deduction or withholding of Foreign Taxes or
Covered Taxes, to enable such Person to received from such
- 57 -
Obligor, on the due date thereof, an amount equal to the full amount stated
to be payable to such Person under this Agreement.
(d) Each Obligor shall furnish to the Agent, upon the request of
any Lender (through the Agent), together with certified copies for
distribution to each Lender requesting the same (identifying the Lenders
which have so requested), original official tax receipts in respect of each
payment of Foreign Taxes and Covered Taxes required under this Section 5.07,
within 30 days after the date such payment is made, and each Obligor shall
promptly furnish to the Agent at its request or at the request of any Lender
(through the Agent) any other information, documents and receipts that the
Agent or such Lender may reasonably require to establish to its satisfaction
that full and timely payment has been made of all Foreign Taxes and Covered
Taxes required to be paid under this Section 5.07.
Section 6. GUARANTEE.
6.01 THE GUARANTEE. Subject to the limitation set forth in Section 6.10
hereof, the Subsidiary Guarantors hereby jointly and severally guarantee to
each Lender and the Agent and their respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Loans made by the
Lenders to, and the Notes held by each Lender of, the Company and all other
amounts from time to time owing to the Lenders or the Agent by the Company
under this Agreement and under the Notes and by any Obligor under any of the
other Basic Documents, in each case strictly in accordance with the terms
thereof (such obligations being herein collectively called the "GUARANTEED
OBLIGATIONS"). The Subsidiary Guarantors hereby further jointly and
severally agree that if the Company shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended
maturity, by acceleration or otherwise) in accordance with the terms of such
extension or renewal.
6.02 OBLIGATIONS UNCONDITIONAL. Subject to the limitation set forth in
Section 6.10 hereof, the obligations of the Subsidiary Guarantors under
Section 6.01 hereof are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of or security
for any of the Guaranteed Obligations, and, to the
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fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 6.02 that the obligations of the Subsidiary Guarantors hereunder
shall be absolute and unconditional, joint and several, under any and all
circumstances. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following shall not
alter or impair the liability of the Subsidiary Guarantors hereunder which
shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor
of, the Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement
that the Agent or any Lender exhaust any right, power or remedy or proceed
against the Company under this Agreement or the Notes or any other agreement
or instrument referred to herein or therein, or against any other Person
under any other guarantee of, or security for, any of the Guaranteed
Obligations.
6.03 REINSTATEMENT. The obligations of the Subsidiary Guarantors under
this Section 6 shall be automatically reinstated if and to the extent that
for any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of
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the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Subsidiary Guarantors
jointly and severally agree that they will indemnify the Agent and each
Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Agent or such Lender in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
6.04 SUBROGATION. Each Subsidiary Guarantor hereby waives all
rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising
under the Bankruptcy Code) or otherwise by-reason of any payment by it
pursuant to the provisions of this Section 6 and each Subsidiary
Guarantor further agrees with the Company for the benefit of each of its
creditors (including, without limitation, each Lender and the Agent)
that any such payment by it shall constitute a contribution of capital
by such Subsidiary Guarantor to the Company (or an investment in the
equity capital of the Company by such Subsidiary Guarantor).
6.05 REMEDIES. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Company under this Agreement and the Notes may be
declared to be forthwith due and payable as provided in Section 10
hereof (and shall be deemed to have become automatically due and payable
in the circumstances provided in said Section 10) for purposes of
Section 6.01 hereof notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or
not due and payable by the Company) shall forthwith become due and
payable by the Subsidiary Guarantors for purposes of said Section 6.01.
6.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Section 6
constitutes an instrument for the payment of money, and consents and
agrees that any Lender or the Agent, at its sole option, in the event of
a dispute by such Subsidiary Guarantor in the payment of any moneys due
hereunder, shall have the right to bring motion-action under New York
CPLR Section 3213.
6.07 CONTINUING GUARANTEE. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
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6.08 RIGHTS OF CONTRIBUTION. The Subsidiary Guarantors hereby agree, as
between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such
Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to
the next sentence), pay to such Excess Funding Guarantor an amount equal to
such Subsidiary Guarantor's Pro Rata Share (as defined below and determined,
for this purpose, without reference to the Properties, debts and liabilities
of such Excess Funding Guarantor) of the Excess Payment (as defined below) in
respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 6.08
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other
provisions of this Section 6 and such Excess Funding Guarantor shall not
exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations.
For purposes of this Section 6.08, (i) "EXCESS FUNDING GUARANTOR" shall
mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that
has paid an amount in excess of its Pro Rata Share of such Guaranteed
Obligations, (ii) "EXCESS PAYMENT" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its
Pro Rata Share of such Guaranteed Obligations and (iii) "PRO RATA SHARE"
shall mean, for any Subsidiary Guarantor, the ratio (expressed as a
percentage) of (x) the amount by which the aggregate present fair saleable
value of all Properties of such Subsidiary Guarantor (excluding any shares of
stock of any other Subsidiary Guarantor) exceeds the amount of all the debts
and liabilities of such Subsidiary Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Subsidiary Guarantor hereunder and any obligations of any
other Subsidiary Guarantor that have been Guaranteed by such Subsidiary
Guarantor) to (y) the amount by which the aggregate fair saleable value of
all Properties of the Company and all of the Subsidiary Guarantors exceeds
the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Company and the Subsidiary Guarantors hereunder) of the
Company and all of the Subsidiary Guarantors, all as of the Original Closing
Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder subsequent
to the Original Closing Date, then for purposes of this Section 6.08 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Original Closing Date and the aggregate present fair
saleable value of the Properties, and the amount of the debts and
liabilities, of such Subsidiary Guarantor as of the Original Closing Date
shall be deemed to be equal to
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such value and amount on the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
6.09 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.08 hereof, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability under said Section 6.01, then,
notwithstanding any other provision hereof to the contrary, the amount of
such liability shall, without any further action by such Subsidiary
Guarantor, any Lender, the Agent or any other Person, be automatically
limited and reduced to the highest amount that is valid and enforceable and
not subordinated to the claims of other creditors as determined in such
action or proceeding.
6.10 LIMITATION ON XXXXXX'X LIABILITY. It is understood and agreed
that the sole recourse of the Agent and the Lenders in respect of the
obligations of Tri-Star Technologies under this Section 6 shall be to the
assets of Tri-Star Technologies and that nothing contained herein shall
create any obligation of or right to look to Xxxxxxxxx Xxxxxx or his assets
individually for the satisfaction of such obligations.
6.11 LIMITATION ON GUTERMANN'S LIABILITY. It is understood and agreed
that the sole recourse of the Agent and the Lenders in respect of the
obligations of Unidec under this Section 6 shall be to the assets of Unidec
and that nothing contained herein shall create any obligation of or right to
look to Xxxxxx Xxxxxxxxx or her assets individually for the satisfaction of
such obligations.
Section 7. CONDITIONS PRECEDENT.
7.01 EFFECTIVENESS OF AMENDMENT AND RESTATEMENT. The effectiveness of
the amendment and restatement of the Original Credit Agreement provided for
by this Agreement is subject to the conditions precedent that the Agent shall
have received the following documents, each of which shall be satisfactory to
the Agent (and to the extent specified below, to each Lender) in form and
substance:
(a) CORPORATE DOCUMENTS. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate
authority for each Obligor (including, without limitation, board of
director resolutions and evidence of the incumbency of officers) with
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respect to the execution, delivery and performance of such of the Basic
Documents to which such Obligor is intended to be a party and each other
document to be delivered by such Obligor from time to time in connection
herewith and the extensions of credit hereunder (and the Agent and each
Lender may conclusively rely on such certificate until it receives notice
in writing from such Obligor to the contrary).
(b) OFFICER'S CERTIFICATE. A certificate of a senior officer of the
Company, dated the Closing Date, to the effect set forth in the first
sentence of Section 7.02 hereof.
(c) BORROWING BASE CERTIFICATE. A Borrowing Base Certificate as of
June 30, 1996.
(d) OPINION OF COUNSEL TO THE OBLIGORS. An opinion, dated the
Closing Date, of Spolin & Xxxxxxxxx, counsel to the Obligors,
substantially in the form of Exhibit E hereto and covering such other
matters as the Agent or any Lender may reasonably request (and each
Obligor hereby instructs such counsel to deliver such opinion to the
Lenders and the Agent).
(e) OPINION OF SWISS COUNSEL TO THE OBLIGORS. An opinion, dated the
Closing Date, of Bolla Bonzanigo & Associates, special Swiss counsel to
the Obligors, substantially in the form of Exhibit F hereto and covering
such other matters as the Agent or any Lender may reasonably request
(and each Obligor hereby instructs such counsel to deliver such opinion
to the Lenders and the Agent).
(f) OPINION OF U.K. COUNSEL TO THE OBLIGORS. An opinion,
dated the Closing Date, of Trethowans Solicitors, special U.K. counsel
to the Obligors, substantially in the form of Exhibit G hereto and
covering such matters as the Agent or any Lender may reasonably request
(and each Obligor hereby instructs such counsel to deliver such opinion
to the Lenders and the Agent).
(g) NOTES. The Notes, duly completed and executed.
(h) AMENDED SECURITY AGREEMENT. The Security Agreement
Amendment, duly executed by the Obligors and the Agent, together with
appropriate Uniform Commercial Code Financing Statements with respect to
the ADS Subsidiary.
(i) INSURANCE. In addition, the Company shall have delivered
a certificate of the chief financial officer of the Company (a) setting
forth the insurance obtained by it
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in accordance with the requirements of Section 9.04 and stating that
such insurance is in full force and effect and (b) stating that such
insurance, insofar as it relates to the ADS Subsidiary, provides
coverage at least as extensive as that described in the "Risk Management
Audit for Aerospace Display Systems," dated July 29, 1996, prepared by
The Xxxxx X. Xxxxxx Company.
(j) ENVIRONMENTAL SURVEY AND QUESTIONNAIRE. An environmental survey
and assessment prepared by a firm of licensed engineers (familiar with
the identification of toxic and hazardous substances) in form and
substance satisfactory to the Agent, such environmental survey and
assessment to be based upon physical on-site inspections by such firm of
each of the existing sites and facilities of ADS, as well as an
historical review of the uses of such sites and facilities and of the
business and operations of ADS (including any former sub-divisions of
ADS that have been disposed of prior to the date of such survey and
assessment and with respect to which ADS may have retained liability for
Environmental Claims).
(k) FINANCIAL PROJECTIONS. Projections satisfactory to the Lenders
from the chief financial officer of the Company (in form satisfactory to
the Agent) reflecting, on a consolidated and consolidating basis, the
forecasted financial condition, income and expenses of the Obligors, for
the fiscal year ending on December 31, 1996, through and including the
fiscal year ending on December 31, 2000 (which projections shall be
detailed on a monthly basis through the fiscal year ending on December
31, 1996 and thereafter on an annual basis), after giving effect to the
transactions contemplated hereby and the transactions contemplated under
the Senior Subordinated Debt Obligations.
(l) ADVERSE LITIGATION OR PROCEEDING. Certificates of each
Obligor, signed on behalf of each Obligor by a senior officer thereof,
to the effect that (and each Lender shall be satisfied in its good faith
judgment that) no litigation or proceeding shall exist (or, to such
officer's knowledge be threatened) (i) with respect to the transactions
contemplated hereby or the transactions contemplated under the ADS
Purchase Agreement or (ii) with respect to such Obligor that could have
a Material Adverse Effect.
(m) ADS PURCHASE. A certified copy of the ADS Purchase
Agreement (which shall be in form and substance satisfactory to the
Lenders), as executed by the parties thereto, and evidence that all of
the conditions to the ADS Purchase Agreement (any such conditions
requiring the satisfaction of any person or entity other than the Agent
or
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the Lenders to be deemed for this purpose to require the satisfaction of
the Agent) have been met or waived with the concurrence of the Lenders.
(n) LICENSES, PERMITS AND GOVERNMENTAL APPROVALS. Evidence that all
necessary licenses, permits and governmental and third-party approvals in
connection with the ADS Purchase have been obtained and remain in full
force and effect.
(o) DEBT AND EQUITY ISSUANCE AND PROCEEDS. Each of the following:
(i) Evidence that the Company shall have received at least
$3,000,000 in gross cash proceeds from the issuance of its Series E
Preferred Stock;
(ii) Certified copies of the Series E Preferred Stock
Documentation (which shall be in form and substance satisfactory to the
Lenders);
(iii) Evidence that the Company shall have received at least
$3,000,000 in gross cash proceeds from the issuance of its Convertible
Subordinated Notes;
(iv) Certified copies of the Convertible Subordinated Note
Documentation (which shall be in form and substance satisfactory to the
Lenders).
(p) XXXXXX NON-COMPETE. Certified copies of the Xxxxxx Non-Compete
Documentation (which shall be in form and substance satisfactory to the
Lenders).
(q) BORROWING NOTICE. A notice of borrowing from the Company for an
amount of $6,000,000 to be used by the Company in connection with the ADS
Purchase.
(r) OTHER DOCUMENTS. Such other documents as the Agent or any Lender
or special New York counsel to ING may reasonably request.
The effectiveness of this Agreement is also subject to the payment or delivery
by the Company of such fees and other consideration as the Company shall have
agreed to pay or deliver to any Lender or an affiliate thereof or the Agent in
connection herewith, including, without limitation, the reasonable fees and
expenses of Xxxxx, Xxxxx & Xxxxx, special New York counsel to ING in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the Notes and the other Basic Documents and the extensions of credit hereunder
(to the extent
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that statements for such fees and expenses have been delivered to the Company).
7.02 INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT. The obligation of
any Lender to make any Loan (including such Lender's initial Loan) or otherwise
extend any credit to the Company upon the occasion of each borrowing or other
extension of credit hereunder is subject to the further conditions precedent
that, both immediately prior to the making of such Loan or other extension of
credit and also after giving effect thereto and to the intended use thereof:
(a) no Default shall have occurred and be continuing; (b) the representations
and warranties made by the Company in Section 8 hereof, and by each Obligor in
each of the other Basic Documents to which it is a party, shall be true and
complete on and as of the date of the making of such Loan or other extension of
credit with the same force and effect as if made on and as of such date (or, if
any such representation or warranty is expressly stated to have been made as of
a specific date, as of such specific date); (c) the aggregate principal amount
of the Revolving Credit Loans together with the aggregate amount of all Letter
of Credit Liabilities shall not exceed the Borrowing Base reflected on the most
recent Borrowing Base Certificate delivered pursuant to Section 9.01(c) hereof;
and (d) no event has occurred that could have a Material Adverse Effect and no
event has occurred and is continuing that could be reasonably expected to have
a material adverse effect on the markets or industries in which the Obligors
operate. Each notice of borrowing or request for the issuance of a Letter of
Credit by the Company hereunder shall constitute a certification by the Company
to the effect set forth in the preceding sentence (both as of the date of such
notice or request and, unless the Company otherwise notifies the Agent prior to
the date of such borrowing or issuance, as of the date of such borrowing or
issuance).
Section 8. REPRESENTATIONS AND WARRANTIES. Each Obligor
represents and warrants to the Agent and the Lenders that:
8.01 CORPORATE EXISTENCE. Each Obligor: (a) is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets
and carry on its business as now being or as proposed to be conducted; and
(c) is qualified to do business and is in good standing in all jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify could (either individually or in
the aggregate) have a Material Adverse Effect.
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8.02 FINANCIAL CONDITION. The Company has heretofore furnished
to each of the Lenders consolidated and consolidating balance sheets of the
Company and its Subsidiaries as at December 31, 1993 and the related
consolidated and consolidating statements of income, retained earnings and
cash flow of the Company and its Subsidiaries for the fiscal year ended on
said date, with the opinion thereon (in the case of said consolidated balance
sheet and statements) of Price Waterhouse L.L.P., and the unaudited
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at August 31, 1994 and the related consolidated and
consolidating statements of income, retained earnings and cash flow of the
Company and its Subsidiaries for the eight-month period ended on such date.
All such financial statements are complete and correct and fairly present the
consolidated financial condition of the Company and its Subsidiaries, and (in
the case of said consolidating financial statements) the respective
unconsolidated financial condition of the Company and its Subsidiaries, as at
said dates and the consolidated and unconsolidated results of their
operations for the fiscal year and eight-month period ended on said dates
(subject, in the case of such financial statements as at August 31, 1993, to
normal year-end audit adjustments), all in accordance with generally accepted
accounting principles and practices applied on a consistent basis. Neither
the Company nor any of its Subsidiaries has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
balance sheets as at said dates. Since December 31, 1993, there has been no
material adverse change in the consolidated financial condition, operations,
business or prospects taken as a whole of the Company and its Subsidiaries
from that set forth in said financial statements as at said date.
8.03 LITIGATION. Schedule I hereto sets forth a complete and
correct list, as of the date of this Agreement, of all legal, arbitral,
government and regulatory proceedings, as well as pending (to the knowledge
of the Company) or threatened (to the knowledge of the Company) proceedings
against each of the Obligors. There are no legal or arbitral proceedings, or
any proceedings by or before any governmental or regulatory authority or
agency, pending or (to the knowledge of the Company) threatened against any
of the Obligors that, if adversely determined could (either individually or
in the aggregate) have a Material Adverse Effect.
8.04 NO BREACH. None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents, the consummation of
the transactions herein and therein contemplated or compliance with the terms
and provisions hereof and thereof will conflict with or result in a breach
of, or require any
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consent under, the charter or by-laws of any Obligor, or any applicable law
or regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which any
Obligor is a party or by which any of them or any of their Property is bound
or to which any of them is subject, or constitute a default under any such
agreement or instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of any Lien upon any
Property of the Obligors pursuant to the terms of any such agreement or
instrument.
8.05 ACTION. Each Obligor has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations
under each of the Basic Documents to which it is a party; the execution,
delivery and performance by each Obligor of each of the Basic Documents to
which it is a party have been duly authorized by all necessary corporate
action on its part (including, without limitation, any required shareholder
approvals); and this Agreement has been duly and validly executed and
delivered by each Obligor and constitutes, and each of the Notes and the
other Basic Documents to which it is a party when executed and delivered by
such Obligor (in the case of the Notes, for value) will constitute, its
legal, valid and binding obligation, enforceable against each Obligor in
accordance with its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights and (b)
the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
8.06 APPROVALS. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery
or performance by any Obligor of the Basic Documents to which it is a party
or for the legality, validity or enforceability hereof or thereof, except for
filings and recordings in respect of the Liens created pursuant to the
Security Documents.
8.07 USE OF CREDIT. No Obligor is engaged principally, or as one
of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying
Margin Stock, and no part of the proceeds of any extension of credit
hereunder will be used to buy or carry any Margin Stock.
8.08 ERISA. Each Plan, and, to the knowledge of the Company,
each Multiemployer Plan, is in compliance in all material respects with, and
has been administered in all material respects in compliance with, the
applicable provisions of ERISA,
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the Code and any other Federal or State law, and no event or condition has
occurred and is continuing as to which the Company would be under an
obligation to furnish a report to the Lenders under Section 9.01(g) hereof.
8.09 TAXES. Except for Tri-Star Technologies, Unidec and
Xxxxxxxxxxx International Limited, the Obligors are members of an affiliated
group of corporations filing consolidated returns for Federal income tax
purposes, of which the Company is the "common parent" (within the meaning of
Section 1504 of the Code) of such group. There is a tax sharing agreement
currently in effect (a true and correct copy of which has heretofore been
furnished to the Agent) providing for the manner in which tax payments owing
by the members of such affiliated group (whether in respect of Federal or
state income or other taxes) are allocated among the members of the group.
The Obligors have filed (either directly, or indirectly through the Company)
all Federal income tax returns and all other material tax returns that are
required to be filed by them and have paid (either directly, or indirectly
through the Company) all taxes due pursuant to such returns or pursuant to
any assessment received by the Company or any other Obligor. The charges,
accruals and reserves on the books of the Obligors in respect of taxes and
other governmental charges are, in the opinion of the Obligors, adequate.
The Company has not given or been requested to give a waiver of the statute
of limitations relating to the payment of Federal, state, local and foreign
taxes or other impositions.
8.10 INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
8.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
8.12 MATERIAL AGREEMENTS AND LIENS.
(a) Part A of Schedule II hereto is a complete and correct list,
as of the date of this Agreement, of each material credit agreement, loan
agreement, indenture, purchase agreement, guarantee, letter of credit or
other arrangement providing for or otherwise relating to any Indebtedness or
any extension of credit (or commitment for any extension of credit) to, or
guarantee by, any Obligor, and the aggregate principal or face amount
outstanding or that may become outstanding under each such arrangement is
correctly described in Part A of said Schedule II.
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(b) Part B of Schedule II hereto is a complete and correct list,
as of the date of this Agreement, of each Lien securing Indebtedness of any
Person and covering any Property of any Obligor, and the aggregate
Indebtedness secured (or that may be secured) by each such Lien and the
Property covered by each such Lien is correctly described in Part B of said
Schedule II.
8.13 ENVIRONMENTAL MATTERS. Each Obligor has obtained all
environmental, health and safety permits, licenses and other authorizations
required under all Environmental Laws to carry on its business as now being
or as proposed to be conducted, except to the extent failure to have any such
permit, license or authorization would not (either individually or in the
aggregate) have a Material Adverse Effect. Each of such permits, licenses
and authorizations is in full force and effect and each Obligor is in
compliance with the terms and conditions thereof, and is also in compliance
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply
therewith would not (either individually or in the aggregate) have a Material
Adverse Effect.
In addition, except as set forth in Schedule III hereto:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by any Obligor to have any environmental, health or safety permit,
license or other authorization required under any Environmental Law in
connection with the conduct of the business of the Company or any of its
Subsidiaries or with respect to any generation, treatment, storage,
recycling, transportation, discharge or disposal, or any Release of any
Hazardous Materials generated by the Company or any of its Subsidiaries.
(b) None of the Obligors owns, operates or leases a treatment,
storage or disposal facility requiring a permit under the Resource
Conservation and Recovery Act of 1976, as amended, or under any comparable
state or local statute; and
(i) no polychlorinated biphenyls (PCB's) is or has been present
at any site or facility now or previously owned, operated or leased
by any Obligor;
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(ii) no asbestos or asbestos-containing materials is or has been
present at any site or facility now or previously owned, operated or
leased by any Obligor;
(iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials, active or abandoned, at any
site or facility now or previously owned, operated or leased by any
Obligor;
(iv) no Hazardous Materials have been Released at, on or under
any site or facility now or previously owned, operated or leased by
any Obligor in a reportable quantity established by statute,
ordinance, rule, regulation or order; and
(v) no Hazardous Materials have been otherwise Released at, on
or under any site or facility now or previously owned, operated or
leased by any Obligor,
in each case, that would (either individually or in the aggregate) have a
Material Adverse Effect.
(c) None of the Obligors has transported or arranged for the
transportation of any Hazardous Material to any location that is listed on
the National Priorities List ("NPL") under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
listed for possible inclusion on the NPL by the Environmental Protection
Agency in the Comprehensive Environmental Response and Liability
Information System, as provided for by 40 C.F.R. Section 300.5 ("CERCLIS"),
or on any similar state or local list or that is the subject of Federal,
state or local enforcement actions or other investigations that may lead
to Environmental Claims against any Obligor.
(d) No Hazardous Material generated by any Obligor has been
recycled, treated, stored, disposed of or Released by any Obligor at any
location other than those listed in Schedule III hereto.
(e) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of any Obligor and no site or
facility now or previously owned, operated or leased by any Obligor is
listed or proposed for listing on the NPL, CERCLIS or any similar state
list of sites requiring investigation or clean-up.
(f) No Liens have arisen under or pursuant to any Environmental Laws
on any site or facility owned, operated or leased by any Obligor, and no
government action has been
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taken or is in process that could subject any such site or facility to such
Liens and none of the Obligors would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any site or
facility owned by it in any deed to the real property on which such site or
facility is located.
(g) All environmental investigations, studies, audits, tests,
reviews or other analyses conducted by or that are in the possession of
any Obligor in relation to facts, circumstances or conditions at or
affecting any site or facility now or previously owned, operated or leased
by any Obligor and that could result in a Material Adverse Effect have been
made available to the Lenders.
8.14 CAPITALIZATION. The authorized capital stock of the
Company, and the ownership thereof, as of the date hereof, is correctly
described on Schedule V hereto. As of the date hereof, (x) except for the
warrants and options described on said Schedule V, there are no outstanding
Equity Rights with respect to the Company and (y) there are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem,
or otherwise acquire any shares of capital stock of the Company nor are there
any outstanding obligations of the Company or any of its Subsidiaries to make
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value
of the Company or any of its Subsidiaries.
8.15 SUBSIDIARIES, ETC.
(a) Set forth in Part A of Schedule IV hereto is a complete and
correct list, as of the date hereof, of all of the Subsidiaries of the
Company, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests
in such Subsidiary and (iii) the nature of the ownership interests held by
each such Person and the percentage of ownership of such Subsidiary
represented by such ownership interests. Except as disclosed in Part A of
Schedule IV hereto, (x) each of the Company and its Subsidiaries owns, free
and clear of Liens (other than Liens created pursuant to the Security
Documents), and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Part A of Schedule IV
hereto, (y) all of the issued and outstanding capital stock of each such
Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) Set forth in Part B of Schedule IV hereto is a complete and
correct list, as of the date of this Agreement, of
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all Investments (other than Investments disclosed in Part A of said Schedule
IV hereto) held by the Company or any of its Subsidiaries in any Person and,
for each such Investment, (x) the identity of the Person or Persons holding
such Investment and (y) the nature of such Investment. Except as disclosed
in Part B of Schedule IV hereto, each of the Company and its Subsidiaries
owns, free and clear of all Liens (other than Liens created pursuant to the
Security Documents), all such Investments.
8.16 TITLE TO ASSETS. Each Obligor owns and has on the date
hereof, and will own and have on the Closing Date, good and marketable title
(subject only to Liens permitted by Section 9.06 hereof) to the Properties
shown to be owned in the most recent financial statements referred to in
Section 8.02 hereof (other than Properties disposed of in the ordinary course
of business or otherwise permitted to be disposed of pursuant to Section 9.05
hereof). Each Obligor owns and has on the date hereof, and will own and have
on the Closing Date, good and marketable title to, and enjoys on the date
hereof, and will enjoy on the Closing Date, peaceful and undisturbed
possession of, all Properties (subject only to Liens permitted by Section
9.06 hereof) that are necessary for the operation and conduct of its
businesses.
8.17 TRUE AND COMPLETE DISCLOSURE. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Obligors to the Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Basic
Documents or included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by any Obligor to the Agent and the Lenders in connection with this
Agreement and the other Basic Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of projections) based on reasonable estimates, on
the date as of which such information is stated or certified. There is no
fact known to the Company that could have a Material Adverse Effect that has
not been disclosed herein, in the other Basic Documents or in a report,
financial statement, exhibit, schedule, disclosure letter or other writing
furnished to the Lenders for use in connection with the transactions
contemplated hereby or thereby.
8.18 LEGAL FORM. This Agreement and each other Basic
Document is in proper legal form under the laws of the United
Kingdom and Switzerland, as the case may be, for the enforcement
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against any Obligor subject to the jurisdiction of such law, and if this
Agreement and each other Basic Document were stated to be governed by such
law, they would constitute legal, valid and binding obligations of such
Obligor under such law, enforceable in accordance with their respective
terms. All formalities required in the United Kingdom and Switzerland, as
the case may be, for the validity and enforceability of this Agreement and
each other Basic Document (including, without limitation, any necessary
registration, recording or filing with any court or other authority in the
United Kingdom and Switzerland) have been accomplished (except that any
amendment to the Security Agreement must be registered under the U.K.
Companies Xxx 0000 within 21 days after the Closing Date), and no Foreign
Taxes are required to be paid and no notarization is required, for the
validity and enforceability thereof.
Section 9. COVENANTS OF THE COMPANY. The relevant Obligor (as
specified below) covenants and agrees with the Lenders and the Agent that, so
long as any Commitment, Loan or Letter of Credit Liability is outstanding and
until payment in full of all amounts payable by the Company hereunder:
9.01 FINANCIAL STATEMENTS, ETC. The Company shall deliver to
each of the Lenders:
(a) within 30 days prior to the end of each fiscal year, but no
earlier than 60 days prior to the end of such fiscal year, a budget (on a
monthly basis) for the Company and its Subsidiaries for the following
fiscal year, substantially in the form of Exhibit H-1 hereto (including
consolidating and consolidated statements of income, cash flow and balance
sheets prepared in accordance with GAAP); and promptly after any material
revision to any such budget, such budget as so revised;
(b) as soon as available and in any event within 30 days after the
end of each month, consolidated and consolidating statements of income and
cash flow of the Company and its Subsidiaries for such period and for the
fiscal year to date, setting forth in comparative form the corresponding
consolidated and consolidating figures provided in the budget required
under Section 9.01(a) hereof for such period, and the related consolidated
and consolidating balance sheets of the Company and its Subsidiaries as at
the end of such period, in each case substantially in the form of
Exhibit H-2 hereto, accompanied by a certificate of a senior financial
officer of the Company, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Company and its Subsidiaries,
and said consolidating
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financial statements fairly present the respective individual
unconsolidated financial condition and results of operations of the Company
and of each of its Subsidiaries, in each case in accordance with generally
accepted accounting principles, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments);
(c) as soon as available and in any event within 150 days after the
fiscal year ending on December 31, 1994 and within 90 days after the end of
each fiscal year of the Company thereafter, consolidated and consolidating
statements of income, retained earnings and cash flow of the Company and
its Subsidiaries for such fiscal year and the related consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at the
end of such fiscal year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied (i) in the case of said consolidated
statements and balance sheet of the Company, by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion shall not have any Impermissible Qualification and shall
state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the Company
and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with generally accepted accounting principles, and a certificate
of such accountants stating that, in making the examination necessary for
their opinion, they obtained no knowledge, except as specifically stated,
of any Default, and (ii) in the case of said consolidating statements and
balance sheets, by a certificate of a senior financial officer of the
Company, which certificate shall state that said consolidating financial
statements fairly present the respective individual unconsolidated
financial condition and results of operations of the Company and of each of
its Subsidiaries, in each case in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and for,
such fiscal year;
(d) as soon as available and in any event within 30 days after the
end of each Quarterly Date, analyses of the chief financial officer of the
Company as to (x) the financial condition of the Company and its
Subsidiaries, on a consolidated and consolidating basis, as of such
Quarterly Date, and (y) sales to the Obligors' ten largest customers for
the month ending on such Quarterly Date and for the period from the
beginning of the fiscal year (of which such Quarterly Date is a part) to
such Quarterly Date, in each case, as compared the Obligors' sales to such
customers for
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the corresponding time period in the immediately preceding fiscal year (for
Quarterly Dates after December 31, 1995) and as compared to the projects
set forth in the budget required under Section 9.01(a) hereof.
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Securities and Exchange Commission (or
any governmental agency substituted therefor) or any national securities
exchange;
(f) promptly upon the mailing thereof to the shareholders of the
Company generally or to any holder of Senior Subordinated Debt or any
holder of any other Indebtedness of any Obligor, copies of all financial
statements, annual reports and proxy statements so mailed; and, promptly
upon the receipt thereof, a copy of each other report submitted to any
Obligor by independent accountants in connection with any annual, interim
or special audit of the books of any Obligor made by such accountants, or
any management letters or similar document submitted to any Obligor by such
accountants;
(g) as soon as possible, and in any event within ten days after any
Obligor knows or has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan has occurred
or exists, a statement signed by a senior financial officer of any Obligor
setting forth details respecting such event or condition and the action, if
any, that any Obligor or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to PBGC by any Obligor or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan,
as to which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event (PROVIDED that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on or before its
due date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless of
the issuance of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under Section 412(d) of the Code
for any Plan;
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(ii) the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan or any action taken by any Obligor or an
ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by any Obligor or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by any Obligor or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or
the receipt by any Obligor or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against any Obligor or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days; and
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a
part if any Obligor or an ERISA Affiliate fails to timely provide
security to the Plan in accordance with the provisions of said
Sections;
(h) as soon as available and in any event within fifteen Business
Days after the end of each monthly accounting period (ending on the last
day of each calendar month), a Borrowing Base Certificate as at the last
day of such accounting period; PROVIDED, HOWEVER, that (x) for any monthly
accounting period ending prior to June 30, 1995, a Borrowing Base
Certificate shall be delivered as soon as available and in any event within
twenty Business Days after the end of such monthly accounting period and
(y) the Company may furnish Borrowing Base Certificates with more frequency
than required by this Section 9.01(h);
(i) periodically (but in any event no less frequently than once a
year) at the request of the Agent or the
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Majority Lenders, a report of the Collateral Auditor (at the expense of the
Company (as provided below)) with respect to the Receivables and Inventory
components included in the Borrowing Base as at the end of any monthly
accounting period which report shall indicate that, based upon a review by
such auditors of the Receivables (including, without limitation,
verification with respect to the amount, aging, identity and credit of the
respective account debtors and the billing practices of the Obligors) and
Inventory (including, without limitation, verification as to the value,
location and respective types), the information set forth in the Borrowing
Base Certificate delivered by the Company as at the end of such accounting
period is accurate and complete in all material respects;
(j) promptly after the Company knows or has reason to believe that
any Default has occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Company has taken or
proposes to take with respect thereto;
(k) from time to time such other information regarding the financial
condition, operations, business or prospects of any Obligor (including,
without limitation, any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA) as any Lender or the Agent
may reasonably request; and
(1) within 45 Business Days after the end of each fiscal quarter, a
certificate of a senior financial officer of the Company substantially in
the form of Exhibit H-3 hereto (i) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and describing the
action that the Company has taken or proposes to take with respect thereto)
and (ii) setting forth in reasonable detail the computations necessary to
determine whether the Company is in compliance with Section 9.10, 9.11,
9.12, 9.13, 9.14, 9.15, 9.16 and 9.17 hereof as of the end of the
respective monthly period or fiscal year.
The Company shall pay to the Collateral Auditor monthly in advance a
monthly fee of $1,500, and shall promptly reimburse the Collateral Auditor
for out-of-pocket expenses (including, without limitation, reasonable travel
expenses (including airfare at coach rates)) incurred in connection with the
collateral audits performed pursuant to paragraph (i) of this Section 9.01.
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9.02 LITIGATION. The Company will promptly give to each Lender
notice of all legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and any material
development in respect of such legal or other proceedings, affecting any
Obligor, except proceedings that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company will give to each
Lender notice of the assertion of any Environmental Claim by any Person
against, or with respect to the activities of, any Obligor and notice of any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations, other than any Environmental Claim or
alleged violation that, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect.
9.03 EXISTENCE, ETC. Each Obligor will:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (PROVIDED that nothing
in this Section 9.03 shall prohibit any transaction expressly permitted
under Section 9.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure
to comply with such requirements could (either individually or in the
aggregate) have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of
its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which
adequate reserves are being maintained in accordance with GAAP;
(d) maintain all of its Properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
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(f) upon reasonable notice to the Company, permit representatives of
any Lender or the Agent, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect any of its Properties,
and to discuss its business and affairs with its officers, all to the
extent requested by such Lender or the Agent (as the case may be).
9.04 INSURANCE. Each Obligor will maintain insurance with
financially sound and reputable insurance companies, and with respect to
Property and risks of a character usually maintained by corporations engaged
in the same or similar business similarly situated, against loss, damage and
liability of the kinds and in the amounts customarily maintained by such
corporations. The Obligors will in any event maintain:
(1) CASUALTY INSURANCE -- insurance against loss or damage
covering all of the tangible real and personal Property and improvements
of the Obligors by reason of any Peril (as defined below), other than
earthquakes and floods, in such amounts (subject to such deductibles as
shall be satisfactory to the Majority Lenders) as shall be reasonable
and customary and sufficient to avoid the insured named therein from
becoming a co-insurer of any loss under such policy but in any event in
an amount (i) in the case of fixed assets and equipment (including,
without limitation, vehicles), at least equal to 100% of the actual
replacement cost of such assets (including, without limitation,
foundation, footings and excavation costs), subject to deductibles as
aforesaid and (ii) in the case of inventory, not less than the fair
market value thereof, subject to deductibles as aforesaid.
(2) AUTOMOBILE LIABILITY INSURANCE FOR BODILY INJURY AND PROPERTY
DAMAGE -- insurance against liability for bodily injury and property
damage in respect of all vehicles (whether owned, hired or rented any
Obligor) at any time located at, or used in connection with, its
Properties or operations in such amounts as are then customary for
vehicles used in connection with similar Properties and businesses, but
in any event to the extent required by applicable law.
(3) COMPREHENSIVE GENERAL LIABILITY INSURANCE -- insurance against
claims for bodily injury, death or Property damage occurring on, in or
about the Properties (and adjoining streets, sidewalks and waterways) of
any Obligor, in such amounts as are then customary for Property similar
in use in the jurisdictions where such Properties are located.
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(4) WORKERS' COMPENSATION INSURANCE -- workers' compensation
insurance (including, without limitation, Employers' Liability
Insurance) to the extent required by applicable law.
(5) PRODUCT LIABILITY INSURANCE -- insurance against claims for
bodily injury, death or Property damage resulting from the use of
products sold by any Obligor in such amounts as are then customarily
maintained by responsible persons engaged in businesses similar to that
of the Company and such Obligor.
(6) BUSINESS INTERRUPTION INSURANCE -- insurance against loss of
operating income (up to an aggregate amount equal to the greater of (x)
$15,000,000 and (y) for the period commencing after January 1, 1995, the
sum of the following for the fiscal year of the Company most recently
ended: "the aggregate sales of the Obligors, LESS the aggregate cost of
sales of the Obligors, PLUS the aggregate payroll expense of the
Obligors) by reason of any Peril (other than earthquakes and floods).
(7) EARTHQUAKE INSURANCE -- insurance against loss in respect of
any earthquake or any flood in an aggregate amount equal to $10,000,000
for the period commencing after March 31, 1995.
(8) KEY MAN INSURANCE -- insurance in the amount of $2,000,000 in
respect of the life of Mr. R. Xxxx XxXxxxx.
(9) OTHER INSURANCE -- such other insurance, including, without
limitation, War-Risk Insurance when and to the extent obtainable from
the United States Government, in each case as generally carried by
owners of similar Properties in the jurisdictions where such Properties
are located, in such amounts and against such risks as are then
customary for Property similar in use.
Such insurance shall be written by financially responsible companies selected
by the Obligors and having an A. M. Best rating of "A-" or better and being
in a financial size category of VII or larger, or by other companies
acceptable to the Majority Lenders, and (other than workers' compensation)
shall name the Agent as loss payee (to the extent covering risk of loss or
damage to tangible property) and as an additional named insured as its
interests may appear (to the extent covering any other risk). Each policy
referred to in this Section 9.04 shall provide that it will not be canceled
or reduced, or allowed to lapse without renewal, except after not less than
30 days' notice to the Agent and shall also provide that the interests of the
Agent and the Lenders shall not be invalidated by any act or
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negligence of any Obligor or any Person having an interest in any Property
covered by such policy nor by occupancy or use of any such Property for
purposes more hazardous than permitted by such policy nor by any foreclosure
or other proceedings relating to such Property. The Company will advise the
Agent promptly of any policy cancellation, reduction or amendment.
Within 15 days after the Original Closing Date the Company will
deliver to the Agent certificates of insurance satisfactory to the Agent
evidencing the existence of all insurance required to be maintained by the
Obligors hereunder setting forth the respective coverages, limits of
liability, carrier, policy number and period of coverage and showing that
such insurance will remain in effect through the December 31 falling at least
six months after the date hereof, subject only to the payment of premiums as
they become due (and attaching original copies of any policies with respect
to casualty insurance). Thereafter, on each November 15 in each year
(commencing with the first November 15 after the date hereof), the Obligors
will deliver to the Agent certificates of insurance evidencing that all
insurance required to be maintained by the Company hereunder will be in
effect through the December 31 of the calendar year following the calendar
year of the current November 15, subject only to the payment of premiums as
they become due. In addition, the Company will not modify any of the
provisions of any policy with respect to casualty insurance without
delivering the original copy of the endorsement reflecting such modification
to the Agent accompanied by a written report of The Xxxxx X. Xxxxxx Company,
or any other firm of independent insurance brokers of nationally recognized
standing, stating that, in their opinion, such policy (as so modified)
adequately protects the interests of the Lenders and the Agent, is in
compliance with the provisions of this Section 9.04, and is comparable in all
respects with insurance carried by responsible owners and operators of
Properties similar to those owned or leased by the Obligors. None of the
Obligors will obtain or carry separate insurance concurrent in form or
contributing in the event of loss with that required by this Section 9.04
unless the Agent is the named insured thereunder, with loss payable as
provided herein. Any Obligor will immediately notify the Agent whenever any
such separate insurance is obtained and shall deliver to the Agent the
certificates evidencing the same.
Without limiting the obligations of any Obligor under the foregoing
provisions of this Section 9.04, in the event the Company shall fail to
maintain in full force and effect insurance as required by the foregoing
provisions of this Section 9.04, then the Agent may, but shall have no
obligation so to do, procure insurance covering the interests of the Lenders
and the Agent in such amounts and against such risks as the Agent (or the
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Majority Lenders) shall deem appropriate, and the Company shall reimburse the
Agent in respect of any premiums paid by the Agent in respect thereof.
For purposes hereof, the term "PERIL" shall mean, collectively,
fire, lightning, flood, windstorm, hail, earthquake, explosion, riot and
civil commotion, vandalism and malicious mischief, damage from aircraft,
vehicles and smoke and all other perils covered by the "all-risk" endorsement
then in use in the jurisdictions where the Properties of the Company and its
Subsidiaries are located.
9.05 PROHIBITION OF FUNDAMENTAL CHANGES. No Obligor will enter
into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), except that each of the Obligors may reincorporate in the State
of Delaware. No Obligor will, without the prior consent of the Agent (with
the approval of the Majority Lenders), acquire any business or Property from,
or capital stock of, or be a party to any acquisition of, any Person except
for purchases of inventory and other Property to be sold or used in the
ordinary course of business, Investments permitted under Section 9.08 hereof,
and Capital Expenditures permitted under Section 9.15 hereof. No Obligor
will convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any part of its business or
Property, whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests, but excluding (i) obsolete
or worn-out Property, tools or equipment no longer used or useful in its
business so long as the aggregate amount thereof sold in any single fiscal
year by Obligors shall not have a fair market value in excess of $200,000 and
(ii) any inventory or other Property sold or disposed of in the ordinary
course of business and on ordinary business terms).
9.06 LIMITATION ON LIENS. No Obligor will, or will permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its Property (excluding any Property owned by a customer but in the
possession of the Obligor or its Subsidiary), whether now owned or hereafter
acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the date hereof and listed in Part B of
Schedule II hereto (excluding, however, following the making of the
initial Loans hereunder, Liens securing Indebtedness to be repaid with
the proceeds of such Loans, as indicated on said Schedule II, but
including any continuation of any existing Liens on Property of Unidec
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securing any refinancing of the Indebtedness of Unidec identified in Part A
of Schedule II hereto);
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith and by appropriate proceedings and
Liens securing judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under Section 10(h) hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of any Obligor; and
(h) Liens upon real and/or tangible personal Property acquired
after the date hereof (by purchase, construction or otherwise) by any
Obligor, each of which Liens either (A) existed on such Property before
the time of its acquisition and was not created in anticipation thereof
or (B) was created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost
(including the cost of construction) of such Property; PROVIDED that (i)
no such Lien shall extend to or cover any Property of any Obligor, other
than the Property so acquired and improvements thereon and (ii) the
principal amount of Indebtedness secured by any such Lien
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shall at no time exceed 80% of the fair market value (as determined in good
faith by a senior financial officer of the relevant Obligor) of such
Property at the time it was acquired (by purchase, construction or
otherwise).
9.07 INDEBTEDNESS. No Obligor will create, incur or suffer to exist
any Indebtedness except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding on the date hereof and listed in Part
A of Schedule II hereto (excluding, however, following the making of the
initial Loans hereunder, the Indebtedness to be repaid with the proceeds
of such Loans, as indicated on said Schedule II, but including any
refinancing of the Indebtedness of Unidec listed in such Part so long as
the principal amount thereof is not increased);
(c) the Senior Subordinated Debt;
(d) Indebtedness arising under the Convertible Subordinated Notes;
(e) Indebtedness arising under the Xxxxxx Non-Compete Documentation;
(f) Indebtedness of Subsidiaries of the Company to the Company or
to other Subsidiaries of the Company; and
(g) Indebtedness, in an aggregate amount not to exceed $600,000,
consisting of obligations to Xxxxxxx under the Restrictive Covenant
Agreement referred to in the Xxxx Purchase Agreement;
(h) additional Indebtedness of the Company and its Subsidiaries up
to but not exceeding $1,000,000 at any one time outstanding.
9.08 INVESTMENTS. No Obligor will make or permit to remain
outstanding any Investments except:
(a) Investments outstanding on the date hereof and identified in
Part B of Schedule IV hereto;
(b) operating deposit accounts with the Cash Management Agent and
other banks;
(c) Permitted Investments;
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(d) Investments by the Company and its Subsidiaries in capital
stock of Subsidiaries of the Company to the extent outstanding on the
date of the financial statements of the Company and its Subsidiaries
referred to in Section 8.02 hereof and advances by the Company and its
Subsidiaries to Subsidiaries of the Company in the ordinary course of
business, PROVIDED that the aggregate amount of advances to be made to
Tri-Star Technologies at any one time outstanding shall not exceed
$250,000; and
(e) Interest Rate Protection Agreements and Commodity Price
Protection Agreements entered into by the Company pursuant to Section
9.18 hereof.
9.09 DIVIDEND PAYMENTS. No Obligor will declare or make any
Dividend Payment at any time. Xxxx will not declare or make any dividend
payment in respect of its capital stock unless such dividend payment is made
ratably to Cory's shareholders. Tri-Star Technologies will not make any
distribution to its partners unless such distribution is made in accordance
with its partnership agreement.
9.10 LEVERAGE RATIO. The Obligors will not permit the Leverage
Ratio to exceed the following respective ratios at any time during the
following respective periods:
Period Ratio
------ -----
From September 30, 1996
through December 30, 1996 6.65 to 1
From December 31, 1996
through June 29, 1997 5.90 to 1
From June 30, 1997
through December 30, 1997 3.60 to 1
From December 31, 1997
through June 29, 1998 2.90 to 1
From June 30, 1998
through December 30, 1998 2.75 to 1
From December 31, 1998 and at
all times thereafter 2.25 to l.
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9.11 EBITDA RATIO. The Obligors will not permit the EBITDA Ratio
to exceed the following respective amounts at any time during the following
respective periods:
Period Ratio
------ -----
From September 30, 1996
through December 30, 1996 6.70 to 1
From December 31, 1996
through June 29, 1997 4.90 to 1
From June 30, 1997
through December 30, 1997 2.75 to 1
From December 31, 1997
through June 29, 1998 2.25 to 1
From June 30, 1998 and
at all times thereafter 1.75 to 1.
9.12 NET WORTH. The Obligors will not permit the Company's Net
Worth to be less than the following respective amounts at any time during the
following respective periods:
Period Amount
------ ------
From September 30, 1996
through December 30, 1996 $6,936,000
From December 31, 1996
through June 29, 1997 $7,845,000
From June 30, 1997
through December 30, 1997 $11,500,000
From December 31, 1997
through June 29, 1998 $14,250,000
From June 30, 1998
through December 30, 1998 $17,500,000
From December 31, 1998 and at
all times thereafter $20,000,000.
9.13 CURRENT RATIO. The Obligors will not permit the ratio of
current assets of the Obligors to current liabilities of the Obligors to be
less than 1.25 to 1 at any time. For purposes hereof, the terms "CURRENT
ASSETS" and "CURRENT LIABILITIES"
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shall have the respective meanings assigned to them by GAAP, PROVIDED that in
any event there shall be included in current liabilities the outstanding
amount of Revolving Credit Loans and there shall be excluded from current
liabilities the current portion of long-term debt and amounts outstanding
under the Convertible Subordinated Note.
9.14 FIXED CHARGES RATIO. The Obligors will not permit the Fixed
Charges Ratio to be less than the following respective ratios at any time
during the following respective periods:
Period Ratio
------ -----
From September 30, 1996
through December 30, 1996 0.75 to 1
From December 31, 1996
through June 29, 1997 0.95 to 1
From June 30, 1997
through December 30, 1997 1.15 to 1
From December 31, 1997 and
at all times thereafter 1.40 to 1.
9.15 CAPITAL EXPENDITURES. The Obligors will not permit the
aggregate amount of Capital Expenditures (other than the ADS Purchase) by the
Obligors to exceed the following respective amounts for the following
respective periods:
Period Amount
------ ------
From January 1, 1996
through December 31, 1996 $2,000,000
For each fiscal year of the
Company thereafter AMOUNT $2,500,000.
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9.16 INTEREST COVERAGE RATIO; SELLING. GENERAL AND ADMINISTRATIVE
EXPENSE RATIO.
(a) The Obligors will not permit the Interest Coverage Ratio to be
less than the following amounts at any time during the following
respective periods:
Period Ratio
------ -----
From September 30, 1996
through December 30, 1996 1.25 to 1
From December 31, 1996
through June 29, 1997 1.50 to 1
From June 30, 1997
through December 30, 1997 2.00 to 1
From December 31, 1997
through June 29, 1998 2.50 to 1
From June 30, 1998 and at
all times thereafter 3.00 to l.
(b) The Obligors will not permit the Selling, General and
Administrative Expense Ratio to less than the following amounts at any
time during the following respective periods:
Period Ratio
------ -----
From September 30, 1996
through December 30, 1996 0.187 to 1
From December 31, 1996
through December 30, 1997 0.185 to 1
From December 31, 1997 and
at all times thereafter 0.180 to 1
9.17 ACCOUNTS PAYABLE RATIO. The Obligors will not permit the
Accounts Payable Ratio to be greater than the following respective amounts at
any time during the following respective periods:
Period Ratio
------ -----
From September 30, 1996 and at
all times thereafter 60.0 to 1.
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9.18 INTEREST RATE AND COMMODITY PRICE PROTECTION AGREEMENTS. The
Company will within 60 days of the Original Closing Date and at all times
thereafter maintain in full force and effect one or more Interest Rate
Protection Agreements with one or more of the Lenders (and/or with a bank or
other financial institution having capital, surplus and undivided profits of
at least $500,000,000), that effectively enables the Company (in a manner
satisfactory to the Majority Lenders), as at any date, to protect itself
against interest rate risk for a period of at least five years (and for no
longer than seven years) and for an amount (which may be an amortizing
amount) of at least $10,000,000 (and for no more than $15,000,000). The
Company will, by no later than ten Business Days after the Original Closing
Date and at all time thereafter to and including December 31, 1996, maintain
in full force and effect one or more Commodity Price Protection Agreements
with ING (or an affiliate thereof) that effectively enables the Company (in a
manner satisfactory to the Majority Lenders), as at any date, to protect
itself against the Swiss franc exposure of Unidec for an amount of at least
Sfr 585,000 per month. For each day after such tenth day on which the
Company shall not have entered into such Commodity Price Protection
Agreements, the Company shall pay to the Agent, for account of the Lenders, a
fee equal to $500, payable on demand.
9.19 SUBORDINATED INDEBTEDNESS: XXXXXX NON-COMPETE.
(a) Neither the Company nor any of its Subsidiaries will purchase,
redeem, retire or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment or
prepayment of the principal of or interest on, or any other amount owing in
respect of, any Senior Subordinated Debt or Indebtedness in respect of the
Convertible Subordinated Note, except (in the case of Senior Subordinated
Debt) for regularly scheduled payments of principal and interest in respect
thereof required pursuant to the instruments evidencing such Senior
Subordinated Debt.
(b) None of the Obligors will make any payment in respect of the
Xxxxxx Non-Compete during any period during which any amount payable by any
Obligor hereunder or under any other Basic Document shall remain due and
unpaid.
9.20 LINES OF BUSINESS. Neither the Company nor any of its
Subsidiaries will engage to any substantial extent in any line or lines of
business activity other than the business of manufacturing, distributing and
selling aircraft components, avionics integrated systems and related products.
9.21 TRANSACTIONS WITH AFFILIATES. Except as expressly permitted
by this Agreement, no Obligor will directly
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or indirectly: (a) make any Investment in an Affiliate; (b) transfer, sell,
lease, assign or otherwise dispose of any Property to an Affiliate; (c) merge
into or consolidate with or purchase or acquire Property from an Affiliate;
or (d) enter into any other transaction directly or indirectly with or for
the benefit of an Affiliate (including, without limitation, Guarantees and
assumptions of obligations of an Affiliate); PROVIDED that (i) any Affiliate
who is an individual may serve as a director, officer or employee of any
Obligor and receive reasonable compensation for his or her services in such
capacity, (ii) the Company, Xxxx and Xxxx Holdings may make payments or
distributions to Xxxxxxx pursuant to the Xxxxxxx Documents, (iii) Xxxx may
pay any Indebtedness owing to any Obligor, (iv) Tri-Star Technologies may
make payments required under the TST Partnership Agreement and the Xxxxxx
Employment Agreement, (v) any non-Wholly-Owned Subsidiary of an Obligor may
make transfers or payments to such Obligor; and (vi) any Obligor may enter
into transactions (other than extensions of credit by any Obligor to an
Affiliate) providing for the leasing of Property, the rendering or receipt of
services or the purchase or sale of inventory and other Property in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Obligors as the
monetary or business consideration that would obtain in a comparable
transaction with a Person not an Affiliate.
9.22 USE OF PROCEEDS. The Company will use the proceeds of the
Loans hereunder solely to finance the ADS Purchase and to finance the working
capital and general corporate purposes of the Obligors (in compliance with
all applicable legal and regulatory requirements); PROVIDED that neither the
Agent nor any Lender shall have any responsibility as to the use of any of
such proceeds.
9.23 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES. Each Obligor
will take such action from time to time as shall be necessary to ensure that
such Obligor at all times owns (subject only to the Lien of the Security
Agreement) at least the same percentage of the issued and outstanding shares
of each class of stock of each of its Subsidiaries as is owned on the date
hereof. In the event that any such additional shares of stock shall be issued
by any Subsidiary, the respective Obligor agrees forthwith to deliver to the
Agent pursuant to the Security Agreement the certificates evidencing such
shares of stock, accompanied by undated stock powers executed in blank and to
take such other action as the Agent shall request to perfect the security
interest created therein pursuant to the Security Agreement. No Obligor will
permit any of its Subsidiaries to enter into, after the date of this
Agreement, any indenture, agreement, instrument or other arrangement that,
directly or indirectly, prohibits or restrains, or has the effect of
prohibiting or restraining, or
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imposes materially adverse conditions upon, the incurrence or payment of
Indebtedness, the granting of Liens, the declaration or payment of dividends,
the making of loans, advances or Investments or the sale, assignment,
transfer or other disposition of Property.
9.24 MODIFICATIONS OF CERTAIN DOCUMENTS. No Obligor will, without
the prior consent of the Agent (with the approval of the Majority Lenders),
consent to any material modification, supplement or waiver of (a) its
constitutional or organizational documents or (b) the provisions of (i) any
agreement, instrument or other document evidencing or relating to (A) Senior
Subordinated Debt, (B) the Xxxx Repurchase, (C) the 1996 (February) Warrants
or Section 7 of the 1996 (February) Securities Purchase Agreement or (D) the
1996 (September) Warrants, the Convertible Subordinated Notes or Section 7 of
the 1996 (September) Securities Purchase Agreement, or (ii) any agreement
relating to employee compensation or similar arrangements. To the extent
that the Company is permitted to withhold its consent to any transfer of any
interest in the Senior Subordinated Debt, the Company shall not grant such
consent without the prior consent of the Majority Lenders (but in no event
shall the Majority Lenders require that the Company withhold its consent to
any such transfer if the Company is not permitted under the Senior
Subordinated Debt Documents to so withhold its consent).
9.25 VENDOR PAYABLES. The Obligors shall not permit the aggregate
amount of payables owed by them to trade vendors on December 31, 1994 to
exceed $6,800,000.
9.26 GOVERNMENTAL APPROVALS. Each Obligor shall promptly obtain,
at its own expense, all governmental licenses, authorizations, consents,
permits and approvals as may be required for such Obligor to (a) comply with
its obligations and preserve its rights under, each Basic Document and (b)
maintain the existence, priority and perfection of the Liens created under
the Security Documents.
9.27 SWISS RECEIVABLES. If at any time the Indebtedness of Unidec
identified on Schedule II hereto, and any refinancing thereof, shall have
been repaid in full and all commitments in respect thereof shall have been
terminated or cancelled, the Obligors shall cause to be delivered to the
Agent such agreements or other instruments, and take such other actions, to
provide that the Agent shall have for the benefit of the Lenders a first
priority perfected security interest in all receivables owing or to be owing
to Unidec.
9.28 INTERCOMPANY NOTE. Xxxx agrees to perform all of its
obligations under the Intercompany Note and, so long as any
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Commitment, Loan or Letter of Credit Liability is outstanding and until
payment in full of all amounts payable by the Company hereunder, to make all
payments under the Intercompany Note directly to the Agent for application to
the payment of principal and/or interest in respect of the Loans.
9.29 ADS FINANCIAL STATEMENTS. The Company shall deliver to each
of the Lenders, as soon as available and in any event no later than October
15, 1996, statements of income and cash flow of ADS for each of the
respective fiscal years ending on December 31, 1994 and December 31, 1995,
and the related balance sheets of ADS as at the end of such fiscal year, in
each case substantially in the form and substance of the financial statements
of ADS heretofore presented by the Company to the Lenders, and accompanied
(i) by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall not have any Impermissible
Qualification and shall state that said financial statements fairly present
the financial condition and results of operations of ADS as at the end of,
and for, such period in accordance with generally accepted accounting
principles, and a certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no knowledge, except
as specifically stated, of any Default, and (ii) by a certificate of a senior
financial officer of the Company, which certificate shall state that said
consolidated financial statements fairly present the financial condition and
results of operations of ADS, in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and for, such
period.
9.30 DEAL COSTS. The Company will not permit the aggregate amount
of Deal Costs to exceed $1,000,000, and shall only pay those Deal Costs
disclosed in writing by the Company to the Agent prior to the date hereof.
Section 10. EVENTS OF DEFAULT. If one or more of the
following events (herein called "EVENTS OF DEFAULT") shall occur
and be continuing:
(a) The Company shall: (i) default in the payment of any
principal of any Loan or any Reimbursement Obligation when due (whether
at stated maturity or at mandatory or optional prepayment); or (ii)
default in the payment of any interest on any Loan, any fee or any other
amount payable by it hereunder or under any other Basic Document when
due and such default shall have continued unremedied for one or more
Business Days; or
(b) Any Obligor shall default in the payment when due of any
principal of or interest on any of its other
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Indebtedness, or in the payment when due of any amount under any Interest
Rate Protection Agreement or Commodity Price Protection Agreement; or
any event specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness or any event specified
in any Interest Rate Protection Agreement or Commodity Price Protection
Agreement shall occur if the effect of such event is to cause, or (with
the giving of any notice or the lapse of time or both) to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf
of such holder or holders) to cause, such Indebtedness to become due, or
to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or, in the case of
an Interest Rate Protection Agreement or Commodity Price Protection
Agreement, to permit the payments owing under such Interest Rate
Protection Agreement or Commodity Price Protection Agreement (as the
case may be) to be liquidated; or
(c) Any representation, warranty or certification made or deemed
made herein or in any other Basic Document (or in any modification or
supplement hereto or thereto) by any Obligor, or any certificate
furnished to any Lender or the Agent pursuant to the provisions hereof
or thereof, shall prove to have been false or misleading as of the time
made or furnished in any material respect; or
(d) The Company shall default in the performance of any of its
obligations under any of Sections 9.01(h), 9.01(j), 9.05, 9.06, 9.07,
9.08, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.16, 9.17, 9.18, 9.19 or 9.21
hereof, or any Obligor shall default in the performance of any of its
obligations under Section 4.2 or 5.2 of the Security Agreement; or any
Obligor shall default in the performance of any of its other obligations
in this Agreement or any other Basic Document and such default shall
continue unremedied for a period of fifteen or more Business Days after
notice thereof (specifying such default and setting forth, if
applicable, calculations showing such default) to the Company and any
Significant Holder (as defined in the 1994 Securities Purchase
Agreement) by the Agent or any Lender (through the Agent); or
(e) Any Obligor shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) Any Obligor shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
examiner or liquidator of itself or of all or a substantial part of its
Property, (ii) make a
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general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition seeking
to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or (vi) take
any corporate action for the purpose of effecting any of the foregoing;
or
(g) A proceeding or case shall be commenced, without the
application or consent of the affected Obligor, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of such Obligor or
of all or any substantial part of its Property, or (iii) similar relief
in respect of such Obligor under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of 60
or more days; or an order for relief against any Obligor shall be
entered in an involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in
excess of $100,000 in the aggregate shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against any Obligor and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within 30 days from the date of entry thereof and
such Obligor shall not, within said period of 30 days, or such longer
period during which execution of the same shall have been stayed or
fully bonded, appeal therefrom and cause the execution thereof to be
stayed during such appeal; or
(i) An event or condition specified in Section 9.01(g) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan and,
as a result of such event or condition, together with all other such
events or conditions, any Obligor or any ERISA Affiliate shall incur or
in the opinion of the Majority Lenders shall be reasonably likely to
incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) that, in the determination of the Majority
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Lenders, would (either individually or in the aggregate) have a Material
Adverse Effect; or
(j) A reasonable basis shall exist for the assertion against any
Obligor, or any predecessor in interest of any Obligor or Affiliates, of
(or there shall have been asserted against any Obligor) an Environmental
Claim that, in the judgment of the Majority Lenders is reasonably likely
to be determined adversely to any Obligor, and the amount thereof
(either individually or in the aggregate) is reasonably likely to have a
Material Adverse Effect (insofar as such amount is payable by any
Obligor but after deducting any portion thereof that is reasonably
expected to be paid by other creditworthy Persons jointly and severally
liable therefor); or
(k) R. Xxxx XxXxxxx shall (i) cease to have the power to direct
the management and policies of the Company and a replacement acceptable
to the Majority Lenders shall not have assumed R. Xxxx XxXxxxx'x duties
within fifteen days thereafter, (ii) cease to own or control 4% of the
Company's capital stock (on a fully-diluted basis), or (iii) shall die
or be unable to perform his duties as a senior executive of the Company
and a replacement acceptable to the Majority Lenders shall not have
assumed R. Xxxx XxXxxxx'x duties within 90 days after such death or
disability; or
(l) The Liens created by the Security Documents shall at any time
not constitute a valid and perfected Lien on the collateral intended to
be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Agent, free and clear of all other Liens (other than Liens permitted
under Section 9.06 hereof or under the respective Security Documents),
or, except for expiration in accordance with its terms, any of the
Security Documents shall for whatever reason be terminated or cease to
be in full force and effect, or the enforceability thereof shall be
contested by any Obligor; or
(m) An event or condition of the type described in Section 10(e),
(f) or (g) hereof shall occur or exist with respect to Boeing or
Claircom or (if the aggregate value of the Obligors' backlog of orders
that relate to IFT constitute at least 20% of the aggregate value of all
of the Obligors' backlog of orders) IFT; or
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(n) The Obligors' business relationship with Boeing or Claircom
shall be modified in a manner that is reasonably likely to have a
Material Adverse Effect or shall terminate; or
(o) Any license, consent, authorization, registration or approval
at any time necessary to enable any Obligor to comply with any of its
obligations under this Agreement or any other Basic Document shall be
revoked, withdrawn or withheld or shall be modified or amended in a
manner materially prejudicial, in the opinion of the Majority Lenders,
to the interests of the Lenders hereunder;
THEREUPON: (1) in the case of an Event of Default other than one referred to
in clause (f) or (g) of this Section 10, (A) the Agent may and, upon request
of the Majority Lenders shall, by notice to the Company, terminate the
Commitments and they shall thereupon terminate, and (B) the Agent may and,
upon request by the Majority Lenders shall, by notice to the Company declare
the principal amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other amounts payable by the
Obligors hereunder and under the Notes (including, without limitation, any
amounts payable under Section 5.05 or 5.06 hereof) to be forthwith due and
payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which
are hereby expressly waived by each Obligor; and (2) in the case of the
occurrence of an Event of Default referred to in clause (f) or (g) of this
Section 10 with respect to any Obligor, the Commitments shall automatically
be terminated and the principal amount then outstanding of, and the accrued
interest on, the Loans, the Reimbursement Obligations and all other amounts
payable by the Obligors hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 or 5.06 hereof) shall
automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by each Obligor.
In addition, upon the occurrence and during the continuance of any Event of
Default (if the Agent has declared the principal amount then outstanding of,
and accrued interest on, the Revolving Credit Loans and all other amounts
payable by the Company hereunder and under the Notes to be due and payable),
the Company agrees that it shall, if requested by the Agent or the Majority
Lenders through the Agent (and, in the case of any Event of Default referred
to in clause (f) or (g) of this Section 10 with respect to the Company,
forthwith, without any demand or the taking of any other action by the Agent
or such Lenders) provide cover for the Letter of Credit Liabilities by paying
to the Agent immediately available funds in an amount
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equal to the then aggregate undrawn face amount of all Letters of Credit,
which funds shall be held by the Agent in the Collateral Account as
collateral security in the first instance for the Letter of Credit
Liabilities and be subject to withdrawal only as therein provided.
Section 11. THE AGENT.
11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes each of the Agent and the Cash Management
Agent to act as its agent hereunder and under the other Basic Documents with
such powers as are specifically delegated to the Agent and the Cash
Management Agent, respectively, by the terms of this Agreement and of the
other Basic Documents, together with such other powers as are reasonably
incidental thereto. Each of the Agent and the Cash Management Agent (which
term as used in this sentence and in Section 11.05 and the first sentence of
Section 11.06 hereof shall include reference to its Affiliates and its own
and its Affiliates' officers, directors, employees and agents): (a) shall
have no duties or responsibilities except those expressly set forth in this
Agreement and in the other Basic Documents, and shall not by reason of this
Agreement or any other Basic Document be a trustee for any Lender; (b) shall
not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other
Basic Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any
other Basic Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for herein or therein
or for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or under any other
Basic Document; and (d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Basic Document or
under any other document or instrument referred to or provided for herein or
therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good
faith. The Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment
or transfer thereof shall have been filed with the Agent (to the extent
provided in Section 12.06(b) hereof).
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11.02 RELIANCE BY AGENT. Each of the Agent and the Cash
Management Agent shall be entitled to rely upon any certification, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, 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 Agent and the Cash Management
Agent, respectively. As to any matters not expressly provided for by this
Agreement or any other Basic Document, the Agent and the Cash Management
Agent, respectively, shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with
instructions given by the Majority Lenders or all of the Lenders as is
required in such circumstance, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of
the Lenders.
11.03 DEFAULTS. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default unless the Agent has received notice
from a Lender or the Company specifying such Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Lenders. The Agent shall (subject to Section 11.07 hereof)
take such action with respect to such Default as shall be directed by the
Majority Lenders, PROVIDED that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
as it shall deem advisable in the best interest of the Lenders except to the
extent that this Agreement expressly requires that such action be taken, or
not be taken, only with the consent or upon the authorization of the Majority
Lenders or all of the Lenders.
11.04 RIGHTS AS A LENDER. With respect to its Commitments and the
Loans made by it, ING (and any successor acting as 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
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. ING (and any
successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in and generally engage in any kind of banking, trust or other business with
the Obligors (and any of their Subsidiaries or Affiliates) as if it were not
acting as the Agent, and ING and its Affiliates may accept fees and other
consideration from the Obligors for
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services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
11.05 INDEMNIFICATION. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section 12.03 hereof, but without
limiting the obligations of the Company under said Section 12.03, and
including in any event any payments under any indemnity that the Agent is
required to issue to any bank referred to in Section 4.02 of the Security
Agreement to which remittances in respect of Accounts, as defined therein,
are to be made) ratably in accordance with their respective Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) arising out of or by reason of any investigation in
or in any way relating to or arising out of this Agreement or any other Basic
Document or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that the Company is obligated to
pay under Section 12.03 hereof, and including also any payments under any
indemnity that the Agent is required to issue to any bank referred to in
Section 4.02 of the Security Agreement to which remittances in respect of
Accounts, as defined therein, are to be made, but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents, 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 party to be indemnified.
11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Obligors and decision to
enter into this Agreement and that it will, independently and without
reliance upon the 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 or under any other Basic Document. The Agent shall not be required
to keep itself informed as to the performance or observance by any Obligor of
this Agreement or any of the other Basic Documents or any other document
referred to or provided for herein or therein or to inspect the Properties or
books of any Obligor. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder or under the Security Documents, the Agent shall not have any duty
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or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Obligors (or
any of their Affiliates) that may come into the possession of the Agent or
any of its affiliates.
11.07 FAILURE TO ACT. Except for action expressly required of the
Agent hereunder and under the other Basic Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and
thereunder unless it shall receive further assurances to its satisfaction
from the Lenders of their indemnification obligations under Section 11.05
hereof against any and all liability and expense that may be incurred by it
by reason of taking or continuing to take any such action.
11.08 RESIGNATION OR REMOVAL OF AGENT. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign
at any time by giving notice thereof to the Lenders and the Company, and the
Agent may be removed at any time with or without cause by the Majority
Lenders (and, during any period during which there are only two Lenders and a
court of competent jurisdiction shall have determined that the Agent shall
have acted hereunder with gross negligence of wilful misconduct, the Lender
that is not acting as Agent (the "Other Lender") shall have the right to
remove the Agent). Upon any such resignation or removal, the Majority
Lenders shall have the right to appoint a successor Agent (or, if the Agent
is removed by the Other Lender as above provided, the Other Lender shall have
the right to appoint a successor Agent). If no successor Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, that
shall be a bank that has an office in New York, New York. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After
any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Section 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as the Agent. The Agent may at any time assign all of its rights and
obligations hereunder to any affiliate of the Agent by notice to the Company
and each Lender.
11.09 AGENCY FEE; CASH MANAGEMENT FEE. Until payment in full of
the principal of and interest on the Loans and all other amounts payable by
the Company hereunder and termination of the Commitments hereunder,
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(a) the Company will pay to the Agent an agency fee of $75,000 per
annum, which shall accrue on the first Business Day of each fiscal year of
the Company (commencing on the first Business Day of 1996) and shall be
payable quarterly in arrears on the last Business Day of each fiscal quarter
(commencing on the Business Day immediately preceding March 31, 1996), and
(b) the Company will pay to the Cash Management Agent a cash management
fee of $25,000 per annum, which shall accrue on the first Business Day of
each fiscal year of the Company (commencing on the first Business Day of
1996) and shall be payable quarterly in arrears on the last Business Day of
each fiscal quarter (commencing on the Business Day immediately preceding
March 31, 1996);
PROVIDED that, upon payment in full of the principal of and interest on the
Loans and the termination o the Commitments hereunder, accrued but unpaid
amounts under this Section 11.09 shall automatically become due and payable.
11.10 CONSENTS UNDER OTHER BASIC DOCUMENTS. Except as otherwise
provided in Section 12.04 hereof with respect to this Agreement, the Agent
may, with the prior consent of the Majority Lenders (but not otherwise),
consent to any modification, supplement or waiver under any of the Basic
Documents, PROVIDED that, without the prior consent of each Lender, the Agent
shall not (except as provided herein or in the Security Documents) release
any collateral or otherwise terminate any Lien under any Basic Document
providing for collateral security, or agree to additional obligations being
secured by such collateral security, except that no such consent shall be
required, and the Agent is hereby authorized, to release any Lien covering
Property that is the subject of a disposition of Property permitted hereunder
or to which the Majority Lenders have consented.
11.11 COLLATERAL SUB-AGENTS. Each Lender by its execution and
delivery of this Agreement agrees, as contemplated by Section 4.3 of the
Security Agreement, that, in the event it shall hold any Permitted
Investments referred to therein, such Permitted Investments shall be held in
the name and under the control of such Lender, and such Lender shall hold
such Permitted Investments as a collateral sub-agent for the Agent
thereunder. The Company by its execution and delivery of this Agreement
hereby consents to the foregoing. In addition, the Cash Management Agent
shall hold the Zero Balance Account and any cash or investments therein as a
collateral sub-agent for the Agent thereunder.
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11.12 RESIGNATION OF CASH COLLATERAL AGENT; ETC.. The Cash
Management Agent may resign at any time by at least 30 days notice to the
Agent and the Company, whereupon the Cash Management Agent shall have no
further obligations hereunder and all provisions herein providing for
payments to be made to the Cash Management Agent shall be deemed to have been
amended to provide for payments to be made to an account designated by the
Agent. All obligations of the Cash Management Agent under the Cash
Management Agreement shall automatically terminate upon the termination of
the Commitments or the acceleration of the maturity of the Loans pursuant to
Section 10 hereof.
Section 12. MISCELLANEOUS.
12.01 WAIVER. No failure on the part of the Agent or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of
any remedies provided by law.
Each Obligor irrevocably waives, to the fullest extent permitted by
applicable law, any claim that any action or proceeding commenced by the
Agent or any Lender relating in any way to this Agreement should be dismissed
or stayed by reason, or pending the resolution, of any action or proceeding
commenced by any Obligor relating in any way to this Agreement whether or not
commenced earlier. To the fullest extent permitted by applicable law, the
Obligors shall take all measures necessary for any such action or proceeding
commenced by the Agent or any Lender to proceed to judgment prior to the
entry of judgment in any such action or proceeding commenced by any Obligor.
12.02 NOTICES. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under,
this Agreement) shall be given or made in writing (including, without
limitation, by telex or telecopy), or, with respect to notices given pursuant
to Section 2.03 hereof, by telephone, confirmed in writing by telecopier by
the close of business on the day the notice is given, delivered (or
telephoned, as the case may be) to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof; or, as to
any party, at such other address as shall be designated by such party in a
notice to each other party. Any communication required to be delivered to a
Significant Holder (as that term is defined in the
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1994 Securities Purchase Agreement) shall be given at the address for the
Purchasers referred to therein, specified in Section 17J of the 1994
Securities Purchase Agreement (or such other address as shall be designated
by such Purchasers in a notice to the Agent). Except as otherwise provided
in this Agreement, all such communications shall be deemed to have been duly
given when transmitted by telex or telecopier (with confirmation) or
personally delivered or, in the case of a mailed notice, upon receipt, in
each case given or addressed as aforesaid.
12.03 EXPENSES, ETC. The Company agrees to pay or reimburse each
of the Lenders and the Agent for: (a) all reasonable out-of-pocket costs and
expenses of each Lander (including, without limitation, the reasonable fees
and expenses of Xxxxx, Xxxxx & Xxxxx, special New York counsel to ING) in
connection with (i) the negotiation, preparation, execution and delivery of
this Agreement and the other Basic Documents and the extension of credit
hereunder and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the
other Basic Documents (whether or not consummated); (b) all reasonable
out-of-pocket costs and expenses of the Lenders and the Agent (including,
without limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection proceedings
resulting therefrom, including, without limitation, all manner of
participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y)
judicial or regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout, restructuring or
transaction contemplated thereby is consummated) and (ii) the enforcement of
this Section 12.03; and (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or revenue authority
in respect of this Agreement or any of the other Basic Documents or any other
document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
by any Basic Document or any other document referred to therein.
The Company hereby agrees to indemnify the Agent and each Lender
and their respective directors, officers, employees, attorneys and agents
from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them (including,
without limitation, any and all losses, liabilities, claims, damages or
expenses incurred by the Agent to any Lender, whether or not the Agent or any
Lender is a party thereto) arising out of or by reason of any investigation
or litigation or other proceedings (including any threatened investigation or
litigation or other proceedings)
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relating to the extensions of credit hereunder or any actual or proposed use
by Obligors of the proceeds of any of the extensions of credit hereunder,
including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or willful
misconduct of the person to be indemnified). Without limiting the generality
of the foregoing, the Company will (x) indemnify the Agent for any payments
that the Agent is required to make under any indemnity issued to any bank
referred to in Section 4.02 of the Security Agreement to which remittances in
respect to Accounts, as defined therein, are to be made and (y) indemnify the
Agent and each Lender from, and hold the Agent and each Lender harmless
against, any losses, liabilities, claims, damages or expenses described in
the preceding sentence (excluding, as provided in the preceding sentence, any
loss, liability, claim, damage or expense incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified) arising
under any Environmental Law as a result of the past, present or future
operations of the Obligors (or any predecessor in interest to the Obligors),
or the past, present or future condition of any site or facility owned,
operated or leased at any time by the Company or any of its Subsidiaries (or
any such predecessor in interest), or any Release or threatened Release of
any Hazardous Materials at or from any such site or facility, including any
such Release or threatened Release that shall occur during any period when
the Agent or any Lender shall be in possession of any such site or facility
following the exercise by the Agent or any Lender of any of its rights and
remedies hereunder or under any of the Security Documents.
12.04 AMENDMENTS, ETC. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or
supplemented only by an instrument in writing signed by the Company, the
Agent and the Majority Lenders, or by the Company and the Agent acting with
the consent of the Majority Lenders, and any provision of this Agreement may
be waived by the Majority Lenders or by the Agent acting with the consent of
the Majority Lenders; PROVIDED that: (a) no modification, supplement or
waiver shall, unless by an instrument signed by all of the Lenders or by the
Agent acting with the consent of all of the Lenders: (i) increase, or extend
the term of any of the Commitments, or extend the time or waive any
requirement for the reduction or termination of any of the Commitments, (ii)
extend the date fixed for the payment of principal of or interest on any
Loan, the Reimbursement Obligations or any fee hereunder, (iii) reduce the
amount of any such payment of principal, (iv) reduce the rate at which
interest is payable thereon or any fee is payable hereunder, (v) alter the
rights or obligations of the Company to prepay Loans, (vi) alter the terms of
this
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Section 12.04, (vii) modify the definition of the term "Majority Lenders" or
modify in any other manner the number or percentage of the Lenders required
to make any determinations or waive any rights hereunder or to modify any
provision hereof, or (viii) waive any of the conditions precedent set forth
in Section 7.01 hereof; (b) any modification or supplement of Section 11
hereof shall require the consent of the Agent; and (c) any modification or
supplement of Section 6 hereof shall require the consent of each Subsidiary
Guarantor.
12.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) No Obligor may assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the Lenders
and the Agent.
(b) Each Lender may assign any of its Loans, its Notes, its
Commitments, and its Letter of Credit Interest (but only with the consent of
the Agent and, in the case of the Revolving Credit Commitment or a Letter of
Credit Interest, the Issuing Bank); PROVIDED that (i) no such consent by the
Company shall be required in the case of any assignment to another Lender;
(ii) any such partial assignment shall be in an amount at least equal to
$2,500,000; and (iii) each such assignment by a Lender shall be made in such
manner so that the same portion of its Revolving Credit Loans and Revolving
Credit Commitment is assigned to the respective assignee. Upon execution and
delivery by the assignee to the Company, the Agent and the Issuing Bank of an
instrument in writing pursuant to which such assignee agrees to become a
"Lender" hereunder (if not already a Lender) having the Commitment(s), Loans,
and, if applicable, Letter of Credit Interest specified in such instrument,
and upon consent thereto by the Agent and the Issuing Bank, to the extent
required above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of the
Company, the Agent and the Issuing Bank), the obligations, rights and
benefits of a Lender hereunder holding the Commitment(s), Loans and, if
applicable, Letter of Credit Interest (or portions thereof) assigned to it
(in addition to the Commitment(s), Loans and Letter of Credit Interest, if
any, theretofore held by such assignee) and the assigning Lender shall, to
the extent of such assignment, be released from the Commitment(s) (or
portion(s) thereof) so assigned. Upon each such assignment the assigning
Lender shall pay the Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more other
Persons a participation in all or any part of any Loans or
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Letter of Credit Interest held by it, or in its Commitments, in which event
each purchaser of a participation (a "PARTICIPANT") shall be entitled to the
rights and benefits of the provisions of Section 9.01(k) hereof with respect
to its participation in such Loans, Letter of Credit Interest and Commitments
as if (and the Company shall be directly obligated to such Participant under
such provisions as if) such Participant were a "Lender" for purposes of said
Section, but, except as otherwise provided in Section 4.07(c) hereof, shall
not have any other rights or benefits under this Agreement or any Note or any
other Basic Document (the Participant's rights against such Lender in respect
of such participation to be those set forth in the agreements executed by
such Lender in favor of the Participant). All amounts payable by the Company
to any Lender under Section 5 hereof in respect of Loans, Letter of Credit
Interest held by it, and its Commitments, shall be determined as if such
Lender had not sold or agreed to sell any participations in such Loans,
Letter of Credit Interest and Commitments, and as if such Lender were funding
each of such Loan, Letter of Credit Interest and Commitments in the same way
that it is funding the portion of such Loan, Letter of Credit Interest and
Commitments in which no participations have been sold. In no event shall a
Lender that sells a participation agree with the Participant to take or
refrain from taking any action hereunder or under any other Basic Document
except that such Lender may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or extend the
term, or extend the time or waive any requirement for the reduction or
termination, of such Lender's related Commitment, (ii) extend the date fixed
for the payment of principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of principal, (iv)
reduce the rate at which interest is payable thereon, or any fee hereunder
payable to the Participant, to a level below the rate at which the
Participant is entitled to receive such interest or fee, (v) alter the rights
or obligations of the Company to prepay the related Loans or (vi) consent to
any modification, supplement or waiver hereof or of any of the other Basic
Documents to the extent that the same, under Section 11.10 or 12.04 hereof,
requires the consent of each Lender.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.06, any Lender may (without
notice to the Company, the Agent or any other Lender and without payment of
any fee) (i) assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank and (ii)
assign all or any portion of its rights under this Agreement and its Loans
and its Notes to an Affiliate.
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No such assignment shall release the assigning Lender from its obligations
hereunder.
(e) A Lender may furnish any information concerning the Company or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 12.12(b) hereof.
(f) Anything in this Section 12.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan or Reimbursement
Obligation held by it hereunder to the Company or any of its Affiliates or
Subsidiaries without the prior consent of each Lender.
12.07 SURVIVAL. The obligations of the Company under Sections
5.01, 5.05, 5.06 and 12.03 hereof, the obligations of each Subsidiary
Guarantor under Section 6.03 hereof, and the obligations of the Lenders under
Section 11.05 hereof, shall survive the repayment of the Loans and
Reimbursement Obligations and the termination of the Commitments. In
addition, each representation and warranty made, or deemed to be made by a
notice of any extension of credit (whether by means of a Loan or a Letter of
Credit), herein or pursuant hereto shall survive the making of such
representation and warranty.
12.08 CAPTIONS. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any provision of this
Agreement.
12.09 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.10 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) This Agreement (including, without limitation, Section 6
hereof as it applies to Unidec) and the Notes shall be governed by, and
construed in accordance with, the internal laws of the State of New York.
Each Obligor hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New
York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Obligor irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have
to the laying of the venue of any such proceeding brought in such a court and
any
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claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(b) Each Obligor hereby agrees that service of all writs, process
and summonses in any such suit, action or proceeding brought in the State of
New York may be made upon CT Corporation (the "PROCESS AGENT"), presently
located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and each Obligor hereby
represents and agrees that the Process Agent has been duly and irrevocably
appointed as its agent and true and lawful attorney-in-fact in its name,
place and stead to accept such service of any and all such writs, process and
summonses, and agrees that the failure of the Process Agent to give any
notice of such service of process to any Obligor shall not impair or affect
the validity of-such service or of any judgment based thereon. Each Obligor
hereby further irrevocably consents to the service of process in any suit,
action or proceeding by the mailing thereof by the Agent or any Lender by
registered or certified mail, postage prepaid, at its address set forth
beneath its signature hereto.
(c) Nothing herein shall in any way be deemed to limit the ability
of the Agent or any Lender to serve any such writs, process or summonses in
any other manner permitted by applicable law or to obtain jurisdiction over
any Obligor in such other jurisdictions, and in such manner, as may be
permitted by applicable law.
12.11 WAIVER OF JURY TRIAL. EACH OF THE OBLIGORS, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OP OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
12.12 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
(a) The Obligors acknowledge that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Obligors (in connection with this Agreement or otherwise) by any Lender
or by one or more Subsidiaries or Affiliates of such Lender and each of the
Obligors hereby authorizes each Lender to share any information delivered to
such Lender by the Obligors pursuant to this Agreement, or in connection with
the decision of such Lender to enter into this Agreement, with any such
Subsidiary or Affiliate, it being understood that any such Subsidiary or
Affiliate receiving such information shall be bound by the provisions of
clause (b) below as if it were a Lender hereunder. Such authorization shall
survive the repayment of the Loans and Reimbursement Obligations and the
termination of the Commitments.
- 109 -
(b) Each Lender and the Agent agrees (on behalf of itself and each of
its affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of the same nature
and in accordance with safe and sound banking practices, any non-public
information supplied to it by any Obligor pursuant to this Agreement that is
identified by such Person as being confidential at the time the same is
delivered to the Lenders or the Agent, PROVIDED that nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for any of the
Lenders or the Agent, (iii) to bank examiners, auditors or accountants,
(iv) to the Agent or any other Lender, (v) in connection with any litigation to
which any one or more of the Lenders or the Agent is a party, (vi) to a
Subsidiary or Affiliate of such Lender as provided in clause (a) above or
(vii) to any assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee or
participant) first executes and delivers to the respective Lender a
Confidentiality Agreement substantially in the form of Exhibit I hereto. In
no event shall any Lender or the Agent be obligated or required to return any
materials furnished by any Obligor. In addition, the obligations of any
assignee that has executed a Confidentiality Agreement in the form of
Exhibit I hereto shall be superseded by this Section 12.12 upon the date upon
which such assignee becomes a Lender hereunder pursuant to Section 12.06 hereof.
12.13 JUDGMENT CURRENCY. The specification of Dollars and payment in
the United States is of the essence, and the obligations of any Obligor under
this Agreement and the other Basic Documents to make payment to (or for the
account of) a Lender in Dollars shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into
any other currency or in another place except to the extent that such tender
or recovery results in the effective receipt by such Lender in the United
States of the full amount of Dollars payable to such Lender under this
Agreement. If for the purpose of obtaining judgment in any court it is
necessary to covert a sum due hereunder in Dollars into another currency (the
"JUDGMENT CURRENCY"), the rate of exchange which shall be applied shall be
that at which in accordance with market practices the Agent could purchase
such Dollars in New York City with the judgment currency on the Business Day
following the day on which such judgment is rendered. The obligation of the
Obligors in respect of any sum due from it to the Agent or any Lender
hereunder or under any Basic Document (any "ENTITLED PERSON") shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the Business Day following
receipt by such Entitled Person of any
- 110 -
sum adjudged to be due hereunder in the judgment currency such Entitled
Person may in accordance with market practices purchase and transfer Dollars
to New York City in the amount of the judgment currency so adjudged to be
due; and each of the Obligors hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify such Entitled Person
against, and to pay such Entitled Person on demand, in Dollars, the amount
(if any) by which the sum originally due to such Entitled Person in Dollars
hereunder exceeds the amount of Dollars so purchased and transferred.
- 111 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
XxXXXXX AIRCRAFT HOLDINGS, INC.
By /s/ R. Xxxx XxXxxxx
---------------------------------
Title:
Address for Notices:
XxXxxxx Aircraft Holdings, Inc.
000 Xxxxxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxx 00000
Attention: Mr. R. Xxxx XxXxxxx
Chief Executive Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- 112 -
SUBSIDIARY GUARANTORS
ADS ACQUISITION, INC.
By /s/ R. Xxxx XxXxxxx
----------------------------
Title:
TRI-STAR HOLDINGS, INC.
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL,
INC.
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri Star Technologies, Inc., as
as general partner
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
TRI-STAR ELECTRONICS EUROPE S.A.,
MEZZOVICO
By
-----------------------------
Title:
XXXX HOLDINGS, INC.
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
- 113 -
SUBSIDIARY GUARANTORS
ADS ACQUISITION, INC.
By
----------------------------
Title:
TRI-STAR HOLDINGS, INC.
By
-----------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL,
INC.
By
-----------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By
-----------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri Star Technologies, Inc., as
as general partner
By
-----------------------------
Title:
TRI-STAR ELECTRONICS EUROPE S.A.,
MEZZOVICO
By /s/ [ILLEGIBLE]
-----------------------------
Title:
XXXX HOLDINGS, INC.
By
-----------------------------
Title:
- 113 -
XXXX COMPONENTS, INC.
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
XXXXXXXXXXX INTERNATIONAL, INC.
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
XXXXXXXXXXX INTERNATIONAL LIMITED
By /s/ R. Xxxx XxXxxxx
-----------------------------
Title:
- 114 -
LENDERS
-------
Revolving Credit Commitment INTERNATIONALE NEDERLANDEN (U.S)
--------------------------- CAPITAL CORPORATION
$9,375,000
Term Loan Commitment
--------------------
$11,250,000
By /s/ Xxxxx Balistrery
--------------------------
Title: Senior Associate
Lending Office for all Loans:
Internationale Nederlanden (U.S.)
Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Address for Notices:
Internationale Nederlanden (U.S.)
Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance Group
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- 115 -
Revolving Credit Commitment THE PROVIDENT BANK
----------------------------
$3,125,000
Term Loan Commitment
--------------------
$3,750,000 By [ILLEGIBLE]
-----------------------------
Title: VP
Lending Office for all Loans:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Address for Notices:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxx
Corporate Banking
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- 000 -
XXXXXXXXXXXXXX XXXXXXXXXXX (U.S.)
CAPITAL CORPORATION,
as Agent
By /s/ Xxxxx Balistrey
------------------------------
Title: SENIOR ASSOCIATE
Address for Notices to
ING as Agent:
Internationale Nederlanden (U.S.)
Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance Group
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
- 117 -
[EXECUTION COPY]
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of September 18, 1996, between XxXXXXX
AIRCRAFT HOLDINGS, INC., a corporation duly organized and validly existing
under the laws of the State of Ohio (the "COMPANY"); each of the Subsidiaries
of the Company identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto (collectively, the "SUBSIDIARY GUARANTORS" and,
together with the Company, the "OBLIGORS"); and INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION, a Delaware corporation, as agent for the Lenders
named in the Amended and Restated Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "AGENT").
The Company, certain of the Subsidiary Guarantors, the Lenders, the
Cash Management Agent identified therein and the Agent entered into a Credit
Agreement, dated as of November 2, 1994 (the "CREDIT AGREEMENT"), providing,
subject to the terms and conditions thereof, for extensions of credit (by
making loans and issuing letters of credit) to be made by said Lenders to the
Company. In order to induce the Lenders to enter into the Credit Agreement,
the Company, the Subsidiary Guarantors identified therein and the Agent
entered into a Security Agreement, dated as of November 2, 1994 (the
"SECURITY AGREEMENT"), providing for the pledge and grant of a security
interest in certain collateral as security for the obligations of the
Obligors under the Credit Agreement.
The Obligors, the Lenders, the Cash Management Agent identified
therein and the Agent entered into an Amended and Restated Credit Agreement,
dated as of September 18, 1996 (the "AMENDED AND RESTATED CREDIT AGREEMENT"),
amending and restating the Credit Agreement for the purpose of providing,
subject to the terms and conditions thereof, additional credit to the Company
to finance certain capital expenditures, the operations of the Company and
for other purposes. To induce the Lenders to enter into the Amended and
Restated Credit Agreement and for other good and valuable consideration, the
Company, the Subsidiary Guarantors party to the Security Agreement and the
Agent wish to modify the Security Agreement to, among other things, include
ADS Acquisition, Inc. as a party to the Security Agreement.
Accordingly, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment, terms defined in the Amended and Restated Credit Agreement are
used herein as defined therein.
Section 2. AMENDMENTS. Subject to the satisfaction of the
conditions precedent specified in Section 4 below, but effective as of the
date hereof, the Security Agreement shall be amended as follows:
2.01 AMENDED AND RESTATED CREDIT AGREEMENT. Each reference to the
Credit Agreement in the Security Agreement shall be a reference to the
Amended and Restated Credit Agreement.
2.02 ADS. ADS Acquisition, Inc. shall be included as a
"Subsidiary Guarantor" and "Obligor" under the Security Agreement, with all
of the rights and obligations of a Subsidiary Guarantor thereunder.
Section 3. REPRESENTATIONS AND WARRANTIES. Each of the Obligors
represents and warrants to the Lenders that the representations and
warranties set forth in Section 2 of the Security Agreement are true and
complete on the date hereof, as if made on and as of the date hereof (or, if
such representation warranty is expressly stated to have been made as of a
specific date, as of such specific date), and as if each reference in said
Section 2 to "this Agreement" included reference to this Amendment.
Section 4. CONDITIONS PRECEDENT. As provided in Section 2 above,
the amendment to the Security Agreement set forth in said Section 2 shall
become effective, as of the date hereof, upon the execution and delivery of
this Amendment by the Obligors and the Agent.
Section 5. MISCELLANEOUS. Except as herein provided, the Security
Agreement shall remain unchanged and in full force and effect. This
Amendment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same amendatory instrument and any of
the parties hereto may execute this Amendment by signing any such
counterpart. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered as of the day and year first above written.
XxXXXXX AIRCRAFT HOLDINGS, INC.
By /s/ R. Xxxx XxXxxxx
---------------------------------
Title:
-3-
SUBSIDIARY GUARANTORS
TRI-STAR HOLDINGS, INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL,
INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri-Star Technologies, Inc., as
as general partner
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
TRI-STAR ELECTRONICS EUROPE S.A.,
MEZZOVICO
By
--------------------------------
Title:
XXXX HOLDINGS, INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
-4-
SUBSIDIARY GUARANTORS
TRI-STAR HOLDINGS, INC.
By
--------------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL,
INC.
By
--------------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By
--------------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri-Star Technologies, Inc., as
as general partner
By
--------------------------------
Title:
TRI-STAR ELECTRONICS EUROPE S.A.,
MEZZOVICO
By /s/ [ILLEGIBLE]
--------------------------------
Title:
XXXX HOLDINGS, INC.
By
--------------------------------
Title:
-4-
XXXX COMPONENTS, INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
XXXXXXXXXXX INTERNATIONAL, INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
XXXXXXXXXXX INTERNATIONAL LIMITED
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title:
ADS ACQUISITION, INC.
By /s/ R. Xxxx XxXxxxx
--------------------------------
Title
AGENT
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION,
as Agent
By /s/ [ILLEGIBLE]
--------------------------------
Title: Senior Associate
-5-
MB&P Draft of December 11, 1996
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of December 12, 1996, between XxXXXXX AIRCRAFT
HOLDINGS INC., a corporation duly organized and validly existing under the
laws of the State of Ohio (the "COMPANY"); each of the Subsidiaries of the
Company identified under the caption "SUBSIDIARY GUARANTORS" on the signature
pages hereto (collectively, the "SUBSIDIARY GUARANTORS" and, together with
the Company, the "OBLIGORS"); each of the lenders that is a signatory hereto
identified under the caption "LENDERS" on the signature pages hereto or that
pursuant to Section 12.06(b) of the Credit Agreement (defined below), shall
become a "Lender" under the Credit Agreement (collectively, the LENDERS");
THE PROVIDENT BANK, an Ohio banking corporation, as Cash Management Agent (in
such capacity, together with its successors in such capacity, the "CASH
MANAGEMENT AGENT"); and ING (U.S.) CAPITAL CORPORATION, a Delaware
corporation, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "AGENT").
The Obligors, the Lenders, the Cash Management Agent and the Agent are
parties to an amended and restated Credit Agreement, dated as of September
18, 1996 (as heretofore amended, the "CREDIT AGREEMENT"), providing, subject
to the terms and conditions thereof, for extensions of credit (by making
loans and issuing letters of credit) to be made by said Lenders to the
Company in an aggregate principal or face amount not exceeding $27,500,000.
The Obligors, the Lenders, the Cash Management Agent and the Agent wish to
increase the aggregate amount of the Revolving Credit Commitments under the
Credit Agreement from $12,500,000 to $15,750,000, to make additional Term
Loans in an aggregate amount equal to $5,000,000 and to modify the Credit
Agreement in certain other respects and accordingly, the parties hereto
hereby agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this Amendment,
terms defined in the Credit Agreement are used herein as defined therein.
Section 2. AMENDMENTS. Subject to the satisfaction of the conditions
precedent specified in Section 5 below, but effective as of the date hereof,
the Credit Agreement shall be amended as follows:
2.01 AMP ACQUISITION.
(a) The following defined terms shall be added to Section 1.01 of the
Credit Agreement (Definitions) in their respective appropriate alphabetical
locations:
""AMP" shall mean AMP Incorporated, a corporation duly organized
and validly existing under the laws of the Commonwealth of
Pennsylvania."
""AMP ACQUISITION" shall mean the acquisition by the Company of
(i) all of the assets of AMP related to its Qualitronix manufacturing
activities and (ii) certain specific proprietary rights and
intellectual property of Xxxxxxxx, in each case pursuant to the AMP
Purchase Agreement."
""AMP PURCHASE AGREEMENT" shall mean the Asset Purchase and
Sale Agreement, dated as of November 25, 1996, among the Company, AMP
and Xxxxxxxx."
""SUPPLY CONTRACTS" shall have the meaning given to that term in
the AMP Purchase Agreement."
""XXXXXXXX" shall mean The Xxxxxxxx Corporation, a corporation
duly organized and validly existing under the laws of the State of
Delaware."
(b) Section 9.05 of the Credit Agreement (Prohibition of Fundamental
Changes) shall be amended by deleting the word "and" in the second
sentence thereof, and by adding the following at the end of such sentence:
"and the AMP Acquisition"
(c) Section 9.22 of the Credit Agreement (Use of Proceeds) shall be
amended by adding the following at the end thereof:
", and FURTHER PROVIDED that the proceeds of Loans made on the date
that the AMP Acquisition is consummated shall be used solely to make
payments due under the AMP Purchase Agreement, and to pay related fees and
expenses."
(d) Section 9.24 of the Credit Agreement (Modification of Certain
Documents) shall be amended by adding the following at the end of the first
sentence thereof:
", or (iii) either of the Supply Contracts"
(e) Annex 6 to the Security Agreement (Locations) shall be amended in
its entirety to read as Annex 6 hereto.
2.02 INCREASE IN REVOLVING CREDIT COMMITMENTS. The definition of
"Revolving Credit Commitment" in Section 1.01 of the Credit Agreement shall
be amended in its entirety to read as follows:
""REVOLVING CREDIT COMMITMENT" shall mean, as to each Lender, the
obligation of such Lender to make Revolving Credit Loans in an
aggregate amount at any one time outstanding up to but not exceeding
the amount set opposite the name of such Lender on the signature pages
of Amendment No. 2 hereto under the caption "Revolving Credit
Commitment" (as the same may reduced from time to time pursuant to
Section 2.04 hereof)."
2.03 ADDITIONAL TERM LOANS
(a) The Following shall be added immediately following the first
sentence of Section 2.01(b) of the Credit Agreement (Commitment to Make
Term Loans):
"In addition, each Lender severally agrees, on the terms and
conditions of this Agreement, to make a term loan to the Company
in Dollars on the date on which the AMP Acquisition is consummated
in a principal amount equal to (a) in the case of ING, $3,750,000 and
(b) in the case of Provident, $1,250,000."
(b) Section 3.01(b) of the Credit Agreement (Amortization of Term
Loans) shall be amended in its entirety to read as follows:
- 2 -
"(b) The Company hereby promises to pay to the Agent for account of
each Lender the principal of such Lender's Term Loans in 20 installments
payable on the Principal Payment Dates as follows:
PRINCIPAL PAYMENT DATE AMOUNT OF INSTALLMENT ($)
December 31, 1996 $375,000
March 31, 1997 468,750
June 30, 1997 468,750
September 30, 1997 468,750
December 31, 1997 468,750
March 31, 1998 875,000
June 30, 1998 875,000
September 30, 1998 875,000
December 31, 1998 875,000
March 31, 1999 968,750
June 30, 1999 968,750
September 30, 1999 968,750
December 31, 1999 968,750
March 31, 2000 968,750
June 30, 2000 968,750
September 30, 2000 968,750
December 31, 2000 968,750
March 31, 2001 968,750
June 30, 2001 968,750
September 30, 2001 1,937,500"
2.04 COVENANT MODIFICATIONS.
[To be provided]
Section 3. FEES.
(a) On the date that this Amendment No. 2 shall become effective, the
Company agrees to pay to the Agent, for the benefit of the Lenders, a fee in
an amount equal to $250,000.
(b) Effective as of the date hereof, the following new Section 2.12
shall be added to the Credit Agreement:
"9.22 SEMI-ANNUAL FEES. Until the payment in full of all obligations
of the Company hereunder and the termination or expiration of the
Commitments, the Company shall pay to the Agent, for account of the
Lenders, a fee in an amount equal to the Semi-annual Fee Amount, payable
on each May 15 and November 15 in each year, commencing with May 15, 1997.
For purposes hereof, the 'SEMI-ANNUAL FEE AMOUNT' shall mean, with respect
to any payment of a fee pursuant to this Section 9.22 , the sum of $67,000
PLUS the aggregate amount of all fees theretofore required to have been
made (E.G., the payment due on November 15, 1997 will be calculated as
follows: $67,00 PLUS $67,000 (the payment required to have been made on
May 15, 1997) EQUALS $134,000)."
- 3 -
(c) Notwithstanding that the increase of the Revolving Credit
Commitments contemplated by Section 2 hereof shall not become effective
until the satisfaction of the conditions precedent specified in Section 6
hereof, for purposes of calculating the amount of commitment fee payable
under Section 2.05 of the Credit Agreement, the Revolving Credit
Commitments of the Lenders shall be deemed to have been so increased
immediately upon the execution of this Amendment by each of the Lenders.
Section 4. REPRESENTATIONS AND WARRANTIES. Each of the Obligors
represents and warrants to the Lenders that (i) the representations and
warranties set forth in Section 8 of the Credit Agreement are true and
complete on the date hereof, as if made on and as of the date hereof ( or, if
such representation warranty is expressly stated to have been made as of a
specific date, as of such specific date), and as if each reference in said
Section 8 to "this Agreement" included reference to this Amendment No. 2 and
(ii) after giving effect to this Amendment No. 2, no Default shall have
occurred and be continuing.
Section 5. CONDITIONS PRECEDENT. As provided in Section 2 above, the
amendments to the Credit Agreement set forth in said Section 2 shall become
effective, as of the date hereof, subject to the satisfaction of the
following conditions:
5.01 EXECUTION. This Amendment No. 2 shall have been duly executed
and delivered by the Company, the Subsidiary Guarantors, the Agent and each
of the Lenders.
5.02 NOTES. The Company shall have delivered to the Agent for each
Lender, in exchange for the Notes heretofore delivered to such Lender
pursuant to Section 2.08 of the Credit Agreement, new Notes, date the date
of the Notes being exchanged, payable to such Lender in a principal amount
equal to its Revolving Credit Commitment (as increased hereby) and the
aggregate amount of its Term Loans (as increased hereby), respectively,
and otherwise duly completed.
5.03 AMP PURCHASE AGREEMENT. The Agent shall have received a copy of
the AMP Purchase Agreement, together with all documents and agreements
relating thereto (including, without limitation, the Supply Contracts),
each in form and substance satisfactory to the Agent.
5.04 UCCs. Appropriate Uniform Commercial Code Financing statements
shall have been delivered to the Agent for filing in such jurisdiction as
the Agent shall request to perfect the Lien created by the Security
Agreement over the Properties acquired by the Company in the AMP
Acquisition.
5.05 FEE. The Agent shall have received the fee referred to in
Section 3(a) hereof.
Section 6. MISCELLANEOUS. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This
Amendment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same amendatory instrument and any of
the parties hereto may execute this Amendment by signing any such
counterpart. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
- 4 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
XxXXXXX AIRCRAFT HOLDINGS, INC.
By_____________________________
Title:
SUBSIDIARY GUARANTORS
TRI-STAR HOLDING, INC.
By_____________________________
Title:
TRI-STAR ELECTRONICS INTERNATIONAL,
INC.
By_____________________________
Title:
TRI-STAR TECHNOLOGIES, INC.
By_____________________________
Title:
TRI-STAR TECHNOLOGIES
By Tri-Star Technologies, Inc., as
as general partner
By_____________________________
Title:
UNIDEC, S.A.
By_____________________________
Title:
- 5 -
XXXX HOLDINGS, INC.
By_____________________________
Title:
XXXX COMPONENTS, INC.
By_____________________________
Title:
XXXXXXXXXXX INTERNATIONAL, INC.
By_____________________________
Title:
XXXXXXXXXXX INTERNATIONAL LIMITED
By_____________________________
Title:
ELSINORE AEROSPACE SERVICES, INC.
By_____________________________
Title:
EE ACQUISITIONS, INC.
By_____________________________
Title:
- 6 -
LENDERS
Revolving Credit Commitment: ING (U.S.) CAPITAL CORPORATION
$11,812,500
By_____________________________
Title:
Revolving Credit Commitment: THE PROVIDENT BANK
$3,937,500
By_____________________________
Title:
ING (U.S.) CAPITAL CORPORATION,
as Agent
By_____________________________
Title:
- 7 -
CONSENTS OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated April 9, 1996 relating
to the consolidated financial statements of XxXxxxx Aircraft Holdings, Inc.
which appears in such Prospectus. We also consent to the application of such
report to the Financial Statement Schedule for the three years ended December
31, 1995 listed under Item 16(b) of this Registration Statement when such
schedule is read in conjunction with the financial statements referred to in
our report. The audits referred to in such report also included this
schedule. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PRICE WATERHOUSE LLP
Cleveland, Ohio
December , 1996
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated April 2, 1996 relating
to the financial statements of Aerospace Display Systems which appears in
such Prospectus.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
December , 1996
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of February 20, 1996, between XxXXXXX
AIRCRAFT HOLDINGS, INC., a corporation duly organized and validly existing
under the laws of the State of Ohio (the "COMPANY"); each of the Subsidiaries
of the Company identified under the caption "SUBSIDIARY GUARANTORS" on the
signature pages hereto (collectively, the "SUBSIDIARY GUARANTORS" and,
together with the Company, the "OBLIGORS"); each of the lenders that is a
signatory hereto identified under the caption "LENDERS" on the signature
pages hereto or that, pursuant to Section 12.06(b) of the Credit Agreement
(defined below), shall become a "Lender" under the Credit Agreement
(collectively, the "LENDERS"); THE PROVIDENT BANK, an Ohio banking
corporation, as Cash Management Agent (in such capacity, together with its
successors in such capacity, the "CASH MANAGEMENT AGENT"); and INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL CORPORATION, a Delaware corporation, as agent for
the Lenders (in such capacity, together with its successors in such capacity,
the "AGENT").
The Obligors, the Lenders, the Cash Management Agent and the Agent
are parties to a Credit Agreement, dated as of November 2, 1994 (as
heretofore amended, the "CREDIT AGREEMENT"), providing, subject to the terms
and conditions thereof, for extensions of credit (by making loans and issuing
letters of credit) to be made by said Lenders to the Company in an aggregate
principal or face amount not exceeding $20,000,000. The Obligors, the
Lenders and the Agent wish to modify the Credit Agreement and, accordingly,
the parties hereto hereby agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment, terms defined in the Credit Agreement are used herein as defined
therein.
Section 2. AMENDMENTS. Subject to the satisfaction of the
conditions precedent specified in Section 4 below, but effective as of the
date hereof, the Credit Agreement shall be amended as follows, and compliance
by the Obligors with certain provisions of the Credit Agreement waived as
follows:
2.01 NEW DEFINITIONS. The following defined terms shall be added
to Section 1.01 of the Credit Agreement in their respective appropriate
alphabetical locations:
"'APPLICABLE ANNUALIZATION FACTOR' shall mean:
(a) for the fiscal quarter ending on March 31, 1996, 4.0;
(b) for the fiscal quarter ending on June 30, 1996, 2.0; and
(c) for the fiscal quarter ending on September 30, 1996, 1.33.
"'COMMODITY PRICE PROTECTION AGREEMENT' shall mean, for any Person,
an exchange-traded or over-the-counter commodity (including, without
limitation, foreign exchange) forward, future, option, swap, swaption,
cap, collar, floor or similar arrangement to which such Person is a
party, providing for the transfer or mitigation of commodity (including
foreign exchange) risks either generally or under specific
contingencies."
"'XXXX PURCHASE AGREEMENT' shall mean the Stock Purchase Agreement,
dated January 1, 1995, between the Company, Xxxx and Xxxxxxx."
"'XXXX REPURCHASE' shall mean the purchase by the Company from
Xxxxxxx of 25% of the outstanding capital stock of Xxxx pursuant to Xxxx
Purchase Agreement."
"'NASSAU' shall mean Nassau Capital Partners L.P., a Delaware
limited partnership, and NAS Partners I L.L.C., a Delaware limited
liability company."
"'NASSAU EQUITY INFUSION' shall mean the purchase by Nassau for
cash, on or about the date of Amendment No. 3 hereto, of shares of preferred
stock of the Company and Nassau Warrants for a purchase price equal to
$6,500,000 pursuant to the Nassau Purchase Agreement."
"'NASSAU/XXXXXXX DEAL COSTS' shall mean all costs and expenses
incurred by the Company or any of its Subsidiaries in connection with
the transactions contemplated by the Xxxx Repurchase, the Nassau Equity
Infusion and Amendment No. 3 to the Credit Agreement, including (without
limitation) the following: (a) fees and expenses paid to the Lenders,
the Agent, Nassau, Electra and their respective counsel and (b)
investment banking, independent accountant, brokerage, arrangement and
commitment fees, commissions and expenses."
-2-
"'NASSAU PURCHASE AGREEMENT' shall mean the Securities Purchase
Agreement dated as of February 20, 1996 among the Company and Nassau."
"'NASSAU WARRANTS' shall mean the warrants to be acquired by Nassau,
pursuant to the terms of the Nassau Purchase Agreement."
"'QUALIFIED PUBLIC OFFERING' shall mean an underwritten public
offering of the common stock of the Company registered under the
Securities Act of 1933, as amended."
"'SENIOR SUBORDINATED DEBT AMENDMENTS' shall mean (i) Amendment No.
1, dated as of February 20, 1996, to the Securities Purchase Agreement
among the Company, Electra Investment Trust P.L.C. and Electra Associates,
Inc and (ii) Amendment No. 1, dated as of February 20, 1996, to the
Advisory Agreement among the Company and Electra Inc."
2.02 MODIFIED DEFINITIONS. The following definitions in Section 1.01
of the Credit Agreement shall be amended as follows:
(a) The existing definition of "Borrowing Base" shall be changed to be
a definition of "GROSS BORROWING BASE" and "Borrowing Base" shall be defined
as follows:
"'BORROWING BASE' shall mean, as at any date, the lesser of the
following:
(i) the sum of the Gross Borrowing Base MINUS the aggregate
amount payable by the Company on or after such date under the
Restrictive Covenant Agreement referred to in the Xxxx Purchase
Agreement, and
(ii) the aggregate amount of the Commitments on such date
MINUS the aggregate amount payable by the Company on or after such
date under the Restrictive Covenant Agreement referred to in the Xxxx
Purchase Agreement."
(b) The definition of "EBITDA" is hereby amended by replacing the
second parenthetical phrase therein with the following:
"(including, without limitation, (x) amortization of intangibles, (y)
amortization of Deal Costs (to the extent that such Deals Costs do not
exceed $2,500,000)
-3-
and (z) amortization of Nassau/Xxxxxxx Deal Costs (to the extent that such
Nassau/Xxxxxxx Deal Costs do not exceed $600,000) and amortization of
legal expenses incurred prior to February 20, 1996, in connection with a
derivative action maintained by Xxxxxxx, on behalf of Xxxx, against the
Company and certain Subsidiary Guarantors (to the extent that such legal
expenses do not exceed $350,000))"
(c) The definition of "EBITDA RATIO" is hereby amended by adding the
following proviso immediately prior to the end of such definition:
"; PROVIDED that, with respect to any date prior to December 31, 1996,
'EBITDA RATIO' shall mean the ratio of (a) all Indebtedness of the
Obligors at such time to (b) the product of (x) EBITDA for the period
commencing on January 1, 1996 and ending on the fiscal quarter ending on
or most recently ended prior to such date and (y) the Applicable
Annualization Factor"
(d) The definition of "FIXED CHARGES RATIO" is hereby amended by
deleting the parenthetical in clause (a) thereof and adding the following
proviso immediately prior to the end of such definition:
"PROVIDED that, with respect to any date prior to December 31, 1996,
'FIXED CHARGES RATIO' shall mean the ratio of Cash Flow for the period
commencing on January 1, 1996 and ending on the fiscal quarter on or most
recently ended prior to such date to Debt Service for such period".
(e) The definition of "INTEREST COVERAGE RATIO" is hereby amended by
deleting the parenthetical in clause (a) thereof and adding the following
proviso immediately prior to the end of such definition:
"PROVIDED that, with respect to any date prior to December 31, 1996,
'INTEREST COVERAGE RATIO' shall mean the ratio of Cash Flow for the period
commencing on January 1, 1996 and ending on the fiscal quarter ending on
or most recently ended prior to such date to Interest Expense that is
payable in cash for such period".
(f) The definition of "INTEREST EXPENSE" is hereby amended by
relettering the existing clause "(b)" thereof as clause "(c)", deleting the
word "and" at the end of clause (a) and by adding the following new clause
(b):
-4-
"(b) the aggregate amount payable by the Company pursuant to Section
11.09 hereof (whether or not actually paid) during such period, and".
(g) The definition of "NET WORTH" is hereby amended by replacing clause
(e) thereof in its entirety with the following:
"(e) the value ascribed to the Warrants and the Nassau Warrants and the
cumulative effect of any change in the valuation of the Warrants and the
Nassau Warrants; PLUS".
(h) The definition of "SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
RATIO" is hereby amended by adding the following proviso immediately prior to
the end of such definition:
"PROVIDED that, with respect to any date prior to December 31, 1996,
'SELLING, GENERAL AND ADMINISTRATIVE EXPENSES RATIO' shall mean the ratio
of Selling, General and Administrative Expenses for the period commencing
on January 1, 1996 and ending on the fiscal quarter ending on or most
recently ended prior to such' date to Net Sales for such period".
Section 2.03 MANDATORY PREPAYMENTS.
(a) The Lenders waive the requirement of Section 2.10(c) of the Credit
Agreement that the Company prepay the Loans with the proceeds of the Nassau
Equity Infusion.
(b) Section 2.10(d) of the Credit Agreement is hereby amended by
replacing the reference therein to "60%" with a reference to "70%."
(c) Section 2.10(f)(i) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(i) first, the amount of the prepayment specified in such clauses
shall be applied to the installments of the Term Loans then outstanding in
the inverse order of the maturity thereof; and"
Section 2.04 LIMITATIONS ON XXXX GUARANTEE. The proviso at the end of
the first sentence of Section 6.08 of the Credit Agreement and Section 6.10
of the Credit Agreement are hereby deleted.
Section 2.05 XXXX REPURCHASE. The Lenders waive the provisions of
Section 9.05 of the Credit Agreement to the
-5-
extent necessary to permit the Company to consummate the Xxxx Repurchase.
The Lenders also waive the provisions of Section 9.24(b)(i) with respect to
the Senior Subordinated Debt Amendments to the extent necessary to permit the
Company to consummate the Xxxx Repurchase. In addition, Section 9.08(e) of
the Credit Agreement is hereby amended in its entirety to read as follows:
"(e) Investments in the capital stock of Xxxx made pursuant to the
Xxxx Purchase Agreement; and".
Section 2.06 NON-COMPETE OBLIGATIONS. Section 9.07 of the Credit
Agreement is hereby amended by relettering the existing clause "(e)" as
clause "(f)," by deleting the word "and" at the end of clause (d) and by
adding the following new clause (e):
"(e) Indebtedness, in an aggregate amount not to exceed $600,000,
consisting of obligations to Xxxxxxx under the Restrictive Covenant
Agreement referred to in the Xxxx Purchase Agreement; and"
Section 2.07 LEVERAGE RATIO. The Lenders hereby waive, compliance by
the Obligors with the provisions of Section 9.10 of the Credit Agreement on
September 30, 1995 and December 31, 1995. In addition, the table in Section
9.10 of the Credit Agreement is hereby amended for all periods prior to March
31, 1997 to read as follows:
"PERIOD RATIO
------ -----
From January 1, 1996
through March 30, 1996 11.00 to 1
From March 31, 1996
through June 29, 1996 3.62 to 1
From June 30, 1996
through September 29, 1996 3.47 to 1
From September 30, 1996
through December 30, 1996 3.07 to 1
From December 31, 1996
through March 30, 1997 2.58 to 1"
Section 2.08 EBITDA RATIO. The Lenders hereby waive compliance by the
Obligors with the provisions of Section 9.11 of the Credit Agreement on
September 30, 1995 and on December 31, 1995. In addition, the table in
Section 9.11 of the Credit Agreement is hereby amended for all periods
-6-
after December 31, 1995 and prior to March 31, 1997 to read as follows:
"PERIOD RATIO
------ -----
From March 31, 1996
through June 29, 1996 7.15 to 1
From June 30, 1996
through September 29, 1996 4.89 to 1
From September 30, 1996
through December 30, 1996 3.68 to 1
From December 31, 1996
through March 30, 1997 2.97 to 1"
Section 2.09 NET WORTH. The Lenders hereby waive compliance by the
Obligors with the provisions of Section 9.12 of the Credit Agreement on
September 30, 1995 and December 31, 1995. In addition, the table in Section
9.12 of the Credit Agreement is hereby amended for all periods prior to March
31, 1997 to read as follows:
"PERIOD AMOUNT
------ ------
From January 1, 1996
through March 30, 1996 $ 3,000,000
From March 31, 1996
through June 29, 1996 $ 9,922,000
From June 30, 1996
through September 29, 1996 $10,284,000
From September 30, 1996
through December 30, 1996 $11,225,000
From December 31, 1996
through March 30, 1997 $12,410,000"
Section 2.10 FIXED CHARGES RATIO. The Lenders hereby waive compliance
by the Obligors with the provisions of Section 9.14 of the Credit Agreement
on December 31, 1995. In addition, the table in Section 9.14 of the Credit
Agreement is hereby amended for all periods after December 31, 1995 and prior
to March 31, 1997 to read as follows:
-7-
"PERIOD RATIO
------ -----
From March 31, 1996
through June 29, 1996 0.26 to 1
From June 30, 1996
through September 29, 1996 0.74 to 1
From September 30, 1996
through December 30, 1996 0.99 to 1
From December 31, 1996
through March 30, 1997 1.21 to 1"
Section 2.11 INTEREST COVERAGE RATIO. The table in Section 9.16(a) of
the Credit Agreement is hereby amended for all periods after December 31,
1995 and prior to March 31, 1997 to read as follows:
"PERIOD RATIO
------ -----
From March 31, 1996
through June 29, 1996 0.41 to 1
From June 30, 1996
through September 29, 1996 1.17 to 1
From September 30, 1996
through December 30, 1996 1.61 to 1
From December 31, 1996
through March 30, 1997 2.02 to 1"
Section 2.12 SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RATIO. The
table in Section 9.16(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"PERIOD RATIO
------ -----
From March 31, 1996
through June 29, 1996 0.2114 to 1
From June 30, 1996
through September 29, 1996 0.1907 to 1
From September 30, 1996
through December 30, 1996 0.1810 to 1
From December 31, 1996
-8-
through March 30, 1997 0.1750 to 1
From March 31, 1997 and
at all times thereafter 0.1700 to 1"
Section 2.13 AGENCY AND CASH MANAGEMENT FEES. Section 11.09 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"11.09 AGENCY FEE; CASH MANAGEMENT FEE. Until payment in full of
the principal of and interest on the Loans and all other amounts payable
by the Company hereunder and termination of the Commitments hereunder,
(a) the Company will pay to the Agent an agency fee of $75,000
per annum, which shall accrue on the first Business Day of each
fiscal year of the Company (commencing on the first Business Day of
1996) and shall be payable quarterly in arrears on the last Business
Day of each fiscal quarter (commencing on the Business Day
immediately preceding March 31, 1996), and
(b) the Company will pay to the Cash Management Agent a cash
management fee of $25,000 per annum, which shall accrue on the first
Business Day of each fiscal year of the Company (commencing on the
first Business Day of 1996) and shall be payable quarterly in arrears
on the last Business Day of each fiscal quarter (commencing on the
Business Day immediately preceding March 31, 1996);
PROVIDED that, upon payment in full of the principal of and interest on
the Loans and the termination of the Commitments hereunder, accrued but
unpaid amounts under this Section 11.09 shall automatically become due and
payable."
Section 2.14 PREPAYMENT FEES. The Credit Agreement is hereby amended
by adding the following Section 2.11:
"2.11 PREPAYMENT FEES. The Company agrees to pay the following
prepayment fees:
(a) A prepayment fee of $400,000 shall be due and payable by
the Company to the Agent, for account of the Lenders, upon repayment
of all principal and interest on the Loans and termination of the
Commitments hereunder pursuant to Section 2.09 or Section 2.10 hereof
or
-9-
otherwise (exclusive, however, of repayment pursuant to paragraphs
(a), (b) or (d) of Section 2.10), if the same shall occur on or prior
to February 20, 1997.
(b) A prepayment fee of $200,000 shall be due and payable by
the Company to the Agent, for account of the Lenders, upon repayment
of all principal and interest on the Loans and termination of the
Commitments hereunder pursuant to Section 2.09 or Section 2.10 hereof
or otherwise (exclusive, however, or repayment pursuant to paragraphs
(a), (b) or (d) of Section 2.10), if the same shall occur after
February 20, 1997 and on or prior to February 20, 1998.
Notwithstanding the foregoing, no such prepayment fee shall be payable
upon repayment of all principal and interest on the Loans and termination
of the Commitments hereunder pursuant to Section 2.10(c) hereof in
connection with a Qualified Public Offering."
Section 2.15 FOREIGN EXCHANGE PROTECTION. Section 9.08(f) of the
Credit Agreement in hereby amended in its entirety to read as follows:
"(f) Interest Rate Protection Agreements and Commodity Price
Protection Agreements entered into by the Company pursuant to Section 9.18
hereof."
In addition, Section 9.18 of the Credit Agreement is hereby amended by
renaming said Section "INTEREST RATE AND COMMODITY PRICE PROTECTION
AGREEMENTS" and by adding the following at the end of said Section:
"The Company will, by no later than ten Business Days after the
date hereof and at all time thereafter to and including December 31,
1996, maintain in full force and effect one or more Commodity Price
Protection Agreements with ING (or an affiliate thereof) that
effectively enables the Company (in a manner satisfactory to the
Majority Lenders), as at any date, to protect itself against the
Swiss franc exposure of Unidec for an amount of at least Sfr 585,000
per month. For each day after such tenth day on which the Company
shall not have entered into such Commodity Price Protection
Agreements, the Company shall pay to the Agent, for account of the
Lenders, a fee equal to $500, payable on demand."
-10-
Section 2.16 MODIFICATIONS TO CERTAIN DOCUMENTS. Section 9.24 of
the Credit Agreement is hereby amended by adding to clause (b)(i) thereof,
immediately following "Senior Subordinated Debt" the following:
"or the Xxxx Repurchase, or the Nassau Warrants or Section 7
of the Nassau Purchase Agreement".
Section 3. REPRESENTATIONS AND WARRANTIES. Each of the Obligors
represents and warrants to the Lenders that (i) the representations and
warranties set forth in Section 8 of the Credit Agreement are true and
complete on the date hereof, as if made on and as of the date hereof (or,
if such representation warranty is expressly stated to have been made as
of a specific date, as of such specific date), and as if each reference in
said Section 8 to "this Agreement" included reference to this Amendment
No. 3 and (ii) after giving effect to this Amendment No. 3, no Default
shall have occurred and be continuing.
Section 4. CONDITIONS PRECEDENT. As provided in Section 2 above, the
amendment to the Credit Agreement set forth in said Section 2 shall become
effective, as of the date hereof, subject to the satisfaction of the following
conditions:
4.01 EXECUTION; DUE AUTHORIZATION. This Amendment No. 3 shall
have been duly executed and delivered by the Company, the Subsidiary
Guarantors, the Agent and the Majority Lenders. In addition, the Agent
shall have received resolutions of the Board of Directors of the Company
authorizing the transactions contemplated by this Agreement, including
(without limitation) the amendments to the Senior Lender Warrant
Agreements referred to in Section 4.09 hereof.
4.02 XXXX PURCHASE AGREEMENT. The Agent shall have received a
copy of the Xxxx Purchase Agreement and all documents and agreements
relating thereto, each in form and substance satisfactory to the Agent,
certified by the Company to be a true and complete copies of the originals
thereof, and each of which shall be in full force and effect.
4.03 NASSAU PURCHASE AGREEMENT AND NASSAU WARRANTS. The Agent
shall have received a copies of the Nassau Purchase Agreement and all
documents and agreements relating thereto (including the Nassau Warrants),
each in form and substance satisfactory to the Agent, certified by the
Company to be true and complete copies of the originals thereof, and each
of which shall be in full force and effect prior to or concurrently with
the effectiveness of this Amendment.
-11-
4.05 SUBORDINATED DEBT DOCUMENTS. The Agent shall have received a
copy of the Senior Subordinated Debt Amendments, in form and substance
satisfactory to the Agent (and which, in any event shall include
covenant levels that are at least 10% more favorable to the Company than
those set forth in the Credit Agreement as amended by this Amendment No.
3), certified by the Company to be true and complete copies of the
originals thereof, each of which shall be in full force and effect
and shall constitute all waivers necessary by the holders of the
Senior Subordinated Debt to permit the Xxxx Repurchase, the Nassau
Equity Infusion and the transactions contemplated thereby and hereby.
4.06 EQUITY PROCEEDS: DEAL COSTS. Evidence satisfactory to
the Agent that (a) the Company has received from Nassau cash proceeds of
at least $6,500,000 from the Nassau Equity Infusion, (b) the aggregate
amount of Nassau/Xxxxxxx Deal Costs do not and will not substantially
exceed $600,000 and (c) the proceeds of the Nassau Equity Infusion will
be sufficient to pay substantially all of the Nassau/Xxxxxxx Deal Costs.
4.07 FEES AND EXPENSES. The Agent shall have received, for account
of the Lenders, a fee in an amount equal to $75,000. In addition, the
Company shall have paid, or reimbursed the Agent for paying, the fees and
expenses of Xxxxx, Xxxxx & Xxxxx, special New York counsel to ING, in
connection with this Amendment No. 3 and the transactions contemplated
hereby.
4.08 SECURITY. The Agent shall have received all certificates
evidencing stock of Xxxx acquired by the Company in connection with the
Xxxx Repurchase, together with undated stock powers duly executed in blank.
4.09 AMENDMENT TO WARRANTS. The Company, ING and Provident shall
have entered into an amendment to each of the Warrants to which ING or
Provident is a party, in substantially the form of Exhibit A hereto. In
addition, the Agent shall have received copies of amendments or other
documents evidencing modifications to any other Warrants, each in form and
substance satisfactory to the Agent, certified by the Company to be true
and complete copies of the originals thereof.
4.10 LETTER REGARDING FUTURE SENIOR FINANCINGS. The Company shall
have executed and delivered to ING and Provident a letter in substantially
the form of Exhibit B hereto.
-12-
Section 5. MISCELLANEOUS. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This
Amendment may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and
any of the parties hereto may execute this Amendment by signing any such
counterpart. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
-13-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered as of the day and year first above written.
XxXXXXX AIRCRAFT HOLDINGS, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
-14-
SUBSIDIARY GUARANTORS
TRI-STAR HOLDINGS, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri-Star Technologies, Inc., as
as general partner
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
UNIDEC, S.A.
By
-------------------------------------
Title:
XXXX HOLDINGS, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
XXXX COMPONENTS, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
-15-
SUBSIDIARY GUARANTORS
TRI-STAR HOLDINGS, INC.
By
-------------------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL, INC.
By
-------------------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By
-------------------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri-Star Technologies, Inc., as
as general partner
By
-------------------------------------
Title:
UNIDEC, S.A.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
XXXX HOLDINGS, INC.
By
-------------------------------------
Title:
XXXX COMPONENTS, INC.
By
-------------------------------------
Title:
-15-
XXXXXXXXXXX INTERNATIONAL, INC.
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
XXXXXXXXXXX INTERNATIONAL LIMITED
By /s/ [ILLEGIBLE]
-------------------------------------
Title:
-00-
XXXXXXX
XXXXXXXXXXXXXX XXXXXXXXXXX (U.S.)
CAPITAL CORPORATION
By /s/ [ILLEGIBLE]
-------------------------------------
Title: Senior Associate
THE PROVIDENT BANK
By
-------------------------------------
Title:
-00-
XXXXXXX
XXXXXXXXXXXXX XXXXXXXXXXX (U.S.)
CAPITAL CORPORATION
By
-------------------------------------
Title:
THE PROVIDENT BANK
By /s/ [ILLEGIBLE]
-------------------------------------
Title: Vice President
-00-
XXXXXXXXXXXXXX XXXXXXXXXXX (X.X.)
CAPITAL CORPORATION,
as Agent
By /s/ [ILLEGIBLE]
-------------------------------------
Title: Senior Associate
-18-
EXHIBIT A
[Letterhead of XxXxxxx Aircraft Holdings, Inc.]
February 20, 1996
To: Internationale Nederlanden (U.S.)
Capital Corporation
The Provident Bank
Re: FUTURE SENIOR FINANCINGS
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of November 2,
1994 (the "CREDIT AGREEMENT") among XxXxxxx Aircraft Holdings,
Inc. (the "COMPANY"), the subsidiaries of the Company parties
thereto, the lenders referred to therein and Internationale
Nederlanden (U.S.) Capital Corporation ("ING"), as Agent. As
consideration for your agreeing to enter into Amendment No. 3 to
the Credit Agreement, the Company hereby agrees as follows:
Section 1. RIGHT TO MAKE FIRST PROPOSAL. If the Company
wishes to raise additional senior financing, or to refinance the
Credit Agreement (collectively, a "FUTURE FINANCING"), the
Company shall (before requesting proposals from any other
possible source or arranger of such Future Financing (an "OTHER
FINANCING SOURCE") and before advising any Other Financing Source
of the Company's desire to raise such Future Financing) advise
each of you of its desire to raise such Future Financing and give
you the opportunity to make a proposal to the Company regarding
the terms and conditions on which ING (or both of you together)
would propose to arrange such Future Financing.
Section 2. RIGHT TO MATCH OTHER PROPOSALS. If, after
receiving proposals from you pursuant to Section 1 hereof, the
Company wishes to solicit additional proposals for raising such
Future Financing, it may do so, PROVIDED that, before granting a
mandate to an Other Financing Source or accepting any proposal or
commitment presented by an Other Financing Source, it shall
disclose to you the terms and conditions of the proposal or
commitment presented by such Other Financing Source and, if ING
(or both of you acting together) agree to make a proposal or
commitment on substantially the same terms and conditions as (or
terms and condition preferable to) the Other Financing Source's
proposal or commitment, ING or both of you acting together (as
the case may be) shall be given the exclusive right to arrange
such Other Financing.
Section 3. TERMINATION; SURVIVAL. The Company's
obligations under this letter shall terminate on the second
anniversary of the date hereof. The Company's obligations under
this letter shall survive any termination of the Credit
Agreement.
Section 4. GOVERNING LAW. This letter shall be governed
by, and construed in accordance with, the law of the State of New
York.
Very truly yours,
XxXXXXX AIRCRAFT HOLDINGS, INC.
By
----------------------------
Title:
-2-
EXHIBIT B
[Form of Amendment to Senior Lender Warrant Agreement]
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of February 20, 1996 (this "Amendment"), to
the Common Stock Purchase Warrant, dated as of November 2, 1994 (the
"Warrant"), entitling INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION,
a Delaware corporation ("ING"), to purchase Common Stock of XxXXXXX AIRCRAFT
HOLDINGS, INC., an Ohio corporation (the "CORPORATION"), which includes a
guarantee of the obligations of the Corporation thereunder by each of the
Subsidiaries of the Corporation identified under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereto (collectively, the "SUBSIDIARY
GUARANTORS"). Except as otherwise defined in this Amendment, terms defined
in the Warrant are used herein as defined therein.
I. AMENDMENTS
The Corporation, the Subsidiary Guarantors and ING wish to
amend the Warrant and, accordingly, the parties hereto hereby
agree that, effective as of the date hereof, the Warrant shall be
amended as follows:
A. NEW DEFINITION. The following defined term shall
be added to Section 1.1 of the Warrant in its
appropriate alphabetical location:
"'NASSAU PURCHASE AGREEMENT' shall mean the
Securities Purchase Agreement, dated February 20, 1996,
among the Corporation, Nassau Capital Partners L.P. and
NAS Partners I L.L.C."
B. REMOVAL OF LIMITATIONS ON XXXX GUARANTEE. The provisos at the
end of the first sentence of Section 8.6 of the Warrant and
Section 8.8 of the Warrant are hereby deleted.
C. PUT FINANCING. Section 5.2(i) is hereby amended in its
entirety to read as follows:
"(i) Notwithstanding anything to the contrary in this Section 5.2:
Immediately upon receipt of notice from the holders of warrants
issued pursuant to the Senior Subordinate Documents, the Securities
Purchase Agreement or the Nassau Purchase Agreement (such holders
being referred to herein collectively as the "OTHER HOLDERS" and,
together with the Holders, the
"PUT HOLDERS") that such Other Holder intends to exercise put
rights in connection with the repurchase of warrants (or shares
issuable upon exercise of such warrants) by the Corporation, the
Corporation shall, before repurchasing any such warrants (or shares
issuable upon exercise of such warrants), give written notice
thereof to the Holders. For a period of twenty (20) days following
receipt of such notice, each Put Holder, shall be entitled, by
written notice to the Corporation, to elect to require the
Corporation to repurchase for cash its pro rata share of warrants
(or shares issuable upon exercise of such warrants), on the basis
of the number of shares of Common Stock then held or issuable upon
exercise of all of the warrants held by the Put Holders and each
such Put Holder. If, at the end of the expiration of such
twenty-day period, any Put Holders have not elected to have the
Corporation repurchase warrants (or shares issuable upon exercise
of such warrants), the Corporation shall repurchase only those
warrants (or shares issuable upon exercise of such warrants) for
which notice has been received.
If such event occurs on or prior to December 31, 2000, the holders
of the warrants issued pursuant to the Securities Purchase
Agreement (the "ELECTRA WARRANTS") shall only be entitled to
include up to 40% of the Common Stock issuable upon exercise of the
Electra Warrants for the purposes of calculating the pro rata share
of such holders. Penalty Warrants (as defined in the Securities
Purchase Agreement) shall be excluded for purposes of calculating
the pro rata share of the holders of the Electra Warrants.
The repurchase of a Holder's Warrants (or Warrant Shares) shall
occur within (10) Business Days following the end of the
above-described twenty-day period. At the Holder's option, any
repurchase obligation not satisfied in full in cash at such time
may be evidenced by a promissory note of the Corporation due within
366 days and bearing interest at a rate of 14% per annum.
Notwithstanding anything to the contrary is this Section 5.2(i),
the Company shall not make any payment to the holders of the
warrants issued pursuant to the Nassau Purchase Agreement in
satisfaction of such holders' put rights under such warrants or the
Nassau Purchase Agreement, until after such time as the Company's
payment obligations to the Holders under this Section 5.2(i) have
been satisfied in full in cash."
-2-
II. REPRESENTATIONS AND WARRANTIES
The Corporation represents and warrants to the Holder that
the representations and warranties set forth in Section 6.2 of
the Warrant are true and complete on the date hereof, as if made
on and as of the date hereof, and as if each reference in said
Section 6.2 to "this Warrant" included reference to this
Amendment No. 1.
III. MISCELLANEOUS
Except as herein provided, the Warrant shall remain
unchanged and in full force and effect. This Amendment may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same amendatory instrument
and any of the parties hereto may execute this Amendment by
signing any such counterpart. This Amendment shall be governed
by, and construed in accordance with, the internal laws of the
State of New York.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
XxXXXXX AIRCRAFT HOLDINGS, INC.
By
----------------------------
Title:
-4-
SUBSIDIARY GUARANTORS
TRI-STAR HOLDINGS, INC.
By
--------------------------------
Title:
TRI-STAR ELECTRONICS INTERNATIONAL, INC.
By
--------------------------------
Title:
TRI-STAR TECHNOLOGIES, INC.
By
--------------------------------
Title:
TRI-STAR TECHNOLOGIES
By Tri-Star Technologies, Inc., as
as general partner
By
----------------------------
Title:
UNIDEC, S.A.
By
--------------------------------
Title:
XXXX HOLDINGS, INC.
By
--------------------------------
Title:
XXXX COMPONENTS, INC.
By
--------------------------------
Title:
-5-
XXXXXXXXXXX INTERNATIONAL, INC.
By
--------------------------------
Title:
XXXXXXXXXXX INTERNATIONAL LIMITED
By
--------------------------------
Title:
-0-
XXXXXXXXXXXXXX XXXXXXXXXXX (U.S.)
CAPITAL CORPORATION
By
--------------------------------
Title:
-7-
