EXHIBIT 99.1
EXECUTION COPY
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CREDIT AGREEMENT
dated as of
August 24, 1999
among
BENCHMARK ELECTRONICS, INC.
The Borrowing Subsidiaries
The Lenders Party Hereto,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent, Collateral Agent
and
Issuing Bank
CITICORP USA, INC.,
as Documentation Agent
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CHASE SECURITIES INC.,
as Arranger
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[CS&M #6700-883]
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS..........................................................5
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS................................30
SECTION 1.03. TERMS GENERALLY.......................................................30
SECTION 1.04. ACCOUNTING TERMS; GAAP................................................30
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS...........................................................31
SECTION 2.02. LOANS AND BORROWINGS..................................................32
SECTION 2.03. REQUESTS FOR BORROWINGS...............................................32
SECTION 2.04. LETTERS OF CREDIT.....................................................33
SECTION 2.05. FUNDING OF BORROWINGS.................................................36
SECTION 2.06. INTEREST ELECTIONS....................................................37
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS..............................38
SECTION 2.08. REPAYMENT OF LOANS; EVIDENCE OF DEBT..................................38
SECTION 2.09. AMORTIZATION OF TERM LOANS............................................39
SECTION 2.10. PREPAYMENT OF LOANS...................................................40
SECTION 2.11. FEES..................................................................40
SECTION 2.12. INTEREST..............................................................41
SECTION 2.13. ALTERNATE RATE OF INTEREST............................................42
SECTION 2.14. INCREASED COSTS.......................................................42
SECTION 2.15. BREAK FUNDING PAYMENTS................................................43
SECTION 2.16. TAXES.................................................................44
SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS...........45
SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS........................46
SECTION 2.19. BORROWING SUBSIDIARIES................................................46
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. ORGANIZATION; POWERS..................................................47
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY.........................................47
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS..................................47
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.......................47
SECTION 3.05. PROPERTIES............................................................48
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS..................................48
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS...................................49
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS.................................49
SECTION 3.09. TAXES.................................................................49
SECTION 3.10. ERISA.................................................................49
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SECTION 3.11. DISCLOSURE............................................................49
SECTION 3.12. SUBSIDIARIES..........................................................49
SECTION 3.13. INSURANCE.............................................................49
SECTION 3.14. LABOR MATTERS.........................................................50
SECTION 3.15. SOLVENCY..............................................................50
SECTION 3.16. SENIOR INDEBTEDNESS...................................................50
SECTION 3.17. YEAR 2000.............................................................50
SECTION 3.18. INTELLECTUAL PROPERTY.................................................50
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE........................................................51
SECTION 4.02. EACH CREDIT EVENT.....................................................53
SECTION 4.03. INITIAL CREDIT EVENT FOR EACH BORROWING SUBSIDIARY....................53
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION............................54
SECTION 5.02. NOTICES OF MATERIAL EVENTS............................................55
SECTION 5.03. INFORMATION REGARDING COLLATERAL......................................55
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS........................................56
SECTION 5.05. PAYMENT OF OBLIGATIONS................................................56
SECTION 5.06. MAINTENANCE OF PROPERTIES.............................................56
SECTION 5.07. INSURANCE.............................................................56
SECTION 5.08. BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS........................56
SECTION 5.09. COMPLIANCE WITH LAWS..................................................57
SECTION 5.10. USE OF PROCEEDS AND LETTERS OF CREDIT.................................57
SECTION 5.11. ADDITIONAL SUBSIDIARIES...............................................57
SECTION 5.12. FURTHER ASSURANCES....................................................57
SECTION 5.13. INTEREST RATE AND CURRENCY EXCHANGE RATE PROTECTION...................57
SECTION 5.14. OWNERSHIP OF SUBSIDIARIES.............................................58
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. INDEBTEDNESS..........................................................58
SECTION 6.02. LIENS.................................................................59
SECTION 6.03. FUNDAMENTAL CHANGES...................................................60
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.............60
SECTION 6.05. ASSET SALES, ETC......................................................61
SECTION 6.06. SALE AND LEASEBACK TRANSACTIONS.......................................62
SECTION 6.07. HEDGING AGREEMENTS....................................................62
SECTION 6.08. RESTRICTED PAYMENTS; CERTAIN PAYMENTS IN RESPECT OF INDEBTEDNESS......62
SECTION 6.09. TRANSACTIONS WITH AFFILIATES..........................................62
SECTION 6.10. RESTRICTIVE AGREEMENTS................................................63
SECTION 6.11. SALES AND ASSIGNMENTS OF INCOME, REVENUES AND RECEIVABLES.............63
SECTION 6.12. AMENDMENT OF MATERIAL DOCUMENTS.......................................63
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SECTION 6.13. INTEREST EXPENSE COVERAGE RATIO.......................................63
SECTION 6.14. ADJUSTED LEVERAGE RATIO; LEVERAGE RATIO...............................63
SECTION 6.15. FIXED CHARGE COVERAGE RATIO...........................................63
SECTION 6.16. CURRENT RATIO.........................................................64
SECTION 6.17. MINIMUM TANGIBLE NET WORTH............................................64
ARTICLE VII
EVENTS OF DEFAULT.................................64
ARTICLE VIII
THE ADMINISTRATIVE AGENT..............................66
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES...............................................................67
SECTION 9.02. WAIVERS; AMENDMENTS...................................................68
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER....................................69
SECTION 9.04. SUCCESSORS AND ASSIGNS................................................70
SECTION 9.05. SURVIVAL..............................................................72
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS..............................72
SECTION 9.07. SEVERABILITY..........................................................72
SECTION 9.08. RIGHT OF SETOFF.......................................................72
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS............73
SECTION 9.10. WAIVER OF JURY TRIAL..................................................73
SECTION 9.11. HEADINGS..............................................................73
SECTION 9.12. CONFIDENTIALITY.......................................................74
SECTION 9.13. INTEREST RATE LIMITATION..............................................74
SECTION 9.14. RELEASE OF LIENS AND GUARANTEES.......................................74
SCHEDULES:
Schedule 1.01 -- Guarantors
Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.05 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
Schedule A -- Mortgaged Property
Schedule B -- Scheduled Indebtedness
Schedule C -- Approved Account Debtors
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EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for
the Company
Exhibit B-2 -- Form of Opinion of local counsel
Exhibit B-3 -- Form of Opinion of counsel for Borrowing Subsidiary
Exhibit C -- Form of Perfection Certificate
Exhibit D -- Form of Pledge Agreement
Exhibit E -- Form of Guarantee Agreement
Exhibit F -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Borrowing Request
Exhibit I -- Form of Interest Election Request
Exhibit J -- Form of Borrowing Base Report
Exhibit K -- Form of Compliance Certificate
Exhibit L -- Form of Mortgage
Exhibit M -- Form of Issuing Bank Agreement
Exhibit N-1 -- Form of Borrowing Subsidiary Agreement
Exhibit N-2 -- Form of Borrowing Subsidiary Termination
Exhibit O -- Form of Foreign Borrower Supplement
CREDIT AGREEMENT dated as of August 24, 1999 among BENCHMARK
ELECTRONICS, INC., the Borrowing Subsidiaries from time to time party hereto,
the LENDERS party hereto, CITICORP USA, INC., as Documentation Agent, BANK OF
AMERICA, N.A., BANK ONE, TEXAS, N.A. and SUN TRUST BANK, ATLANTA as Co-Agents
and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Administrative Agent,
Collateral Agent and Issuing Bank.
Pursuant to the Stock Purchase Agreement (such term and each other
capitalized term used but not defined herein having the meaning given to it in
Article I), the Company intends to acquire all the issued and outstanding shares
of capital stock of the Avex Entities. In connection with the Acquisition (a)
the Company will borrow the Term Loans and a principal amount not to exceed
$75,000,000 of the Revolving Loans, (b) the Company will receive the proceeds of
not less than $80,200,000 aggregate principal amount of the Subordinated Notes
and (c) the Company will refinance the Scheduled Indebtedness.
The Company has requested the Lenders to extend credit in the form
of (a) Term Loans on the Effective Date in an aggregate principal amount not in
excess of $100,000,000 and (b) Revolving Loans at any time and from time to time
on or after the Effective Date and prior to the Revolving Maturity Date in an
aggregate principal amount at any time outstanding not in excess of $125,000,000
minus the LC Exposure at such time. The Company has requested the Issuing Banks
to issue Letters of Credit in an aggregate stated amount at any time outstanding
that will not result in the LC Exposure exceeding $20,000,000. The proceeds of
the Term Loans and of Revolving Loans made on the Effective Date are to be used
by the Company solely (i) to finance the Acquisition, (ii) to refinance the
Scheduled Indebtedness and (iii) to pay fees and expenses related to the
Effective Date Transactions. The proceeds of the remaining Revolving Loans are
to be used by the Company and its Subsidiaries to provide working capital and
for other general corporate purposes. The Letters of Credit are to be used to
support obligations incurred by the Company and the Subsidiaries in the ordinary
course of their businesses.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ACCEPTABLE SECURITIES" means subordinated debt securities issued by
the Company that (a) are subordinated to the Obligations on terms not less
favorable to the Lenders than the Subordinated Notes, (b) contain covenants,
events of default and mandatory redemption, repayment, prepayment or repurchase
requirements no less favorable to the Company and the Lenders than those of the
Subordinated Notes, (c) do not mature, and are not subject to any scheduled
amortization, redemption, repayment, prepayment or repurchase requirement, prior
to the date one year after the Term Loan Maturity Date and (d) are not
Guaranteed by any of the Subsidiaries.
"ACCOUNT" means any right to payment for goods sold or leased or for
services rendered whether or not earned by performance.
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"ACCOUNT DEBTOR" means, with respect to any Account, the obligor
with respect to such Account.
"ACQUISITION" means the purchase by the Company of all the issued
and outstanding shares of capital stock of the Avex Entities, under and as
provided in the Stock Purchase Agreement.
"ADJUSTED LEVERAGE RATIO" means, on any date, the ratio of (a) Total
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Company and its Restricted Subsidiaries ended
on such date (or, if such date is not the last day of a fiscal quarter, ended on
the last day of the fiscal quarter of the Company most recently ended prior to
such date).
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means Chase, in its capacity as
administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"ANGLETON DIRECT MATERIAL PURCHASE PRICE VARIANCE RESERVE" means,
for the Angleton division and all other divisions which directly expense direct
material purchase price variances, an amount equal to the sum of the net
favorable variances (the amount whereby standard cost used to compute Inventory
Value exceeds actual cost incurred) as classified under the Company's and its
Domestic Divisions' current and historical accounting practices for the two
months ending as of the date of the most recently delivered Borrowing Base
Certificate.
"APPLICABLE PERCENTAGE" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"APPLICABLE RATE" means, for any day with respect to any ABR Loan or
Eurodollar Loan that is (a) a Revolving Loan or a Term Loan, or (b) with respect
to the commitment fees payable hereunder, as the case may be, the applicable
rate per annum set forth below under the relevant table under the caption "ABR
Spread", "Eurodollar Spread" or "Commitment Fee", as the case may be, based upon
the Adjusted Leverage Ratio as of the most recent determination date; PROVIDED
that until the delivery of financial statements under Section 5.01(a) or (b) as
of the end of and for the second fiscal quarter commencing after the Effective
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Date, the "Applicable Rate" for all purposes shall be the applicable rate per
annum set forth below in Category 1 in the applicable table below:
REVOLVING LOAN AND TERM LOAN TABLE
ABR EURODOLLAR
ADJUSTED LEVERAGE RATIO: SPREAD SPREAD
------------------------ ------ ----------
CATEGORY 1
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Greater than 1.000% 2.500%
3.00 to 1.00
CATEGORY 2
----------
Less than or equal to 3.00 to 0.750% 2.250%
1.00 but greater than 2.50 to
1.00
CATEGORY 3
----------
Less than or equal to 2.50 to 0.500% 2.000%
1.00 but greater than 2.00 to
1.00
CATEGORY 4
----------
Less than or equal to 2.00 to 0.125% 1.625%
1.00 but greater than 1.50 to
1.00
CATEGORY 5
----------
Less than or equal to 1.50 to 0.000% 1.250%
1.00
REVOLVING LOAN COMMITMENT FEE TABLE
ADJUSTED LEVERAGE RATIO: COMMITMENT FEE
------------------------ --------------
CATEGORY 1
----------
Greater than or equal to 2.00 0.500%
to 1.00
CATEGORY 2
----------
Less than 2.00 to 1.00 0.375%
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For purposes of the foregoing, (i) the Adjusted Leverage Ratio shall
be determined as of the end of each fiscal quarter of the Company's fiscal year
based upon the Company's consolidated financial statements delivered pursuant to
Section 5.01(a) or (b) and (ii) each change in the Applicable Rate resulting
from a change in the Adjusted Leverage Ratio shall be effective during the
period commencing on and including the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; PROVIDED that the Adjusted Leverage Ratio shall be deemed to be in
Category 1 under each of the above tables (A) at any time that an Event of
Default has continued in effect for more than three Business Days following the
Company's receipt of notice thereof from the Administrative Agent and (B) at the
option of the Administrative Agent or at the request of the Required Lenders if
the Company fails to deliver the consolidated financial statements required to
be delivered by it pursuant to Section 5.01(a) or (b), during the period from
the expiration of the time for delivery thereof until such consolidated
financial statements are delivered.
"APPROVED JURISDICTION" means any of the Republic of Ireland,
Scotland, the Kingdom of Sweden or the Republic of Singapore.
"ASSESSMENT RATE" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; PROVIDED that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"AVEX ENTITIES" means Avex Electronics, Inc, an Alabama corporation,
and Avex Holdings B.V., a Netherlands corporation.
"BASE CD RATE" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"BORROWER" means the Company or any Borrowing Subsidiary.
"BORROWING" means Loans of the same Class and Type, made, converted
or continued on the same date and, in the case of Eurodollar Loans, as to which
a single Interest Period is in effect.
"BORROWING BASE" means, at any time (subject to adjustment as
provided in Section 5.08 (b)), an amount equal to the sum of (a) 75% of Eligible
Accounts owed to the Company and its Domestic Divisions, (b) 45% of the
Inventory Value of Eligible Inventory of the Company and its Domestic Divisions,
(c) 50% of Eligible Fixed Assets of the Company and its Domestic Divisions and
(d) the Foreign Subsidiary Amount; provided that beginning with the
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second month that a completed Borrowing Base Certificate is required to be
delivered under Section 5.01(e) after the date that is the second anniversary of
the Effective Date, the Foreign Subsidiary Amount shall not be included in the
computation of the Borrowing Base. The Borrowing Base at any time shall be
determined by reference to the most recent Borrowing Base Certificate delivered
to the Administrative Agent, absent any error in such Borrowing Base
Certificate.
"BORROWING BASE CERTIFICATE" means a certificate in the form of
Exhibit J or any other form approved by the Administrative Agent, together with
all attachments contemplated thereby.
"BORROWING SUBSIDIARY" means, at any time, each Restricted
Subsidiary incorporated or organized in a State of the United States of America
or an Approved Jurisdiction that has been designated as a Borrowing Subsidiary
by the Company pursuant to Section 2.19 and that has not ceased to be a
Borrowing Subsidiary as provided in such Section.
"BORROWING SUBSIDIARY AGREEMENT" means a Borrowing Subsidiary
Agreement substantially in the form of Exhibit N-1.
"BORROWING SUBSIDIARY TERMINATION" means a Borrowing Subsidiary
Termination substantially in the form of Exhibit N-2.
"BORROWING REQUEST" means a request by a Borrower for a Borrowing in
accordance with Section 2.03, substantially in the form of Exhibit H.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "BUSINESS DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, all expenditures
(whether paid in cash or accrued as a liability, including the portion of
Capital Lease Obligations originally incurred during such period that are
capitalized on the consolidated balance sheet of the Company) by the Company and
its Restricted Subsidiaries during such period, that, in conformity with GAAP,
are included in "capital expenditures", "additions to property, plant or
equipment" or comparable items in the consolidated financial statements of the
Company, but excluding expenditures for the restoration, repair or replacement
of any fixed or capital asset that was destroyed or damaged, in whole or in
part, in an amount equal to any insurance proceeds received in connection with
such destruction or damage.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP and any obligations of such Person under any
synthetic lease financing whether or not such obligation is classiffied as a
captial lease under GAAP.
"CASH INTEREST EXPENSE" means, for any period, the sum of all cash
payments of interest and prepayment charges, if any, including, without
limitation, all net amounts payable (or receivable) under interest rate
protection agreements and all imputed interest in respect of capital lease
obligations paid by the Company and its Restricted Subsidiaries on a
consolidated basis during such period.
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"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 50% of either the aggregate ordinary voting
power or the aggregate equity value represented by the issued and outstanding
Equity Interests in the Company; (b) occupation of a majority of the seats
(other than vacant seats) on the Board of Directors by Persons who were neither
(i) nominated by the current Board of Directors nor (ii) appointed by directors
so nominated; or (c) the occurrence of a Designated Event under and as defined
in the Subordinated Note Indenture or a Change of Control or similar event,
however denominated, under the Acceptable Securities or any other Material
Indebtedness.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of
such Lender or by such Lender's or such Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"CHASE" means Chase Bank of Texas, National Association,
and its successors.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Term Loans and, when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Commitment or Term Loan Commitment.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means any and all "Collateral", as defined in any
applicable Security Document.
"COLLATERAL AGENT" means Chase, in its capacity as collateral agent
for the Lenders hereunder.
"COLLATERAL AND GUARANTEE REQUIREMENT" means, at any time, that the
following requirements shall be satisfied (to the extent such requirements are
stated to be applicable at the time under clause (a) or (b) below):
(a) at all times on and after the Effective Date:
(i) the Guarantee Agreement (or a supplement thereto) shall
have been executed by the Company and each Domestic Subsidiary
existing at such time, shall have been delivered to the Collateral
Agent and shall be in full force and effect;
(ii) one or more Pledge Agreements (or supplements thereto)
shall have been duly executed and delivered by the Company and each
Domestic Subsidiary existing at such time and directly owning any
outstanding Equity Interests or any Indebtedness, and there shall
have been duly and validly pledged to the Collateral Agent
thereunder, for the ratable benefit of the Secured Parties (A) all
the outstanding Equity Interests (other than Equity Interests in any
Foreign Subsidiary) owned directly by the Company or any Domestic
Subsidiary, (B) 65% of the outstanding voting Equity Interests, and
100% of the outstanding non-voting Equity Interests (or, in each
case, such lesser percentages
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as shall be owned by the Company and the Domestic Subsidiaries) in
each Foreign Subsidiary owned in whole or in part directly by the
Company or any Domestic Subsidiary and (C) all Indebtedness that is
owed to the Company or any Domestic Subsidiary; and any
certificates, promissory notes or other instruments representing the
Equity Interests or Indebtedness pledged or subjected to a charge
under the Pledge Agreements, accompanied by stock powers or other
instruments of transfer endorsed in blank, shall be in the actual
possession of the Collateral Agent and all other steps required
under applicable law or requested by the Collateral Agent to ensure
that the Pledge Agreements create valid, first priority, perfected
Liens on all the Collateral subject thereto shall have been taken;
(iii) one or more Security Agreements (or supplements thereto)
shall have been duly executed and delivered by the Company and each
Domestic Subsidiary existing at such time and there shall have been
subjected to security interests thereunder securing the Obligations
all the assets of each such Person in which a security interest can
be created under the UCC, and all documents and instruments,
including UCC financing statements, required by law or reasonably
requested by the Collateral Agent to be filed, registered or
recorded to create the security interests intended to be created by
the Security Agreements and perfect such Liens to the extent
required by, and with the priority required by, the Security
Agreements, shall have been filed, registered or recorded (or
arrangements satisfactory to the Collateral Agent for such filing,
registration or recording shall have been made);
(iv) the Administrative Agent shall have received, on or prior
to the later of the 30th day after the acquisition by the Company or
a Domestic Subsidiary of any Mortgaged Property and the 10th day
after the Effective Date, (A) counterparts of a Mortgage with
respect to such Mortgaged Property duly executed and delivered by
the record owner of such Mortgaged Property, (B) in the case of each
Mortgaged Property located in the United States with a book or fair
market value in excess of $2,000,000, a policy or policies of title
insurance issued by a nationally recognized title insurance company
insuring the Lien of each such Mortgage as a valid first Lien on the
Mortgaged Property described therein, free of any other Liens except
as expressly permitted by Section 6.02, together with such
endorsements, coinsurance and reinsurance as the Administrative
Agent or the Required Lenders may reasonably request, and (C) such
surveys, abstracts, appraisals, legal opinions and other documents
as the Administrative Agent or the Required Lenders may reasonably
request with respect to any such Mortgage or Mortgaged Property;
(v) the Indemnity, Subrogation and Contribution Agreement (or
a supplement thereto) shall have been executed by the Company and
each Domestic Subsidiary party to the Guarantee Agreement or any
Pledge Agreement, Security Agreement or Mortgage, shall have been
delivered to the Collateral Agent and shall be in full force and
effect; and
(vi) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder; and
(b) at all times when there shall be one or more Foreign
Subsidiaries that are Foreign Borrowers under this Agreement:
12
(i) the Guarantee Agreement (or a supplement thereto) shall
have been executed by each Foreign Subsidiary that is a direct or
indirect parent of any such Foreign Borrower (a "FOREIGN PARENT")
(it being understood that each Foreign Parent will guarantee only
the Obligations of Foreign Borrowers that are its subsidiaries),
shall have been delivered to the Collateral Agent and shall be in
full force and effect;
(ii) one or more Pledge Agreements (or supplements thereto)
shall have been duly executed and delivered by each Foreign Borrower
and each Foreign Parent of such Foreign Borrower existing at such
time and directly owning any outstanding Equity Interests or any
Indebtedness, and there shall have been duly and validly pledged to
the Collateral Agent under the Pledge Agreement, for the ratable
benefit of the Secured Parties, (A) all the Equity Interests in such
Foreign Borrower, each Foreign Parent of such Foreign Borrower and
each Subsidiary directly owned in whole or in part by such Foreign
Borrower or any such Foreign Parent, including any such Equity
Interests owned by the Company and the Domestic Subsidiaries that
are not pledged pursuant to clause (a)(ii) above and (B) all the
Indebtedness that is owed to such Foreign Borrower or a Foreign
Parent (it being understood that the Equity Interests and
Indebtedness referred to in this clause (ii) will secure only the
Obligations of such Foreign Borrower); and any certificates,
promissory notes or other instruments representing such Equity
Interests or Indebtedness, accompanied by stock powers or other
instruments of transfer endorsed in blank, shall be in the actual
possession of the Collateral Agent and all other steps required
under applicable law or requested by the Collateral Agent to ensure
that the Pledge Agreements create valid, first priority, perfected
Liens on all the Collateral subject thereto shall have been taken;
(iii) one or more Security Agreements (or supplements thereto)
shall have been duly executed and delivered by each Foreign Borrower
or Foreign Parent of such Foreign Borrower existing at such time and
there shall have been subjected to security interests thereunder
securing the Obligations of such Foreign Borrower (but not any
obligations of the Company or any Domestic Subsidiary) all the
personal property or fixtures (within the meaning of the UCC) of
such Person in which a security interest can be created under the
laws of each applicable jurisdiction, with such exceptions as the
Collateral Agent may approve in its sole discretion, and without
liability to any party hereto, taking into account the cost and
difficulty involved in creating or perfecting any such security
interest and the benefits to the Lenders that would result
therefrom, and all documents and instruments required by law or
reasonably requested by the Collateral Agent to be filed, registered
or recorded to create the security interests intended to be created
by the Security Agreements and perfect such Liens to the extent
required by, and with the priority required by, the Security
Agreements, shall have been filed, registered or recorded (or
arrangements satisfactory to the Collateral Agent for such filing,
registration or recording shall have been made); and
(iv) the Administrative Agent shall have received (A)
counterparts of a Mortgage with respect to each Mortgaged Property
of each Foreign Borrower or Foreign Parent of such Foreign Borrower,
duly executed and delivered by the record owner of such Mortgaged
Property and securing the Obligations of such Foreign Borrower (but
not any obligations of the Company or any Domestic Subsidiary), and
(B) such surveys, abstracts, appraisals, legal opinions and other
documents as the Administrative Agent or the Required Lenders may
reasonably request with respect to any such Mortgage or Mortgaged
Property.
13
Notwithstanding any of the foregoing provisions of this definition, if the
Company or any Subsidiary shall be using commercially reasonable efforts to
create or perfect any pledge of Equity Interests in or Indebtedness of any
Foreign Subsidiary, the failure to have created or perfected such pledge shall
not, in and of itself, prevent the Collateral and Guarantee Requirement from
being satisfied until (x) the later of (i) the 90th day after the Effective Date
and (ii) the 90th day after the acquisition of such Collateral by the Company or
a Domestic Subsidiary or (y) if, in the judgment of the Collateral Agent, the
Company is endeavoring in good faith to satisfy the Collateral and Guarantee
Requirement, such later date as may be agreed to by the Collateral Agent.
"COMMITMENT" means a Revolving Commitment, a Foreign Borrower
Commitment or a Term Loan Commitment, or any combination thereof (as the context
requires).
"COMPANY" means Benchmark Electronics, Inc., a Texas corporation.
"CONSOLIDATED EBITDA" means, for any period, the EBITDA of the
Company and its Restricted Subsidiaries for such period determined on a
consolidated basis. Solely for purposes of calculating the Leverage Ratio and
the Adjusted Leverage Ratio, but not for any other purpose, (i) Consolidated
EBITDA for any period of four fiscal quarters during which the Acquisition shall
have occurred shall be computed on a pro forma consolidated basis to include the
EBITDA of the Avex Entities that are Restricted Subsidiaries; PROVIDED that if
any such period of four fiscal quarters shall have begun before January 1, 1999,
the EBITDA of such Avex Entities shall be deemed for such purpose to equal the
EBITDA of such Avex Entities for the period from January 1, 1999, to the end of
such period multiplied by a fraction of which the numerator shall be four and
the denominator shall be the number of fiscal quarters from January 1, 1999 to
the end of such period.
"CONSOLIDATED NET INCOME" means, for any Person for any period, the
net income (or loss) of such person and its subsidiaries during such period,
calculated and consolidated or combined in accordance with GAAP; PROVIDED that
there shall be excluded from such net income (to the extent otherwise included
therein) the following: (i) any non-cash, non-recurring charges, (ii) gains or
losses attributable to Property sales not in the ordinary course of business,
and (iii) the cumulative effect of a change in accounting principles and any
gains or losses attributable to writeups or writedowns of assets.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total assets of the
Company and its Restricted Subsidiaries less, without duplication, (i)
intangible assets including, without limitation, goodwill, research and
development costs, trademarks, trade names, patents, franchises, copyrights,
licenses and like general intangibles, experimental or organizational expense,
unamortized debt discount and expense carried as an asset, all reserves and any
write-up in the book of value of assets made after the closing date (other than
write-ups of assets of a going concern business made within 12 months after the
acquisition of such business), net of accumulated amortization and (ii) all
reserves for depreciation and other asset valuation reserves (but excluding
reserves for federal, state and other income taxes).
"CONSOLIDATED TANGIBLE NET WORTH" means, at any time:
(a) the total assets of the Company and its Restricted Subsidiaries
which would be shown as assets on a consolidated balance sheet of the
Company and its Restricted Subsidiaries as of such time prepared in
accordance with GAAP, after eliminating all amounts properly attributable
to minority interests, if any, in the stock and surplus of Restricted
Subsidiaries, MINUS
(b) the total liabilities of the Company and its Restricted
Subsidiaries which would be shown as liabilities on a consolidated balance
sheet of the Company and its Restricted Subsidiaries as of such time
prepared in accordance with GAAP, MINUS
14
(c) the net book amount of all assets of the Company and its
Restricted Subsidiaries (after deducting any reserves applicable thereto)
that would be shown as intangible assets on a consolidated balance sheet
of the Company and its Restricted Subsidiaries as of such time prepared in
accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CURRENT ASSETS" means all assets of a Person which under GAAP would
be classified as current assets.
"CURRENT LIABILITIES" means all liabilities of a Person which under
GAAP would be classified as current liabilities, other than current maturities
of Long-Term Indebtedness and the obligation to repay the Revolving Loans.
"CURRENT RATIO" means, on any day, the ratio of (a) the Current
Assets of the Company and its Restricted Subsidiaries to (b) the Current
Liabilities of the Company and its Restricted Subsidiaries, each on a
consolidated basis.
"DEBT SERVICE" means, for any period, the sum of (a) Cash Interest
Expense for such period and (b) scheduled principal payments on Total
Indebtedness for such period.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"DOCUMENTATION AGENT" means Citicorp USA, Inc., in its capacity as
Documentation Agent.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"DOMESTIC DIVISIONS" means all corporate offices, manufacturing and
warehousing facilities of the Company and its Domestic Subsidiaries located
within the continental United States of America.
"DOMESTIC SUBSIDIARIES" means all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"EBITDA" means, for any Person for any period, without duplication,
the Consolidated Net Income of such Person for such period PLUS, to the extent
deducted in determining such Consolidated Net Income, Interest Expense,
depreciation, amortization, other non-cash, non-recurring charges and income tax
expense.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"EFFECTIVE DATE TRANSACTIONS" means the Transactions that have
occurred, or that are contemplated or required by this Agreement to have
occurred, on or before the Effective Date and prior to or simultaneously with
the initial Borrowing or issuance of a Letter of Credit hereunder.
15
"ELIGIBLE ACCOUNT" means, on any date, all Accounts owed to the
Company and its Domestic Divisions on such date that meet the requirements of
this definition. An Account shall not be an Eligible Account unless each of the
following statements is accurate and complete with respect thereto (and the
Company by including such Account in any computation of the Borrowing Base shall
be deemed to represent and warrant to the Administrative Agent, the Issuing Bank
and the Lenders the accuracy and completeness of such statements with respect to
such Account):
(a) Said Account (i) indicates the Company or one of its Domestic
Divisions as sole payee and sole remittance party, (ii) is a binding and
valid obligation of the obligor thereon in full force and effect and (iii)
is denominated in dollars;
(b) Said Account has been invoiced and represents the bona fide sale
and delivery of merchandise, in each case in the ordinary course of
business of the Company or any of its Domestic Divisions in connection
with trade operations;
(c) Said Account is genuine as appearing on its face or as
represented in the books and records of Company or any of its Domestic
Divisions, as applicable;
(d) Said Account is free from claims regarding rescission,
cancelation or avoidance, whether by operation of law or otherwise;
(e) Said Account is net of concessions, offsets or understandings
with the obligor thereon that in any way could reasonably be expected to
adversely affect the payment of said account;
(f) The Account Debtor (i) has not asserted a right of setoff and
(ii) has not disputed its liability (whether by chargeback or otherwise)
or made any claim with respect to the Account or any other Account of the
Company or its Domestic Divisions which has not been resolved;
(g) In the case of any Account arising from invoicing for excess and
obsolete inventory, said account is supported by a purchase order
acknowledging approval and authorization to be invoiced and to make
payment thereon;
(h) Payment of said Account is less than 90 days from the date of
invoicing or less than 60 days past due as determined by the due date
stated on the invoice therefor (or, if said Account is not paid by
reference to an invoice in the ordinary course of business but instead by
reference to the terms of the agreements creating said account, said
Account has not remained unpaid beyond 60 days after the due date
therefor);
(i) The goods giving rise to the Account have been shipped and the
Account does not represent a progress or partial billing or otherwise not
represent a competed sale;
(j) The Account Debtor is not the United States of America or any
department, agency or instrumentality thereof;
(k) If such Account and other Accounts are owed by a creditor of the
Company or any of its Domestic Divisions, the amount of all such Accounts
included as Eligible Accounts shall be the amount by which all such
Accounts exceed the aggregate accounts payable owed by the Company or such
Domestic Subsidiary to such creditor;
(l) The obligor on said Account is not (i) an Affiliate of the
Company or any of the Domestic Divisions, or (ii) an employee of the
Company or any of the Domestic Divisions;
16
(m) Said account is not payable by an obligor for which 50% or more
of the total accounts owed to the Company or the Domestic Divisions by
such obligor or any of its Affiliates is unpaid more than 90 days past the
invoice date or is more than 60 days past due;
(n) All consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required to
be obtained, effected or given in connection with the execution, delivery
and performance of said account by each party obligated thereunder have
been duly obtained, effected or given and are in full force and effect;
(o) The obligor on said Account is not the subject of any bankruptcy
or insolvency proceeding, has not had a trustee or receiver appointed for
all or a substantial part of its property and has not made an assignment
for the benefit of creditors, admitted its inability to pay its debts as
they mature or suspended its business;
(p) In the case of an Account arising from a sale of goods, the
subject goods have been sold to an obligor on a true sale basis on open
account, or subject to contract, and not on a xxxx and hold, consignment,
on approval or on a "sale or return" basis or subject to any other
repurchase or return agreement, no material part of the subject goods has
been returned, rejected, lost or damaged, and said Account is not
evidenced by chattel paper or an instrument of any kind;
(q) The Account Debtor in respect of such Account (i) has its
principal place of business in the United States of America, (ii) has its
principal place of business in a member country of the Organization for
Economic Cooperation and Development and has a senior debt rating of at
least BBB+ by S&P or a comparable rating from another nationally
recognized rating agency, (iii) is listed on Schedule C hereto or (iv) is
otherwise approved by the Required Lenders; and
(r) Said Account is subject to a valid, first priority perfected
security interest in favor of the Collateral Agent securing the
Obligations;
In determining the amounts of Eligible Accounts, the face amounts of all
Accounts shall, to the extent included therein, be reduced by (i) the amount of
all accrued and actual returns, discounts, claims, credits, credits pending,
accrued and actual price adjustments, freight or finance charges or other
allowances (including any amount that the Company or Domestic Subsidiary may be
obligated to rebate to a customer pursuant to the terms of any agreement or
understanding (written or oral)); (ii) the aggregate amount of all reserves,
limits or deductions provided for in this definition and elsewhere in this
Agreement; and (iii) the aggregate amount of all cash received in respect of
Accounts but not yet applied by the Company or the applicable Domestic
Subsidiary to reduce the amount of the Accounts. If any Eligible Account (other
than an Account for which the Account Debtor has a senior debt rating of at
least BBB+ by S&P or a comparable rating from another nationally recognized
rating agency), when added to all other accounts that are obligations of the
same obligor and its Affiliates, results in a total sum that exceeds 15% of the
total balance then due on all gross Accounts receivable (without giving effect
to any reduction in Eligible Accounts pursuant to this proviso), the amount of
said account in excess of 15% of such total balance then due shall be excluded
from Eligible Accounts. In determining the aggregate amount of Accounts from the
same Account Debtor that are unpaid more than 90 days from the date of invoice
or more than 60 days from the due date pursuant to clause (h) above, there shall
be excluded the amount of any net credit balances relating to the Accounts.
"ELIGIBLE FIXED ASSETS" means, at the time of any determination
thereof, the net book value of the Company's and its Domestic Divisions' Fixed
Assets, determined in accordance with GAAP on a basis consistent with the
Company's and its Domestic Subsidiaries' historical
17
and current accounting practices; PROVIDED that real property for which
appraisals reasonably acceptable to the Administrative Agent have been completed
shall be valued at appraised value (except for the Company's real property
located in Angleton, Texas, which shall be valued at net book value). For
purposes of calculating the Borrowing Base, no Fixed Asset may be included as an
"Eligible Fixed Asset" unless (i) the Company or a Domestic Subsidiary has good
and unencumbered title thereto, (ii) the Administrative Agent on behalf of the
Secured Parties possesses a valid first priority perfected security interest
therein under the Security Documents and (iii) such equipment is in service at
the end of the month for which the Borrowing Base is being determined and is not
construction in progress.
"ELIGIBLE INVENTORY" means, at any date, Inventory of the Company
and its Domestic Divisions, net of any Inventory Reserves, and for which each of
the following statements is accurate and complete (and the Company by including
the Inventory Value of such Inventory in any computation of the Borrowing Base
shall be deemed to represent and warrant to the Administrative Agent, the
Issuing Bank and each Lender the accuracy and completeness of such statements):
(a) No Person other than the Company or its Domestic Divisions has
any direct or indirect ownership interest or title to said Inventory;
(b) Said Inventory is subject to a valid, unencumbered, first
priority perfected security interest in favor of the Collateral Agent
securing the Obligations;
(c) Said Inventory is in good condition, meets all standards imposed
by any Governmental Authority having regulatory authority over it or its
use and/or sale and is currently usable in the normal course of business
of the Company and its Domestic Divisions;
(d) Said Inventory is in the possession of the Company or one of its
Domestic Divisions and is located in the United States or in a contract
warehouse specified on a schedule attached to the Security Agreement and
segregated or otherwise separately identifiable from goods of all others,
if any, stored on the premises;
(e) Said Inventory does not include goods that are used for
demonstrations and display or are held by the Company or its Domestic
Divisions pursuant to a consignment agreement or other agreement whereby
the Company or Domestic Division will not be invoiced for the goods and
payment for the goods will result in a reduced finished good selling
price;
(f) Said Inventory does not represent goods returned or rejected due
to quality issues raised by customers of the Company or its Domestic
Divisions or goods in transit;
(g) Said Inventory is not seconds, thirds, return to vendor, scrap,
stale, defective, obsolete, slow moving or unmerchantable, and otherwise
conforms to the representations and warranties contained in the Loan
Documents;
(h) Said Inventory is not located at an operating facility that the
Company or the applicable Domestic Division plans to close within thirty
(30) days from the date of determination of the most recent Borrowing
Base;
(i) Said inventory is not is not film, packaging and/or shipping
supplies or materials;
(j) The Inventory Value of said Inventory included in the Borrowing
Base is net of any premium or expedite fee that was not approved and will
not be reimbursed
18
by the customer (other than any such fees to the extent the aggregate
amount thereof included in Inventory Value does not exceed $400,000);
Without limiting the foregoing, Inventory shall not be Eligible Inventory if any
purchase order, invoice or any other document in connection therewith indicates
that any Person other than the Company or Domestic Subsidiary has any ownership
interest therein.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"EQUITY INTERESTS" means any shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights to acquire any such equity ownership
interests.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
19
"EVENT OF DEFAULT" has the meaning assigned to such term in Article
VII.
"EXCESS AND OBSOLETE RESERVE" shall equal 50% of the gross amount of
all Raw Materials which are not supported by a specific purchase order from a
customer or Hard Forecast.
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of a Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by a Borrower under
Section 2.18(b)), any withholding tax imposed by the United States of America
that (i) is in effect and would apply to amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or designates
a new lending office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the applicable
Borrower with respect to any withholding tax pursuant to Section 2.16(a), or
(ii) is attributable to such Foreign Lender's failure to comply with Section
2.16(e).
"EXISTING FACILITY" means the Amended and Restated Credit Agreement
dated as of February 26, 1999, among the Company, the Lenders thereunder and
Chase, as Issuing Bank and as Administrative Agent.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"FINISHED GOODS" means completed assemblies which have completed
final testing and are to be sold in the normal course of business and are valued
at standard costs with respect to labor, overhead and direct material costs,
provided that labor and overhead do not comprise more than 25% of the total cost
of the finished assembly.
"FISCAL QUARTER" means the fiscal quarter of the Company, ending on
the last day of each March, June, September and December of each year.
"FIXED ASSETS" means property, plant and equipment.
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of
(i) Consolidated EBITDA plus operating lease and rental expenses and less cash
taxes of the Company and its Restricted Subsidiaries for such period to (ii)
Debt Service plus Capital Expenditures plus operating lease and rental expenses
of the Company and its Restricted Subsidiaries for such period.
"FOREIGN BORROWER" means any Borrowing Subsidiary that is a Foreign
Subsidiary.
20
"FOREIGN BORROWER COMMITMENT" means, with respect to each Fronting
Lender and Foreign Borrower Supplement, the commitment of such Fronting Lender
to make Revolving Loans under Section 2.01(b) and such Foreign Borrower
Supplement, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Fronting Lender pursuant to Section 9.04.
"FOREIGN BORROWER EXPOSURE" means, with respect to any Revolving
Lender at any time, such Revolving Lender's Applicable Percentage of the
aggregate principal amounts of the outstanding Revolving Loans made under
Section 2.01(b).
"FOREIGN BORROWER FRONTING FEE" shall have the meaning specified in
Section 2.11(c)(ii).
"FOREIGN BORROWER PARTICIPATION FEE" shall have the meaning
specified in Section 2.11(c)(i).
"FOREIGN BORROWER SUPPLEMENT" means an agreement in the form of
Exhibit O hereto executed and delivered by one or more Foreign Borrowers, one or
more Fronting Lenders and the Administrative Agent as provided in Section
2.01(d).
"FOREIGN LENDER" means, with respect to any Borrower, any Lender
that is organized under the laws of a jurisdiction other than that in which such
Borrower is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"FOREIGN SUBSIDIARY AMOUNT" means an amount equal to the lesser of
(a) $40,000,000 and (b) the sum of (i) 65% of the net book value of the Accounts
owed to Foreign Subsidiaries (other than Unrestricted Subsidiaries) organized in
Approved Jurisdictions, (ii) 35% of the net book value of the Inventory of
Foreign Subsidiaries (other than Unrestricted Subsidiaries) organized in
Approved Jurisdictions and (iii) 40% of the net book value of Fixed Assets of
Foreign Subsidiaries (other than Unrestricted Subsidiaries) organized in
Approved Jurisdictions; PROVIDED, that if the amount under this clause (b) would
constitute more than 20% of the Borrowing Base (calculated using such amount for
purposes of clause (d) of the definition of "Borrowing Base"), the Foreign
Subsidiary Amount shall be reduced to an amount that constitutes no more than
20% of the Borrowing Base (calculated using such revised amount for purposes of
clause (d) of the definition of "Borrowing Base"). For purposes of computing the
Foreign Subsidiary Amount, (i) the net book value of any Accounts, Inventory or
Fixed Assets at any time shall be deemed to equal the net book value of such
assets at the end of the month prior to the date a completed Borrowing Base
Certificate shall have been delivered under Section 5.01(e) and (ii) amounts
expressed in foreign currencies shall be translated into dollars using the same
practices as are used by the Company in preparing its consolidated financial
statements.
"FRONTING LENDER" means, as to any Foreign Borrower Supplement, each
Revolving Lender that has executed and delivered such Foreign Borrower
Supplement as a Fronting Lender. Any Fronting Lender may, in its discretion,
arrange for one or more Revolving Loans to be made by it under any Foreign
Borrower Supplement to be made by Affiliates of such Fronting Lender, in which
case the term "Fronting Lender" shall include any such Affiliate with respect to
Revolving Loans so made by it.
"GAAP" means generally accepted accounting principles in the United
States of America.
21
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; PROVIDED, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"GUARANTEE AGREEMENT" means the Guarantee Agreement substantially in
the form of Exhibit E among the Company, the Guarantors from time to time party
thereto and the Collateral Agent for the benefit of the Secured Parties, as the
same may be amended, modified or supplemented from time to time in accordance
with the provisions hereof.
"HARD FORECAST" is communicated in advance or in lieu of a purchase
order from a customer, as stipulated in the customer's contract, and means that
the customer is liable for raw materials purchased on the customer's behalf in
the case that the customer changes or cancels an order.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services, other than accounts payable in
the ordinary course of business, (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (f)
all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (i) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest
22
in or other relationship with such entity, except to the extent the terms of
such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" means the
Indemnity, Subrogation and Contribution Agreement substantially in the form of
Exhibit F among the Company, the Subsidiaries from time to time party thereto
and the Collateral Agent for the benefit of the Secured Parties, as the same may
be amended, modified or supplemented from time to time in accordance with the
provisions hereof.
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated July 1999 relating to the Company and the Transactions.
"INTERCOMPANY INDEBTEDNESS" means any Indebtedness of the Company or
any Subsidiary owed to and held by the Company or any Wholly Owned Subsidiary;
PROVIDED that any subsequent issuance or transfer of any Equity Interest which
results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such Indebtedness (other than to the
Company or another Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute a new incurrence of Indebtedness other than Intercompany Indebtedness
by the issuer thereof.
"INTEREST COVERAGE RATIO" means, on any day, the ratio of (a)
Consolidated EBITDA less Capital Expenditures for the Rolling Period ending on
the then most recent preceding Quarterly Date to (b) Cash Interest Expense
during such Rolling Period.
"INTEREST ELECTION REQUEST" means a request by a Borrower to convert
or continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.06.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the applicable Borrower may elect; PROVIDED, that (a)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(b) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"INVENTORY" means all Raw Materials, Work-in-Process and Finished
Goods held in the normal course of business and as such term is defined in
Section 9.109(4) of the UCC as shown on the Company's perpetual inventory
records or equivalent reporting in accordance with their current and historical
classifications.
"INVENTORY RESERVES" means for the Company and its Domestic
Divisions at any date, an amount equal to the sum of (i) any profits or transfer
price additions accrued in
23
connection with transfers of such Inventory between the Company and its Domestic
Divisions or among Domestic Divisions of the Company, (ii) any net favorable
direct material variances capitalized on the Company's or its Domestic
Division's balance sheet for financial reporting purposes based on current and
historical accounting practices, (iii) the Angleton Direct Material Purchase
Price Reserve, (iv) the Excess and Obsolete Reserve, (v) the amount which
represents cycle count adjustments or any other amount which represents
inventory shrinkage, (vi) warranty or scrap reserves and (vii) the amount of any
reserve maintained by the Company and its Domestic Divisions which represents
written-down, non-saleable or otherwise obsolete inventory that has not been
otherwise excluded from Eligible Inventory.
"INVENTORY VALUE" means a dollar amount equal to the lesser of (i)
standard cost excluding "Obsolescence Reserve", calculated or summarized on a
basis consistent with the Company's quarterly SEC reporting and with GAAP and
with the Company's current and historical accounting practices and (ii) the
market value of such Inventory; PROVIDED that the portion attributable to labor
and overhead in work-in-process and finished goods does not comprise more than
25% of total cost for these items.
"ISSUING BANKS" means with respect to Letters of Credit issued on or
after the Effective Date, Chase and up to two other Lenders that may become
Issuing Banks hereunder from time to time by entering into Issuing Bank
Agreements with the Company, each in its capacity as an issuer of Letters of
Credit hereunder, and the successors of any such person in such capacity as
provided in Section 2.04(i). Any Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank (provided that the Company has approved such Affiliate, such approval not
to be unreasonably withheld), in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by it.
"ISSUING BANK AGREEMENT" means an Issuing Bank Agreement between an
Issuing Bank and the Company substantially in the form of Exhibit M.
"LC DISBURSEMENT" means a payment made by an Issuing Bank pursuant
to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant to
this Agreement.
"LEVERAGE RATIO" means, on any date, the ratio of (a) Total
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Company ended on such date (or, if such date
is not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of the Company most recently ended prior to such date); PROVIDED, that
for purposes of determining the Leverage Ratio, all references in the
definitions of Total Indebtedness and Consolidated EBITDA (and in the
definitions used therein) to Restricted Subsidiaries shall be deemed references
to Subsidiaries.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing
24
rate quotations comparable to those currently provided on such page of such
Service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the "LIBO
RATE" with respect to such Eurodollar Borrowing for such Interest Period shall
be the rate at which dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds to leading commercial banks
in the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities. For the purposes of this Agreement and the other Loan Documents, the
Company or any Subsidiary of the Company shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.
"LOAN DOCUMENTS" means this Agreement, each Borrowing Subsidiary
Agreement, each Borrowing Subsidiary Termination, each Foreign Borrower
Supplement, the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement, the other Security Documents, any Issuing Bank Agreement, any
promissory note issued pursuant to Section 2.08 and the Borrowing Base
Certificates.
"LOAN PARTIES" means each Borrower and each Subsidiary that is party
to the Guarantee Agreement or any Security Document.
"LOANS" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"LONG-TERM INDEBTEDNESS" means any Indebtedness that, in accordance
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
"MATERIAL ADVERSE EFFECT" means the result of one or more events,
changes or effects which, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on (a) the business, operations,
assets, liabilities, condition (financial or otherwise) or results of operations
of the Company on an individual basis, or the Company and its Subsidiaries,
taken as a whole (after giving effect to the Transactions) or (b) the validity
or enforceability of any of the documents entered into in connection with the
Transactions (including the Loan Documents) or the rights, remedies and benefits
available to the parties thereunder.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Company and its Subsidiaries in an aggregate principal
amount exceeding $5,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of the Company or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
25
"MORTGAGE" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"MORTGAGED PROPERTY" means each parcel of real property and the
improvements thereto owned by any Borrower, any Domestic Subsidiary or any
Foreign Subsidiary that is a direct or indirect parent of a Borrower.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET WORTH" means, at any time and from time to time, the net worth
of the Company and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP.
"OBLIGATIONS" means (a) the due and punctual payment by the
Borrowers or the applicable Loan Parties of (i) the principal of and premium, if
any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Borrowers under this
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Secured Parties under this Agreement and the other Loan
Documents, (b) the due and punctual payment and performance of all covenants,
agreements, obligations and liabilities of the Loan Parties, monetary or
otherwise, under or pursuant to this Agreement and the other Loan Documents and
(c) the due and punctual payment of all obligations of the Company under each
Hedging Agreement entered into (i) prior to the date hereof with any
counterparty that is a Lender (or an Affiliate thereof) on the date hereof or
(ii) on or after the date hereof with any counterparty that is a Lender (or an
Affiliate thereof) at the time such Hedging Agreement is entered into.
"OTHER TAXES" means any and all present or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means a certificate in the form of Exhibit
C or any other form approved by the Collateral Agent.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 90 days or are being contested in compliance with Section 5.04;
26
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Company or any Subsidiary;
(g) any obligations or duties affecting any of the property of the
Company or the Subsidiaries to any municipality or public authority with
respect to any franchise, grant, license or permit which do not materially
impair the use of such property for the purposes for which it is held;
(h) Liens arising from precautionary UCC financing statements
regarding operating leases; and
(i) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Company or any of its Subsidiaries in
the ordinary course of business.
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within one year from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 364 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof which (i) has a combined capital and surplus and undivided profits
of not less than $500,000,000 and (ii) has short-term credit ratings of at
least A1 and P1 by S&P and Moody's, respectively;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above; PROVIDED THAT the Company shall take possession of all
securities purchased by the Company or any Subsidiary under repurchase
agreements and shall adhere to customary margin and xxxx-to-market
procedures with respect to fluctuations in value; and
27
(e) deposits in money market accounts investing exclusively or
substantially exclusively in investments comprised of clauses (a) through
(d) above.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PLEDGE AGREEMENTS" means (a) a Pledge Agreement substantially in
the form of Exhibit D among the Company, the Subsidiaries from time to time
party thereto and the Collateral Agent and (b) in connection with pledges of
shares of or other equity interests in Foreign Subsidiaries, other pledge
agreements or similar agreements in form and substance satisfactory to the
Collateral Agent, as the same may be amended, modified or supplemented from time
to time in accordance with the provisions hereof.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate in effect at its principal office
in The City of Houston; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"PROCEEDS" means the net cash proceeds received by the Borrower from
any issuance of the Acceptable Securities after the Effective Date.
"QUALIFIED FOREIGN SUBSIDIARY HOLDING COMPANY" means a Domestic
Subsidiary that does not own any assets other than, or engage in any business or
activity other than the ownership of, Equity Interests of one or more Domestic
or Foreign Subsidiaries and that does not have any Indebtedness or liabilities
other than (a) liabilities incidental to its ownership of such Equity Interests
and (b) liabilities as a Guarantor of the Obligations.
"QUARTERLY DATES" means the last day of each March, June, September
and December in each year.
"RAW MATERIALS" means any raw materials to be used or consumed in
the manufacture of goods to be sold in the normal course of business and shall
be valued at standard costs with respect to direct material purchases.
"REGISTER" has the meaning set forth in Section 9.04.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing at least 51% of the
sum of the aggregate Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Company or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Equity Interests in the Company or any Subsidiary.
28
"RESTRICTED SUBSIDIARY" means (a) any Domestic Subsidiary and (b)
any Foreign Subsidiary that is not an Unrestricted Subsidiary.
"REVOLVING AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity Date
and the date of termination of the Revolving Commitments.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Revolving Commitments is $125,000,000.
"REVOLVING EXPOSURE" means, with respect to any Lender at any time,
the sum of (a) the outstanding principal amount of such Lender's Revolving
Loans, (b) such Lender's Foreign Borrower Exposure and (c) such Lender's LC
Exposure, in each case at such time.
"REVOLVING LENDER" means a Lender with a Revolving Commitment or, if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"REVOLVING LOAN" means a Loan made pursuant to clause (a) of Section
2.01.
"REVOLVING MATURITY DATE" means September 30, 2004.
"ROLLING PERIOD" means any period of four consecutive Fiscal
Quarters (or, if less, the number of full Fiscal Quarters subsequent to the
Effective Date).
"S&P" means Standard & Poor's Rating Services.
"SCHEDULED INDEBTEDNESS" means all Indebtedness incurred under the
Existing Facility or listed on Schedule B.
"SECURED PARTIES" means the Administrative Agent, the Collateral
Agent, each Lender, the Issuing Bank and each other person to which any of the
Obligations is owed.
"SECURITY AGREEMENTS" means (a) a Security Agreement substantially
in the form of Exhibit G among the Company, the Domestic Subsidiaries from time
to time party thereto and the Collateral Agent for the benefit of the Secured
Parties and (b) in connection with the creation of security interests in the
assets of Foreign Subsidiaries, other security agreements or similar agreements
in form and substance satisfactory to the Collateral Agent, as the same may be
amended, modified or supplemented from time to time in accordance with the
provisions hereof.
"SECURITY DOCUMENTS" means the Security Agreements, the Pledge
Agreements, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.11 or 5.12 to secure
any of the Obligations.
"SELLER" means X.X. Xxxxx Corporation, a New Jersey corporation.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the
29
Administrative Agent is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STOCK PURCHASE AGREEMENT" means the Amended and Restated Stock
Purchase Agreement dated August 12, 1999, between the Seller and the Company.
"SUBORDINATED INDEBTEDNESS" means Indebtedness that by its terms is
subordinated to any of the Obligations.
"SUBORDINATED NOTES" means the 6% Convertible Subordinated Notes due
2006 issued by the Company in an aggregate principal amount of $80,200,000 under
the Subordinated Note Indenture.
"SUBORDINATED NOTE INDENTURE" means the Indenture dated as of August
13, 1999, between the Company and Xxxxxx Trust Company of New York, as trustee.
"SUBSIDIARY" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, as of
such date, owned, controlled or held by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Company. For purposes of
the representations and warranties made herein on the Effective Date, the term
"Subsidiary" includes each of the Avex Entities and their subsidiaries.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOAN" means a Loan made by a Lender pursuant to clause (a) of
Section 2.01.
"TERM LOAN COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the
Effective Date, expressed as an amount representing the maximum principal amount
of the Term Loan to be made by such Lender hereunder. The amount of each
Lender's Term Loan Commitment is set forth on Schedule 2.01. The aggregate
amount of the Lenders' Term Loan Commitments is $100,000,000.
"TERM LOAN LENDER" means a Lender with a Term Loan Commitment or an
outstanding Term Loan.
"TERM LOAN MATURITY DATE" means September 30, 2004.
30
"THREE-MONTH SECONDARY CD RATE" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"TOTAL INDEBTEDNESS" means, as of any date, the sum of (a) the
aggregate principal amount of Indebtedness of the Company and its Restricted
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP, plus (b) the aggregate principal amount of Indebtedness of
the Company and its Restricted Subsidiaries outstanding as of such date that is
not required to be reflect on a balance sheet in accordance with GAAP,
determined on a consolidated basis; PROVIDED that, for purposes of clause (b)
above, the term "Indebtedness" shall not include contingent obligations of the
Company or any Restricted Subsidiary as an account party in respect of any
letter of credit or letter of guaranty unless such letter of credit or letter of
guaranty supports an obligation that constitutes Indebtedness.
"TRANSACTIONS" means the Acquisition, the repayments of Indebtedness
required under Section 4.01, the execution, delivery and performance of the Loan
Documents, the Borrowings and issuances of Letters of credit hereunder and the
creation of the Liens created by the Security Documents.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the State of Texas or, where applicable as to specific Collateral, any
other relevant state.
"UNRESTRICTED SUBSIDIARY" means (i) any Foreign Subsidiary of the
Company that at the time of determination shall have been designated as an
Unrestricted Subsidiary by the Company in the manner provided below (and shall
not subsequently have been designated as a Restricted Subsidiary) and (ii) any
subsidiary of an Unrestricted Subsidiary. The Company may from time to time
designate any Foreign Subsidiary (other than a Foreign Subsidiary that,
immediately after such designation, shall hold any Indebtedness of or Equity
Interest in the Company or any Restricted Subsidiary) as an Unrestricted
Subsidiary, and may designate any Unrestricted Subsidiary as a Restricted
Subsidiary so long as, immediately after giving effect to such designation, no
Default shall have occurred and be continuing. Any designation by the Company
pursuant to this definition shall be made in an officer's certificate delivered
to the Administrative Agent and containing a certification that such designation
is in compliance with the terms of this definition. Notwithstanding the
foregoing, no Borrowing Subsidiary shall at any time be an Unrestricted
Subsidiary.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of the Company all
the capital stock or other equity interests of which (other than directors'
qualifying shares and shares held by other than the Persons to the extent such
shares are required by applicable law to be held by a Person other than the
Company or one of its Subsidiaries) is owned by the Company or one or more
Wholly Owned Subsidiaries.
31
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"WORK-IN-PROCESS" means goods to be sold in the normal course of
business, which are currently in the process of being manufactured and shall be
valued at standard costs with respect to labor, overhead and direct material
costs; PROVIDED that labor and overhead does not comprise more than 25% of the
total value of work-in-process per assembly.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes
of this Agreement, Loans may be classified and referred to by Class (E.G., a
"Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class and Type
(E.G., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (E.G., a "Revolving Borrowing") or by Type (E.G., a
"Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. (a) Subject to the terms and conditions
set forth herein, each Lender agrees (i) to make a Term Loan to the Company on
the Effective Date, in dollars, in a principal amount that will not result in
(x) such Lender's Term Loan exceeding such Lender's Term Loan Commitment or (y)
the sum of the aggregate outstanding principal
32
amount of the Loans and the LC Exposure exceeding the Borrowing Base then in
effect and (ii) to make Revolving Loans to any Borrower from time to time during
the Revolving Availability Period, in dollars, in an aggregate principal amount
that will not result in (x) such Lender's Revolving Exposure exceeding its
Revolving Commitment, (y) the sum of the aggregate outstanding principal amount
of the Loans and the LC Exposure exceeding the Borrowing Base then in effect or
(z) in the case of any Foreign Borrower, the sum of the aggregate outstanding
principal amount of the Revolving Loans of all Foreign Borrowers exceeding
$20,000,000. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
Amounts repaid in respect of Term Loans may not be reborrowed.
(b) Subject to the terms and conditions and relying upon the
representations and warranties set forth herein, each Fronting Lender that is
party to a Foreign Borrower Supplement agrees, severally and not jointly, to
make Revolving Loans to any Foreign Borrower that is a designated Borrower under
such Foreign Borrower Supplement from time to time during the Revolving
Availability Period, in dollars, in an aggregate principal amount that will not
result in (i) such Lender's Revolving Exposure exceeding its Revolving
Commitment, (ii) the aggregate outstanding principal amount of the Loans and the
LC Exposure exceeding the Borrowing Base then in effect, (iii) the aggregate
principal amount of the Revolving Loans made by such Fronting Lender pursuant to
such Foreign Borrower Supplement exceeding such Fronting Lender's Foreign
Borrower Commitment under such Foreign Borrower Supplement or (iv) the sum of
the aggregate outstanding principal amount of the Revolving Loans of all Foreign
Borrowers exceeding $20,000,000; PROVIDED that a Fronting Lender shall not be
required to, and shall not, make any Revolving Loan under this paragraph if the
Required Lenders shall have delivered to such Fronting Lender, not later than
two Business Days prior to the date on which any such Revolving Loan shall have
been scheduled to be made, a notice stating that a Default has occurred and is
continuing and directing such Fronting Lender not to make Revolving Loans.
(c) In the event that any Revolving Borrowing made pursuant to
paragraph (b) above shall be outstanding and (i) the principal of or interest on
such Borrowing shall not be paid within three Business Days after the date on
which it is due and one or more Fronting Lenders holding a majority in interest
of the outstanding Revolving Loans included in such Revolving Borrowing shall
deliver to the Administrative Agent and the Company a request that the
provisions of this paragraph take effect with respect to such Borrowing or (ii)
the Revolving Commitments shall be terminated or the Loans accelerated pursuant
to Article VII, then (A) each Revolving Lender shall acquire at face value a
participation in the Loans included in such Revolving Borrowing and the interest
accrued thereon equal to its Applicable Percentage of such obligations, and
shall pay the purchase price for such participation by wire transfer of
immediately available funds in dollars to the Administrative Agent in the manner
provided in Section 2.05 (and the Administrative Agent shall promptly wire the
amounts so received to the applicable Fronting Lenders ratably in accordance
with their respective Revolving Loans included in such Revolving Borrowings) and
(B) such Loans shall at all times thereafter, until repaid in accordance with
the terms hereof, bear interest at the rate applicable to overdue ABR Borrowings
under Section 2.13(c), and the principal of and interest on such Loans will be
payable at the applicable times and places for overdue ABR Borrowings. The
obligations of the Revolving Lenders to acquire and pay for participations in
Revolving Loans pursuant to this paragraph shall be absolute and unconditional
under any and all circumstances.
(d) One or more Foreign Borrowers, the Administrative Agent and one
or more Revolving Lenders may from time to time enter into one or more Foreign
Borrower Supplements pursuant to which such Revolving Lenders may agree to serve
as Fronting Lenders. Any such Foreign Borrower Supplement shall set forth the
Foreign Borrower Commitment of each Fronting Lender party thereto, the Foreign
Borrowers that may borrow under such Foreign Borrower Supplement, any special
provisions for the times and places at which or the Persons to which Borrowing
Requests are to be delivered, proceeds of Borrowings are to be disbursed or
payments in respect of Borrowings are to be made or for the compensation to be
payable to
33
Fronting Lenders and any other special provisions to be applicable to Borrowings
under such Foreign Borrower Supplement. Any special provisions referred to in
the preceding sentence that shall be included in any Foreign Borrower Supplement
shall be applicable to all Borrowings under such Foreign Borrower Supplement,
notwithstanding any other provision of this Article II to the contrary (and in
the absence of any such special provisions, the applicable provisions set forth
in this Article II shall control).
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Term Loan and each
Revolving Loan made pursuant to Section 2.01(a) shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
Each Revolving Loan made pursuant to Section 2.01(b) shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Fronting Lenders
ratably in accordance with their respective applicable Foreign Borrower
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; PROVIDED
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
applicable Borrower may request in accordance herewith. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; PROVIDED that any exercise of such
option shall not affect the obligation of any Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, and at the time that any ABR Borrowing is made, such Borrowing shall
be in an aggregate amount that is an integral multiple of $500,000; PROVIDED
that an ABR Revolving Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Revolving Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e). Borrowings of more than one Type and Class may be outstanding at the
same time; PROVIDED that there shall not at any time be more than a total of
five Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date or Term Loan Maturity Date, as applicable or if the
requested Interest Period with respect to any Term Loan or portion thereof would
extend beyond any date upon which is due any scheduled principal payment in
respect of Term Loans unless the aggregate principal amount of Term Loans which
are ABR Loans or which are Eurodollar Loans having Interest Periods that will
expire on or before such date equals or exceeds the amount of such principal
payment.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Revolving
Borrowing or Term Borrowing, the applicable Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing or
Term Borrowing and, in the case of a Revolving Borrowing, whether such
Borrowing is to be
34
made under Section 2.01(a) or 2.01(b) (and, if such Borrowing is to be
made under Section 2.01(b), the Foreign Borrower Supplement pursuant to
which such Borrowing is to be made);
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period";
(vi) the Borrower requesting such Borrowing; and
(vii) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.05(a).
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the requesting
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender or Fronting
Lender, as the case may be, of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. LETTERS OF CREDIT. (a) GENERAL. Subject to the terms
and conditions set forth herein, the Company may request the issuance of Letters
of Credit for its own account or for the joint and several account of the
Company and a Subsidiary, in a form reasonably acceptable to the Administrative
Agent and the applicable Issuing Bank, at any time and from time to time during
the Revolving Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Company to,
or entered into by the Company with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the applicable Issuing Bank) to the
applicable Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by such
Issuing Bank, the Company also shall submit a letter of credit application on
such Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Company shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $20,000,000, (ii) the total Revolving Exposures shall not exceed the
total Revolving Commitments and (iii) the sum of the aggregate
35
outstanding principal amount of the Loans and the LC Exposure shall not exceed
the Borrowing Base then in effect.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of any Issuing Bank or the Lenders, each Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of each Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by such Issuing Bank
and not reimbursed by the Company on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Company for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Company shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Company prior to such time on such
date, then not later than 12:00 noon, New York City time, on the Business Day
immediately following the day that the Company receives such notice. If the
Company fails to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Company in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Company, in the same manner as provided in Section 2.05 with
respect to Loans made by such Lender (and Section 2.05 shall apply, MUTATIS
MUTANDIS, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the applicable Issuing Bank the
amounts so received by it from the Revolving Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Company pursuant to this
paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any
LC Disbursement shall not constitute a Loan and shall not relieve the Company of
its obligation to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Company's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by any
36
Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv)
any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Company's obligations hereunder. Neither the Administrative Agent, the Lenders
nor any Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of any Issuing Bank; PROVIDED that the foregoing shall
not be construed to excuse any Issuing Bank from liability to the Company to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Company to the extent permitted by
applicable law) suffered by the Company that are caused by any Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, each Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Company by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; PROVIDED that any failure to give or
delay in giving such notice shall not relieve the Company of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) INTERIM INTEREST. If any Issuing Bank shall make any LC
Disbursement, then, unless the Company shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Company reimburses such LC Disbursement,
at the rate per annum then applicable to ABR Revolving Loans; PROVIDED that, if
the Company fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Revolving
Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.
(i) REPLACEMENT OF AN ISSUING BANK. Any Issuing Bank may be replaced
at any time by written agreement among the Company, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of an Issuing Bank. At
the time any such replacement shall become effective, the Company shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to
37
the term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and
be continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Company shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; PROVIDED that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Company described in clause (h) or (i) of Article VII. The Company also shall
deposit cash collateral pursuant to this paragraph as and to the extent required
by Section 2.10(b) and (c), and any such cash collateral so deposited and held
by the Administrative Agent hereunder shall constitute part of the Borrowing
Base for purposes of determining compliance with Section 2.10(b) and (c). Each
such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Company under this Agreement.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Company's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse any Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Company for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Revolving
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Company under this
Agreement. If the Company is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Company within
three Business Days after all Events of Default have been cured or waived. If
the Company is required to provide an amount of cash collateral hereunder
pursuant to Section 2.10(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Company as and to the extent that, after
giving effect to such return, the Company would remain in compliance with
Section 2.10(b) and no Default shall have occurred and be continuing.
SECTION 2.05. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the applicable Borrower by promptly crediting the amounts so received, in
like funds, to an account of such Borrower maintained with the Administrative
Agent in New York City and designated by such Borrower in the applicable
Borrowing Request; PROVIDED that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.04(e) shall be
remitted by the Administrative Agent to the applicable Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender
38
has made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. In such event, if a Lender has not
in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.06. INTEREST ELECTIONS. (a) Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
applicable Borrower may elect to convert such Borrowing to a different Type or
to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the applicable
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
39
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the applicable Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless
previously terminated, (i) the Term Loan Commitments shall permanently terminate
at 5:00 p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments and the Foreign Borrower Commitments shall permanently terminate on
the Revolving Maturity Date.
(b) The Company may at any time terminate, or from time to time
reduce, the Revolving Commitments or any Foreign Borrower Commitment; PROVIDED
that (i) each reduction of the Revolving Commitments shall be in an amount that
is an integral multiple of $5,000,000 and (ii) the Company shall not terminate
or reduce the Revolving Commitments or any Foreign Borrower Commitment if, after
giving effect to any concurrent prepayment of the Revolving Loans in accordance
with Section 2.10, the sum of the Revolving Exposures would exceed the total
Revolving Commitments.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; PROVIDED that a notice of
termination of the Revolving Commitments delivered by the Company may state that
such notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving
Commitments shall be permanent. Each reduction of the Revolving Commitments
shall be made ratably among the Lenders in accordance with their respective
Revolving Commitments.
SECTION 2.08. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) Each
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date and (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum
40
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the applicable Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent and the
Company. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.09. AMORTIZATION OF TERM LOANS. (a) Subject to adjustment
pursuant to paragraph (d) of this Section, the Company shall repay the Term
Borrowings in 20 consecutive quarterly installments, payable on December 31,
1999 and on each Quarterly Date thereafter, in the quarterly and annual
aggregate principal amounts set forth opposite the applicable period listed
below:
PERIOD QUARTERLY PAYMENT ANNUAL AMOUNT
1999 $3,000,000 $3,000,000
2000 4,000,000 16,000,000
2001 4,500,000 18,000,000
2002 5,000,000 20,000,000
2003 5,500,000 22,000,000
2004 7,000,000 21,000,000
(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Term Loan Maturity Date.
(c) Any prepayment of a Term Borrowing shall be applied to reduce
the subsequent scheduled repayments of the Term Borrowings to be made pursuant
to this Section ratably; PROVIDED that any prepayment made pursuant to Section
2.10(a) shall be applied FIRST, to reduce the next scheduled repayment of the
Term Borrowings to be made pursuant to this Section unless and until such next
scheduled repayment has been eliminated as a result of reductions hereunder and
SECOND, ratably.
(d) Prior to any repayment of any Term Borrowings hereunder, the
Company shall select the Borrowing or Borrowings to be repaid and shall notify
the Administrative Agent by telephone (confirmed by telecopy) of such selection
not later than 11:00 a.m., New York City time, three Business Days before the
scheduled date of such repayment. Each repayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.
41
SECTION 2.10. PREPAYMENT OF LOANS. (a) Each Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, in an aggregate amount that is an integral multiple of $5,000,000, subject
to the requirements of this Section.
(b) In the event and on each occasion that the sum of the Revolving
Exposures exceeds the total Revolving Commitments, the Borrowers shall prepay
Revolving Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the Administrative Agent pursuant to Section
2.04(j)) in an aggregate amount equal to such excess.
(c) In the event and on each occasion that the sum of the aggregate
outstanding principal amount of all Term Loans and the aggregate Revolving
Exposure exceeds the Borrowing Base, the Borrowers shall prepay Borrowings (or,
if no such Borrowings are outstanding, deposit cash collateral in an account
with the Administrative Agent pursuant to Section 2.04(j)) in an aggregate
amount equal to such excess.
(d) In the event and on each occasion that any Proceeds are received
by the Company, the Company shall, immediately after such Proceeds are received,
apply such Proceeds to prepay Term Loans until the Term Loans have been paid in
full.
(e) The Company shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
PROVIDED that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
aggregate amount that is an integral multiple of $5,000,000, except as necessary
to apply fully the required amount of a mandatory prepayment. Each prepayment of
a Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.
SECTION 2.11. FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily unused amount of the
Revolving Commitment of such Lender during the period from and including the
date of this Agreement to but excluding the date on which such Revolving
Commitment terminates. Accrued commitment fees in respect of the Revolving
Commitments shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). For purposes of computing commitment fees with
respect to Revolving Commitments, a Revolving Commitment of a Lender shall be
deemed to be used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender.
(b) The Company agrees to pay (i) to the Administrative Agent for
the account of each Revolving Lender a participation fee with respect to its
participation in each Letter of Credit, which shall accrue at a per annum rate
equal to the Applicable Rate used to compute interest on Eurodollar Revolving
Loans on the average daily amount of the portion of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
42
Disbursements) attributable to such Letter of Credit during the period from and
including the date of issuance of such Letter of Credit to but excluding the
date on which such Letter of Credit expires or is drawn in full (but which shall
in no event be less than $500 for the period from and including the date of
issuance thereof to but excluding the date on which it expires or is drawn in
full), and (ii) to each Issuing Bank a fronting fee, which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as each Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; PROVIDED that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on demand.
Any other fees payable to any Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Company agrees to pay (or to cause the applicable Foreign
Borrower to pay) (i) to the Administrative Agent for the account of each
Revolving Lender a participation fee (an "FOREIGN BORROWER PARTICIPATION FEE")
with respect to its obligation under Section 2.01(c) to acquire participations
in Revolving Loans, which shall accrue at the Applicable Rate used to determine
the interest rate applicable to Eurocurrency Revolving Loans on the average
daily amount of such Revolving Lender's Foreign Borrower Exposure (excluding any
portion thereof attributable to Revolving Loans in respect of which such Lender
has made, or is required to have made, payments to the applicable Fronting
Lenders as provided in Section 2.01(d)) during the period from and including the
date hereof to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any Foreign Borrower Exposure, and (ii) to each Fronting Lender a fronting fee
(an "FOREIGN BORROWER FRONTING FEE"), which shall accrue at the rate of .125%
per annum on the daily aggregate outstanding amount of the Revolving Loans made
by such Fronting Lender under Section 2.01(b) during the period from and
including the date hereof to but excluding the later of the date of termination
of the Revolving Commitments and the date on which there cease to be any
Revolving Loans outstanding. Foreign Borrower Participation Fees and Foreign
Borrower Fronting Fees accrued under this paragraph through and including the
last day of March, June, September and December of each year shall be payable on
the third Business Day following such last day, commencing on the first such
date to occur after the date hereof; PROVIDED that all such Fees shall be
payable on the date on which the Revolving Commitments terminate and any such
Fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. All Foreign Borrower Participation Fees and Foreign
Borrower Fronting Fees payable under this paragraph shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(d) The Company agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to any Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
43
SECTION 2.12. INTEREST. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate (except
that the Loans comprising each ABR Borrowing made pursuant to Section 2.01(b)
shall bear interest at the Alternate Base Rate).
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate (except that the Loans comprising each
Eurodollar Borrowing made pursuant to Section 2.01(b) shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing).
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by any Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments; PROVIDED that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest
Period; or
(b) the Administrative Agent determines that the Adjusted LIBO Rate
for such Interest Period will not adequately and fairly reflect the cost
to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
44
SECTION 2.14. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by
such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Company will pay to such Lender or Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or Issuing Bank, as
the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or Issuing Bank's capital or on the capital of such
Lender's or Issuing Bank's holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by such Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or Issuing Bank's policies and the policies of
such Lender's or Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Company will pay to such Lender or Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or Issuing Bank or such Lender's or Issuing Bank's holding company
for any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay such Lender or Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 Business Days
after receipt thereof.
(d) Failure or delay on the part of any Lender or Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or Issuing Bank's right to demand such compensation; PROVIDED that
the Company shall not be required to compensate a Lender or Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or Issuing Bank, as the case
may be, notifies the Company of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or Issuing Bank's intention to claim
compensation therefor; PROVIDED FURTHER that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.15. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
45
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.10(e) and is revoked in accordance therewith), (d) the
purchase of participations in any Revolving Loan pursuant to Section 2.01(c), or
(e) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the applicable
Borrower pursuant to Section 2.18, then, in any such event, the applicable
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the applicable Borrower and shall
be conclusive absent manifest error. The applicable Borrower shall pay such
Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.16. TAXES. (a) Any and all payments by or on account of
any obligation of any Loan Party hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; PROVIDED that if any Loan Party shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent, each
Lender and each Issuing Bank, within 10 Business Days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of any Loan Party
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Company by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Company shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
46
applicable law, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Foreign Lender has received written notice from the Borrower advising it of the
availability of such exemption or reduction and supplying all applicable
documentation.
SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) Each Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 12:00 noon, New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, except payments to be made directly to an Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.14,
2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans (other than Revolving Loans made pursuant
to Section 2.01(b)), Term Loans, participations in LC Disbursements or in
participations in Revolving Loans made by Fronting Lenders resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Revolving Loans (other than Revolving Loans made pursuant to Section 2.01(b)),
Term Loans, participations in LC Disbursements or in participations in Revolving
Loans made by Fronting Lenders and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Revolving Loans
(other than Revolving Loans made pursuant to Section 2.01(b)), Term Loans,
participations in LC Disbursements of other Lenders or in participations in
Revolving Loans made by Fronting Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans (other than Revolving Loans made pursuant to
Section 2.01(b)), Term Loans, participations in LC Disbursements or in
participations in Revolving Loans made by Fronting Lenders; PROVIDED that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by a Borrower pursuant to and in accordance with the express terms
47
of this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
a Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Banks hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing
Banks, as the case may be, the amount due. In such event, if such Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Banks, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.04(d) or (e), 2.05(b), 2.17(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender requests compensation under Section 2.14, or if a Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if a
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16, such
48
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 2.19. BORROWING SUBSIDIARIES. On or after the Effective
Date, the Company may designate any Restricted Subsidiary of the Company as a
Borrowing Subsidiary by delivery to the Administrative Agent of a Borrowing
Subsidiary Agreement executed by such Restricted Subsidiary and the Company, and
upon such delivery such Restricted Subsidiary shall for all purposes of this
Agreement be a Borrowing Subsidiary and a party to this Agreement until the
Company shall have executed and delivered to the Administrative Agent a
Borrowing Subsidiary Termination with respect to such Restricted Subsidiary,
whereupon such Restricted Subsidiary shall cease to be a Borrowing Subsidiary
and a party to this Agreement. Notwithstanding the preceding sentence, no
Borrowing Subsidiary Termination will become effective as to any Borrowing
Subsidiary at a time when any principal of or interest on any Revolving Loan to
such Borrowing Subsidiary or any Letter of Credit issued for the account of such
Borrowing Subsidiary shall be outstanding hereunder; PROVIDED that such
Borrowing Subsidiary Termination shall be effective to terminate such Borrowing
Subsidiary's right to make further Borrowings or to request Letters of Credit
under this Agreement. As soon as practicable upon receipt of a Borrowing
Subsidiary Agreement, the Administrative Agent shall send a copy thereof to each
Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions to be
entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Borrowers and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of the Borrowers or such Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except (i) such as have been
obtained or made and are in full force and effect, (ii) filings necessary to
perfect Liens created under the Loan Documents and (iii) those the failure to
obtain or make which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Company or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, material agreement or other material instrument binding upon the
49
Company or any of its Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Company or any of its
Subsidiaries and (d) will not result in the creation or imposition of any Lien
on any asset of the Company or any of its Subsidiaries, except Liens created
under the Loan Documents.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a)
The Company has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended December 31, 1998, reported on by KPMG LLP,
independent certified public accountants, and (ii) as of and for the fiscal
quarter and the portion of the current fiscal year ended June 30, 1999,
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(b) The Company has heretofore furnished to the Lenders its pro
forma consolidated balance sheet as of June 30, 1999, prepared giving effect to
the Transactions as if the Transactions had occurred on such date. Such pro
forma consolidated balance sheet (i) has been prepared in good faith based on
the same assumptions used to prepare the pro forma financial statements included
in the Information Memorandum (which assumptions are believed by the Company to
be reasonable), (ii) accurately reflects all adjustments reasonably necessary to
give effect to the Transactions and (iii) presents fairly, in all material
respects, the pro forma financial position of the Company and its consolidated
Subsidiaries as of June 30, 1999 as if the Transactions had occurred on such
date; PROVIDED that with respect to the Avex Entities, the Company's
representation hereunder is made only pursuant to the Company's best knowledge.
(c) Except as disclosed in the financial statements referred to
above or the notes thereto or in the Information Memorandum and except for the
Disclosed Matters, after giving effect to the Transactions, none of the Company
or its Subsidiaries has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses.
(d) Since December 31, 1998, there has been no Material Adverse
Effect.
SECTION 3.05. PROPERTIES. (a) Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that (i) do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and (ii) individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Each of the Company and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property that
is owned or leased by the Company or any of its Subsidiaries as of the Effective
Date after giving effect to the Transactions.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate,
50
to result in a Material Adverse Effect (other than the Disclosed Matters) or
(ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Company nor any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Company and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, material agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Company nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. TAXES. Each of the Company and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $5,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $15,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. DISCLOSURE. The Company has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which the
Company or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, taken as a whole, in the light of the circumstances
under which
51
they were made, not misleading; PROVIDED that, with respect to projected
financial information, the Borrowers represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.12. SUBSIDIARIES. Schedule 3.12 sets forth the name of,
and the ownership interest of the Company in, each Subsidiary of the Company and
identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of
the Effective Date.
SECTION 3.13. INSURANCE. Schedule 3.13 sets forth a description of
all insurance maintained by or on behalf of the Company and its Subsidiaries as
of the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Company believes that the insurance maintained by
or on behalf of the Company and its Subsidiaries is adequate.
SECTION 3.14. LABOR MATTERS. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Company or any Subsidiary pending or,
to the knowledge of the Company, threatened. The hours worked by and payments
made to employees of the Company and the Subsidiaries have not been in violation
of the Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters. All payments due from the Company or any
Subsidiary, or for which any claim may be made against the Company or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Company or such Subsidiary. The consummation of the Transactions will not give
rise to any right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Company or any
Subsidiary is bound.
SECTION 3.15. SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. SENIOR INDEBTEDNESS. The Obligations will constitute
Senior Debt under and as defined in the Subordinated Note Indenture.
SECTION 3.17. YEAR 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the computer systems
of the Company and its Subsidiaries and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Company's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, will be completed by September 30, 1999, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. The cost to the Company and its
Subsidiaries of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Company and its Subsidiaries (including
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Company and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Company to conduct its
businesses without Material Adverse Effect.
52
SECTION 3.18. INTELLECTUAL PROPERTY. The Company and each of its
Subsidiary owns, or is licensed to use, all patents, trademarks, tradenames,
service marks, copyrights, technology, know-how and processes (together with all
applications therefor and licenses granting rights therein, "INTELLECTUAL
PROPERTY") reasonably necessary for the conduct of its business as currently
conducted, except for those the failure to own or be licensed to use which could
not reasonably be expected to result in a Material Adverse Effect. To the
knowledge of the Company, (a) the use of Intellectual Property by the Company
and its Subsidiaries does not infringe on the rights of any person, (b) no
Intellectual Property of the Company or any of its Subsidiaries is being
infringed upon by any Person, and (c) no claim is pending or threatened in
writing challenging the use or the validity of any Intellectual Property of the
Company or any Subsidiary, except for infringements and claims referred to in
the foregoing clauses (a), (b) and (c) that, in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make
Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent, the Collateral Agent, the
Documentation Agent, the Issuing Banks and the Lenders and dated the
Effective Date) of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for the Company,
substantially in the form of Exhibit B-1 and covering such other matters
relating to the Loan Parties, the Loan Documents or the Transactions as
the Required Lenders shall reasonably request. The Company hereby requests
such counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or
a Financial Officer of the Company, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel)
required to be reimbursed or paid by any Loan Party hereunder or under any
other Loan Document.
53
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an executive
officer or Financial Officer of the Company, together with all attachments
contemplated thereby, including the results of a search of the UCC (or
equivalent) filings made with respect to the Loan Parties in the
jurisdictions contemplated by the Perfection Certificate and copies of the
financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent that the
Liens indicated by such financing statements (or similar documents) are
permitted by Section 6.02 or have been released.
(g) The Administrative Agent shall have received evidence that the
insurance required by Section 5.07 and the Security Documents is in
effect.
(h) The Company shall have received (and there shall have been
released from any escrow or similar arrangements in effect pending the
consummation of the Acquisition) gross cash proceeds of not less than
$80,200,000 from the issuance of the Subordinated Notes. The
Administrative Agent shall have received copies of the Subordinated Note
Documents, certified by a Financial Officer as complete and correct.
(i) All consents and approvals required to be obtained from any
Governmental Authority or other Person in connection with the Transactions
shall have been obtained, and all applicable waiting periods and appeal
periods shall have expired, in each case without the imposition of any
burdensome conditions. The Acquisition and the other Transactions shall
have been, or substantially simultaneously with the initial funding of
Loans on the Effective Date shall be, consummated in accordance with the
Stock Purchase Agreement and applicable law, without any amendment to or
waiver of any material terms or conditions of the Stock Purchase Agreement
not approved by the Administrative Agent. The Administrative Agent shall
have received a copy of the Stock Purchase Agreement and all certificates,
opinions and other documents delivered thereunder, certified by a
Financial Officer as complete and correct.
(j) The Lenders shall have received a pro forma consolidated balance
sheet of the Company as of June 30, 1999, reflecting all pro forma
adjustments as if the Transactions had been consummated on such date, and
such pro forma consolidated balance sheet shall be consistent in all
material respects with the forecasts and other information previously
provided to the Lenders.
(k) The Administrative Agent shall have received (i) audited
consolidated balance sheets and related statements of income,
stockholders' equity and cash flows of the Avex Entities for the fiscal
years ended December 31, 1998 and 1997 and (ii) to the extent available,
unaudited consolidated balance sheets and related statements of income,
stockholders' equity and cash flows of the Avex Entities for each fiscal
quarter, if any, ending after December 31, 1998, which audited financial
statements for periods ending in 1999 (x) shall be in form and scope
satisfactory to the Administrative Agent and (y) shall not be materially
and adversely inconsistent with the financial statements or the
projections previously provided to the Lenders.
(l) The Administrative Agent shall have received a completed
Borrowing Base Certificate dated the Effective Date and signed by a
Financial Officer of the Company.
(m) The consummation of the Transactions shall not (i) violate any
applicable law, statute, rule or regulation, (ii) cause or create any
prepayment events or liens under any debt instruments or other agreements
or (iii) conflict with, or result in a default or event of default under,
any material agreement of the Company, any of the Subsidiaries or the Avex
Entities.
54
(n) The Scheduled Indebtedness shall have been or shall
simultaneously be repaid in full or released, all agreements and
instruments evidencing or governing such Indebtedness and all lending or
other commitments thereunder shall have been terminated and all Liens
securing such Indebtedness shall have been released, and the
Administrative Agent shall have received such evidence as it shall
reasonably have requested as to the satisfaction of such conditions. After
giving effect to the Effective Date Transactions, neither the Company nor
any of its Subsidiaries shall have outstanding any Indebtedness or shares
of preferred stock other than (i) Indebtedness incurred under the Loan
Documents, (ii) the Subordinated Notes and (iii) Indebtedness set forth in
Schedule 4.01(o).
(o) The Administrative Agent shall be reasonably satisfied that each
of the Company and its Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or
its property (including ERISA, margin regulations, securities laws and
environmental laws) and all indentures, material agreements and other
instruments binding upon it or its property, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
(p) The Administrative Agent shall be reasonably satisfied with the
sufficiency of amounts under available Revolving Loans to meet the ongoing
working capital requirements of the Company and its subsidiaries following
the consummation of the Transactions.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 5:00 p.m., New York City time, on October 31, 1999 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of the Issuing Banks to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set forth
in the Loan Documents shall be true and correct in all material respects
on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
SECTION 4.03. INITIAL CREDIT EVENT FOR EACH BORROWING SUBSIDIARY.
The obligation of the Lenders to make Loans to any Borrowing Subsidiary and the
obligations of the
55
Issuing Banks to issue Letters of credit for the account of any Borrowing
Subsidiary are subject to the satisfaction of the following conditions:
56
(a) The Administrative Agent (or its counsel) shall have received a
Borrowing Subsidiary Agreement duly executed by such Borrowing Subsidiary
and the other parties
thereto.
(b) The Administrative Agent shall have received a favorable written
opinion of counsel for such Borrowing Subsidiary, substantially in the
form of Exhibit B-2 and covering such other matters relating to such
Borrowing Subsidiary and its Borrowing Subsidiary Agreement as the
Administrative Agent shall reasonably request.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of such
Borrowing Subsidiary, the authorization of the Transactions insofar as
they relate to such Borrowing Subsidiary, the satisfaction of the
Collateral and Guarantee Requirement insofar as it relates to the assets
of such Borrowing Subsidiary and any other legal matters relating to such
Borrowing Subsidiary, its Borrowing Subsidiary Agreement or such
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Company will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Company,
audited consolidated balance sheets and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, of (i) the Company and the consolidated Subsidiaries
and (ii) the Company and the Restricted Subsidiaries as of the end of such
year, all reported on by KPMG LLP or other independent public accountants
of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as
to the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition
and results of operations of the Company and the consolidated Subsidiaries
or the Company and the consolidated Restricted Subsidiaries, as
applicable, on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, the consolidated balance
sheets and related statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, of (i) the Company and the
consolidated Subsidiaries and (ii) the Company and the Restricted
Subsidiaries, all certified by one of the Company's Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of the Company and the consolidated Subsidiaries or
the Company and the consolidated Restricted Subsidiaries, as applicable,
on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes;
57
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Company (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.13, 6.14, 6.15, 6.16 and 6.17 and (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the
Company's audited financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, any management letter delivered to the management of the
Company by the accounting firm that reported on such financial statements;
(e) within 10 days after the end of each calendar month, (i) a
completed Borrowing Base Certificate calculating and certifying the
Borrowing Base as of the last day of such calendar month, certified as
complete and correct and signed on behalf of the Company by a Financial
Officer, and (ii) such other supporting documentation and additional
reports with respect to the Borrowing Base as the Administrative Agent
shall reasonably request;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Company or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
by the Company to its shareholders generally, as the case may be; and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidi ary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. The Company will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Company or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Company and its Subsidiaries in an aggregate
amount exceeding $5,000,000;
(d) the occurrence of any event or any other development by which
the Company or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii)
becomes subject to any Environmental Liability, (iii) receives notice of
any claim with respect to any Environmental Liability or (iv) becomes
aware of any basis for any Environmental Liability and in each of the
preceding clauses, which individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect; and
58
(e) any other development (including the termination of any material
contract) that results in, or could reasonably be expected to result in, a
Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. INFORMATION REGARDING COLLATERAL. (a) The Company will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or corporate structure or (iv) in any Loan
Party's Federal Taxpayer Identification Number. The Company agrees not to effect
or permit any change referred to in the preceding sentence unless all filings
have been made under the UCC or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral. The Company
also agrees promptly to notify the Administrative Agent if any material portion
of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Company shall deliver to the Administrative Agent a
certificate of a Financial Officer and the chief legal officer of the Company
(i) setting forth the information required pursuant to Section 1 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this Section and (ii) certifying that all UCC financing statements (including
fixture filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests under the Security Documents for a period of not
less than 18 months after the date of such certificate (except as noted therein
with respect to any continuation statements to be filed within such period).
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS. The Company will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect; PROVIDED that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
SECTION 5.05. PAYMENT OF OBLIGATIONS. The Company will, and will
cause each of its Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Company or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. MAINTENANCE OF PROPERTIES. The Company will, and will
cause each of its Subsidiaries to, keep and maintain all property material to
the conduct of its business
59
in good working order and condition, ordinary wear and tear excepted, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.07. INSURANCE. The Company will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required to be maintained pursuant to
the Security Documents. The Company will furnish to the Lenders, upon request of
the Administrative Agent, information in reasonable detail as to the insurance
so maintained.
SECTION 5.08. BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS. (a)
The Company will, and will cause each of its Subsidiaries to, keep proper books
of record and account in which full, true and correct entries are made of all
material dealings and transactions in relation to its business and activities.
The Company will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
(b) The Company will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent (including any
consultants, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct evaluations and appraisals of the Company's computation of the
Borrowing Base and the assets included in the Borrowing Base, all at such
reasonable times and as often as reasonably requested; PROVIDED that, if no
Default shall have occurred and be continuing, no more than one such evaluation
will be requested by the Administrative Agent during any fiscal year. The
Company shall pay the reasonable fees and expenses of any representatives
retained by the Administrative Agent to conduct any such evaluation or
appraisal. The Company also agrees to modify or adjust the computation of the
Borrowing Base (which may include maintaining additional reserves or changing
the definitions of or modifying the eligibility criteria for the components of
the Borrowing Base) to the extent required by the Administrative Agent or the
Required Lenders as a result of any such evaluation or appraisal, in each case
with the consent of the Company (such consent not to be unreasonably withheld).
SECTION 5.09. COMPLIANCE WITH LAWS. The Company will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority (including Environmental Laws) applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.10. USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of
the Borrowings hereunder will be used only for the purposes set forth in the
preamble to this Agreement. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations U and X.
SECTION 5.11. ADDITIONAL SUBSIDIARIES. If any additional Subsidiary
is formed or acquired after the Effective Date, the Company will, at least five
Business Days before such Subsidiary is formed or acquired, notify the
Administrative Agent and the Lenders thereof and cause the Collateral and
Guarantee Requirement to be satisfied (to the extent applicable) with respect to
such Subsidiary and with respect to any Equity Interest in or Indebtedness of
such Subsidiary owned or to be owned by or on behalf of the Company or any other
Subsidiary.
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SECTION 5.12. FURTHER ASSURANCES. The Company will, and will cause
each Subsidiary to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents), which may be required under any applicable law,
or which the Administrative Agent or the Required Lenders may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain
satisfied, all at the expense of the Loan Parties. The Company also agrees to
provide to the Administrative Agent from time to time upon request evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.
SECTION 5.13. INTEREST RATE AND CURRENCY EXCHANGE RATE PROTECTION.
As promptly as practicable, and in any event within 60 days after the Effective
Date, the Company will enter into, and thereafter for a period of not less than
four years will maintain in effect, one or more interest rate protection
agreements on such terms and with such parties as shall be reasonably
satisfactory to the Administrative Agent, the effect of which shall be to fix or
limit the interest cost to the Company with respect to at least 50% of the Term
Loans outstanding from time to time. The Company will also identify currency
exchange rate risks to which the Company and the Subsidiaries are subject from
time to time and enter into one or more exchange rate protection agreements, on
such terms and with such parties as shall be reasonably satisfactory to the
Administrative Agent, to limit such risks. Without limiting the foregoing, in
the event the Company shall use the proceeds of any Borrowing hereunder to make
a loan or advance to any Foreign Subsidiary, such loan or advance will be
denominated in the currency of the jurisdiction in which such Subsidiary has its
principal operations and the Company will enter into one or more exchange rate
protection agreements, on such terms and with such parties as shall be
reasonably satisfactory to the Administrative Agent, to limit the exchange rate
risk to the Company associated with such loan or advance.
SECTION 5.14. OWNERSHIP OF SUBSIDIARIES. (a) The Company will, and
will cause each of the Subsidiaries to, ensure that all Equity Interests in
Domestic Subsidiaries are owned directly or indirectly at all times only by the
Company or one or more other Domestic Subsidiaries and that all the Equity
Interests of such latter Domestic Subsidiaries are pledged to secure the
Obligations.
(b) As promptly as practicable, and in any event within 30 days
after the Effective Date, the Company will, and will cause each of its
Subsidiaries to, ensure that any Foreign Subsidiary (including each Foreign
Subsidiary acquired in connection with the Acquisition), is owned directly or
indirectly at all times by a Qualified Foreign Subsidiary Holding Company and
that all the Equity Interests of such Qualified Foreign Subsidiary Holding
Company are pledged to secure the Obligations.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each Borrower covenants and agrees
with the Lenders that:
SECTION 6.01. INDEBTEDNESS. The Company will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) the Obligations;
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(b) Subordinated Notes in a maximum aggregate principal amount of
$80,200,000;
(c) Acceptable Securities; PROVIDED that the Proceeds thereof shall
have been applied as required by Section 2.10(d);
(d) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, and extensions, renewals and replacements of any such
Indebtedness that do not change the obligors liable for the payment
thereof, increase the outstanding principal amount thereof or shorten the
maturity or the weighted average life thereof;
(e) Intercompany Indebtedness (to the extent permitted by Section
6.04);
(f) Guarantees by the Company or any Subsidiary of Indebtedness of
any Restricted Subsidiary, other than Guarantees by the Company or any
Subsidiary that is a Loan Party of Indebtedness of any Subsidiary that is
not a Loan Party;
(g) Indebtedness of the Company, any Domestic Subsidiary or any
Foreign Borrower incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or
decreased weighted average life thereof; PROVIDED that (A) such
Indebtedness is incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement and (B) the
aggregate principal amount of Indebtedness permitted by this clause (g)
shall not exceed $5,000,000 at any time outstanding;
(h) Indebtedness of any Person that becomes a Domestic Subsidiary or
a Foreign Borrower after the date hereof; PROVIDED that (A) such
Indebtedness exists at the time such Person becomes a Domestic Subsidiary
or a Foreign Borrower, as the case may be, and is not created in
contemplation of or in connection with such Person becoming a Domestic
Subsidiary or a Foreign Borrower, as the case may be, and (B) the
aggregate principal amount of Indebtedness permitted by this clause (h)
shall not exceed $5,000,000 at any time outstanding;
(i) Indebtedness of Unrestricted Subsidiaries for which neither the
Company nor any Restricted Subsidiary shall be liable as obligor, under
any Guarantee or otherwise;
(j) other unsecured Indebtedness in an aggregate principal amount
not exceeding $2,500,000 at any time outstanding; and
(k) other unsecured Indebtedness incurred by Foreign Subsidiaries
for working capital purposes in an aggregate principal amount not
exceeding $2,500,000 at any time outstanding.
SECTION 6.02. LIENS. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
62
(c) any Lien on any property or asset of the Company or any Subsidiary
existing on the date hereof and set forth in Schedule 6.02; PROVIDED that
(i) such Lien shall not apply to any other property or asset of the
Company or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof;
(d) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary or existing on any property or
asset of any Person that becomes a Subsidiary after the date hereof prior
to the time such Person becomes a Subsidiary; PROVIDED that (A) such Lien
is not created in contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may be, (B) such Lien
shall not apply to any other property or assets of the Company or any
Subsidiary and (C) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Company or any Subsidiary, including Liens deemed to exist in
respect of assets subject to Capital Lease Obligations; PROVIDED that (A)
such Liens secure Indebtedness permitted by clause (g) of Section 6.01,
(B) such Liens and the Indebtedness secured thereby are incurred prior to
or within 180 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does not
exceed of the cost of acquiring, constructing or improving such fixed or
capital assets and (D) such Liens shall not apply to any other property or
assets of the Company or any Subsidiary;
(f) Liens securing Intercompany Indebtedness permitted under Section
6.01(e);
(g) extensions, renewals or replacements of any Lien referred to in
clauses (c), (d) and (e); PROVIDED that the principal amount of the
Indebtedness or obligations secured thereby is not increased and that any
such extension, renewal or replacement is limited to the assets originally
encumbered thereby;
(h) Liens on the assets of Unrestricted Subsidiaries securing
Indebtedness permitted under Section 6.01(i); and
(i) additional Liens incurred by the Company and its Subsidiaries so
long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed
$1,000,000 at any time.
SECTION 6.03. FUNDAMENTAL CHANGES. (a) The Company will not, and
will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Person may merge into the Company in a transaction in which the Company is the
surviving corporation, (ii) any Person may merge with or into any Subsidiary in
a transaction in which the surviving entity is a Subsidiary; PROVIDED that (A)
if any party to such merger is a Loan Party the surviving Person must also be a
Loan Party and must succeed to all the obligations of such Loan Party under the
Loan Documents and (B) if any party to such merger is a Restricted Subsidiary
the surviving Person shall also be a Restricted Subsidiary unless designated as
an Unrestricted Subsidiary pursuant to the definition of such term and (iii) any
Subsidiary (other than a Loan Party) may liquidate or dissolve if the Company
determines in good faith that such liquidation or dissolution is in the best
interests of the Company and is not materially disadvantageous to the Lenders;
PROVIDED that any such merger involving a Person that is not a Wholly Owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
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(b) The Company will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the date
hereof and businesses reasonably related or reasonably incidental thereto.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS. The Company will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a Wholly Owned Subsidiary prior to such merger) any Equity
Interests in or evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person
(all the foregoing being collectively called "INVESTMENTS"), or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person (other than inventory acquired in the ordinary course of
business) that constitute a business unit or are substantial in relation to the
consolidated assets of the Company, except:
(a) the Acquisition;
(b) Permitted Investments;
(c) Investments existing on the date hereof and set forth on Schedule
6.04;
(d) Investments existing on the date hereof in Subsidiaries;
(e) additional Investments in Persons that, immediately prior to such
investments, are Restricted Subsidiaries;
(f) Investments by Unrestricted Subsidiaries in Persons that,
immediately prior to such investments, are Unrestricted Subsidiaries;
(g) Investments consisting of all the issued and outstanding capital
stock, or all or substantially all the assets, of Persons engaged in lines
of business permitted under Section 6.03(b); PROVIDED that (A) no Default
shall have occurred and be continuing at the time any such Investment is
made or would occur as a result thereof and (B) the cash consideration
payable for all such Investments made under this clause (g) after the date
hereof in the capital stock or assets of other Persons shall not exceed
$20,000,000 in the aggregate;
(h) Guarantees constituting Indebtedness permitted by Section 6.01;
PROVIDED that a Subsidiary shall not Guarantee the Subordinated Notes or
any Acceptable Securities;
(i) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(j) accounts receivable arising in the ordinary course of business;
(k) investments and loans held by any Subsidiary at the time it becomes
a Subsidiary in a transaction permitted by this Section;
(l) reasonable advances to officers and employees of the Company and
any Subsidiary for travel arising in the ordinary course of business;
(m) loans to officers and employees of the Company or any Subsidiary,
not to exceed $100,000 in the aggregate at any one time outstanding;
64
(n) promissory notes and other noncash consideration received by the
Company and its Subsidiaries in connection with any asset sale permitted
hereunder;
(o) advances in the form of prepayments of expenses, so long as such
expenses were incurred in the ordinary course of business and are paid in
accordance with customary trade terms of the Company or any of its
Subsidiaries;
(p) Guarantees by the Company of obligations of Restricted Subsidiaries
incurred in the ordinary course of business and not constituting
Indebtedness; and
(q) other investments, loans or advances made by the Company, any
Domestic Subsidiary or any Foreign Borrower at times when no Default or
Event of Default shall have occurred and be continuing or would occur as a
result thereof and that, taken together with all other investments made
after the date hereof under this clause (q), would not exceed (A) the sum
of $5,000,000 and 50% of Consolidated Net Income of the Company for the
period (treated as one accounting period) commencing January 1, 2000, and
ending at the most recent fiscal quarter end for which financial
statements shall have been delivered under Section 5.01(a) or (b), minus
(B) the amount of Restricted Payments made after the date hereof pursuant
to Section 6.08(a).
SECTION 6.05. ASSET SALES, ETC. The Company will not, and will not
permit any of its Restricted Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business or as expressly permitted
elsewhere in this Agreement;
(b) sales, transfers and dispositions to the Company or a Restricted
Subsidiary; and
(c) sales, transfers and other dispositions of other assets (other than
Equity Interests in Subsidiaries); PROVIDED that (x) the aggregate
proceeds from such sales, transfers and other dispositions during any
fiscal year shall not exceed the greater of (A) 10% of Consolidated Net
Tangible Assets as of the beginning of such fiscal year and (B) 10% of
Consolidated Net Income of the Company (excluding Unrestricted
Subsidiaries) for such fiscal year, (y) not more than $2,000,000 of
noncash proceeds shall be received from such sales, transfers and other
dispositions during any fiscal year and (z) the aggregate cash proceeds in
excess of the greater of (A) 5% of Consolidated Net Tangible Assets as of
the beginning of such fiscal year and (B) 5% of Consolidated Net Income of
the Company (excluding Unrestricted Subsidiaries) for such fiscal year
shall be applied to prepay Term Borrowings; PROVIDED FURTHER, however,
that if the Company shall deliver to the Administrative Agent within 10
days after receipt of such proceeds a certificate of a Financial Officer
to the effect that the Company and the Subsidiaries intend to apply such
proceeds (or a portion thereof specified in such certificate), within one
year after receipt of such proceeds, to acquire real property, equipment
or other tangible assets to be used in the business of the Company and the
Subsidiaries, and certifying that no Default has occurred and is
continuing, and if, pending such application, such proceeds shall be held
in the form of cash or Permitted Investments, then no prepayment shall be
required pursuant to this clause (iii) in respect of such proceeds (or the
portion of such proceeds specified in such certificate, if applicable)
except to the extent such proceeds shall not have been so applied by the
end of such one year period, at which time a prepayment shall be required
in an amount equal to the proceeds not so applied.
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SECTION 6.06. SALE AND LEASEBACK TRANSACTIONS. The Company will not,
and will not permit any of its Restricted Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereinafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.
SECTION 6.07. HEDGING AGREEMENTS. The Company will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
(a) Hedging Agreements required by Section 5.13 and (b) Hedging Agreements
entered into in the ordinary course of business to hedge or mitigate risks to
which the Company or such Subsidiary is exposed in the conduct of its business
or the management of its liabilities.
SECTION 6.08. RESTRICTED PAYMENTS; CERTAIN PAYMENTS IN RESPECT OF
INDEBTEDNESS. (a) The Company will not, and will not permit any Restricted
Subsidiary to, declare or make, or agree to make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that (i) Restricted Subsidiaries may declare and pay dividends ratably
with respect to their capital stock and (ii) if no Default or Event of Default
has occurred and is continuing or would occur as a result thereof, the Company
may make any Restricted Payment that, taken together with all other Restricted
Payments made after the date hereof, would not exceed (A) the sum of $5,000,000
and 50% of Consolidated Net Income of the Company for the period (treated as one
accounting period) commencing January 1, 2000, and ending at the most recent
fiscal quarter end for which financial statements shall have been delivered
under Section 5.01(a) or (b), minus (B) the amount of investments made after the
date hereof pursuant to Section 6.04(q).
(b) The Company will not, and will not permit any Restricted
Subsidiary to, make or agree to make, directly or indirectly, any payment or
other distribution (whether in cash, securities or other property) of or in
respect of the principal of or interest on any Subordinated Indebtedness, or any
payment or other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, defeasance, cancelation or termination of any
Subordinated Indebtedness, except scheduled and other mandatory payments of
interest and principal in respect of Subordinated Indebtedness; PROVIDED that no
payment shall be made in respect of Subordinated Indebtedness that is prohibited
by the subordination provisions applicable to such Subordinated Indebtedness.
SECTION 6.09. TRANSACTIONS WITH AFFILIATES. The Company will not,
and will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business at prices
and on terms and conditions not less favorable to the Company or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Company and the Restricted Subsidiaries
not involving any other Affiliate, (c) transactions among or between
Unrestricted Subsidiaries and (d) any Restricted Payment permitted by Section
6.08.
SECTION 6.10. RESTRICTIVE AGREEMENTS. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Company or any
Restricted Subsidiary to create, incur or permit to exist any Lien upon any of
its property or assets, or (b) the ability of any Restricted Subsidiary (i) to
pay dividends or other distributions with respect to any shares of its capital
stock, (ii) to make or repay loans or advances to the Company or any other
Restricted Subsidiary, (iii) to Guarantee Indebtedness of the Company or any
other Restricted Subsidiary or (iv) sell, lease or transfer any of its Property
to the Company or any other Restricted Subsidiary; PROVIDED that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (ii) the
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foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.10 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Restricted Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Restricted Subsidiary that is to be sold and such
sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
SECTION 6.11. SALES AND ASSIGNMENTS OF INCOME, REVENUES AND
RECEIVABLES. The Company will not, and will not permit any Restricted Subsidiary
to, sell or assign, with or without recourse, for discount or otherwise, any
income or revenues, including notes and accounts receivable.
SECTION 6.12. AMENDMENT OF MATERIAL DOCUMENTS. The Company will not,
and will not permit any Subsidiary to, amend, modify or waive in any respect
materially adverse to the Company or to the rights or interests of the Lenders
any of its rights under the Subordinated Note Indenture or any document
evidencing or governing Acceptable Securities.
SECTION 6.13. INTEREST EXPENSE COVERAGE RATIO. The Company will not
permit the Interest Coverage Ratio for any Rolling Period to be less than 3.00
to 1.00.
SECTION 6.14. ADJUSTED LEVERAGE RATIO; LEVERAGE RATIO. (a) The
Company will not permit the Adjusted Leverage Ratio as of any date during any
period set forth below to exceed the ratio set forth opposite such period:
PERIOD RATIO
Through December 31, 1999 3.25 to 1.00
January 1, 2000 through December 31, 2000 3.00 to 1.00
Thereafter 2.50 to 1.00
(b) The Company will not permit the Leverage Ratio as of any date during
any period set forth below to exceed the ratio set forth opposite such period:
PERIOD RATIO
Through December 31, 1999 3.25 to 1.00
Thereafter 3.00 to 1.00
SECTION 6.15. FIXED CHARGE COVERAGE RATIO. The Company will not
permit the Fixed Charge Coverage Ratio for any Rolling Period to be less than
1.10 to 1.00.
SECTION 6.16. CURRENT RATIO. The Company will not permit the Current
Ratio at any time to be less than 1.50 to 1.00.
SECTION 6.17. MINIMUM TANGIBLE NET WORTH. The Company will not
permit Consolidated Tangible Net Worth (excluding Unrestricted Subsidiaries) as
of any date to be less than the sum of (x) 75% of Consolidated Tangible Net
Worth (excluding Unrestricted Subsidiaries) as of the Effective Date plus (y)
50% of Consolidated Net Income of the Company
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and its Restricted Subsidiaries (but only to the extent such amount is positive)
for fiscal quarters ended after September 30, 1999 plus (z) 75% of the aggregate
Net Proceeds (cash or non-cash) from the issuance by the Company or any
Restricted Subsidiary of Equity Interests subsequent to the Effective Date.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepay ment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Company or any Subsidiary in or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any material respect when made or deemed made;
(d) the Company or any Subsidiary shall fail to observe or perform
any covenant or agreement contained in Section 5.02, 5.04 (with respect to
the existence of any Borrower) or 5.10 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant or
agreement contained in any Loan Document (other than those specified in
clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after the earlier of (i) the Company's
obtaining knowledge thereof or (ii) written notice thereof from the
Administrative Agent to the Company (which notice will be given at the
request of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of
any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; PROVIDED that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Company or any Subsidiary or its debts, or of a
substantial part of its assets, under any
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Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Company or any Subsidiary or for a substantial part of its assets, and, in
any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) the Company or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to
the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the
fore going;
(j) the Company or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Company or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Company and its Subsidiaries in an aggregate amount exceeding (i)
$5,000,000 in any year or (ii) $15,000,000 for all periods;
(m) any Lien or guarantee purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not to
be, a valid and perfected Lien on any material portion of the Collateral,
with the priority required by the applicable Security Document, except (i)
as a result of the sale or other disposition of the applicable Collateral
in a transaction permitted under the Loan Documents or (ii) as a result of
the Administrative Agent's failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it under
any Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Company
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Company, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment,
69
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with respect to the Company described in
clause (h) or (i) of this Article, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrowers.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Company or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall not be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Company or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability
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for relying thereon. The Administrative Agent may consult with legal counsel
(who may be counsel for the Company), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Banks and the Company.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Company, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Banks, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Company to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
It is expressly understood that none of the Documentation Agent nor
any Co-Agent shall have any duties or responsibilities under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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(a) if to the Company or any Borrowing Subsidiary, to it, or to it
in care of the Company, at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, XX, Attention
of: Xxxx X. Xx (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to it at Chase Bank of Texas,
National Association, Loan and Agency Services Group, 000 Xxxx Xxxxxx,
Xxxxxxx, XX 00000, Attention of Xxxxx Xxxxxxx (Telecopy No. (713)
216-6004), with a copy to The Chase Manhattan Bank, One Chase Xxxxxxxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxxxx Xxxxxxx
(Telecopy No. (000)-000-0000);
(c) if to Chase in its capacity as an Issuing Bank, to it at Chase
Bank of Texas, National Association., Loan and Agency Services Group, 000
Xxxx Xxxxxx, Xxxxxxx, XX 00000, Attention of Xxxxx Xxxxxxx (Telecopy No.
(000) 000-0000), with a copy to The Chase Manhattan Bank, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxxxx
Xxxxxxx (Telecopy No. (000)-000-0000); and
(d) if to any other Lender or Issuing Bank, to it at its address (or
telecopy number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by the
Administrative Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Banks and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any
Lender or any Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders; PROVIDED
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the maturity of any Loan, or any scheduled payment of the
principal amount of any Term Loan under Section 2.09, or the required date of
reimbursement of any LC Disbursement, or any date for the payment of any
interest or fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.17(b) or (c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) change any
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of the provisions of this Section or the percentage set forth in the definition
of "Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders (or Lenders of any Class) required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender (or each Lender
of such Class, as the case may be), (vi) release all or substantially all the
Guarantors from their Guarantees under the Guarantee Agreement except as
expressly provided in the Guarantee Agreement or Section 9.14, or limit the
liability of the Guarantors in respect of their Guarantee, without the written
consent of each Lender or (vii) release all or substantially all the Collateral
from the Liens of the Security Documents without the written consent of each
Lender; PROVIDED FURTHER that (A) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or any Issuing
Bank without the prior written consent of the Administrative Agent or such
Issuing Bank, as the case may be, and (B) any waiver, amendment or modification
of this Agreement that by its terms reduces or adversely affects the rights or
duties under this Agreement of the Lenders holding Loans or Commitments of one
or more Classes without affecting the rights or duties of the Lenders holding
Loans or Commitments of the other Class or Classes may be effected by an
agreement or agreements in writing entered into by the Company and the
percentage in interest of each adversely affected Class of Lenders that would be
required to consent thereto under this Section if such Class of Lenders were the
only Class of Lenders at such time. Notwithstanding the foregoing, any provision
of this Agreement may be amended by an agreement in writing entered into by the
Company, the Required Lenders and the Administrative Agent (and, if their rights
or obligations are affected thereby the Issuing Banks) if (i) by the terms of
such agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment
and (ii) at the time such amendment becomes effective, each Lender not
consenting thereto receives payment in full of the principal of and interest
accrued on each Loan made by it and all other amounts owing to it or accrued for
its account under this Agreement.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Company
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent and such Affiliates,
in connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by the Administrative Agent, any Issuing Bank or, after the occurrence and
during the continuance of any Default, any Lender, including the fees, charges
and disbursements of any counsel for the Administrative Agent, any Issuing Bank
or any Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Company shall indemnify the Administrative Agent, each
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "INDEMNITEE") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by an Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not
73
strictly comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any Mortgaged
Property or any other property currently or formerly owned or operated by the
Company or any of its Subsidiaries, or any Environmental Liability related in
any way to the Company or any of its Subsidiaries or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are deter mined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount required
to be paid by it to the Administrative Agent or any Issuing Bank under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or Issuing Bank, as the case may be, such Lender's pro rata
share (determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; PROVIDED that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or Issuing Bank in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its share of
the sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at the time.
(d) To the extent permitted by applicable law, the Company shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of an Issuing Bank that issues any Letter of Credit), except that a
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by a Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of an Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing
Banks and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); PROVIDED that (i)
except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure, such Issuing Bank) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 unless each of the
Company and the Administrative
74
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and PROVIDED FURTHER that any consent of the
Company otherwise required under this paragraph shall not be required if an
Event of Default under clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices in The City of Houston a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
the Issuing Banks and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by any Borrower, any Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company, the
Administrative Agent or any Issuing Bank, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); PROVIDED that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent, the Issuing
Banks and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; PROVIDED that (i) such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant and (ii) in the
case of
75
a Lender selling a participation to a wholly owned subsidiary of such Lender,
such agreement or instrument may provide that such Participant shall also have
the right to approve any amendment, modification or waiver of any provision of
the Loan Documents . Subject to paragraph (f) of this Section, the Borrowers
agree that each Participant shall be entitled to the benefits of Sections 2.14,
2.15 and 2.16 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Company, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; PROVIDED that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. SURVIVAL. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, any Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and the Fee Letter dated July 21, 1999, among Chase
Securities Inc., Chase and the Company constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
76
SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Borrower against any of and all the obligations of any Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, any Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against any Borrower or its properties in the courts of any
jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
77
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. CONFIDENTIALITY. Each of the Administrative Agent, the
applicable Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Company or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Company. For the purposes of this Section,
"INFORMATION" means all information received from the Company relating to the
Company or its business, other than any such information that is available to
the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Company; PROVIDED that, in the case of
information received from the Company after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14. RELEASE OF LIENS AND GUARANTEES. In the event that the
Company or any Subsidiary sells, transfers or otherwise disposes of all or any
portion of any of the Equity Interests, assets or property owned by the Company
or such Subsidiary in a transaction not prohibited by this Agreement, the
Administrative Agent and the Collateral Agent shall promptly (and the Lenders
hereby authorize and instruct the Administrative Agent and the Collateral Agent
to) take such action and execute any such documents as may be reasonably
78
requested by the Company and at the Borrower's expense to release any Liens
created by any Loan Document in respect of such Equity Interests, assets or
property, including the release and satisfaction of record of any mortgage or
deed of trust granted in connection herewith, and, in the case of a disposition
of all or substantially all the Equity Interests or assets of any Subsidiary
that is a Loan Party, terminate such Subsidiary's obligations under the
Guarantee Agreement and each other Loan Document. In addition, the
Administrative Agent and the Collateral Agent agree to take such actions as are
reasonably requested by the Company and at the Borrower's expense to terminate
the Liens and security interests created by the Loan Documents when all the
Obligations have been paid in full and all Letters of Credit and Commitments
terminated.
79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
BENCHMARK ELECTRONICS, INC.,
by
/s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Treasurer
80
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, individually and as
Administrative Agent,
by
/s/ XXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
00
XXXXXXXX XXXXX XXXXXXX, INC.,
individually and as Documentation Agent,
by
/s/ XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx
Title: Attorney in Fact
82
BANK OF AMERICA, N.A., individually and as
Co-Agent,
by
/s/ XXXXXXX X. XX XXXXXXX
Name: Xxxxxxx X. Xx Xxxxxxx
Title: Managing Director
83
BANK ONE, TEXAS, N.A., individually and as
Co-Agent,
by
/s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Managing Director
84
SUNTRUST BANK, ATLANTA, individually
and as Co-Agent,
by
/s/ X. X. XXXXXXXXX
Name: X. X. Xxxxxxxxx
Title:
85
ABN AMRO BANK N.V.,
by
/s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Vice President
by
/s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Vice President
86
BANK OF TOKYO-MITSUBISHI, LTD.
HOUSTON AGENCY,
by
/s/ XXXXXX XXXXXXX
Name: Xxxxxx Xxxxxxx
Title: General Manager
87
COMERICA BANK,
by
/s/ XXXXXXXX X. XXXXXXXXX, III
Name: Xxxxxxxx X. Xxxxxxxxx, III
Title: Vice President
88
COMPASS BANK,
by
/s/ XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title: Vice President
89
GUARANTY FEDERAL BANK, F.S.B.,
by
/s/ XXXXXXX MENCHACO
Name: Xxxxxxx Menchaco
Title: Vice President
