1
EXHIBIT 10.41
EXECUTION
================================================================================
LOAN AGREEMENT
Dated as of August 31, 1999
among
XXXXX INSTRUMENTS CORP.
the Lenders and the Issuing Lender
referred to herein
and
BANK OF AMERICA, N.A.
as Administrative Agent
for itself and for the other Lenders
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS ................................................ 1
1.1 Defined Terms........................................................ 1
1.2 Use of Defined Terms................................................. 15
1.3 Accounting Terms .................................................... 15
1.4 Rounding............................................................. 16
1.5 Exhibits and Schedules............................................... 16
1.6 Miscellaneous Terms ................................................. 16
ARTICLE 2
LOANS AND LETTERS OF CREDIT...................................................... 16
2.1 Loans-General......................................................... 16
2.2 Base Rate Loans....................................................... 17
2.3 Eurodollar Loans...................................................... 17
2.4 Continuation and Redesignation of Loans .............................. 18
2.5 Letters of Credit .................................................... 18
2.6 Voluntary Reductions of the Revolving Commitment...................... 20
2.7 Automatic Reduction of Commitments.................................... 21
2.8 Rights to Assume Funds Available for Advances......................... 21
2.9 Collateral ........................................................... 21
ARTICLE 3
PAYMENTS AND FEES................................................................ 21
3.1 Principal and Interest................................................ 21
3.2 Letter of Credit Fees ................................................ 23
3.3 Capital Adequacy ..................................................... 23
3.4 Eurodollar Fees and Costs............................................. 23
3.5 Post Default Interest and Late Payments .............................. 26
3.6 Right to Assume Payments Will be Made by Borrower .................... 26
3.7 Computation of Interest and Fees...................................... 26
3.8 Non-Business Days..................................................... 26
3.9 Manner and Treatment of Payments...................................... 26
3.10 Funding Sources ...................................................... 27
3.11 Failure to Charge Not Subsequent Waiver............................... 27
3.12 Authority to Charge Account........................................... 27
3.13 Survivability ........................................................ 28
3.14 Agency Fees........................................................... 28
ARTICLE 4
REPRESENTATIONS AND WARRANTIES ................................. 28
4.1 Existence and Qualification; Power; Compliance With Laws ............. 28
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations................................ 29
4.3 No Governmental Approvals Required.................................... 29
4.4 Subsidiaries.......................................................... 29
-i-
3
Page
----
4.5 Financial Statements ................................................. 30
4.6 No Other Liabilities; No Material Adverse Effect...................... 30
4.7 Title to and Location of Property..................................... 30
4.8 Real Property ........................................................ 31
4.9 Intangible Assets..................................................... 31
4.10 Governmental Regulation .............................................. 31
4.11 Litigation ........................................................... 31
4.12 Binding Obligations................................................... 31
4.13 No Default ........................................................... 31
4.14 ERISA ................................................................ 31
4.15 Regulations T, U and X................................................ 32
4.16 Disclosure............................................................ 32
4.17 Tax Liability......................................................... 33
4.18 Projections .......................................................... 33
4.19 Security Interests.................................................... 33
4.20 Hazardous Materials................................................... 33
4.21 Year 2000 Compliance ................................................. 34
ARTICLE 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS) ......................................................... 34
5.1 Payment of Taxes and Other Potential Liens ........................... 34
5.2 Preservation of Existence............................................. 35
5.3 Maintenance of Properties............................................. 35
5.4 Maintenance of Insurance ............................................. 35
5.5 Compliance With Laws.................................................. 35
5.6 Inspection Rights..................................................... 35
5.7 Keeping of Records and Books of Account .............................. 36
5.8 Use of Proceeds....................................................... 36
5.9 Hazardous Materials Laws ............................................. 36
5.10 Future Guarantors and Collateral...................................... 36
5.11 Further Assurances ................................................... 37
ARTICLE 6
NEGATIVE COVENANTS .............................................................. 37
6.1 Disposition of Property .............................................. 37
6.2 Mergers .............................................................. 37
6.3 Acquisitions ......................................................... 37
6.4 Distributions......................................................... 38
6.5 ERISA ................................................................ 38
6.6 Change in Name; Nature of Business.................................... 38
6.7 Indebtedness and Contingent Obligations............................... 38
6.8 Liens; Negative Pledges; Sales and Leasebacks ....................... 39
6.9 Transactions with Affiliates.......................................... 39
6.10 Capital Expenditures.................................................. 39
6.11 Investments........................................................... 40
6.12 Leverage Ratio ....................................................... 40
-ii-
4
Page
----
6.13 EBITDA................................................................ 40
6.14 Profitability......................................................... 41
6.15 Change of Location.................................................... 41
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS .......................................... 41
7.1 Financial and Business Information.................................... 41
7.2 Compliance Certificates............................................... 43
ARTICLE 8
CONDITIONS ...................................................................... 43
8.1 Conditions to the Initial Loans and Letters of Credit.................. 43
8.2 Any Increasing Loan................................................... 45
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES................................................... 46
9.1 Events of Default .................................................... 46
9.2 Remedies Upon Event of Default........................................ 47
ARTICLE 10
THE AGENT ....................................................................... 49
10.1 Appointment and Authorization......................................... 49
10.2 Delegation of Duties ................................................. 49
10.3 Liability of the Agent................................................ 49
10.4 Reliance by Agent..................................................... 50
10.5 Notice of Default..................................................... 50
10.6 Credit Decision....................................................... 50
10.7 Indemnification....................................................... 51
10.9 Successor Agents ..................................................... 52
10.10 Action by the Agent; Collateral Matters .............................. 52
10.11 No Obligations of Borrower ........................................... 53
10.12 Proportionate Interest of the Lenders in Collateral ................... 53
ARTICLE 11
MISCELLANEOUS.................................................................... 53
11.1 Cumulative Remedies; No Waiver........................................ 53
11.2 Amendments; Consents ................................................. 53
11.3 Costs, Expenses and Taxes ............................................ 54
11.4 Nature of Lenders' Obligations ....................................... 55
11.5 Survival of Representations and Warranties............................ 55
11.6 Notices .............................................................. 55
11.7 Execution of Loan Documents........................................... 55
11.8 Binding Effect; Assignment............................................ 55
11.9 Foreign Lenders and Participants...................................... 57
11.10 Right of Setoff ...................................................... 57
11.11 Sharing of Setoffs ................................................... 58
11.12 Indemnity by Borrower ................................................ 58
11.13 Nonliability of the Creditors ........................................ 59
11.14 No Third Parties Benefited ........................................... 59
-iii-
5
Page
----
11.15 Confidentiality...................................................... 59
11.16 Integration.......................................................... 60
11.17 Severability of Provisions .......................................... 60
11.18 Independent Covenants ............................................... 60
11.19 Headings............................................................. 60
11.20 Environmental Indemnity.............................................. 60
11.21 Jurisdiction and Venue............................................... 61
11.22 GOVERNING LAW........................................................ 62
11.23 PURPORTED ORAL AMENDMENTS............................................ 62
11.24 WAIVER OF JURY TRIAL................................................. 62
-iv-
6
Exhibits
A - Assignment Agreement
B - Compliance Certificate
C - Projections
D - Request For Letter of Credit
E - Request For Loan
F - Request For Redesignation
Schedules
4.2 - Certain Agreements
4.4 - Subsidiaries
4.6 - Liabilities
4.7 - Locations of Property
4.11 - Litigation
4.14 - Pension Plans
6.7 - Existing Indebtedness
6.8 - Existing Liens
6.11 - Investments
-v-
7
LOAN AGREEMENT
This Loan Agreement ("Agreement") dated as of August 31, 1999 is
entered into by and among Xxxxx Instruments Corp., a Delaware corporation (the
"Borrower"), the lenders named on the signature pages hereof or which hereafter
become parties hereto in accordance with Section 11.8 hereof, as the Lenders,
and Bank of America, N.A., as Administrative Agent for itself and for the other
Lenders (hereinafter, the "Agent"). The parties hereto covenant and agree as
follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the respective meanings set forth below:
"Acquisition" means any transaction, or any series of related
transactions, by which Borrower and/or any Subsidiary of Borrower directly or
indirectly (i) acquires any business or all or substantially all of the assets
of any firm, partnership, joint venture, corporation or division thereof,
whether through purchase of assets, merger or otherwise, or (ii) acquires (in
one transaction or as the most recent transaction in a series of transactions)
control of at least a majority in ordinary voting power of the securities of a
corporation which have ordinary voting power for the election of directors, or
(iii) acquires control of a 50% or more ownership interest in any partnership or
joint venture.
"Agent" means Bank of America, when acting in its capacity as Agent
under any of the Loan Documents, or any successor Agent.
"Advance" means any advance made or to be made by any Lender under its
Pro Rata Share of a commitment, and includes each Base Advance and each
Eurodollar Advance.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "control" (and the correlative terms,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of Securities or partnership or other
ownership interests, by contract or otherwise).
"Agreement" means this Loan Agreement, as amended from time to time.
"Amortization Amount" means, as to the last Business Day of each
calendar quarter, the amount set forth below opposite such period:
Amortization
Period Amount
------ ------------
Closing Date through
August 31, 2000 $ 0
September 30, 2000 and thereafter
$ 250,000
At Maturity Date $1,000,000
-1-
8
"Approved Swap Agreement" means each interest rate, currency or other
similar swap or hedging agreement between Borrower and any Lender, as amended or
replaced from time to time.
"Assignment Agreement" means an Assignment Agreement in the form of
Exhibit A.
"Bank of America" means Bank of America, N.A., its successors and
assigns.
"Base Margin" means, (a) with respect to each Line A Loan, a reduction
from the Base Rate of 0.25% per annum and (b) with respect to each Line B Loan,
0%.
"Base Rate" means, as of any date of determination, the greater of (a)
the Reference Rate or (b) the Federal Funds Rate plus .50%.
"Base Advance" means each Advance made by a Lender designated as a Base
Advance in accordance with Article 2.
"Base Rate Loan" means a Loan made hereunder and designated as a Base
Rate Loan in accordance with Article 2.
"Borrower Pledge Agreement" means a Borrower Pledge Agreement of even
date herewith in favor of the Agent for the benefit of the Lenders executed by
Borrower on the Closing Date, as amended from time to time.
"Borrower Security Agreement" means a security agreement of even date
herewith in favor of the Agent for the benefit of the Lenders executed by
Borrower on the Closing Date, as amended from time to time.
"Bresser" means, collectively, Bresser Optik Geschaftsfuhrungs und
Verwaltungs GmbH, a limited partnership organized under the Laws of Germany, and
Bresser Optik GmbH & Co., KG, a limited liability company organized under the
Laws of Germany.
"Bresser Acquisition" means the acquisition of all of the outstanding
interests in Bresser by MIEC pursuant to the terms of the Bresser Acquisition
Agreement.
"Bresser Acquisition Agreement" means the Interest Purchase Agreement
dated as of July 15, 1999, among Bresser, Xxxxxxx Xxxxxxx, Borrower and MIEC, as
amended as of the Closing Date.
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or Friday,
other than a day on which banks are authorized or required to be closed in
California.
"Capital Expenditure" means any expenditure during any fiscal period
that is considered a capital expenditure under GAAP (other than any expenditure
associated with a Permitted Acquisition), consistently applied, including any
that portion of Capital Leases required to be treated as Capital Expenditures
under GAAP.
"Capex Loan" means a Loan made under the Line A Commitment and
designated as such in the related Request for Loan in accordance with Section
2.1(a).
-2-
9
"Capital Lease" means, as to any Person, a lease of any Property by that
Person as lessee that is or should be recorded as a "capital lease" on the
balance sheet of that Person prepared in accordance with GAAP.
"Cash" means, when used in connection with any Person, all monetary and
non-monetary items owned by that Person that are treated as cash in accordance
with GAAP, consistently applied.
"Cash Equivalents" means direct obligations of the United States
government; and other highly liquid investment grade commercial paper,
certificates of deposit and other instruments generally deemed to be cash
equivalents and having a maturity of less than one year.
"Cash Proceeds" means (a) the gross cash payments (including any cash
received by way of deferred payment pursuant to a note receivable or otherwise,
but only as and when so received) received from any sale, transfer, exchange or
other disposition of assets and (b) the gross cash consideration received from
or upon the sale or other disposition of any asset received, directly or
indirectly, in exchange for the asset which is the subject of that sale,
transfer, exchange or disposition.
"Change in Control" means (a) any transaction or series of related
transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a) under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of 25% or more of the outstanding Common Stock (other than
transitory holdings by the underwriter in an underwritten public offering
transaction), (b) Borrower or any of its Subsidiaries consolidates with or
merges into another Person or conveys, transfers or leases its properties and
assets substantially as an entirety to any Person or any Person consolidates
with or merges into Borrower or its Subsidiaries, in either event pursuant to a
transaction in which the outstanding Common Stock is changed into or exchanged
for cash, securities or other property, with the effect that any Unrelated
Person becomes the beneficial owner, directly or indirectly, of 25% or more of
the Common Stock or that the Persons who were the holders of Common Stock
immediately prior to the transaction hold less than 51% of the common stock of
the surviving corporation after the transaction, (c) during any period of 24
consecutive months, individuals who at the beginning of such period constituted
the board of directors of Borrower or any of its Subsidiaries (together with any
new or replacement directors whose election by the board of directors, or whose
nomination for election, was approved by a vote of at least a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for reelection was previously so
approved) cease for any reason to constitute a majority of the directors then in
office or (d) a "change in control" as defined in any document governing
Indebtedness of Borrower or any of its Subsidiaries in excess of $1,000,000
which gives the holders of such Indebtedness the right to accelerate or
otherwise require payment of such Indebtedness prior to the maturity date
thereof.
"Closing Date" means the time and Business Day on which the consummation
of all of the transactions contemplated in Section 8.1 occurs.
"Code" means the U.S. Internal Revenue Code, as amended from time to
time.
"Collateral" means, collectively, all of the collateral subject to the
Liens, or intended to be subject to the Liens, created by the Collateral
Documents.
"Collateral Documents" means, collectively, Borrower Security Agreement,
the Borrower Pledge Agreement, the Guarantor Security Agreement, the Trademark
Security Agreement, the Patent Security Agreement and any other pledge
agreement, hypothecation agreement, security agreement,
-3-
10
assignment, deed of trust, mortgage or similar instrument executed by Borrower
or any of its Subsidiaries to secure the Obligations.
"Commission" means the Securities and Exchange Commission.
"Commitments" means, collectively, the Line A Commitment and the Line B
Commitment.
"Common Stock" means the common stock of Borrower.
"Compliance Certificate" means a completed certificate in the form of
Exhibit B, signed by a Senior Officer of Borrower and delivered to the Agent.
"Contingent Obligation" means, as to any Person, any (a) direct or
indirect guarantee of Indebtedness of, or other obligation performable by, any
other Person, including any endorsement (other than for collection or deposit in
the ordinary course of business), acting as an accommodation party for the
obligations of any other Person, (b) contingent reimbursement obligations in
respect of any letter of credit, including a Letter of Credit, or (c) assurance
given to an obligee with respect to the performance of an obligation by, or the
financial condition of, any other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item to such
other Person, or any "keep-well", "take-or-pay", "through put" or other
arrangement of whatever nature having the effect of assuring or holding harmless
any obligee against loss with respect to any obligation of such other Person.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation (unless the
Contingent Obligation is limited by its terms to a lesser amount, in which case
to the extent of such amount) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined in good faith
by the Person so obligated.
"Contractual Obligation" means, as to any Person, any provision of any
outstanding Securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its Property is bound.
"Creditors" means, collectively the Agent, the Issuing Lender, and the
Lenders.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, as amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable notice
or passage of time set forth in Section 9.1, or both, would be an Event of
Default.
"Default Rate" means the rate of interest specified in Section 3.5.
"Disposition" means the sale, transfer or other disposition in any
single transaction or series of related transactions (including by means of a
sale-leaseback transaction) of any asset, or group of related assets, of
Borrower or of any Subsidiary of Borrower (a) which asset or assets constitute a
line of business or substantially all the assets of Borrower or Subsidiary or
(b) the aggregate amount of the net cash sales proceeds of such assets is more
than $500,000 during any twelve month period, other than
-4-
11
(i) inventory or other assets sold or otherwise disposed of in the ordinary
course of business of Borrower or Subsidiary, (ii) equipment sold or otherwise
disposed of where substantially similar equipment in replacement thereof has
theretofore been acquired, or thereafter within 180 days is acquired, by
Borrower or Subsidiary and (iii) obsolete assets no longer useful in the
business of Borrower or Subsidiary.
"Distribution" means, with respect to any shares of capital stock or any
warrant or right to acquire shares of capital stock or any other equity security
issued by Borrower (other than pursuant to the terms of Indebtedness which is
convertible into or exchangeable for capital stock or any other equity
security), (a) the retirement, redemption, purchase, or other acquisition for
value by such Person of any such security, (b) the declaration or (without
duplication) payment by Borrower of any dividend in cash or in Property (other
than Common Stock or any other equity security) on or with respect to any such
security, (c) any Investment by Borrower in the holder of any such security, and
(d) any other payment by Borrower constituting a distribution under applicable
Laws with respect to such security, provided that "Distributions" shall not be
construed to include distributions made by the ESOP.
"EBITDA" means, for any period, Borrower's and its Subsidiaries'
consolidated, (i) Net Income, plus (ii) income tax expense (if any), plus (iii)
gross interest expense, plus (iv) depreciation, plus (v) amortization, plus (vi)
ESOP contributions, minus (vii) extraordinary income/gains, minus (viii) gains
(or plus losses) on sales of fixed assets, in each case for that period and
determined in accordance with GAAP, consistently applied.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
Lender, any Affiliate of that Lender, (c) any commercial bank having a combined
capital and surplus of $100,000,000 or more, (d) any (i) savings bank, savings
and loan association or similar financial institution or (ii) insurance company
engaged in the business of writing insurance which, in either case (A) has a net
worth of $200,000,000 or more, (B) is engaged in the business of lending money
and extending credit under credit facilities substantially similar to those
extended under this Agreement and (C) is operationally and procedurally able to
meet the obligations of a Lender hereunder to the same degree as a commercial
bank and (e) any other financial institution (including a mutual fund or other
fund) having total assets of $250,000,000 or more which meets the requirements
set forth in subclauses (B) and (C) of clause (d) above; provided that each
Eligible Assignee must either (a) be organized under the Laws of the United
States of America, any State thereof or the District of Columbia or (b) be
organized under the Laws of the Cayman Islands or any country which is a member
of the Organization for Economic Cooperation and Development, or a political
subdivision of such a country, and (i) act hereunder through a branch, agency or
funding office located in the United States of America and (ii) be exempt from
withholding of tax on interest and deliver the documents related thereto
pursuant to Section 11.9.
"Enforcement or Remedial Action" shall mean any step taken by any Person
to enforce compliance with or to collect or impose penalties, fines or other
sanctions provided by any Environmental Law.
"Environmental Claims" means all claims, however asserted, by any
governmental agency or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or any Enforcement or
Remedial Action or for release or injury to the environment or threat to public
health, personal injury (including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or responsibility for
damages (punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or
-5-
12
non-accidental, placement, spills, leaks, discharges, emissions or releases) of
any Hazardous Material at, in, or from Property, whether currently or formerly
owned, leased or operated by Borrower or any of its Subsidiaries.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes together with all
administrative orders, directed duties, policies, notices, decrees, requests,
licenses, authorizations and permits of (in each case having the force of law),
and agreements with, any Governmental Agencies, in each case relating to,
regulating or imposing liability or standards of conduct regarding
environmental, health, safety, project liability and land use matters (including
matters related to air and water quality, the handling, transportation, storage,
treatment, usage or disposal of Hazardous Materials, air emissions, noise
control, industrial hygiene, zoning, and land-use permits) including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the Solid Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the California Hazardous Waste Control Law, the California
Solid Waste Management, Resource, Recovery and Recycling Act, the California
Water Code and the California Health and Safety Code.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.
"ERISA Affiliate" means, with respect to any Person, any Person (or any
trade or business, whether or not incorporated) that is under common control
with that Person within the meaning of Section 414 of the Code.
"ESOP" means the Xxxxx Instruments Corp. - Employee Stock Ownership
Plan.
"Eurodollar Advance" means each Advance made by a Lender designated as a
Eurodollar Advance in accordance with Article 2.
"Eurodollar Base Rate" means, with respect to any Eurodollar Loan, the
average per annum interest rate at which U.S. dollar deposits would be offered
for the applicable interest period by major banks in the London Eurodollar
Market, as shown on the Telerate Page 3750 (or such other page as may replace
it) at approximately 11:00 a.m. London time two Eurodollar Days before the
commencement of the interest period. If such rate does not appear on the
Telerate Page 3750 (or such other page that may replace it), the rate for that
interest period will be determined by such alternate method as reasonably
selected by the Agent. The Agent's determination of the Eurodollar Base Rate
shall be conclusive in the absence of manifest error.
"Eurodollar Day" means any Business Day on which dealings in Dollar
deposits are conducted by and among banks in the Eurodollar Market.
"Eurodollar Loan" means a Loan made hereunder and designated as a
Eurodollar Loan in accordance with Article 2.
"Eurodollar Margin" means 1.40% with respect to Line A Loans and 2.00%
with respect to Line B Loans.
"Eurodollar Market" means a regular, established market located outside
the United States of America by and among banks for the solicitation, offer and
acceptance of Dollar deposits in such banks.
-6-
13
"Eurodollar Office" means, as to each Lender, its office or branch so
designated by written notice to Borrower and the Agent as its Eurodollar Office.
If no Eurodollar Office is designated by a Lender, its Eurodollar Office shall
be its office at its address for purposes of notices hereunder.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
Regulation D.
"Eurodollar Period" means:
(a) as to each Eurodollar Loan, the period commencing on the
date specified by Borrower pursuant to Section 2.1(c) and ending one, two, three
or six months thereafter, as specified by Borrower in the applicable Request for
Loan; provided that:
(i) The first day of any Eurodollar Period shall be a Eurodollar
Day;
(ii) Any Eurodollar Period that would otherwise end on a day that is
not a Eurodollar Day shall be extended to the next succeeding Eurodollar
Day unless such Eurodollar Day falls in another calendar month, in which
case such Eurodollar Period shall end on the next preceding Eurodollar
Day; and
(iii) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Loan, the
interest rate (rounded upward to the next 1/16 of 1%) determined to be equal to
the Eurodollar Base Rate divided by [1 minus the Reserve Rate].
"Event of Default" shall have the meaning provided in Section 9.1.
"Federal Funds Rate" means, as of any date of determination, a
fluctuating interest rate per annum equal to the federal funds effective rate
for the previous Business Day as quoted by the Federal Reserve Bank of New York
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by the
Agent.
"Fiscal Quarter" means the fiscal quarter of Borrower ending on each
February 28 (or 29th), May 31, August 31 and November 30.
"Fiscal Year" means the fiscal year of Borrower ending on each February
28 (or 29th).
"Funding Account" means account no. 14582-25330 maintained by Borrower
with Bank of America, or any other account designated by Borrower and reasonably
acceptable to the Agent.
"GAAP" means, as of any date of determination, accounting principles (a)
set forth as generally accepted in then currently effective Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants or (b) set forth as generally accepted in then currently effective
Statements of the Financial Accounting Standards Board.
"Guarantors" means, collectively, MIEC, MIHC and any other Person which
is or hereafter becomes a wholly-owned Subsidiary of, or a parent company of,
Borrower and in each case is incorporated in one of the States of the United
States.
-7-
14
"Guarantor Security Agreement" means the security agreement to be
executed and delivered on the Closing Date by each of the Guarantors, as amended
from time to time.
"Guaranty" means the continuing guaranty of the Obligations to be
executed and delivered on the Closing Date pursuant to Article 8 by each of the
Guarantors, as amended from time to time.
"Hazardous Materials" means all those substances which are regulated by,
or which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Indebtedness" means, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) that portion of the
obligations of such Person under Capital Leases which is properly recorded as a
liability on a balance sheet of that Person prepared in accordance with GAAP,
(c) any obligation of such Person that is evidenced by a promissory note or
other instrument representing an extension of credit to such Person, whether or
not for borrowed money, (d) any payment obligation of such Person for the
deferred purchase price of Property or services (other than trade or other
accounts payable in the ordinary course of business in accordance with customary
industry terms), (e) any payment obligation of such Person that is secured by a
Lien on assets of such Person, whether or not that Person has assumed such
obligation or whether or not such obligation is non-recourse to the credit of
such Person, but only to the extent of the fair market value of the assets so
subject to the Lien, (f) contingent recourse payment obligations of such Person
arising under acceptance facilities or under facilities for the discount of
accounts receivable of such Person, (g) any direct or contingent obligations of
such Person under letters of credit issued for the account of such Person and
(h) any obligations of such Person under a Swap Agreement.
"Intangible Assets" means, as of any date of determination, the
intangible assets of Borrower and its Subsidiaries, including goodwill, patents,
trademarks, trade names, organization expense, capitalized acquisition expenses,
deferred research and development costs and deferred marketing expense, deferred
tax assets and money due from Affiliates, officers, directors or shareholders of
Borrower and its Subsidiaries.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by means
of loan, advance, capital contribution, or other debt or equity participation or
interest, or otherwise, in any other Person, including any partnership and joint
venture interests of such Person in any other Person. The amount of any
Investment shall be the amount actually invested, without adjustment for
increases or decreases in the value of such Investment minus the aggregate
amount of any repayments, redemptions, dividends or other distributions on such
Investment or proceeds from the sale thereof, in each case to the extent of any
Cash payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) actually received by Borrower or any of its Subsidiaries.
"Issuing Lender" means Bank of America, when acting in its capacity as
issuer of any Letter of Credit hereunder.
"Laws" means, collectively, all international, foreign, federal, state
laws, to the extent applicable.
-8-
15
"Lenders" means Bank of America and each other Lender which hereafter
becomes a party hereto pursuant to Section 11.8.
"Letter of Credit" means a commercial letter of credit or standby letter
of credit issued by the Issuing Lender for the account of Borrower in the
ordinary course of its business.
"Letter of Credit Usage" means, at any date of determination, the sum of
(i) the maximum aggregate amount that is or at any time thereafter may become
available for drawing or payment under issued and outstanding Letters of Credit,
plus (ii) the aggregate amount of all drawings honored or payments made by the
Issuing Lender under Letters of Credit issued pursuant hereto and not reimbursed
by Borrower.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of Law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and/or the filing of or agreement to give any financing
statement (other than a precautionary financing statement with respect to a
lease that is not in the nature of a security interest) under the Uniform
Commercial Code or comparable Law of any jurisdiction with respect to any
Property.
"Line A Commitment" means the Commitment by Lenders to make revolving
Loans to Borrower in an aggregate principal amount, subject to Section 2.6, not
to exceed $35,000,000.
"Line A Loan" means, as the context requires, a Working Capital Loan or
a Capex Loan.
"Line B Commitment" means the Commitment of the Lenders to make a term
Loan to Borrower on the Closing Date, subject to Section 2.7, in the amount of
$5,000,000.
"Line B Loan" means a Loan made under the Line B Commitment.
"Loan" means any group of Advances made at any one time under any
Commitment by the Lenders having Pro Rata Shares of that Commitment pursuant to
Article 2.
"Loan Documents" means, collectively, this Agreement, the Collateral
Documents, the Guaranty, each Compliance Certificate, each Approved Swap
Agreement, and any other certificates, documents or agreements to, with or for
the benefit of the Creditors, of any type or nature heretofore or hereafter
executed and delivered by Borrower or any of its Subsidiaries to the Creditors
in any way relating to or in furtherance of this Agreement, in each case as
amended from time to time.
"Market" means, with respect to any Eurodollar Loan, (a) the London
Eurodollar Market, (b) if prime banks in the London Eurodollar Market are at the
relevant time not accepting deposits of dollars or if the Agent determines that
the London Eurodollar Market does not represent at the relevant time the
effective pricing to the Lenders for deposits of dollars in the London
Eurodollar Market, the Cayman Islands Eurodollar Market or (c) such other
Eurodollar Market as may from time to time be selected by the Agent with the
approval of the Requisite Lenders, provided that the Market shall not be changed
(i) without notice to Borrower from the Agent or (ii) with respect to any
Eurodollar Loan requested by Borrower, prior to the making of that Eurodollar
Loan unless consented to by Borrower.
"Material Adverse Effect" means any set of circumstances or events which
(a) has or would reasonably be expected to have any material adverse effect upon
the validity or enforceability of any
-9-
16
Loan Document, (b) has or would reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), business operations or
prospects of Borrower and its Subsidiaries, taken as a whole, (c) materially
impairs or would reasonably be expected to materially impair the ability of
Borrower and its Subsidiaries, taken as a whole, to perform the Obligations or
(d) materially impairs or would reasonably be expected to materially impair the
ability of the Creditors to enforce their legal remedies pursuant to the Loan
Documents.
"Material Subsidiary" means any Subsidiary of Borrower having (a) a net
worth, determined in accordance with GAAP, which is 10% or more of the
consolidated net worth of Borrower and its Subsidiaries, or (b) annual revenues
(annualized if the Subsidiary has been a Subsidiary for less than one year)
which are 10% or more of the consolidated pre-tax annual revenues of Borrower
and its Subsidiaries or (c) annual pre-tax income (annualized as to any
Subsidiary of Borrower which has been a Subsidiary of Borrower for less than one
year), which is 10% or more of the consolidated pre-tax annual income of
Borrower and its Subsidiaries.
"Maturity Date" means August 31, 2004.
"MIEC" means Xxxxx Instruments Europe Corp., a California corporation.
"MIHC" means Xxxxx Instruments Holding Corp., a California corporation.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means any covenant binding on Borrower or any current
or future guarantor of the Obligations that prohibits the creation of Liens on
any Property of Borrower or of any such guarantor to the Creditors or
prohibiting the granting of any such covenant to any of the Creditors.
"Net Cash Proceeds" means, with respect to any sale, transfer or other
disposition of assets, the Cash Proceeds received by Borrower or by any
Subsidiary of Borrower upon such sale, transfer or other disposition minus, (a)
the actual expenses of such sale paid or payable by Borrower or by any
Subsidiary of Borrower in connection with such sale, transfer or other
disposition, (b) any amount paid or payable by the transferor to retire existing
Liens on the assets sold to the extent that the transferor is contractually
obligated to do so, and (c) an amount representing the taxes (other than income
taxes) reasonably estimated by Borrower to be payable by Borrower with respect
to such sale, transfer or other disposition.
"Net Income" means, for any fiscal period, the consolidated net income
of Borrower and its Subsidiaries for that period, determined in accordance with
GAAP, consistently applied.
"Obligations" means all present and future obligations of every kind or
nature of Borrower or any Party at any time and from time to time owed to any of
the Creditors under any of the Loan Documents, whether due or to become due,
matured or unmatured, liquidated or unliquidated, or contingent or
noncontingent, including obligations of performance as well as obligations of
payment, and including interest that accrues after the commencement of any
proceeding under any Debtor Relief Law by or against Borrower or any Subsidiary
of Borrower.
"Party" means each party to the Loan Documents other than the Creditors.
-10-
17
"Patent Security Agreement" means the Patent Security Agreement of even
date herewith executed on the Closing Date by Borrower in favor of the Agent for
the benefit of the Lenders, as amended from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereof.
"Pension Plan" means any "employee pension benefit plan" that is subject
to Title IV of ERISA and which is maintained for employees of Borrower or of any
ERISA Affiliate of Borrower, other than a Multiemployer Plan.
"Permitted Acquisition" means an Acquisition by Borrower or any of its
Subsidiaries (as applicable, the "acquiror") of another Person engaged in the
same or a similar line of business as that of Borrower and its Subsidiaries as
of the Closing Date (a "Target") (or all or any substantial part of the assets
of any such Person), provided that:
(a) the aggregate consideration (excluding consideration
consisting of equity securities in Borrower) payable by Borrower and its
Subsidiaries in connection with such Acquisitions (including by way of
assumption of Indebtedness or other obligations) shall not exceed
$3,000,000 in any Fiscal Year;
(b) Borrower and its Subsidiaries shall not have been
notified by the management or board of directors or other governing body
of the Target that the proposed Acquisition is unwelcome, undesired or
opposed (i.e., such Acquisition shall not be "hostile");
(c) upon the closing of such Acquisition, the Agent shall be
granted a first-priority security interest in all assets of the target,
subject only to Permitted Encumbrances and to purchase money liens and
real property mortgages not created in anticipation of the Acquisition;
(d) where the consideration for the proposed Acquisition is
$1,000,000 or more, not later than 10 Business Days prior to the
consummation thereof, the Agent shall have received (i) a certificate of
the chief financial officer of Borrower to the effect that no Default or
Event of Default exists or may reasonably be expected to occur as a
result of the proposed Acquisition, that the provisions of this
Agreement will be complied with in connection with the Acquisition, and
that, after giving effect to the Acquisition, the sum of the undrawn
available Working Capital Loans plus unallocated Cash on hand of
Borrower is in excess of $5,000,000 and that Borrower shall be in pro
forma compliance with the covenants set forth in Sections 6.10 through
6.15, inclusive (together with supporting calculations), (ii) the most
recently quarterly financial statements of the Target and the most
recent audited annual financial statements of the Target (but only to
the extent that audited financial statements are available), (iii) a
copy of Borrower's purchase agreement; and (iv) where real property is
being acquired, a completed Environmental Assessment and Questionnaire
of the Target (the results of which shall be satisfactory to the
Requisite Lenders).
(e) no Default or Event of Default shall exist at the time
of such Acquisition or after giving effect thereto; and
(h) the acquisition shall be consummated in accordance with
all laws and in material conformity with the purchase agreement
delivered to the Agent.
-11-
18
"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA or any such Lien relating to or imposed in connection
with any Environmental Claim):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by Section
5.1;
(ii) statutory Liens of landlords, statutory bankers liens
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a) for
amounts not yet overdue or (b) for amounts that are overdue and that (in
the case of any such amounts overdue for a period in excess of 10 days)
are being contested in good faith by appropriate proceedings, so long as
(1) such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts,
and (2) in the case of a Lien with respect to any portion of the
Collateral, such contest proceedings conclusively operate to stay the
sale of any portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an
Event of Default under Section 9.1(j);
(v) leases, subleases or licenses granted to third parties
and not interfering in any material respect with the ordinary conduct of
the business of Borrower or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title, in each case which
do not and will not interfere in any material respect with the ordinary
conduct of the business of Borrower or any of its Subsidiaries or result
in a material diminution in the value of any Collateral as security for
the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
a lease, (b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any restriction
or encumbrance referred to in the preceding clause (b), so long as the
holder of such restriction or encumbrance agrees to recognize the rights
of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to Property which is the subject of leases permitted by
this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; and
-12-
19
(x) Liens arising from any zoning or similar law or right
reserved to or vested in any governmental office or agency to control or
regulate the use of any real property.
"Person" means any entity, whether an individual, trustee, corporation,
general partnership, limited partnership, limited liability company, joint stock
company, trust, estate, unincorporated organization, business association, firm,
joint venture, governmental agency, or otherwise.
"Pro Rata Share" means, with respect to each Lender, the percentage of
each of the Commitments held by that Lender from time to time. As of the Closing
Date, Bank of America's Pro Rata Share is 100%.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Projections" means the projected financial information prepared by
Borrower and attached hereto as Exhibit C.
"Real Property" means the interests in real property described in
Section 4.8.
"Reference Rate" means the rate of interest publicly announced from time
to time by Bank of America as its "Reference Rate." The Reference Rate is set by
Bank of America based on various factors, including Bank of America's costs and
desired returns, general economic conditions and other factors, and is used as a
reference point for pricing some loans. Bank of America may price loans at,
above or below its Reference Rate. Any change in the Reference Rate shall take
effect on the day specified in the public announcement of such change.
"Regulations D, T, U and X" means Regulations D, T, U and X, as at any
time amended, of the Board of Governors of the Federal Reserve System, or any
other regulations in substance substituted therefor.
"Related Persons" means Bank of America and any successor Agent,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Request for Letter of Credit" means a completed Request for a Letter of
Credit, substantially in the form of Exhibit D, together with the standard form
of application for letters of credit used by the Issuing Lender, signed by a
Responsible Official of Borrower.
"Request for Loan" means a written request for a Loan, substantially in
the form of Exhibit E, signed by a Responsible Official of Borrower and properly
completed to provide all information required to be included therein.
"Request for Redesignation" means a completed request substantially in
the form of Exhibit F, signed by a Responsible Official of Borrower.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any Law, or judgment, award, decree, writ or
determination of a governmental agency, in each case applicable to or binding
upon such Person or any of its Property or to which such Person or any of its
Property is subject.
-13-
20
"Requisite Lenders" means as of any date of determination, Lenders
having in the aggregate 66-2/3% or more of the Commitments then in effect.
"Reserve Rate" means, with respect to any Eurodollar Loan, as of the
date of determination of the Eurodollar Base Rate for that Eurodollar Loan, the
total of the maximum Reserve Rates for determining the reserves to be
maintained, if any, by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Regulation D, rounded upward to the
nearest 1/100 of 1%. The percentage will be expressed as a decimal, and will
include, but not be limited to, marginal, emergency, supplemental, special, and
other Reserve Rates. The determination by the Agent of any applicable Reserve
Rate shall be conclusive in the absence of manifest error.
"Responsible Official" means (a) when used with reference to a Person
other than an individual, any executive officer of such Person, general partner
of such Person, executive officer of a corporate general partner of such Person,
or executive officer of a corporate general partner of a partnership that is a
general partner of such Person, and (b) when used with reference to a Person who
is an individual, such Person. Any document or certificate hereunder that is
signed or executed by a Responsible Official of a Person shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of that Person.
"Right of Others" means, as to any Property in which a Person has an
interest, (a) any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in or with respect to that Property, and (b)
any option or right held by any other Person to acquire any right, title or
other interest in or with respect to that Property, including any option or
right to acquire a Lien.
"Securities" means any capital stock, share, voting trust certificate,
bonds, debentures, notes or other evidences of indebtedness, limited partnership
interests, or any warrant, option or other right to purchase or acquire any of
the foregoing.
"Senior Officer" means the President, Chief Executive Officer, or Chief
Financial Officer.
"Special Eurodollar Circumstance" means the application or adoption of
any Law or interpretation, or any change therein or thereof, or any change in
the interpretation or administration thereof by any governmental agency, central
bank or comparable authority charged with the interpretation or administration
thereof, or compliance by any Lender or its Eurodollar Office with any request
or directive (whether or not having the force of Law) of any such governmental
agency, central bank or comparable authority, or the existence or occurrence of
circumstances affecting the Market generally that are beyond the reasonable
control of that Lender.
"Subsidiary" means, as of any date of determination and with respect to
any Person, any corporation, partnership or joint venture, whether now existing
or hereafter organized or acquired: (a) in the case of a corporation, of which a
majority of the securities having ordinary voting power for the election of
directors or other governing body (other than securities having such power only
by reason of the happening of a contingency) are at the time beneficially owned
by such Person and/or one or more Subsidiaries of such Person, or (b) in the
case of a partnership or joint venture, of which such Person or a Subsidiary of
such Person is a general partner or joint venturer or of which a majority of the
partner- ship or other ownership interests are at the time beneficially owned by
such Person and/or one or more of its Subsidiaries.
-14-
21
"Swap Agreements" means one or more written agreements between Borrower
and one or more financial institutions providing for "swap", "cap", "collar" or
other interest rate or currency risk protection with respect to any
Indebtedness.
"Termination Event" means (a) a "reportable event" as defined in Section
4043 of ERISA (other than a "reportable event" that is not subject to the
provision for 30 day notice to the PBGC), (b) the withdrawal of either of
Borrower or any of its ERISA Affiliates from a Pension Plan during any plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate a Pension Plan or the
treatment of an amendment to a Pension Plan as a termination thereof pursuant to
Section 4041 of ERISA, (d) the institution of proceedings to terminate a Pension
Plan by the PBGC or (e) any other event or condition which, in any such case as
aforesaid, might reasonably be expected to constitute grounds under ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan.
"Total Debt" means, as of the last day of any Fiscal Quarter and without
duplication, the sum of Borrower's and its Subsidiaries consolidated (i)
Indebtedness, (ii) all obligations to reimburse the issuer of any standby letter
of credit for amounts drawn or which may be drawn under such letters of credit,
other than Letters of Credit issued for the importation or purchase of goods
(including any such Letter of Credit issued under this Agreement), (iii) all
guaranties or other suretyship arrangements with respect to any of the
foregoing, and (iv) all Contingent Obligations of Borrower and its Subsidiaries.
"to the best knowledge of" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation described
therein is known by the Person (or, in the case of a Person other than a natural
Person, known by a Responsible Official of that Person) making the
representation, warranty or other statement.
"Trademark Security Agreement" means the Trademark Security Agreement of
even date herewith executed on the Closing Date by Borrower in favor of the
Agent for the benefit of the Lenders, as amended from time to time.
"Unrelated Person" means any Person other than (A) those Persons holding
equity ownership of 5% or more of the Borrower as of the Closing Date, (B)
Borrower or any of its Subsidiaries or (C) the ESOP or any other employee stock
ownership plan or other employee benefit plan covering the employees of Borrower
and its Subsidiaries.
"Wholly-Owned Subsidiary" means a Subsidiary of Borrower, 100% of the
capital stock or other equity interest of which is owned, directly or
indirectly, by Borrower, except for director's qualifying shares required by
applicable Laws.
"Working Capital Loan" means a Loan made under the Line A Commitment and
designated as such in the related Request for Loan in accordance with Section
2.1(a).
1.2 Use of Defined Terms. Any defined term used in the
plural shall refer to all members of the relevant class, and any defined term
used in the singular shall refer to any one or more of the members of the
relevant class.
1.3 Accounting Terms. All accounting terms not specifically
defined in this Agreement shall be construed in conformity with, and all
financial data required to be submitted by this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, except as otherwise
specifically prescribed herein. In the event that GAAP change during the term of
this
-15-
22
Agreement such that the financial covenants contained in Sections 6.12 through
6.15 would then be calculated in a different manner or with different
components, Borrower and the Lenders agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
Borrower's financial position to substantially the same criteria as were
effective prior to such change in GAAP.
1.4 Rounding. Any financial ratios required to be maintained
by Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number to the number
of places by which such ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to
this Agreement are incorporated herein by this reference.
1.6 Miscellaneous Terms. The term "or" is disjunctive; the
term "and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. The term "including" is by way of example and not limitation.
ARTICLE 2
LOANS AND LETTERS OF CREDIT
2.1 Loans-General.
(a) Subject to the terms and conditions set forth in
this Agreement, at any time and from time to time from the Closing Date
through the Maturity Date, each Lender shall, pro rata according to that
Lender's Pro Rata Share of the Line A Commitment, make Advances to
Borrower under the Line A Commitment in such amounts as Borrower may
request that do not exceed in the aggregate at any one time outstanding
that Lender's Pro Rata Share of the Line A Commitment; provided that,
after giving effect to the requested Loan:
(i) the aggregate outstanding principal balance of the Line
A Loans plus Letter of Credit Usage shall not exceed the Line A
Commitment;
(ii) subject to Section 3.1(e), the aggregate outstanding
principal balance of the Working Capital Loans shall not exceed
$30,000,000 (or during the 30 day period referred to in Section
3.1(e), $5,000,000); and
(iv) the aggregate outstanding principal balance of the Capex
Loans shall not exceed $5,000,000.
Each Line A Loan requested by Borrower shall be designated by Borrower
as either a Capex Loan or a Working Capital Loan at the time that the
Loan is requested. Subject to the limitations set forth herein
(including, without limitation, the requirements of Section 3.4(d)),
Borrower may borrow, repay and reborrow under the Line A Commitment
without premium or penalty.
(b) Subject to the terms and conditions set forth in
this Agreement, on the Closing Date each Lender shall, pro rata
according to that Lender's Pro Rata Share of the Line B Commitment, make
an Advance to Borrower under the Line B Commitment in an
-16-
23
amount equal to that Lender's Pro Rata Share of the Line B Commitment.
Subject to the limitations set forth herein (including, without
limitation, the requirements of Section 3.4(d)), Borrower may prepay the
Line B Loan without premium or penalty; provided, however, that amounts
prepaid or repaid with respect to the Line B Loan may not be reborrowed.
(c) Each Loan shall be made pursuant to a written
Request for Loan which shall specify (i) the requested date of such
Loan, (ii) the Commitment under which the Loan is requested, (iii)
whether such Loan is to be a Base Rate Loan or a Eurodollar Loan, (iv)
the amount of such Loan, (v) the Eurodollar Period for such Loan if such
Loan is to be a Eurodollar Loan and (vi) with respect to a requested
Line A Loan, whether such Loan is to be a Capex Loan or a Working
Capital Loan.
(d) Promptly following receipt of a Request for
Loan, the Agent shall notify each Lender having a Pro Rata Share of the
Commitment under which such Loan is requested by telephone or telecopier
of the date and type of the Loan, the applicable Eurodollar Period, and
that Lender's Pro Rata Share of the Loan. Not later than 11:00 a.m., Los
Angeles time, on the date specified for any Loan, each Lender shall make
its Pro Rata Share of that Loan available to the Agent in immediately
available funds. Upon fulfilment of the applicable conditions set forth
in Article 8, the Loan shall be credited in immediately available funds
to the Funding Account.
(e) Unless the Requisite Lenders otherwise consent,
(i) each Base Rate Loan shall be in an integral multiple of $100,000
which is not less than $250,000 and (ii) each Eurodollar Loan shall be
in an integral multiple of $100,000 which is not less than $1,000,000.
(f) Unless the Agent otherwise consents, no more
than six Eurodollar Loans shall be outstanding at any one time.
(g) A Request for Loan shall be irrevocable upon the
Agent's first notification thereof.
2.2 Base Rate Loans. Each request by Borrower for a Base
Rate Loan shall be made pursuant to a Request for Loan received by the Agent not
later than 9:00 a.m., Los Angeles time, on the Business Day of the requested
Base Rate Loan. All Loans shall constitute Base Rate Loans unless properly
designated as Eurodollar Loans pursuant to Section 2.3.
2.3 Eurodollar Loans.
(a) Each request by Borrower for a Eurodollar Loan
shall be made pursuant to a Request for Loan received by the Agent not
later than 9:00 a.m., Los Angeles time, at least three Eurodollar Days
before the first day of the applicable Eurodollar Period.
(b) At or about 11:00 a.m., Los Angeles time, two
Eurodollar Days before the first day of the applicable Eurodollar
Period, the Agent shall determine the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly shall give notice of the same to Borrower and the Lenders by
telephone, telecopier or telex.
(c) No Eurodollar Loan may be requested during the
continuance of a Default or Event of Default.
-17-
24
(d) Nothing contained herein shall require any
Lender to fund any Eurodollar Loan in the Market.
2.4 Continuation and Redesignation of Loans. Borrower may
redesignate a Base Rate Loan, or any portion thereof subject to Section 2.1(e),
as a Eurodollar Loan by delivering a Request for Redesignation to the Agent
subject to the same time limitations and other conditions set forth in Sections
2.3 in the case of a Request for Loan. Borrower may continue or redesignate a
Eurodollar Loan, or any portion thereof subject to Section 2.1(e), as a Base
Rate Loan by delivering a Request for Redesignation to the Agent subject to the
same time limitations and other conditions set forth in Section 2.2; provided
that such redesignation shall not be effective prior to the end of the
Eurodollar Period for that Eurodollar Loan. Borrower may, upon the expiration of
any applicable Eurodollar Period, continue all or any portion of such Loan equal
to $1,000,000 and integral multiples of $100,000 in excess of that amount as a
Eurodollar Loan. Borrower shall deliver a Notice of Continuation to Agent no
later than 9:00 A.M. at least three Business Days in advance of the proposed
continuation date. The Notice of Continuation shall specify (i) the proposed
continuation date (which shall be a Business Day), (ii) the amount of the
Eurodollar Loan to be continued, (iii) the requested Eurodollar Period, and (iv)
that no Default or Event of Default has occurred and is continuing. If no timely
Request for Redesignation or Notice of Continuation is delivered to the Agent
prior to the end of the Eurodollar Period for any Eurodollar Loan, it shall
automatically be redesignated as a Base Rate Loan as of the end of such
Eurodollar Period.
2.5 Letters of Credit.
(a) Subject to the terms and conditions hereof, at
any time and from time to time from the Closing Date through the day
prior to the Maturity Date, the Issuing Lender shall issue such Letters
of Credit as Borrower may request by a Request for Letter of Credit;
provided that, after giving effect to the issuance of such Letter of
Credit, (i) in no event shall Letter of Credit Usage exceed $10,000,000
at any time, and (ii) Letter of Credit Usage plus the then aggregate
outstanding principal amount of the Line A Loans shall not exceed the
Line A Commitment.
(b) Unless all the Lenders otherwise consent in a
writing delivered to the Agent, the terms of Letters of Credit shall not
exceed one year and shall not extend beyond the Maturity Date.
(c) Unless the Issuing Lender otherwise agrees in
writing, each Request for Letter of Credit shall be submitted to the
Issuing Lender at least five Business Days prior to the date when the
issuance of a Letter of Credit is requested. Upon issuance of a Letter
of Credit, the Issuing Lender shall promptly notify the Agent, and the
Agent shall thereafter promptly notify the Lenders, of the amount and
terms thereof.
(d) Upon the issuance of a Letter of Credit, each
Lender shall be deemed to have purchased a pro rata participation from
the Issuing Lender, in an amount equal to that Lender's Pro Rata Share
of the Line A Commitment, of the Letter of Credit. Without limiting the
scope and nature of each such Lender's participation in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed by
Borrower for any payment required to be made by the Issuing Lender under
any Letter of Credit, each such Lender shall reimburse the Agent for the
account of the Issuing Lender promptly upon demand for the amount of
such payment in accordance with its Pro Rata Share of the Line A
Commitment. The obligation of
-18-
25
each such Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of an
Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of
Borrower to reimburse the Issuing Lender for the amount of any payment
made by the Issuing Lender under any Letter of Credit together with
interest as hereinafter provided.
(e) After the making by the Issuing Lender of any
payment with respect to any Letter of Credit issued for the account of
Borrower, Borrower agrees to pay to the Issuing Lender, within one
Business Day after demand therefor, a principal amount equal to any
payment made by the Issuing Lender under that Letter of Credit, together
with interest at the Base Rate plus the Base Margin applicable to Line A
Loans if the payment is made within one Business Day after demand (and
there after at the Default Rate) on such amount from the date of any
payment made by the Issuing Lender through the date of payment by
Borrower. The principal amount of any such payment made to the Issuing
Lender shall be used to reimburse the Issuing Lender for the payment
made by it under the Letter of Credit. Each Lender that has reimbursed
the Issuing Lender pursuant to Section 2.5(d) for its Pro Rata Share of
any payment made by the Issuing Lender under a Letter of Credit shall
thereupon acquire a participation, to the extent of such reimbursement,
in the claim of the Issuing Lender against Borrower under this Section
2.5(e).
(f) If Borrower fails to make the payment required
by Section 2.5(d), the Agent may but is not required to, without notice
to or the consent of Borrower, cause Advances to be made by the Lenders
having a Pro Rata Share of the Line A Commitment in accordance with
their respective Pro Rata Shares in an aggregate amount equal to the
amount paid by the Issuing Lender on that Letter of Credit and, for this
purpose, the conditions precedent set forth in Article 8 shall not
apply. The proceeds of such Advances shall be paid to the Issuing Lender
to reimburse it for the payment made by it under the Letter of Credit.
(g) The issuance of any supplement, modification,
amendment, renewal, or extension to or of any Letter of Credit which has
the effect of increasing the amount or tenor thereof shall be treated in
all respects the same as the issuance of a new Letter of Credit, and
shall require the submission of a new Request for Letter of Credit;
provided however that nothing contained in this clause (g) shall require
the payment of any additional issuance fees in respect thereof by
Borrower other than with respect to any extension of the term thereof or
renewal thereof or any increase in the amount of such Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing
Lender the amount of any payment made by the Issuing Lender under any
Letter of Credit issued to Borrower shall be absolute, unconditional,
and irrevocable, subject only to performance by the Issuing Lender of
its obligations to Borrower under California Commercial Code Section
5108. Without limiting the foregoing, the obligations of Borrower to pay
to the Issuing Lender the amount of any payment made by the Issuing
Lender under any Letter of Credit issued to Borrower shall not be
affected by any of the following circumstances:
(i) any lack of validity or enforceability
of the Letter of Credit, this Agreement, or any other agreement
or instrument relating thereto;
(ii) any amendment or waiver of or any
consent to departure from the Letter of Credit, this Agreement,
or any other agreement or instrument relating thereto;
-19-
26
(iii) the existence of any claim, setoff,
defence, or other rights which Borrower may have at any time
against any Lender, any beneficiary of the Letter of Credit (or
any persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, or any underlying transactions;
(iv) any demand, statement, or any other
document presented under the Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect
whatsoever so long as any such document appeared to comply with
the terms of the Letter of Credit;
(v) the solvency or financial responsibility
of any party issuing any documents in connection with a Letter
of Credit;
(vi) any failure or delay in notice of
shipments or arrival of any Property;
(vii) any error in the transmission of any
message relating to a Letter of Credit not caused by the Issuing
Lender, or any delay or interruption in any such message;
(viii) any error, neglect or default of any
correspondent of the Issuing Lender in connection with a Letter
of Credit;
(ix) any consequence arising from acts of
God, war, insurrection, disturbances, labor disputes, emergency
conditions or other causes beyond the control of the Lenders;
(x) so long as the Issuing Lender in good
faith determines that the draft, contract or document appears to
comply with the terms of the Letter of Credit, the form,
accuracy, genuineness or legal effect of any contract or
document referred to in any document submitted to the Issuing
Lender in connection with a Letter of Credit; and
(xi) where the Issuing Lender has acted in
good faith and without gross negligence, any other circumstance
whatsoever;
provided, in each case, that payment by Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence
or willful misconduct of Issuing Lender under the circumstances in
question.
(i) The Issuing Lender shall be entitled to the
protection accorded to the Agent pursuant to Article 10, mutatis
mutandis.
2.6 Voluntary Reductions of the Revolving Commitment.
Borrower shall have the right, at any time and from time to time, without
penalty or charge, upon at least five Business Days prior written notice to the
Agent, voluntarily to reduce, permanently and irrevocably, in aggregate
principal amounts in an integral multiple of $1,000,000, or to terminate, all or
a portion of the then undisbursed portion of the Line A Commitment, provided
that any such reduction or termination shall be
-20-
27
accompanied by payment of all accrued and unpaid fees with respect to the
portion of the Line A Commitment being reduced or terminated.
2.7 Automatic Reduction of Commitments. The Line B
Commitment shall automatically and permanently reduce by an amount equal to the
amount of (i) any voluntary prepayment of the Line B Loan pursuant to Section
3.1(e) and (ii) any mandatory prepayment of the Line B Loan pursuant to Section
3.1(d).
2.8 Rights to Assume Funds Available for Advances. Unless
the Agent shall have been notified by any Lender no later than 10:00 a.m. (Los
Angeles time) no later than the Business Day prior to the Business Day proposed
for the funding by the Agent of any Loan that any such Lender does not intend to
make available to the Agent such Lender's portion of the total amount of any
such Loan, the Agent may assume that such Lender has made such amount available
to the Agent on the date of the Loan and may, in reliance upon such assumption,
make available to Borrower a corresponding amount. If the Agent has made funds
available to Borrower based on such an assumption and such corresponding amount
is not in fact made available to the Agent by such Lender, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay such corresponding amount forthwith upon demand
therefor, the Agent promptly shall notify Borrower and Borrower shall pay such
corresponding amount to the Agent. The Agent also shall be entitled to recover
from such Lender interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Agent to
Borrower to the date such corresponding amount is recovered by the Agent, at a
rate per annum equal to the Federal Funds Rate. Nothing herein shall be deemed
to relieve any Lender from its obligation to fulfill its Pro Rata Share of the
Commitments or to prejudice any rights which the Agent or the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
2.9 Collateral. The Obligations shall be secured by a first
priority (subject to Liens permitted by Section 6.8) perfected Lien on the
Collateral pursuant to the Collateral Documents.
ARTICLE 3
PAYMENTS AND FEES
3.1 Principal and Interest.
(a) Interest shall be payable on the outstanding
daily unpaid principal amount of each Loan from the date thereof until
payment in full is made and shall accrue and be payable at the rates set
forth herein before and after default, before and after maturity, before
and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue
interest to bear interest at the Default Rate to the fullest extent
permitted by applicable Laws.
(b) Interest accrued on each Base Rate Loan shall be
due and payable on the last day of each calendar month. Except as
otherwise provided in Section 3.5, the unpaid principal amount of each
Base Rate Loan shall bear interest at a fluctuating rate per annum equal
to the Base Rate plus the Base Margin. Each change in the interest rate
hereunder shall take effect simultaneously with the corresponding
changes in the Base Rate and the Base Margin.
-21-
28
(c) Interest accrued on each Eurodollar Loan shall
be due and payable on the earlier of (i) the last day of the related
Eurodollar Period or (ii) the last day of each calendar month. Except as
otherwise provided in Section 3.5, the unpaid principal amount of any
Eurodollar Loan shall bear interest at a rate per annum equal to the
Eurodollar Rate for that Eurodollar Loan plus the Eurodollar Margin.
(d) If not sooner paid, the principal Indebtedness
under this Agreement shall be payable as follows:
(i) The principal amount of each Eurodollar
Loan shall be immediately payable in cash on the last day of the
related Eurodollar Period (it being understood that each such
Eurodollar may be redesignated or continued in accordance with
the provisions hereof).
(ii) The Line A Loans shall be immediately
payable in cash in the amount by which the aggregate outstanding
amount of the Line A Loans plus Letter of Credit Usage at any
time exceeds the Line A Commitment.
(iii) The Line B Loan shall be immediately
payable in cash on the last Business Day of each calendar
quarter in the related Amortization Amount.
(iv) The Line B Loan shall be payable
immediately in cash in an amount equal to (A) 50% of the
proceeds of the issuance of any equity securities by Borrower or
any of its Subsidiaries, net of associated transaction expenses;
(B) 100% of the Net Cash Proceeds of any Disposition by Borrower
or any of its Subsidiaries; (C) 100% of the Net Cash Proceeds
from any Disposition consisting of a sale of assets outside the
ordinary course of business, and (D) 100% of insurance or
condemnation proceeds received by Borrower or any of its
Subsidiaries under any casualty insurance policy or as a result
of the taking of any assets pursuant to the power of eminent
domain or condemnation (in each case less any amounts reinvested
in replacement assets within 180 days after receipt of such
proceeds). Payments made pursuant to this Section 3.1(d)(iv)
shall be applied to reduce installments due with respect to the
principal balance of the Line B Loan in the inverse order of
maturity.
(v) Borrower shall immediately prepay the
Line A Notes in the amount which is necessary to assure
compliance with clause (e) of this Section.
(vi) the outstanding principal balance of all
of the other Loans shall, in any event, be payable on the
Maturity Date.
(e) Borrower agrees that it shall reduce the
outstanding principal balance of the Working Capital Loans to an amount
which is not greater than $5,000,000, and that it shall thereafter
maintain the principal balance of the Working Capital Loans at or below
such amount, for a thirty consecutive day period, to be determined by
Borrower, but occurring during the period between January 31 and April
15 during each year which occurs during the term of this Agreement.
(f) The Loans may, at any time and from time to
time, voluntarily be paid or prepaid in whole or in part without premium
or penalty and without prior notice, except that with respect to any
voluntary prepayment under this Section 3.1(f), (i) each prepayment
-22-
29
shall be in an integral multiple of $100,000, which is, in the case of
any prepayment of any Eurodollar Loan, not less than $500,000, (ii) the
Agent shall have received written notice of any prepayment at least one
Business Day, in the case of a Base Rate Loan, or three Business Days,
in the case of a Eurodollar Loan, before the date of prepayment, which
notice shall identify the date and amount of the prepayment and the
Loan(s) being prepaid, (iii) each prepayment of principal in respect of
a Eurodollar Loan shall be accompanied by payment of interest accrued
through the date of payment on the amount of principal paid and (iv) in
any event, any payment or prepayment of all or any part of any
Eurodollar Loan on a day other than the last day of the applicable
Eurodollar Period shall be subject to Section 3.4(d).
3.2 Letter of Credit Fees. With respect to each Letter of
Credit issued by the Issuing Lender, Borrower shall pay to the Issuing Lender
the following fees on a non-refundable basis concurrently with the issuance of
such Letter of Credit:
(i) in the case of any trade, usance or
commercial Letter of Credit issued to support the obligation of
Borrower to pay for goods in the ordinary course of its
business, amendment, issuance and other fees in accordance with
the Issuing Lender's standard schedule of fees for such
services, as advised to Borrower from time to time, which fees
shall be for the sole account of the Issuing Lender;
(ii) in the case of each other Letter of
Credit, a letter of credit fee equal to the Eurodollar Margin
with respect to Line A Loans times the maximum face amount of
each other Letter of Credit, but not less than $500 (which fee
shall be for the ratable account of the Lenders with a Pro Rata
Share of the Line A Commitment); and
(iii) for the sole account of the Issuing
Lender a fronting fee in an amount set forth in a letter
agreement with Borrower and such standard payment, negotiation,
processing, amendment and other similar charges as and when the
Issuing Lender may from time to time advise Borrower are
applicable to Letters of Credit.
3.3 Capital Adequacy. If any Lender determines that either
(i) the introduction of or any change, in case after the date of this Agreement,
in any law, order or regulation or in the interpretation or administration of
any law, order or regulation by any governmental agency charged with the
interpretation thereof or (ii) compliance with any guideline or request issued
or made after the date hereof from any such governmental agency (whether or not
having the force of law) has or would have the effect of reducing the rate of
return on the capital of that Lender or any corporation controlling that Lender
as a consequence of that Lender's Pro Rata Share of the Commitments or the
making or maintaining of Loans or Letters of Credit below the rate at which that
Lender or such other corporation would have achieved but for such introduction,
change or compliance (taking into account the policies of that Lender or
corporation with regard to capital), then Borrower shall from time to time, upon
demand by such Lender accompanied by the certificate referred to in the next
sentence, pay to that Lender additional amounts sufficient to compensate such
Lender or other corporation for such reduction. A certificate setting forth in
reasonable detail the basis for calculating the additional amounts owed,
submitted to Borrower by the relevant Lender, shall be conclusive and binding
for all purposes, absent manifest error.
3.4 Eurodollar Fees and Costs.
(a) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance:
-23-
30
(1) shall subject any Lender or its
Eurodollar Office to any tax, duty or other charge or cost with
respect to any Eurodollar Advance, or its obligation to make
Eurodollar Advances, or shall change the basis of taxation of
payments to any Lender of the principal of or interest on any
Eurodollar Advance or any other amounts due under this Agreement
in respect of any Eurodollar Advance or its obligation to make
Eurodollar Advances (except for changes in any tax, duty or
other charge on the overall net income, gross income or gross
receipts of such Lender or its Eurodollar Office);
(2) shall impose, modify or deem applicable
any reserve (including any reserve imposed by the Board of
Governors of the Federal Reserve System), special deposit or
similar requirements against assets of, deposits with or for the
account of, or credit extended by, any Lender or its Eurodollar
Office; or
(3) shall impose on any Lender or its
Eurodollar Office or the Market any other condition affecting
any Eurodollar Loan, its obligation to make Eurodollar Advances
or this Agreement, or shall otherwise affect any of the same;
and the result of any of the foregoing, as reasonably determined by such
Lender, increases the cost to such Lender or its Eurodollar Office of
making or maintaining any Eurodollar Advance or in respect of any
Eurodollar Advance, its obligation to make Eurodollar Advances or
reduces the amount of any sum received or receivable by such Lender or
its Eurodollar Office with respect to any Eurodollar Advance or its
obligation to make Eurodollar Advances (assuming the Lender's Eurodollar
Office had funded 100% of its Eurodollar Advance in the Market), then,
upon demand by such Lender and receipt by Borrower of the statement
referred to below (with a copy to the Agent) Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender
for such increased cost or reduction (determined as though such Lender's
Eurodollar Office had funded 100% of its Eurodollar Advance in the
Market). A statement of any Lender claiming compensation under this
Section and setting forth in reasonable detail the basis for calculating
the additional amount or amounts to be paid to it hereunder delivered to
Borrower shall be conclusive in the absence of manifest error. Each
Lender agrees to endeavour promptly to notify Borrower of any event of
which it has actual knowledge (and in any event, within one year from
the date on which it obtained such knowledge), occurring after the
Closing Date, which will entitle such Lender to compensation pursuant to
this Section, and agrees to designate a different Eurodollar Office if
such designation will avoid the need for or reduce the amount of such
compensation and will not, in the judgment of such Lender, otherwise be
disadvantageous to such Lender.
(b) If, after the date hereof, the existence or
occurrence of any Special Eurodollar Circumstance shall, in the reasonable
opinion of any Lender, make it unlawful, impossible or impracticable for such
Lender or its Eurodollar Office to make, maintain or fund any Eurodollar Loan,
or materially restrict the authority of such Lender to purchase or sell, or to
take deposits of, dollars in the Market, or to determine or charge interest
rates based upon the Eurodollar Rate, and such Lender shall so notify the Agent
and Borrower, then such Lender's obligation to make Eurodollar Advances shall be
suspended for the duration of such illegality, impossibility or impracticability
and the Agent forthwith shall give notice thereof to the other Lenders and
Borrower. Upon receipt of such notice, the outstanding principal amount of such
Lender's Eurodollar Advances, together with accrued interest thereon,
automatically shall be converted to Base Advances with Eurodollar Periods
corresponding to the Eurodollar Loans of
-24-
31
which such Eurodollar Advances were a part on either (1) the last day of the
Eurodollar Period(s) applicable to such Eurodollar Advances if such Lender may
lawfully continue to maintain and fund such Eurodollar Advances to such day(s)
or (2) immediately if such Lender may not lawfully continue to fund and maintain
such Eurodollar Advances to such day(s), provided that in such event the
conversion shall not be subject to payment of a prepayment fee under Section
3.4(d). In the event that such Lender is unable, for the reasons set forth
above, to make, maintain or fund any Eurodollar Loan, such Lender shall fund
such amount as a Base Advance for the same period of time, and such amount shall
be treated in all respects as a Base Advance.
(c) If, with respect to any proposed Eurodollar
Loan:
(1) the Agent reasonably determines that, by
reason of circumstances affecting the Market generally that are
beyond the reasonable control of the Lenders, deposits in
dollars (in the applicable amounts) are not being offered to the
Lenders in the Market for the applicable Eurodollar Period; or
(2) the Requisite Lenders advise the Agent
that the Eurodollar Rate as determined by the Agent (i) does not
represent the effective pricing to such Lenders for deposits in
dollars in the Market in the relevant amount for the applicable
Eurodollar Period, or (ii) will not adequately and fairly
reflect the cost to such Lenders of making the applicable
Eurodollar Advances;
then the Agent forthwith shall give notice thereof to Borrower and the
Lenders, whereupon until the Agent notifies Borrower that the
circumstances giving rise to such suspension no longer exist, the
obligation of the Lenders to make any future Eurodollar Advances shall
be suspended. If at the time of such notice there is then pending a
Request for Loan that specifies a Eurodollar Loan, such Request for Loan
shall be deemed to specify a Base Rate Loan.
(d) Upon payment or prepayment of any Eurodollar
Loan, (other than as the result of a conversion required under Section
3.4(b)), on a day other than the last day in the applicable Eurodollar
Period (whether voluntarily, involuntarily, by reason of acceleration,
or otherwise), or upon the failure of Borrower to borrow on the date or
in the amount specified for a Eurodollar Loan in any Request for Loan,
Borrower shall indemnify the Lenders against and reimburse each Lender
on demand for all costs, expenses, penalties, losses, reasonable legal
fees and damages incurred or sustained, or that would be incurred or
sustained, by the Lenders, including loss of interest, as reasonably
determined by the Lenders, to the extent that the same are a direct
result of such payment, prepayment or failure to borrow. Each Lender's
determination of the amount payable under this Section 3.4(d) shall be
conclusive in the absence of manifest error. The loss of interest by a
Lender will be calculated as (i) the principal amount of the subject
Loan, times (ii) a fraction the numerator of which is the number of days
between the date of payment and the last day of the applicable
Eurodollar Period, and the denominator of which is 360, times (iii) the
Eurodollar Rate for the subject Loan, minus the Eurodollar Rate that
would be applicable to a Loan in the amount of the subject Loan to be
made on the date of prepayment or a period equal to the number of days
remaining in the applicable Eurodollar Period (to the extent such
difference is a positive number).
(e) Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for
administering the Loans of such Lender becomes aware of the occurrence
of an event or the existence of a condition that would entitle such
Lender to receive
-25-
32
payments under Sections 3.3. or 3.4, it will, to the extent not
inconsistent with the internal policies of such Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i)
to make, issue, fund or maintain the Commitments of such Lender, or the
affected Loans of such Lender through another lending office of such
Lender, or (ii) take such other measures as such Lender may deem
reasonable, if as a result thereof the additional amounts which would
otherwise be required to be paid to such Lender pursuant to Sections 3.3
or 3.4 would be materially reduced and if, as determined by such Lender
in its sole discretion, the making, issuing, funding or maintain of such
Commitments or Loans through such other lending office or in accordance
with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or the interests
of such Lender.
3.5 Post Default Interest and Late Payments. At the option
of the Requisite Lenders, so long as any Event of Default has occurred and is
continuing, the Loans shall thereafter bear interest, and if any installment of
principal or interest or any fee or cost or other amount payable under any Loan
Document to any Creditor is not paid when due, it shall thereafter bear interest
until paid in full, at a fluctuating interest rate per annum at all times equal
to 2% per annum above the rate of interest that would otherwise be applicable
pursuant to this Agreement (the "Default Rate"), to the fullest extent permitted
by applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be compounded quarterly, on the last day of
each calendar quarter, to the fullest extent permitted by applicable Laws.
3.6 Right to Assume Payments Will be Made by Borrower.
Unless the Agent shall have been notified by Borrower prior to the date on which
any payment to be made by Borrower hereunder is due that Borrower does not
intend to remit such payment, the Agent may, in its sole discretion, assume that
Borrower has remitted such payment when so due and may, in its sole discretion
and in reliance upon such assumption, make available to each Lender on such
payment date an amount equal to such Lender's share of such assumed payment. If
Borrower has not in fact remitted such payment to the Agent each Lender shall
forthwith on demand repay to the Agent the amount of such assumed payment made
available to such Lender, together with interest thereon in respect of each day
from and including the date such amount was made available by the Agent to such
Lender to the date such amount is repaid to the Agent at the Federal Funds Rate.
3.7 Computation of Interest and Fees. Computation of
interest or fees under this Agreement shall be calculated on the basis of a year
of 360 days and the actual number of days elapsed. Borrower acknowledges that
such calculation method will result in a higher yield to the Lenders than a
method based on a year of 365 or 366 days.
3.8 Non-Business Days. If any payment to be made by Borrower
or any other Party under any Loan Document shall come due on a day other than a
Business Day, payment shall instead be considered due on the next succeeding
Business Day and the extension of time shall be reflected in computing interest.
3.9 Manner and Treatment of Payments.
(a) Each payment hereunder shall be made to the
Agent for the account of the relevant Creditor in immediately available
funds not later than 11:00 a.m., Los Angeles time, on the day of payment
(which must be a Business Day). All payments received after these
deadlines on any Business Day, shall be deemed received on the next
succeeding Business Day. The amount of all payments received by the
Agent for the account of any Lender shall be
-26-
33
promptly paid by the Agent to that Lender in immediately available
funds. All payments shall be made in lawful money of the United States
of America.
(b) Each Lender shall use its best efforts to keep a
record of Advances made by it and payments received by it with respect
to each of the Loans and such record shall, as against Borrower, be
presumptive evidence of the amounts owing. Notwithstanding the foregoing
sentence, no Lender shall be liable to any Party for any failure to keep
such a record.
(c) Subject in the case of each Lender to compliance
by that Lender with Section 11.9, each payment of any amount payable by
Borrower or any other Party under this Agreement or any other Loan
Document shall be made free and clear of, and without reduction by
reason of, any taxes, assessments or other charges imposed by any
governmental agency, central bank or comparable authority (other than
taxes on overall net income, gross income or gross receipts of a Lender
or its Eurodollar Office). To the extent that Borrower is obligated by
applicable Laws to make any deduction or withholding on account of
taxes, assessments or other charges imposed by any governmental agency
from any amount payable to any Lender under this Agreement, Borrower
shall (i) make such deduction or withholding and pay the same to the
relevant governmental agency and (ii) pay such additional amount to that
Lender as is necessary to result in that Lender's receiving a net
after-tax (or after-assessment or aftercharge) amount equal to the
amount to which that Lender would have been entitled under this
Agreement absent such deduction or withholding. If the Agent or any
Lender receives a refund in respect of any taxes paid by Borrower
pursuant to this Section 3.9, which in the reasonable judgment of such
Lender is allocable to such payment, it shall promptly pay such refund,
together with any other amounts paid by Borrower in connection with such
taxes, to Borrower, net of all out-of-pocket expenses of such Lender
incurred in obtaining such refund, provided, however, that Borrower
agrees to promptly return such refund to the Agent or the applicable
Lender, as the case may be, if it receives notice from the Agent or
applicable Lender that Agent or Lender is required to repay such refund.
3.10 Funding Sources. Nothing in this Agreement shall be
deemed to obligate any Lender to obtain the funds for any Loan in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any Loan in any particular place or
manner.
3.11 Failure to Charge Not Subsequent Waiver. Any decision by
any Creditor not to require payment of any interest (including interest arising
under Section 3.5), fee, cost or other amount payable under any Loan Document,
or to calculate any amount payable by a particular method, on any occasion shall
in no way limit or be deemed a waiver of that Creditor's right to require full
payment of any interest (including interest arising under Section 3.5), fee,
cost or other amount payable under any Loan Document, or to calculate an amount
payable by another method, on any other or subsequent occasion.
3.12 Authority to Charge Account.
(a) Borrower hereby authorizes Bank of America upon
notice from the Agent to charge the Funding Account and thereafter to
remit to the Agent, in such amounts as may from time to time be
necessary to cause timely payment of principal, interest, fees and other
charges payable by Borrower under the Loan Documents.
-27-
34
(b) Approximately ten days prior to the date any
payment is due from Borrower under any of the Loan Documents, the Agent
shall provide to Borrower a statement of the amounts that will be due on
such date (the "Billed Amount"). The calculation of the Billed Amount
shall be made on the assumption that no new Loans or payments will be
made between the date of the billing statement and the date the amounts
are due, and that there will be no changes in the applicable interest
rate.
(c) Bank of America, upon notice from the Agent,
will charge the Funding Account for the Billed Amount regardless of the
actual amount of interest accrued (the "Accrued Amount"). If the Billed
Amount charged to the Funding Account differs from the Accrued Amount,
the discrepancy will be treated as follows: (i) if the Billed Amount is
less than the Accrued Amount, the Billed Amount for the following
payment date will be increased by the amount of the discrepancy (and no
Default or Event of Default shall be deemed to have occurred solely as a
result of such discrepancy); and (ii) if the Billed Amount is more than
the Accrued Amount, the Billed Amount for the following payment date
will be decreased by the amount of the discrepancy. Regardless of any
such discrepancy, interest will continue to accrue based on the actual
amount of principal outstanding under the Loans, without compounding.
The Agent and the Lenders shall not pay to Borrower any interest on any
excess payment.
(d) Nothing herein shall obligate the Agent to
charge the Funding Account as provided above at a time when there are
not sufficient good funds in such account, and if there are insufficient
funds in the Funding Account on a date the Agent enters any debit
authorized hereby, the Agent shall reverse such debit to the extent of
such insufficiency.
3.13 Survivability. All of Borrower's obligations under
Sections 3.3 and 3.4 shall survive for six months following the date on which
all Loans hereunder are fully paid.
3.14 Agency Fees. From and after the date upon which more
than one Lender is a party to this Agreement, Borrower shall pay an annual
agency fee to Bank of America in an amount, and on the dates, set forth in a
letter agreement with Bank of America.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Creditors as follows:
4.1 Existence and Qualification; Power; Compliance With
Laws. Borrower is a corporation duly formed, validly existing and in good
standing under the laws of the state of its incorporation, as described in the
preamble to this Agreement. Borrower is duly qualified to transact business, is
in good standing in its jurisdiction of incorporation and each other
jurisdiction, in which the conduct of its business or the ownership or leasing
of its properties makes such qualification or registration necessary, except
where the failure so to qualify or register and to be in good standing would not
reasonably be expected to have a Material Adverse Effect. The chief executive
offices and principal place of business of Borrower are located at the addresses
for notices set forth for Borrower in the signature pages to this Agreement.
Borrower has all requisite corporate power and authority to conduct its
business, to own and lease its properties and to execute and deliver each Loan
Document to which it is a party and to perform the Obligations. All outstanding
shares of capital stock of Borrower are duly authorized, validly issued, fully
paid, non-assessable and issued in compliance with all applicable state and
federal securities and other Laws. Borrower is in compliance with all Laws and
other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals,
-28-
35
orders, licenses and permits from, and has accomplished all filings,
registrations and qualifications with, or obtained exemptions from any of the
foregoing from, any governmental agency that are necessary for the transaction
of its business, except where the failure so to comply, file, register, qualify
or obtain exemptions would not reasonably be expected to have a Material Adverse
Effect.
4.2 Authority; Compliance With Other Agreements and
Instruments and Government Regulations. Except as set forth on Schedule 4.2,the
execution, delivery and performance by Borrower and the Guarantors of each Loan
Document to which it is a Party have been duly authorized by all necessary
corporate action, and do not:
(a) Require any consent or approval not heretofore
obtained of any partner, director, stockholder, security holder or
creditor of such Party, except as heretofore obtained;
(b) Violate or conflict with any provision of such
Party's charter, articles of incorporation or bylaws, as applicable;
(c) Result in or require the creation or imposition
of any Lien or right of others (other than pursuant to the Collateral
Documents) upon or with respect to any Property now owned or leased or
hereafter acquired by that Party;
(d) Violate any Requirement of Law applicable to
such Party in any respect which is material;
(e) Result in a material breach of or constitute a
material default under, or cause or permit the acceleration of any
obligation owed under, any indenture or loan or credit agreement or any
other material Contractual Obligation to which such Party is a party or
by which such Party or any of its Property is bound or affected;
and no Party is in violation of, or default under, any Requirement of Law or
Contractual Obligation, or any indenture, loan or credit agreement described in
Section 4.2(e), in any respect that would reasonably be expected to have a
Material Adverse Effect.
4.3 No Governmental Approvals Required. No authorization,
consent, approval, order, license or permit from, or filing, registration or
qualification with, any governmental agency is required to authorize or permit
under applicable Laws the execution, delivery and performance by Borrower and
the Guarantors of any of the Loan Documents to which it is a Party except as
have been or will be made or obtained as of the Closing Date except for the
making of UCC-1 filings.
4.4 Subsidiaries.
(a) As of the Closing Date, Schedule 4.4 hereto
correctly sets forth the names, the form of legal entity, jurisdictions
of organization, chief executive offices and principal place of business
of all Subsidiaries of Borrower and the identities of the Material
Subsidiaries existing as of the Closing Date. Except as described in
Schedule 4.4, Borrower does not own as of the Closing Date any capital
stock or equity interest in any Person. All of the outstanding shares of
capital stock, or all of the units of equity interest, as the case may
be, of each such Subsidiary are owned of record and beneficially as
indicated on Schedule 4.4, and all such shares or equity interests so
owned are duly authorized, validly issued, fully paid,
-29-
36
nonassessable, and were issued in compliance with all applicable state,
federal and other Laws, and are free and clear of all Liens.
(b) Each such Subsidiary is a legal entity of the
form described for that Subsidiary in Schedule 4.4, duly organized,
validly existing, and in good standing under the Laws of its
jurisdiction of organization, is duly qualified to do business as a
foreign organization and is in good standing as such, and has filed
fictitious business name statements, in each jurisdiction in which the
conduct of its business or the ownership or leasing of its properties
makes such qualification necessary (except where the failure to be so
duly qualified and in good standing would not reasonably be expected to
have a Material Adverse Effect), and has all requisite power and
authority to conduct its business and to own and lease its properties.
(c) Each such Subsidiary is in compliance with all
Laws and other requirements applicable to its business and has obtained
all authorizations, consents, approvals, orders, licenses, and permits
from, and each such Subsidiary has accomplished all filings,
registrations, and qualifications with, or obtained exemptions from any
of the foregoing from, any governmental agency that are necessary for
the transaction of its business, except where the failure to be in such
compliance, obtain such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registrations, and
qualifications, or obtain such exemptions, would not reasonably be
expected to have a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the
Agent (a) the audited annual financial statements of Borrower and its
Subsidiaries for the Fiscal Year ended February 28, 1999, (b) the unaudited
consolidated financial statements of Borrower and its Subsidiaries for the
Fiscal Quarter ended May 31, 1999, and (c) the un-audited financial statements
dated December 31, 1998 of Bresser. The financial statements described in (a)
and (b) fairly present in all material respects the financial position, results
of operations and changes in cash flows of Borrower and its Subsidiaries as of
such dates and for such respective periods in conformity with GAAP consistently
applied, subject only to normal year-end accruals and audit adjustments. To the
best knowledge of Borrower, the financial statements of Bresser described above
fairly present in all material respects the financial position, results of
operations and changes in cash flows of Bresser as of such dates and for such
respective periods in conformity with GAAP consistently applied.
4.6 No Other Liabilities; No Material Adverse Effect. Except
as disclosed on Schedule 4.6, neither Borrower nor any of its Subsidiaries has
any material liability or material contingent liability required under GAAP to
be reflected or disclosed, and not reflected or disclosed, in the financial
statements described in Section 4.5, other than liabilities and contingent
liabilities arising in the ordinary course of business since the date of such
financial statements. As of the Closing Date, no circumstance or event has
occurred which would reasonably be expected to have a Material Adverse Effect
since February 28, 1999.
4.7 Title to and Location of Property. Borrower and its
Subsidiaries have valid title to the Property (other than assets which are the
subject of a Capital Lease) reflected in the financial statements described in
Section 4.5, other than items of Property or exceptions to title which are in
each case immaterial and Property subsequently sold or disposed of in the
ordinary course of business. Such Property is free and clear of all Liens and
Rights of Others, other than those permitted under Section 6.8. All Property of
Borrower and its Subsidiaries is located at one of the locations described in
Schedule 4.7.
-30-
37
4.8 Real Property. Borrower's most recent report on Form
10-K sets forth a summary of all real property owned by Borrower and its
Subsidiaries, and of all real property leasehold estates held by Borrower and
its Subsidiaries, which summary is accurate and complete in all material
respects except for real property acquired or leased after the Closing Date.
4.9 Intangible Assets. Borrower and its Subsidiaries own, or
possess the right to use to the extent necessary in their respective businesses,
all trademarks, trade names, copyrights, patents, patent rights, computer
software, licenses and other intangible assets that are used in the conduct of
their businesses as now operated. None of the intangible assets described in the
first sentence of this Section, to the best knowledge of Borrower, conflicts
with the valid trademark, trade name, copyright, patent, patent right or
intangible asset of any other Person to the extent that such conflict would
reasonably be expected to have a Material Adverse Effect.
4.10 Governmental Regulation. Neither Borrower nor any
Subsidiary of Borrower is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, the
Investment Company Act of 1940 or to any other Law limiting or regulating its
ability to incur Indebtedness for money borrowed.
4.11 Litigation. Except for (a) any matter fully covered
(subject to applicable deductibles and retentions) by insurance for which the
insurance carrier has assumed full responsibility, (b) any matter, or series of
related matters, involving a claim against Borrower or any of its Subsidiaries
of less than $1,000,000, and (c) matters set forth in Schedule 4.11, as of the
Closing Date, there are no actions, suits, proceedings or investigations pending
as to which Borrower or any Subsidiary of Borrower has been served or has
received written notice or, to the best knowledge of Borrower, threatened
against or affecting Borrower, any Subsidiary of Borrower or any Property of any
of them before any governmental agency. Except for matters set forth in Schedule
4.11, there is no reasonable basis, to the best knowledge of Borrower, for any
action, suit, proceeding or investigation against or affecting Borrower, any
Subsidiary of Borrower or any Property of any of them before any governmental
agency which would reasonably be expected to have a Material Adverse Effect.
4.12 Binding Obligations. Each of the Loan Documents to which
Borrower and the Guarantors are a party will, when executed and delivered by
such Party, constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms, except as
enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies
and/or defenses as a matter of judicial discretion.
4.13 No Default. No event has occurred and is continuing that
is a Default or Event of Default.
4.14 ERISA.
(a) Except as disclosed in Schedule 4.14, as of the
Closing Date neither Borrower nor any ERISA Affiliate of Borrower
maintains, contributes to or is required to contribute to any "employee
pension benefit plan" that is subject to Title IV of ERISA.
(b) With respect to each Pension Plan disclosed in
Schedule 4.14:
(i) such Pension Plan complies in all
material respects with ERISA and any other applicable Laws;
-31-
38
(ii) such Pension Plan has not incurred any
"accumulated funding deficiency", as that term is defined in
Section 302 of ERISA which would reasonably be expected to have
a Material Adverse Effect;
(iii) no "reportable event" (as defined in
Section 4043 of ERISA) has occurred that would subject Borrower
or any Subsidiary of Borrower to any liability with respect to
such Pension Plan that would reasonably be expected to have
constitute a Material Adverse Effect;
(iv) neither Borrower nor any Subsidiary of
Borrower has engaged in any non-exempt "prohibited transaction"
(as defined in Section 4975 of the Code) that would subject
Borrower or any Subsidiary of Borrower to any penalty that would
reasonably be expected to have a Material Adverse Effect;
(v) no Termination Event has occurred or may
reasonably be expected to occur which would reasonably be
expected to have a Material Adverse Effect; and
(vi) no material unfunded vested liabilities
exist under any Pension Plan and the present value of all
benefit liabilities under each Pension Plan and each Pension
Plan of a Subsidiary and of an ERISA Affiliate do not exceed by
a material amount the value of the assets of such Plan in each
case by an amount which would reasonably be expected to have a
Material Adverse Effect.
(c) As of the Closing Date, all contributions
required to be made by Borrower or any of its Subsidiaries to a
Multiemployer Plan described in Schedule 4.14 have been made except as
may be described in Schedule 4.14. Neither Borrower, any Subsidiary of
Borrower, nor any ERISA Affiliate has incurred any withdrawal liability
under Section 4201 of ERISA that would reasonably be expected to have a
Material Adverse Effect. Neither Borrower nor any ERISA Affiliate of
Borrower has received any notification that any Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, where such reorganization has
resulted or can reasonably be expected to result in an increase in the
contributions required to be made to such Plan that would reasonably be
expected to have a Material Adverse Effect.
(d) Each of Borrower, its Subsidiaries and their
ERISA Affiliates are in compliance with those provisions of ERISA which
are applicable to Borrower, its Subsidiaries and their ERISA Affiliates,
the non-compliance with which would reasonably be expected to have a
Material Adverse Effect.
4.15 Regulations T, U and X. No part of the proceeds of any
Loan hereunder will be used to purchase or carry, or to extend credit to others
for the purpose of purchasing or carrying, any "margin stock" (as such term is
defined in Regulation U) in violation of Regulations T, U or X. Neither Borrower
nor any Subsidiary of Borrower is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any such "margin stock."
4.16 Disclosure. As of the date delivered, and subject to
Section 4.18 as to the Projections, written statement made by a Responsible
Official of Borrower or any Guarantor to any Creditor in connection with this
Agreement, or in connection with any Loan, contains any untrue
-32-
39
statement of a material fact or omits a material fact (which fact is known to
Borrower or such Guarantor, in the case of materials not furnished by Borrower
or such Guarantor) necessary to make the statement made not misleading in light
of all the circumstances existing at the date the statement was made. There is
no fact known to Borrower or any Guarantor (other than facts relating to the
economy generally or generally applicable to businesses of the types engaged in
by Borrower) which would reasonably be expected to have a Material Adverse
Effect that has not been disclosed in writing to the Lenders.
4.17 Tax Liability. Borrower and its Subsidiaries have filed
all material tax returns which are required to be filed, and have paid,
withheld, collected or remitted, all taxes, interest, penalties and installments
of taxes due and payable by them with respect to the periods, Property or
transactions covered by such returns, or pursuant to any assessment received by
either Borrower or any Subsidiary of Borrower, except (a) taxes for which
Borrower or any such Subsidiary has been fully indemnified and (b) such taxes,
if any, as are being contested in good faith by appropriate proceedings
diligently being pursued and as to which adequate reserves have been established
and maintained. To the best knowledge of Borrower, there is no tax assessment
contemplated or proposed by any governmental agency against Borrower or any
Subsidiary of Borrower that would reasonably be expected to have a Material
Adverse Effect.
4.18 Projections. The Projections are based on good faith
estimates and assumptions believed by management to be reasonable at the time
made, it being recognized that Projections as to future events are not to be
viewed as facts and actual results may differ from the Projections. Nothing in
this Section shall be construed as a representation or covenant that the
Projections in fact will be achieved.
4.19 Security Interests. The Collateral Documents create a
valid security interest in the Collateral described therein in favor of the
Agent securing the Obligations. Upon (a) the filing of UCC-1 financing
statements delivered to the Agent pursuant to Section 8.1(a) with the
appropriate Governmental Agencies, (b) the filing of the Trademark Security
Agreement with the United States Patent and Trademark Office, (c) the filing of
the Patent Security Agreement with the United States Patent and Trademark
Office, and (d) the delivery to the Agent of the stock certificates representing
the shares of capital stock of the United States Domestic Subsidiaries of
Borrower, all action necessary to perfect the security interests so created by
the Collateral Documents described in this sentence, will have been taken and
completed (except for the requirement that continuation statements periodically
must be filed and/or recorded with respect to financing statements on file in
favor of the Agent). Such security interests are of first priority except as
otherwise permitted under this Agreement.
4.20 Hazardous Materials.
(a) The on-going operations of Borrower and its
Subsidiaries, and to the best of their knowledge the on-going operations
of all current tenants, subtenants or other occupants of all or any part
of the real property described in Section 4.8, are conducted and comply
in all respects with all Environmental Laws, except such non-compliance
which would not be reasonably expected to have a Material Adverse
Effect.
(b) Borrower and each of its Subsidiaries have
obtained all licenses, permits, authorizations and registrations
required under any Environmental Law ("Environmental Permits") and
necessary for their respective ordinary course operations, all such
Environmental Permits are in good standing, and Borrower and each of its
Subsidiaries are in compliance with all terms and conditions of such
Environmental Permits except to the extent
-33-
40
that the failure to so obtain the same would reasonably be expected to
have a Material Adverse Effect.
(c) Neither Borrower nor any Subsidiary of Borrower
(nor to the best of their knowledge any current tenants, or other
occupants of all or part of the Property) or any of their respective
present Property or operations, is subject to any existing, pending,
threatened or outstanding written order, suit, claim, proceeding,
investigation, order, comment, injunction, writ, award, action or
proceeding from or agreement with any governmental agency or third
party, nor subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law, Environmental Claim or
Hazardous Material which would reasonably be expected to have a Material
Adverse Effect.
(d) There are no Hazardous Materials or other
conditions or circumstances existing with respect to any Property, or
arising from operations prior to the Closing Date, of Borrower or any of
its Subsidiaries that would reasonably be expected to give rise to
Environmental Claims with a potential liability of Borrower and its
Subsidiaries except to the extent that the failure to so obtain the same
would reasonably be expected to have a Material Adverse Effect. In
addition, (i) neither Borrower nor any Subsidiary of Borrower has any
underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Laws, or (y) that are leaking
or disposing of Hazardous Materials off-site, and (ii) to their best
knowledge, Borrower and its Subsidiaries have notified all of their
employees of the existence, if any, of any health hazard arising from
the conditions of their employment and have met all notification
requirements under Title III of CERCLA and all other Environmental Laws.
4.21 Year 2000 Compliance. Borrower and its Subsidiaries have
conducted a comprehensive review and assessment of its systems and equipment
applications and made inquiry of their key suppliers, vendors and customers (and
those of Bresser) with respect to the "year 2000 problem" (that is, the
inability of computers, as well as embedded microchips in non-computing devices,
to properly perform date-sensitive functions with respect to certain dates prior
to and after December 31, 1999). Based on that review and inquiry, Borrower does
not believe the year 2000 problem, including costs of remediation, will result
in a Materially Adverse Effect.
ARTICLE 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)
So long as any Loan remains unpaid, any Letter of Credit remains
outstanding, any other Obligation remains unpaid, or any portion of the
Commitments remains in force, Borrower shall, and shall cause each of its
Subsidiaries to, unless the Requisite Lenders otherwise consent in writing:
5.1 Payment of Taxes and Other Potential Liens. Pay,
collect, withhold, remit and discharge promptly all material taxes, assessments
and governmental charges or levies imposed upon any of them, upon their
respective Property or any part thereof, upon their respective income or profits
or any part thereof or upon any right or interest of the Creditors under any
Loan Document, except that Borrower and its Subsidiaries shall not be required
to pay or cause to be paid (a) any income or gross receipts tax or any other tax
on or measured by income generally applicable to banks or their corporate
parents or (b) any tax, assessment, charge or levy that is not yet past due, or
is being contested in good
-34-
41
faith by appropriate proceedings diligently pursued, so long as the relevant
entity has established and maintains adequate reserves for the payment of the
same and by reason of such nonpayment and contest no material item or portion of
Property of Borrower or its Subsidiaries is in imminent jeopardy of being
seized, levied upon or forfeited, provided that in the event that Borrower or
any of its Subsidiaries fails to pay any material taxes, assessments and
governmental charges or levies imposed upon any Collateral when due (except to
the extent then being contested in good faith in accordance with clause (b),
above), then, upon 10 days prior written notice to Borrower or such Subsidiary,
the Agent may pay such taxes and the same shall be considered additional
Advances hereunder, and bear interest at the rate otherwise then applicable for
Base Rate Loans.
5.2 Preservation of Existence. Preserve and maintain, or
cause to be maintained and preserved, their respective existences in the
jurisdictions of their formation and all authorizations, rights, franchises,
privileges, consents, approvals, orders, licenses, permits, or registrations
from any governmental agency that are necessary for the transaction of their
respective businesses, and qualify and remain qualified to transact business in
each jurisdiction in which such qualification is necessary in view of their
respective businesses or the ownership or leasing of their respective properties
except, in each case, to the extent that the same would not reasonably be
expected to have a Material Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and
protect, or cause to be maintained, preserved and protected, all of their
respective depreciable properties in good order and condition, subject to wear
and tear in the ordinary course of business, or damage or destruction from
casualties which are fully covered by insurance (subject to customary
deductibles and retentions), and not permit any waste of their respective
properties, except that the failure to maintain, preserve and protect a
particular item of depreciable Property that is not of material value, either
intrinsically or to the operations of Borrower and its Subsidiaries, taken as a
whole, shall not constitute a violation of this covenant.
5.4 Maintenance of Insurance. Maintain, or cause to be
maintained, liability, casualty and other insurance (subject to customary
deductibles and retentions) in such amounts and against such risks as are
customary for similarly situated businesses, including public liability
insurance, business interruption insurance and all-risk casualty insurance with
respect to all of Borrower's and its Subsidiaries tangible personal property.
Such insurance shall be maintained, in amounts and with responsible insurance
companies reasonably acceptable to the Requisite Lenders. The Agent shall be
named as additional insured and loss payee as its interests may appear, with
respect to casualty insurance on all Collateral, and Borrower shall deliver to
the Agent, not less frequently than once in each calendar year, (a) an Accord
Certificate (or its equivalent) evidencing that insurance of the types required
by this Section and the Collateral Documents is in force and (b) a Lenders Loss
Payable Endorsement in a form acceptable to the Agent evidencing that the Agent
is an additional insured and loss payee with respect to all risk casualty
insurance and other insurance requested by the Agent.
5.5 Compliance With Laws. Comply with, or cause to be
complied with, all Requirements of Laws, noncompliance with which would
reasonably be expected to have a Material Adverse Effect.
5.6 Inspection Rights. At any time during regular business
hours and as often as requested (but not so as to materially interfere with the
business of Borrower or any of its Subsidiaries), permit the Agent or any
Lender, or any authorized employee, agent or representative thereof, (a) to
examine, audit and make copies and abstracts from the records and books of
account of, (b) to visit, and inspect the Properties of, Borrower and its
Subsidiaries, (c) to discuss the affairs, finances and accounts
-35-
42
of Borrower and its Subsidiaries with any of their officers or accountants
(provided that Borrower may be present at such discussions), and (d) upon
request, furnish promptly to the Agent true copies of all financial information
made available to the senior management of Borrower or any of its Subsidiaries.
The Agent may conduct audits of Borrower's and any of its Subsidiaries' books
and records and of the Collateral twice per year.
5.7 Keeping of Records and Books of Account. Keep records
and books of account in conformity with GAAP, consistently applied, and in
material conformity with all applicable requirements of any governmental agency
having regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.8 Use of Proceeds. Directly use all proceeds of (a)(i) the
Working Capital Loans solely for working capital and general corporate purposes
of Borrower and its United States Domestic Subsidiaries (other than for Capital
Expenditures), for Permitted Acquisitions, and Investments permitted in Section
6.11(h), and (ii) the Capex Loans for Capital Expenditures of Borrower or any of
its Subsidiaries permitted hereunder, provided that the proceeds of Line A Loans
may not be used to consummate the Bresser Acquisition; and (b) use the proceeds
of the Line B Loan solely to consummate the Bresser Acquisition.
5.9 Hazardous Materials Laws.
(a) conduct their operations and keep and maintain
their Property in material compliance with all Environmental Laws
noncompliance with which would reasonably be expected to have a Material
Adverse Effect.
(b) Notify the Agent in writing upon, but in no
event later than 10 Business Days after, becoming aware of (i) any and
all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing against Borrower
or any Subsidiary of Borrower or any of their respective Properties
pursuant to any applicable Environmental Laws, and (ii) all other
Environmental Claims, would reasonably be expected to have a Material
Adverse Effect.
(c) Upon the written request of the Agent or the
Requisite Lenders, submit to the Agent with sufficient copies for each
Lender, at Borrower's sole cost and expense, a report providing an
update of the status of any environmental, health or safety compliance,
hazard or liability issue identified in any notice or report required
pursuant to Section 5.9(b).
5.10 Future Guarantors and Collateral.
(a) Promptly and in any event within 30 days
following the formation or acquisition of any Material Subsidiary (other
than Bresser), or upon any Subsidiary not previously being a Material
Subsidiary becoming a Material Subsidiary, deliver 100% of the capital
stock or other equity interests thereof in pledge to the Agent (or, in
the case of any foreign Material Subsidiary, 66% of the capital stock or
other equity interests thereof within 60 days following such date).
(b) Promptly and in any event within 30 days
following the formation or acquisition of any United States domestic
Material Subsidiary, cause each such Subsidiary which is a United States
domestic Person to enter into a joinder to the Guaranty and the
-36-
43
Guarantor Security Agreement together with UCC-1 financing statements
for filing in each jurisdiction in which any such Person owns property.
(c) Promptly following the request of the Agent or
the Requisite Lenders, deliver such additional instruments, documents
and agreements as are necessary or desirable to grant a perfected Lien
in favor of the Agent in (i) any hereafter acquired patents and
trademarks or (ii) any other personal property collateral having a value
in excess of $250,000, in each case which is hereafter acquired by
Borrower and its United States domestic Material Subsidiaries
5.11 Further Assurances. Promptly upon request by the Agent
or the Requisite Lenders, Borrower shall (and shall cause its Subsidiaries to)
do, execute, acknowledge, deliver, record, re-record, file, re-file, register
and re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Lenders, as the case may be, may reasonably require from time to time in order
(i) to subject to the Liens created by any of the Collateral Documents any of
the Properties of Borrower and its Subsidiaries, rights or interests covered by
any of the Collateral Documents, or (ii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby.
ARTICLE 6
NEGATIVE COVENANTS
So long as any Loan remains unpaid, any Letter of Credit remains
outstanding, any other Obligation remains unpaid, or any portion of the
Commitments remains in force, Borrower shall not, and shall not permit Borrower
or any of its Subsidiaries to, unless the Requisite Lenders otherwise consent in
writing:
6.1 Disposition of Property. Make any Disposition of its
Property, whether now owned or hereafter acquired, except (a) Dispositions by
Borrower to a Wholly-Owned Subsidiary which is a Guarantor, or (b) by a
Subsidiary of Borrower to Borrower or a Wholly-Owned Subsidiary which is a
Guarantor.
6.2 Mergers. Merge or consolidate with or into any Person,
except (a) mergers and consolidations of a Subsidiary of Borrower into Borrower
or a Subsidiary or of Subsidiaries of Borrower with each other and (b) a merger
or consolidation of a Person into Borrower or with or into a Subsidiary of
Borrower in connection with a Permitted Acquisition; provided that (i) Borrower
or its existing Subsidiary is the surviving entity, (ii) no Change in Control
results therefrom, (iii) no Default or Event of Default then exists or would
result therefrom and (iv) Borrower and each of the Guarantors execute such
amendments to the Loan Documents as the Lender may reasonably determine are
appropriate as a result of such merger.
6.3 Acquisitions. Make or agree to make any Acquisition
other than:
(a) the Bresser Acquisition in accordance with the
Bresser Acquisition Agreement and for a consideration which is not in
excess of $8,000,000; and
(b) Permitted Acquisitions.
-37-
44
6.4 Distributions. Make any Distribution, whether from
capital, income or otherwise, and whether in cash or other Property, except
Distributions of Common Stock in kind.
6.5 ERISA.
(a) At any time, permit any Pension Plan disclosed
in Schedule 4.14, in such case if to do so would reasonably be expected
to have a Material Adverse Effect, to:
(i) engage in any non-exempt "prohibited
transaction", as such term is defined in Section 4975 of the
Code;
(ii) incur any material "accumulated funding
deficiency", as that term is defined in Section 302 of ERISA; or
(iii) suffer a Termination Event to occur
which may reasonably be expected to result in liability of
Borrower or any ERISA Affiliate thereof to the Pension Plan or
to the PBGC or the imposition of a Lien on the Property of
Borrower or any ERISA Affiliate thereof pursuant to Section 4068
of ERISA.
(b) Fail, upon a Responsible Official of Borrower
becoming aware thereof, promptly to notify the Agent of the occurrence
of any "reportable event" (as defined in Section 4043 of ERISA) or of
any non-exempt "prohibited transaction" (as defined in Section 4975 of
the Code) with respect to any Pension Plan described in Schedule 4.14 or
any trust created thereunder which would reasonably be expected to have
a Material Adverse Effect.
(c) At any time, permit any Pension Plan described
in Schedule 4.14 to fail to comply with ERISA or other applicable Laws
in any respect which would reasonably be expected to have a Material
Adverse Effect.
6.6 Change in Name; Nature of Business. Change the legal
name of Borrower or of any Subsidiary of Borrower without written notice to the
Agent within fifteen days following such change or make any material change
(other than to the extent required by Law) in the nature of the business of
Borrower and its Subsidiaries, taken as a whole, as currently conducted.
6.7 Indebtedness and Contingent Obligations. Create, incur,
assume or suffer to exist any Indebtedness or Contingent Obligation, except:
(a) Existing Indebtedness and Contingent Obligations
disclosed on Schedule 6.7 and refinancings thereof which do not result
in an increase of the amount thereof;
(b) Indebtedness and Contingent Obligations in favor
of the Creditors under the Loan Documents;
(c) Indebtedness and Contingent Obligations
consisting of Approved Swap Agreements;
(d) Indebtedness of Bresser in an aggregate
principal amount not to exceed $15,000,000, and unsecured guarantees by
Borrower of any such Indebtedness of Bresser containing no covenants,
representations, warranties or defaults which are more restrictive than
those contained in this Agreement and L/C's issued in support of such
-38-
45
Indebtedness which, when aggregated with such guarantees do not exceed
$15,000,000, provided that Borrower shall cause Bresser to reduce the
aggregate outstanding Indebtedness of Bresser for borrowed funds to an
amount which is not greater than $5,000,000, and that it shall
thereafter maintain the principal balance of such Indebtedness at or
below such amount, for a thirty consecutive day period, to be determined
by Borrower, but occurring during the period between January 31 and
April 15 during each year which occurs during the term of this
Agreement;
(e) purchase money Indebtedness and Indebtedness in
connection with Capital Leases provided that the aggregate amount of
such Indebtedness does not exceed $5,000,000 at any time, and unsecured
guarantees by Borrower of any portion of such obligations which are
incurred by its Subsidiaries and refinancings thereof which do not
result in an increase of the amount thereof;
(f) other unsecured Indebtedness incurred when no
Default or Event of Default exists in an aggregate principal amount
which does not exceed $250,000 in any year or $500,000, in the aggregate
at any one time outstanding; and
(g) Indebtedness of Borrower and the Guarantors to
Borrower or other Guarantors, and Indebtedness of other Subsidiaries to
Borrower and the Guarantors in an aggregate principal amount not to
exceed $1,000,000.
6.8 Liens; Negative Pledges; Sales and Leasebacks. Create,
incur, assume or suffer to exist any Lien or Right of Others of any nature upon
or with respect to any of its Property, whether now owned or hereafter acquired;
or suffer to exist any Negative Pledge with respect to any of its Property; or
engage in any sale and leaseback transaction with respect to any of its
Property; except:
(a) Permitted Encumbrances;
(b) Liens and Negative Pledges in favor of the Agent
or the Lenders under the Loan Documents;
(c) Existing Liens disclosed in Schedule 6.8;
provided that the obligations secured thereby are not increased; and
(d) purchase money Liens securing Indebtedness
permitted under Section 6.7(e) and related Negative Pledges on the
assets subject to such purchase money Liens.
6.9 Transactions with Affiliates. Enter into any transaction
of any kind with any officer or Affiliate of Borrower, or any Person that owns
or holds 5% or more of the outstanding Common Stock, other than transactions
(including real property lease transactions) on terms at least as favorable to
Borrower or its Subsidiaries as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power; provided that this
restriction shall not apply to transactions between or among Borrower and its
Subsidiaries which are Guarantors.
6.10 Capital Expenditures. Make or incur obligations for
Capital Expenditures other than:
(a) Capital Expenditures associated with the Bresser
Acquisition; and
-39-
46
(b) other Capital Expenditures made during any
Fiscal Year in an aggregate amount not to exceed $4,000,000, provided
that to the extent that the aggregate Capital Expenditures made by
Borrower and its Subsidiaries during any Fiscal Year are less than
$4,000,000, and provided that no Default or Event of Default then
exists, the amount by which such Capital Expenditures are less than
$4,000,000 (but not more than $1,500,000) may be expended in the next
succeeding Fiscal Year in addition to those otherwise allowed.
6.11 Investments. Make or suffer to exist any Investment,
other than:
(a) Investments in existence on the Closing Date and
disclosed on Schedule 6.11;
(b) Investments consisting of Cash Equivalents;
(c) Investments in a Person that is the subject of a
Permitted Acquisition;
(d) Investments consisting of advances in an
aggregate principal amount not to exceed $250,000 at any time, to
officers, directors, shareholders, employees and Affiliates of Borrower
and its Subsidiaries (or relatives of the foregoing);
(e) other Investments in an aggregate amount not to
exceed $250,000 at any time in equity securities or debt securities;
(f) to the extent considered an Investment, notes
receivable from the ESOP;
(g) additional Investments in Guarantors; and
(h) additional Investments in Subsidiaries which are
not Guarantors in an aggregate principal amount which does not exceed
$1,000,000 at any time.
6.12 Leverage Ratio. Permit the ratio of (a) Total Debt as of
the last day of any Fiscal Quarter, to (b) EBITDA for the four Fiscal Quarter
period ending on that date, to be greater than 2.75:1.00.
6.13 EBITDA. Permit EBITDA for the of period of four Fiscal
Quarters ending on the last day of any Fiscal Quarter ending during a period set
forth below to be less than the amount set forth opposite that period:
Fiscal Quarters Ending Minimum EBITDA
---------------------- --------------
February, 2000 through
November, 2000 $14,000,000
February, 2001 through
November, 2001 $14,700,000
-40-
47
Fiscal Quarters Ending Minimum EBITDA
---------------------- --------------
February, 2002 through
November, 2002 $15,400,000
February, 2003 through
November 2003 $16,200,000
February, 2004 and thereafter $17,000,000.
6.14 Profitability. Permit Net Income to be less than $0 in
any two consecutive Fiscal Quarters.
6.15 Change of Location. Change the place of their respective
chief executive offices or principal places of business unless the Agent has
been notified in writing at least 30 days prior to such change.
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS
7.1 Financial and Business Information. So long as any Loan
remains unpaid, any Letter of Credit remains outstanding, any other Obligation
remains unpaid, or any portion of the Commitments remain in force, Borrower
shall, unless the Requisite Lenders otherwise consent in writing, deliver to the
Agent, at Borrower's sole expense:
(a) As soon as practicable, and in any event within
50 days after the end of each Fiscal Quarter, other than the final
Fiscal Quarter of each Fiscal Year, (i)(A) the consolidated and
consolidating balance sheets of Borrower and its Material Subsidiaries
as at the end of such Fiscal Quarter, (B) the consolidated and
consolidating statements of income and statement of changes in cash
flows of Borrower and its Material Subsidiaries for that Fiscal Quarter,
and (C) a comparison of the income statements with the financial results
as of the end of the same fiscal period during the immediately preceding
Fiscal Year, all in reasonable detail (in the case of Bresser commencing
November, 2000). Such financial statements shall be certified by a
Senior Officer of Borrower as fairly presenting the financial position,
results of operations and cashflows of Borrower and its Subsidiaries,
and shall be prepared and presented in accordance with GAAP (other than
any requirement for footnote disclosures), consistently applied, as at
such date and for such periods, subject only to normal year-end accruals
and audit adjustments, and (ii) Borrower's report on Form 10-Q for that
Fiscal Quarter;
(b) As soon as practicable, and in any event within
100 days after the end of each Fiscal Year, (i) the audited consolidated
balance sheet and statement of income and changes in cash flows of
Borrower and its Subsidiaries prepared and presented in accordance with
GAAP, consistently applied, and accompanied by (x) a report and opinion
of independent public accountants of recognized national standing
selected by Borrower and reasonably satisfactory to the Requisite
Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards as at such date, and shall not be
subject to any qualifications or exceptions which the Requisite Lenders
determine is unacceptable, (ii) any management letters issued by
Borrower's auditors, (iii) the unaudited company-prepared consolidating
balance sheets and statements of income and changes in cash flows of
Borrower and its Material Subsidiaries, and (iv) Borrower's report on
Form 10-K for that Fiscal Year;
-41-
48
(c) As soon as practicable, and in any event no
later than 30 days after the commencement of each Fiscal Year, a
business plan and budget by Fiscal Quarter for that Fiscal Year
(including consolidating quarterly projected results for the first
Fiscal Year), in form and detail reasonably satisfactory to the Agent
but in any event including projected statements of profit and loss,
changes in cash flows, and balance sheets;
(d) Promptly after the same are available, to the
extent not addressed by other provisions of this Section 7.1, copies of
each annual report, proxy or financial statement or other report or
communication sent to the shareholders of Borrower, and copies of all
annual, regular, periodic and special reports and registration
statements (other than on form S-8 or a similar report) which Borrower
may file or be required to file under Sections 13 or 15(d) of the
Securities Exchange Act of 1934;
(e) Promptly upon a Responsible Official of Borrower
becoming aware, and in any event within ten Business Days after becoming
aware, of the occurrence of any (i) "reportable event" (as such term is
defined in Section 4043 of ERISA) or (ii) "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the
Code) in connection with any Pension Plan or any trust created
thereunder in each case which would reasonably be expected to have a
Material Adverse Effect, written notice specifying the nature thereof
and specifying what action Borrower or any of its Subsidiaries is taking
or proposes to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto;
(f) Promptly upon a Responsible Official of Borrower
becoming aware thereof, notice of any substantial dispute with any
Governmental Agency which would reasonably be expected to have a
Material Adverse Effect;
(g) As soon as practicable, and in any event within
two Business Days after a Responsible Official of Borrower becomes aware
of the existence of any condition or event which constitutes a Default,
written notice specifying the nature and period of existence thereof and
specifying what action Borrower and its Subsidiaries are taking or
propose to take with respect thereto;
(h) Promptly upon a Responsible Official of Borrower
becoming aware that (i) any Person commenced a legal proceeding with
respect to a claim against Borrower or any of its Subsidiaries that
would reasonably be expected to have a Material Adverse Effect, (ii) any
creditor or lessor under a written credit agreement or material lease
has asserted a default thereunder on the part of Borrower or any of its
Subsidiaries, and, in the case of a lease, such default has not been
cured or rescinded within any applicable cure period under the lease or
applicable Laws, (iii) any Person commenced a legal proceeding with
respect to a claim against Borrower or any of its Subsidiaries under a
contract that is not a credit agreement or material lease stated to be
in excess of $1,000,000, or (iv) any development of any such ligitation
which may reasonably be expected to result in a Material Adverse Effect,
in each case a written notice describing the pertinent facts relating
thereto and what action Borrower and its Subsidiaries are taking or
propose to take with respect thereto;
(i) Not less frequently than once in each Fiscal
Quarter, provide notice to the Agent of each new trademark or patent
issued to Borrower or any of its Subsidiaries;
-42-
49
(j) Promptly following request by the Requisite
Lenders submitted through the Agent, accounts receivable agings and
inventory listings for Borrower and its Subsidiaries;
(k) Concurrently with their delivery to the
counterparties to the Bresser Acquisition Agreement, any notices
hereafter given to such counterparties pursuant to the Bresser
Acquisition Agreement relating to a liability in excess of $500,000;
(l) Promptly following the same, notice of each
Subsidiary which becomes a Material Subsidiary; and
(m) Such other data and information as from time to
time may be reasonably requested by the Agent or any Lender.
7.2 Compliance Certificates. So long as any Loan remains
unpaid, any Letter of Credit remains outstanding, any other Obligation remains
unpaid, or any portion of the Commitments remains outstanding, Borrower shall,
unless the Requisite Lenders otherwise consent, deliver to the Agent
concurrently with the financial statements required pursuant to Sections 7.1(a)
and 7.1(b), a Compliance Certificate signed by a Senior Officer of Borrower.
ARTICLE 8
CONDITIONS
8.1 Conditions to the Initial Loans and Letters of Credit.
The obligation of each Lender to make the initial Advance to be made by it, and
the obligation of the Issuing Lender to issue the initial Letters of Credit, is
subject to the following conditions precedent, each of which shall be satis-
fied prior to the making of the initial Advances (unless all of the Lenders, in
their sole and absolute discretion, shall agree otherwise):
(a) The Agent shall have received all of the
following, each of which shall be originals unless otherwise specified
or, where applicable, the context otherwise requires, each properly
executed by a Responsible Official of each party thereto, each dated as
of the Closing Date and each in form and substance reasonably
satisfactory to the Agent and its legal counsel (unless otherwise
specified or, in the case of the date of any of the following, unless
the Agent otherwise agrees or directs):
(1) executed counterparts of this Agreement;
(2) Borrower Security Agreement executed by
Borrower, together with sufficient copies of financing
statements on Form UCC-1 for filing in every United States
jurisdiction in which Borrower owns Property;
(3) the Guarantor Security Agreement
executed by each of the Guarantors, together with sufficient
copies of financing statements and fixture financing statements
on Form UCC-1 for filing in every United States jurisdiction in
which the Guarantors own Property;
-43-
50
(4) the Trademark Security Agreement,
executed by all Parties thereto;
(5) the Patent Security Agreement, executed
by all Parties thereto;
(6) the Borrower Pledge Agreement, together
with certificates representing 100% of the capital stock of MIEC
and MIHC and stock powers executed in blank with respect
thereto;
(7) the Guaranty, executed by the
Guarantors;
(8) with respect to Borrower and the
Guarantors, such documentation as the Agent may reasonably
require to establish the due organization, valid existence and
good standing of each of Borrower, the Guarantors, and each such
Subsidiary, its qualification to engage in business in each
jurisdiction in which it is engaged in business or required to
be so qualified, its authority to execute, deliver and perform
any Loan Documents to which it is a Party, and the identity,
authority and capacity of each Responsible Official thereof
authorized to act on its behalf, including, without limitation,
certified copies of articles of incorporation and amendments
thereto, bylaws and amendments thereto, certificates of good
standing and/or qualification to engage in business,
certificates of corporate resolutions, incumbency certificates,
Certificates of Responsible Officials, and the like;
(9) evidence satisfactory to the Agent that
the Liens and security interest of the Agent in the Collateral
have or will be been perfected and are of first priority (except
for Permitted Encumbrances and Liens referred to on Schedule
6.7);
(10) a certificate from Borrower's insurance
broker or other evidence of the insurance policies required by
Section 5.4, together with such endorsements as are necessary to
show the Agent as loss payee thereunder to the extent required
by Section 5.4;
(11) a Certificate signed by a Senior Officer
of Borrower certifying that the conditions specified in Sections
8.1(e) and 8.1(f), have been satisfied and attaching a certified
copy of the Bresser Acquisition Agreement;
(12) a Request for Loan and, if applicable, a
Request for Letter of Credit;
(13) legal opinions of O'Melveny & Xxxxx LLP,
special counsel to Borrower and its Subsidiaries, and Xxxx
Xxxxxxxx, Vice President and General Counsel to Borrower, in
form and substance satisfactory to the Agent, together with
copies of all factual certificates and legal opinions delivered
to such counsel in connection with such opinion upon which such
counsel has relied;
(14) Borrower shall have completed an
Environmental Questionnaire and Disclosure Statement on the
Agent's standard form; and
-44-
51
(15) such other assurances, certificates,
documents, consents or opinions, consistent with the foregoing,
as the Agent or any Lender reasonably may require;
(b) Any amounts payable pursuant to clause (a) of
Section 11.3 shall be paid concurrently;
(c) The Lenders shall have reviewed and found
satisfactory each of the following:
(1) the Projections;
(2) financial statements of Bresser and its
Subsidiaries for the Fiscal Year ended December 31, 1998;
(3) Borrower report on form 10-Q dated May
31, 1999;
(4) a completed year 2000 compliance
questionnaire, on Bank of America's standard form; and
(5) the executed purchase agreement and
related documents for the Bresser Acquisition.
(d) The representations and warranties of Borrower
contained in Article 4 shall be true and correct; and
(e) Borrower shall be in compliance with all the
terms and provisions of the Loan Documents, no Default or Event of
Default shall have occurred and be continuing, and no event shall have
occurred since February 28, 1999, which would reasonably be expected to
have a Material Adverse Effect.
(f) Arrangements satisfactory to the Agent for the
termination of Borrower's credit facility with Fleet Financial shall
have been made, including arrangements for delivery of all termination
statements and other lien releases associated with that credit facility.
8.2 Any Increasing Loan. The obligation of each Lender to
make any Advance which would increase the outstanding principal amount of the
Loans, and the obligation of the Issuing Lenders to issue any Letter of Credit,
is subject to the following conditions precedent, each of which shall be
satisfied prior to the making of such an Advance or the issuance of a Letter of
Credit:
(a) except as disclosed by Borrower and approved in
writing by the Requisite Lenders, the representations and warranties
contained in Article 4 (other than Sections 4.7 and 4.11) shall be true
and correct on and as of the date of the Loan or Letter of Credit as
though made on that date;
(b) other than matters described in Schedule 4.11,
or matters not required as of the Closing Date to be therein described,
or matters disclosed by Borrower and approved in writing by the
Requisite Lenders, there shall not be then pending or threatened in
writing any action, suit, proceeding or investigation against or
affecting Borrower or any of its
-45-
52
Subsidiaries or any Property of any of them before any governmental
agency that would reasonably be expected to have a Material Adverse
Effect;
(c) the Agent shall have received a timely Request
for Loan in compliance with Article 2, or the Issuing Lender and the
Agent shall have timely received a Request for Letter of Credit in
compliance with Article 2, as applicable.
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default. The existence or occurrence of any
one or more of the following events shall constitute an Event of Default:
(a) Borrower fails to pay any principal in respect
of the Loans or Letters of Credit hereunder when due; or
(b) Borrower fails to pay any interest, commitment
fee, letter of credit fee, expenses or other amount in respect of the
Loans or Letters of Credit hereunder, or any portion thereof, within
five days of the date when due; or
(c) Any failure to comply with Section 7.1(g) or any
covenant in Article 6; or
(d) Borrower or any other Party fails to perform or
observe any other covenant or agreement contained in any Loan Document
on its part to be performed or observed and fails to cure such Default
within thirty days following notice thereof;
(e) Any representation or warranty made in any Loan
Document proves to have been incorrect when made or reaffirmed; or
(f) Borrower or any of its Subsidiaries (i) fails to
pay the principal, or any principal installment, or any interest, of any
present or future indebtedness for borrowed money or Capital Lease of
$500,000 or more in the aggregate, or any guaranty of present or future
Indebtedness for borrowed money or Capital Lease of $500,000 or more in
the aggregate, on its part to be paid, when due (or within any stated
grace period), whether at the stated maturity, upon acceleration, by
reason of required prepayment or otherwise or (ii) fails to perform or
observe any other term, covenant or agreement on its part to be
performed or observed, or suffers any event to occur, in connection with
any present or future indebtedness for borrowed money or Capital Lease
of $1,000,000 or more in the aggregate, or of any guaranty of present or
future indebtedness for borrowed money or Capital Lease of $1,000,000 or
more in the aggregate, if as a result of such failure or sufferance any
holder or holders thereof (or an agent or trustee on its or their
behalf) has the right to declare such Indebtedness due before the date
on which it otherwise would become due;
(g) This Agreement or any other Loan Document at any
time after its execution and delivery and for any reason, other than the
agreement of the Lenders or satisfaction in full of all the Obligations,
ceases to be in full force and effect or is declared by a court of
competent jurisdiction to be null and void, invalid or unenforceable in
any respect which, in any
-46-
53
such event in the reasonable opinion of the Requisite Lenders, is
materially adverse to the interests of the Lenders; or any Party thereto
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind same (other than
in accordance with the terms and conditions of the Loan Documents); or
(h) Any judgments or arbitration awards are entered
against Borrower or any of its Subsidiaries, or Borrower or any of its
Subsidiaries enters into any settlement agreements with respect to any
litigation or arbitration, in an aggregate amount of $1,000,000 or more
in excess of any insurance coverage and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event
later than five days prior to the date of any proposed sale thereunder);
(i) Borrower or any of its Subsidiaries institutes
or consents to any proceeding under a Debtor Relief Law relating to it
or to all or any part of its Property, or is unable or admits in writing
its inability to pay its debts as they mature, or makes a general
assignment for the benefit of creditors; or applies for or consents to
the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any
part of its Property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of that Person and the appointment continues
undischarged or unstayed for sixty calendar days; or any proceeding
under a Debtor Relief Law relating to any such Person or to all or any
part of its Property is instituted without the consent of that Person
and continues undismissed or unstayed for sixty calendar days; or any
judgment, writ, warrant of attachment or execution or similar process is
issued or levied against all or any material part of the Property of any
such Person and is not released, vacated or fully bonded within sixty
calendar days after its issue or levy; or
(j) Any Lien on any Collateral (other than
Collateral with a value of less than $250,000) created by any Loan
Document, at any time after the execution and delivery of that Loan
Document and for any reason (other than the failure of the Agent to take
any action within its unilateral control) ceases to be perfected or of
less than first priority (subject to any Lien permitted by this
Agreement); or
(k) The occurrence of a Termination Event with
respect to any Pension Plan if the aggregate liability of Borrower and
its ERISA Affiliates due within the next twelve months under ERISA as a
result thereof exceeds $1,000,000; or the complete or partial with-
drawal by Borrower or any of its Subsidiaries or any of their ERISA
Affiliates from any Multiemployer Plan if the aggregate liability of
Borrower and its ERISA affiliates due within the next twelve months as a
result thereof exceeds $1,000,000; or
(l) The occurrence of a Change in Control.
9.2 Remedies Upon Event of Default. Without limiting any
other rights or remedies of the Creditors provided for elsewhere in this
Agreement or the Loan Documents, or by applicable Law, or in equity, or
otherwise:
(a) Upon the occurrence of any Event of Default
other than an Event of Default described in Section 9.1(i):
-47-
54
(1) the Commitment to make Advances and to
issue Letters of Credit and all other obligations of the
Creditors shall terminate without notice to or demand upon
Borrower, which are expressly waived by Borrower, except that
the Requisite Lenders (or, to the extent required by Section
11.2, all of the Lenders) may waive the Event of Default or,
without waiving, determine, upon terms and conditions
satisfactory to the Requisite Lenders (or, to the extent
required by Section 11.2, all of the Lenders), to make further
Advances, which waiver or determination shall apply equally to,
and shall be binding upon, all the Lenders;
(2) the Requisite Lenders (or, to the extent
required by Section 11.2, all of the Lenders) may request the
Issuing Lender to, and the Issuing Lender thereupon shall,
demand immediate payment by Borrower of an amount equal to the
aggregate effective face amount of all outstanding Letters of
Credit issued to Borrower as provided in Section 2.5 to be held
as cash collateral for the reimbursement obligations of Borrower
under such Letters of Credit; and
(3) the Requisite Lenders (or, to the extent
required by Section 11.2, all of the Lenders) may request the
Agent to, and the Agent thereupon shall, declare all or any part
of the unpaid principal of all Loans, all interest accrued and
unpaid thereon and all other amounts payable under the Loan
Documents to be forthwith due and payable, whereupon the same
shall become and be forthwith due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any
kind, all of which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default
described in Section 9.1(i):
(1) the Commitment to make Advances and to
issue Letters of Credit and all other obligations of the
Creditors under the Loan Documents shall terminate without
notice to or demand upon Borrower, which are expressly waived by
Borrower, except that all the Lenders may waive the Event of
Default or, without waiving, determine, upon terms and
conditions satisfactory to all the Lenders, to make further
Advances, which determination shall apply equally to, and shall
be binding upon, all the Lenders; and
(2) an amount equal to the aggregate
effective face amount of all outstanding Letters of Credit
issued to Borrower shall be forthwith due and payable by
Borrower to the Issuing Lender to be held by the Issuing Lender
as cash collateral for the reimbursement obligations of Borrower
to the Issuing Lender with respect to Letters of Credit issued
by the Issuing Lender, without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of which are
waived by Borrower; and
(3) the unpaid principal amount of all
Loans, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents shall be forthwith due
and payable, without protest, presentment, notice of dishonor,
demand or further notice of any kind, all of which are expressly
waived by Borrower.
(c) Upon the occurrence of any Event of Default, the
Lenders and the Agent, or any of them, without notice to or demand upon
Borrower, which are expressly waived
-48-
55
by Borrower, may proceed (but only with the consent of the Requisite
Lenders) to protect, exercise and enforce their rights and remedies
under the Loan Documents against Borrower and such other rights and
remedies as are provided by Law or equity.
(d) The order and manner in which the Lenders'
rights and remedies are to be exercised shall be determined by the
Requisite Lenders in their sole discretion, and all payments received
by the Creditors, or any of them, shall be applied first to the costs
and expenses (including reasonable attorneys' fees and disbursements) of
the Agent, acting in such capacity, second, to the principal amount of
the Obligations and interest and credit fees thereon, and thereafter
paid pro rata to the Lenders in the same proportions that the aggregate
Obligations owed to each Lender under the Loan Documents bear to the
aggregate Obligations owed under the Loan Documents to all the Lenders,
without priority or preference among the Lenders for application to
Obligations. Regardless of how each Lender may treat payments for the
purpose of its own accounting, for the purpose of computing Borrower's
Obligations hereunder, payments shall be applied first, to the
reimbursable costs and expenses of the Creditors, as set forth above,
second, to the payment of accrued and unpaid interest due under any Loan
Documents to and including the date of such application (ratably, and
without duplication, according to the accrued and unpaid interest due
under each of the Loan Documents), and third, to the payment of all
other amounts (including principal and credit fees) then owing to the
Creditors under the Loan Documents. No such application of payments will
cure any Event of Default, or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents, or prevent
the exercise, or continued exercise, of rights or remedies of the
Lenders hereunder or thereunder or at law or in equity.
ARTICLE 10
THE AGENT
10.1 Appointment and Authorization. Each Lender hereby
irrevocably appoints, designates and authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
10.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that selected with reasonable care.
10.3 Liability of the Agent. No Related Person shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Creditors for any recital, statement, representation or warranty made
by Borrower or any Subsidiary or Affiliate of Borrower, or any officer thereof,
contained in this Agreement or in any
-49-
56
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or for the value of any
Collateral or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Borrower or any other Party to any Loan Document to perform its obligations
hereunder or thereunder. No Related Person shall be under any obligation to the
Creditors to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the Properties, books or records of Borrower or any
of Borrower's Subsidiaries or Affiliates.
10.4 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed
by them to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel to Borrower), independent accountants and
other experts selected by them. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless they shall first receive such advice or concurrence
of the Requisite Lenders (and, in a case covered by Section 11.2, of all
the Lenders) as they deem appropriate and, if they so request, they
shall first be indemnified to their satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with a request
or consent of the Requisite Lenders (or, in a case covered by Section
11.2, of all the Lenders) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the
Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 8.1, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with each document or other matter either sent by the
Agent to such Lender for consent, approval, acceptance or satisfaction,
or required thereunder to be consented to or approved by or acceptable
or satisfactory to the Lender.
10.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Requisite Lenders in accordance with Article 9; provided,
however, that unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as each
shall deem advisable or in the best interest of the Lenders.
10.6 Credit Decision. Each other Creditor expressly
acknowledges that none of the Related Persons has made any representation or
warranty to it and that no act by the Agent hereinafter
-50-
57
taken, including any review of the affairs of Borrower and its Subsidiaries
shall be deemed to constitute any representation or warranty by the Agent to any
other Creditor. Each other Creditor represents to the Agent that it has,
independently and without reliance upon the Agent and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, Property, financial and
other condition and creditworthiness of Borrower and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions contemplated
thereby, and made its own decision to enter into this Agreement and extend
credit to Borrower hereunder. Each other Creditor also represents that it will,
independently and without reliance upon the Agent and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, Property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents
expressly herein required to be furnished to the other Creditors by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
Property, financial and other condition or creditworthiness of Borrower or any
of its Subsidiaries which may come into the possession of any of the Related
Persons.
10.7 Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Lenders shall indemnify upon
demand the Related Persons (to the extent not reimbursed by or on behalf of
Borrower and without limiting the obligation of Borrower to do so), ratably from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time following the repayment
of the Loans and the termination or resignation of the Agent) be imposed on,
incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by any such Person under or in connection with any of
the foregoing; provided, however, that no Lender shall be liable for the payment
to the Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
attorneys fees and expenses and the allocated fees and expenses of any internal
counsel to the Agent) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein to the
extent that the Agent is not reimbursed for such expenses by or on behalf of
Borrower. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other governmental agency asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including attorneys fees and expenses and
the allocated fees and expenses of any internal counsel to the Agent). The
obligation of the Lenders in this Section shall survive the payment of all
Obligations hereunder.
-51-
58
10.8 Bank of America in its Individual Capacity. Bank of
America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory or other business with
Borrower and its Subsidiaries and Affiliates as though Bank of America were not
the Agent hereunder and without notice to or consent of the Lenders. With
respect to its Advances and its risk participation in Letters of Credit, Bank of
America shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include Bank of America in its individual capacity.
10.9 Successor Agents. The Agent may, and at the request of
the Requisite Lenders shall, resign upon 30 days' notice to the Lenders. If the
Agent so resigns, the Requisite Lenders shall appoint from among the Lenders a
successor Agent for the Lenders, which successor Agent shall be reasonably
acceptable to the Borrower unless any Default or Event of Default then exists.
If no successor is appointed prior to the effective date of the resignation, the
Agent may appoint, after consulting with the Lenders and Borrower, a successor
Agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring agent and the term "Agent" shall mean such
successor agent and the retiring agent's appointment, powers and duties as Agent
shall be terminated. After any retiring agent's resignation under this Section,
the provisions of this Article 10 and Sections 11.3, 11.12 and 11.20 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring agent's notice of
resignation, the retiring agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the retiring
agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor agent as provided for above.
10.10 Action by the Agent; Collateral Matters
(a) The Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from
the Lenders, from time to time to take any action with respect to any
Collateral or the Collateral Documents which may be necessary to perfect
and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at
its option and in its discretion, to release any Lien granted to or held
by the Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans and all other Obligations payable under
this Agreement and under any other Loan Document; (ii) constituting
Property sold or to be sold or disposed of as part of or in connection
with any disposition permitted hereunder; (iii) constituting Property in
which Borrower or any Subsidiary of Borrower owned no interest at the
time the Lien was granted or at any time thereafter; (iv) constituting
Property leased to Borrower or any Subsidiary of Borrower under a lease
which has expired or been terminated in a transaction permitted under
this Agreement or is about to expire and which has not been, and is not
intended by Borrower or such Subsidiary of Borrower to be, renewed or
extended; (v) consisting of an instrument evidencing Indebtedness or
other debt instrument, if the Indebtedness evidenced thereby has been
paid in full; or (vi) if approved, authorized or ratified in writing by
the Requisite Lenders or all the Lenders, as the case may be, as
provided in Section 11.2. Upon request by the Agent at any time, the
Lenders will confirm in writing the
-52-
59
Agent's authority to release particular types or items of Collateral
pursuant to this Section 10.10(b).
(c) Each Lender agrees with and in favor of each
other (which agreement shall not be for the benefit of Borrower or any
of its Subsidiaries) that Borrower's obligations to such Lender under
this Agreement and the other Loan Documents is not and shall not be
secured by any real property collateral now or hereafter acquired by
such Lender unless all of the Lenders otherwise agree.
10.11 No Obligations of Borrower. Nothing contained in this
Article 10 shall be deemed to impose upon Borrower any obligation in respect of
the due and punctual performance by the Agent of its obligations to the Lenders
under any provision of this Agreement, and Borrower shall have no liability to
any Creditor in respect of any failure by any other Creditor to perform any of
its obligations to any other Creditor under this Agreement. Without limiting the
generality of the foregoing, where any provision of this Agreement relating to
the payment of any amounts due and owing under the Loan Documents provides that
such payments shall be made by Borrower to the Agent for the account of the
Lenders, Borrower's obligations to the Lenders in respect of such payments shall
be deemed to be satisfied upon the making of such payments to such Person in the
manner provided by this Agreement.
10.12 Proportionate Interest of the Lenders in Collateral. The
Agent, on behalf of all the Lenders, shall hold in accordance with the Loan
Documents all items of any collateral or interests therein received or held by
the Agent. Subject to the Agent's rights to reimbursement for its costs and
expenses hereunder (including reasonable attorneys' fees and disbursements and
other professional services and the allocated costs of attorneys employed by the
Agent) and subject to the application of payments in accordance with Section
9.2(d), each Lender shall have an interest in any collateral or interests
therein in the same proportions that the aggregate Obligations owed such Lender
under the Loan Documents (other than the Approved Swap Agreement) bear to the
aggregate Obligations owed under the Loan Documents to all the Lenders, without
priority or preference among the Lenders. Any obligation owed to a Lender under
the Approved Swap Agreement shall rank pari passu with the Obligations under the
Loan Documents.
ARTICLE 11
MISCELLANEOUS
11.1 Cumulative Remedies; No Waiver. The rights, powers,
privileges and remedies of the Creditors provided herein or in any Loan Document
are cumulative and not exclusive of any right, power, privilege or remedy
provided by Law or equity. No failure or delay on the part of the Agent or any
Lender in exercising any right, power, privilege or remedy may be, or may be
deemed to be, a waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and conditions of
Article 8 hereof are inserted for the sole benefit of the Agent and the Lenders;
the same may be waived in whole or in part, with or without terms or conditions,
in respect of any Loan without prejudicing the Agent's or any Lender's rights to
assert them in whole or in part in respect of any other Loan.
11.2 Amendments; Consents. No amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent to
any departure by any Party therefrom, may in any event be effective unless in
writing signed by Borrower and the Requisite Lenders and then only in the
specific
-53-
60
instance and for the specific purpose given; and, without the approval in
writing of all the Lenders, no amendment, modification, supplement, termination,
waiver or consent may be effective:
(i) To amend or modify the principal of, or
the amount of principal, principal prepayments or the rate of
interest payable on, any Loan, or the amount of the Commitments
or of any commitment fee or any letter of credit fee payable to
any Lender, or any other fee or amount payable to any Lender
under the Loan Documents or to waive an Event of Default
consisting of the failure of Borrower to pay when due principal,
interest, any commitment fee or any letter of credit fee;
(ii) To postpone any date fixed for any
payment of principal of, prepayment of principal of or any
installment of interest on, any Loan or any installment of any
commitment fee or letter of credit fee, or to extend the term of
the Commitments, or to release any Collateral Document except to
the extent expressly contemplated thereby;
(iii) To amend the provisions of the
definition of "Requisite Lenders", Articles 8 or 9, or this
Section 11.2; or
(iv) To amend any provision of this Agreement
that expressly requires the consent or approval of all the
Lenders.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
Lenders and the Agent. Without implying that the Lenders are obligated to agree
to any amendment, modification, supplement, extension, termination or waiver
requested by Borrower, the Lenders may impose such additional conditions and
such other fees and expenses (including pursuant to Section 11.3) as the Lenders
may deem appropriate in connection with the Lenders' approval thereof.
11.3 Costs, Expenses and Taxes. Borrower shall pay the
reasonable costs and expenses (including any sales, use, value-added, goods,
services or other taxes) of (a) the Agent in connection with the negotiation,
preparation, execution and delivery of the Loan Documents (including reasonable
fees and out-of-pocket expenses of legal counsel to the Agent and the allocated
costs of internal counsel to the Agent), (b) after an Event of Default, of each
Creditor in connection with any amendment, modification, supplement, extension
or waiver of the Loan Documents in connection with any refinancing,
restructuring, reorganization (including a bankruptcy reorganization) and
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto, in each case including filing fees, recording fees, title
insurance fees, appraisal fees, search fees and other reasonable out-of-pocket
expenses and the reasonable fees (including any sales, use, value-added, goods
services or other taxes) and reasonable out-of-pocket expenses of any legal
counsel (including the allocated cost of in-house counsel), independent public
accountants and other outside experts retained by the Agent, and including any
costs, expenses or fees incurred or suffered by each Creditor in connection with
or during the course of any bankruptcy or insolvency proceedings of Borrower or
any Subsidiary thereof, and (c) out-of-pocket costs and expenses of the Agent
incurred in connection with the administration of the Loan Documents. Borrower
shall pay any and all documentary and other taxes (other than income or gross
receipts taxes generally applicable to banks) and all costs, expenses, fees and
charges payable in connection with the filing or recording of any Loan Document
or any other instrument or writing to be delivered hereunder or thereunder.
After an Event of Default, any amount payable to the Creditors
-54-
61
under this Section shall bear interest from the second Business Day following
the date of demand for payment at the Default Rate.
11.4 Nature of Lenders' Obligations. The obligations of the
Lenders hereunder are several and not joint or joint and several. Nothing
contained in this Agreement or any other Loan Document and no action taken by
the Creditors or any of them pursuant hereto or thereto may, or may be deemed
to, make the Creditors a partnership, an association, a joint venture or other
entity, either among themselves or with Borrower or any Affiliate of Borrower.
Each Lender's obligation to make any Advance pursuant hereto is several and not
joint or joint and several, and is conditioned upon the performance by all other
Lenders of their obligations to make Advances. A default by any Lender will not
increase the percentage of the Commitments attributable to any other Lender. Any
Lender not in default may, if it desires, assume in such proportion as the
nondefaulting Lenders agree the obligations of any Lender in default, but is not
obligated to do so.
11.5 Survival of Representations and Warranties. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the Loans
hereunder (except to the extent the same relate solely to a specified earlier
date) until the payment in full of the Obligations and the termination of the
Commitment, and have been or will be relied upon by the Agent and each Lender,
notwithstanding any investigation made by the Agent or by any Lender or on their
behalf.
11.6 Notices. Except as otherwise expressly provided in the
Loan Documents: All notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document must be
in writing and must be mailed, telecopied, delivered by recognized overnight
delivery service or hand delivered to the appropriate party at the address set
forth on the signature pages of this Agreement or other applicable Loan Document
or, as to any party to any Loan Document, at any other address as may be
designated by it in a written notice sent to all other parties to such Loan
Document in accordance with this Section. Except as otherwise expressly provided
in any Loan Document, if any notice, request, demand, direction or other
communication required or permitted by any Loan Document is given by mail it
will be effective on the earlier of receipt or the third Business Day after
deposit in the United States mail with first class or airmail postage prepaid;
if given by telecopier, when sent; or if given by recognized overnight delivery
service or personal delivery, when delivered.
11.7 Execution of Loan Documents. This Agreement and any
other Loan Document may be executed in any number of counterparts and any party
hereto or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument.
11.8 Binding Effect; Assignment.
(a) This Agreement and the other Loan Documents to
which Borrower is a Party will be binding upon and inure to the benefit
of Borrower, the Creditors, and their respective successors and assigns,
except that Borrower may not assign its rights hereunder or thereunder
or any interest herein or therein without the prior written consent of
all the Lenders. Each Lender represents that it is not acquiring its
interest in the Loans with a view to the distribution thereof within the
meaning of the Securities Act of 1933, as amended (subject to
-55-
62
any requirement that disposition of such interest must be within the
control of such Lenders). Any Lender may at any time pledge its interest
in the Loans to a Federal Reserve Bank, but no such pledge shall release
that Lender from its obligations hereunder or grant to such Federal
Reserve Bank the rights of a Lender hereunder absent foreclosure of such
pledge.
(b) From time to time, each Lender may assign all or
a portion of its Pro Rata Share of the Commitments to any Eligible
Assignee; provided that (i) pursuant to any such assignment, the
applicable assigning Lender shall assign an identical percentage of its
Pro Rata Share of each of the Commitments, (ii) the assignee, if not
then a Lender or an Affiliate of the assigning Lender, shall be approved
by the Agent and Borrower (neither of which approvals shall be
unreasonably withheld or delayed), (iii) such assignment shall be
evidenced by an Assignment Agreement, a copy of which shall be furnished
to the Agent as hereinbelow provided, (iv) such assignment shall be of
the same Pro Rata Share of each Commitment, (v) except in the case of an
assignment to an Affiliate of the assigning Lender, to another Lender or
of the entire remaining portion of the Commitments of the assigning
Lender, the assignment shall not assign a Pro Rata Share of the
Commitments equivalent to less than $5,000,000, and (vi) the effective
date of any such assignment shall be as specified in the Assignment
Agreement, but not earlier than the date which is five Business Days
after the date the Agent has received the Assignment Agreement. Upon the
effective date of such Assignment Agreement, the assignee named therein
shall be a Lender for all purposes of this Agreement, with the Pro Rata
Share of the Commitments therein set forth and, to the extent of such
Pro Rata Share, the assigning Lender shall be released from its
obligations under this Agreement.
(c) By executing and delivering an Assignment
Agreement, the assignee Lender thereunder acknowledges and agrees that:
(i) other than (A) the representation and warranty that it is the legal
and beneficial owner of the Pro Rata Share of the Commitments being
assigned thereby free and clear of any adverse claim, (B) the
representations and warranties that it has full power and authority, and
has taken all action necessary, to execute and deliver the applicable
Assignment Agreement and any and all other documents required to be
executed by it in connection with the applicable Assignment Agreement
and to fulfill its obligations under, and to consummate the transactions
contemplated by the applicable Assignment Agreement, and that no
governmental authorizations or other authorizations are required in
connection with the applicable Assignment Agreement, (C) the
representation and warranty that the applicable Assignment Agreement
constitutes its legal, valid and binding obligation, the assigning
Lender has made no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness or
sufficiency of this Agreement or any other Loan Document; (ii) the
assigning Lender has made no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or
the Guarantors or the performance by Borrower or the Guarantors of their
applicable Obligations; (iii) it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered
pursuant to Section 7.1 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into the applicable Assignment Agreement; (iv) it will,
independently and without reliance upon the Agent or any Lender and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) it appoints and authorizes the
Agent to take such action and to exercise such powers as are delegated
to the Agent by this Agreement and (vi) it
-56-
63
will perform in accordance with their respective terms all of the
obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Agent shall maintain a copy of each
Assignment Agreement delivered to it. After receipt of a completed
Assignment Agreement executed by any Lender and an assignee, and receipt
of an assignment fee of $3,500 from such assignee, Agent shall, promptly
following the effective date thereof notify Borrower and each Lender of
the identity of the new Lender.
(e) Each Lender may from time to time grant
participations to one or more banks or other financial institutions in a
portion of its Pro Rata Share of the Commitments; provided, however,
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, (iii) the
participating banks or other financial institutions shall not be a
Lender hereunder for any purpose except, if the participation agreement
so provides, for the purposes of Sections 3.3, 3.4, and 11.12 but only
to the extent that the cost of such benefits to Borrower does not exceed
the cost which Borrower would have incurred in respect of such Lender
absent the participation, (iv) Borrower, the Agent 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, (v) the participation shall be of the same Pro Rata Share of
each of the Commitments, (vi) the participation interest shall be
expressed as a percentage of the assigning Lender's Pro Rata Share of
the Commitments as they then exist and shall not restrict an increase in
the Commitments, or in the assigning Lender's Pro Rata Share of the
Commitments, so long as the amount of the participation interest is not
affected thereby and (vii) the consent of the holder of such
participation interest shall not be required for amendments or waivers
of provisions of the Loan Documents other than those which (A) extend
the Maturity Date or any other date upon which any payment of money is
due to the Lenders or (B) reduce the rate of interest on the Loans, any
fee or any other monetary amount payable to the Lenders.
11.9 Foreign Lenders and Participants. Each Lender, and each
holder of a participation interest in the Loans that is incorporated under the
Laws of a jurisdiction other than the United States of America or any state
thereof shall deliver to Borrower (with a copy to the Agent), concurrently with
its receipt of an assignment or receiving a participation interest herein
pursuant to Section 11.8, all appropriate United States Internal Revenue Service
forms as the Agent may require, or such other evidence satisfactory to Borrower
and the Agent, to establish that no withholding under the federal income tax
laws is required with respect to such Person. Thereafter and from time to time,
each such Person shall (a) promptly submit to Borrower (with a copy to the
Agent), such additional duly completed and signed copies of one of such forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is satisfactory
to Borrower and the Agent of any available exemption from, United States
withholding taxes in respect of all payments to be made to such Person by
Borrower pursuant to this Agreement and (b) take such steps as shall not be
disadvantageous to it, in the judgment of such Lender, and as may be reasonably
necessary (including the re-designation of its Eurodollar Office, if any) to
avoid any requirement of applicable laws that Borrower make any deduction or
withholding for taxes from amounts payable to such Person.
11.10 Right of Setoff. If an Event of Default has occurred and
is continuing, the Agent or any Lender (but only with the consent of the
Requisite Lenders) may exercise its rights under
-57-
64
Article 9 of the Uniform Commercial Code and other applicable Laws and, to the
extent permitted by applicable Laws, apply any funds in any deposit account
maintained with it by Borrower and/or any Property of Borrower in its possession
against the Obligations.
11.11 Sharing of Setoffs. Each Lender severally agrees that if
it, through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable
Laws: (a) The Lender exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from the other Lender a participation
in the Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) Such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of the Lenders
share any payment obtained in respect of the Obligations ratably in accordance
with each Lender's share of the Obligations immediately prior to, and without
taking into account, the payment; provided that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section shall from and after the purchase have the
right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a participation in
an Obligation so purchased may exercise any and all rights of setoff, banker's
lien or counterclaim with respect to the participation as fully as if that
Lender were the original owner of the Obligation purchased.
11.12 Indemnity by Borrower. Borrower agrees to indemnify,
save and hold harmless each Creditor and their respective parent corporations,
Subsidiaries, directors, officers, agents, attorneys and employees (collectively
the "Indemnitees") from and against: (a) Any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than any Indemnitee or any Party) if the claim, demand, action or cause of
action directly or indirectly relates to a claim, demand, action or cause of
action that such Person asserts or may assert against Borrower, any Affiliate of
Borrower or any officer, director or shareholder of Borrower, provided that the
same relates to or arises from this Agreement, any other Loan Document, or any
transaction contemplated hereunder or thereunder; (b) Any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by
any Person (other than any Indemnitee or any Party) if the claim, demand, action
or cause of action arises out of or relates to the Commitments, the use or
contemplated use of proceeds of any Loan or Letter of Credit, or the
relationship of Borrower and the Creditors under this Agreement; (c) Any
administrative or investigative proceeding by any governmental agency arising
out of or related to a claim, demand, action or cause of action described in
clauses (a) or (b) above; and (d) Any and all liabilities, losses, costs or
expenses (including reasonable attorneys' fees (including the allocated cost of
in-house counsel) and disbursements and other reasonable professional services)
that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action or cause of action; provided that no Indemnitee
shall be entitled to indemnification for any loss caused by its own gross
negligence or willful misconduct. If any such claim, demand, action or cause of
action is
-58-
65
asserted against any Indemnitee, such Indemnitee shall promptly notify Borrower
in writing, but the failure to so promptly notify Borrower shall not affect
Borrower's obligations under this Section, except to the extent that Borrower is
materially prejudiced thereby. Any obligation or liability of Borrower to any
Indemnitee under this Section shall survive the expiration or termination of
this Agreement and the repayment of all Loans and the payment and performance of
all other Obligations.
11.13 Nonliability of the Creditors. Borrower acknowledges and
agrees that:
(a) Any inspections or audits of any Property of
Borrower made by or through the Creditors are for purposes of
administration of the Loan Documents only and Borrower is not entitled
to rely upon the same, nor is any Creditor obligated to release to
Borrower any information obtained as a result of such inspection or
audit, provided that the Creditors shall provide copies of (i) all
reports prepared by third party consultants prior to the occurrence of
any Event of Default, and (ii) all environmental reports (whenever
prepared) unless such environmental reports were prepared (1) at the
expense of the Creditors, or (2) in a litigation context or in
connection with any "workout" of the Obligations;
(b) By accepting or approving anything required to
be observed, performed, fulfilled or given to any Creditor pursuant to
the Loan Documents, the Creditors shall not be deemed to have warranted
or represented the sufficiency, legality, effectiveness or legal effect
of the same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a warranty or
representation to anyone with respect thereto by any Creditor; and
(c) The relationship among Borrower, its Affiliates
and the Creditors is, and shall at all times remain, solely that of
borrower, guarantors and lenders; no Creditor shall under any
circumstance be construed to be a partner or joint venturer of Borrower
or its Affiliates; no Creditor shall under any circumstance be deemed to
be in a relationship of confidence or trust or a fiduciary relationship
with Borrower or its Affiliates, or to owe any fiduciary duty to
Borrower or its Affiliates under this Agreement; the Creditors do not
undertake or assume any responsibility or duty to Borrower or its
Affiliates to select, review, inspect, supervise, pass judgment upon or
inform Borrower or its Affiliates of any matter in connection with their
Property or the operations of Borrower or its Affiliates; Borrower and
its Affiliates shall rely entirely upon their own judgment with respect
to such matters; and any review, inspection, supervision, exercise of
judgment or supply of information undertaken or assumed by the Creditors
in connection with such matters is solely for the protection of the
Creditors and neither Borrower nor any other Person is entitled to rely
thereon.
11.14 No Third Parties Benefited. This Agreement is made for
the purpose of defining and setting forth certain obligations, rights and duties
of Borrower and the Creditors in connection with the Loans and Letters of
Credit, and is made for the sole benefit of Borrower and the Creditors and the
successors and assigns of the Creditors. Except as provided in Section 11.8, no
other Person shall have any rights of any nature hereunder or by reason hereof.
11.15 Confidentiality. Each Lender agrees to hold any
confidential information that it may receive from Borrower pursuant to this
Agreement in confidence, except for disclosure: (a) To other Lenders; (b) To
legal counsel and accountants for Borrower, the Agent or any Lender on a
confidential basis; (c) To other professional advisors to Borrower, the Agent or
any Lender; (d) To regulatory officials having jurisdiction over that Lender;
(e) As required by Law or legal process or in
-59-
66
connection with any legal proceeding to which that Lender is a party; and (f) To
another financial institution in connection with a disposition or proposed
disposition to that financial institution of all or part of that Lender's
interests hereunder or a participation interest in its Loans, provided that in
the case of clauses (c) and (f) the recipient has accepted such information
subject to a confidentiality agreement substantially similar to this Section.
For purposes of the foregoing, "confidential information" shall mean any
information respecting Borrower or its Subsidiaries reasonably considered by
Borrower to be confidential, other than (i) information previously filed with
any governmental agency and available to the public, and (ii) information
previously published in any public medium from a source other than, directly or
indirectly. Nothing in this Section shall be construed to create or give rise to
any fiduciary duty on the part of the Agent or the Lenders to Borrower.
11.16 Integration. This Agreement, together with the other
Loan Documents, comprises the complete and integrated agreement of the parties
on the subject matter hereof and supersedes all prior agreements, written or
oral, on the subject matter hereof. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control and govern; provided that the
inclusion of supplemental rights or remedies in favor of the Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
11.17 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid as to any
party or in any jurisdiction shall, as to that party or jurisdiction, be
inoperative, unenforceable or invalid without affecting the remaining provisions
or the operation, enforceability or validity of that provision as to any other
party or in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
11.18 Independent Covenants. Each covenant in Articles 5, 6
and 7 is independent of the other covenants in those Articles; the breach of any
such covenant shall not be excused by the fact that the circumstances underlying
such breach would be permitted by another such covenant.
11.19 Headings. Article and Section headings in this Agreement
and the other Loan Documents are included for convenience of reference only and
are not part of this Agreement or the other Loan Documents for any other
purpose.
11.20 Environmental Indemnity.
(a) Borrower hereby agrees to indemnify, defend and
hold harmless each Creditor and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person"), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including reasonable fees and
out-of-pocket expenses of legal counsel to the Agent and the allocated
costs of internal counsel to the Agent and the allocated cost of
internal environmental audit or review services), which may be incurred
by or asserted against such Indemnified Person in connection with or
arising, directly or indirectly out of any pending or threatened
investigation, litigation or proceeding, or any action taken by any
Person, with respect to any Environmental Claim arising out of or
related to any Property subject to a Lien in favor of the Agent or any
Lender except to the extent that the same arise out of the negligence or
willful misconduct of a Creditor. No action taken by legal counsel
chosen by the Agent or
-60-
67
any Lender in defending against any such investigation, litigation or
proceeding or requested remedial, removal or response action shall
vitiate or in any way impair Borrower's obligation and duty hereunder to
indemnify and hold harmless each Creditor.
(b) In no event shall any site visit, observation,
or testing by the Agent or any Lender (or any contractee of the Agent or
any Lender) be deemed a representation or warranty that Hazardous
Materials are or are not present in, on, or under, the site, or that
there has been or shall be compliance with any Environmental Law.
Neither Borrower nor any other Person is entitled to rely on any site
visit, observation, or testing by the Agent or any Lender. Neither the
Agent nor any Lender owes any duty of care to protect Borrower or any
other Person against, or to inform Borrower or any other party of, any
Hazardous Materials or any other adverse condition affecting any site or
Property. Neither the Agent nor any Lender shall be obligated to
disclose to Borrower or any other Person any report or findings made as
a result of, or in connection with, any site visit, observation, or
testing by the Agent or any Lender.
(c) The obligations in this Section shall survive
payment of all other Obligations. At the election of any Indemnified
Person, Borrower shall defend such Indemnified Person using legal
counsel reasonably satisfactory to such Indemnified Person in such
Person's sole discretion, at the sole cost and expense of Borrower. All
amounts owing under this Section shall be paid within 30 days after
demand.
(d) Borrower acknowledges that the Agent's and
Lenders' appraisal of the Real Property is such that the Agent and
Lenders are not willing to accept the consequences under any applicable
anti-deficiency rules, of inclusion of the obligations under this
Section among the obligations secured by the Real Property, and that
Agent and Lenders would not enter into the Loan Agreement with Borrower
but for the personal liability undertaken by Borrower for such
obligations.
11.21 Jurisdiction and Venue. Except as otherwise expressly
provided in any Loan Document, the parties hereto and thereto agree and intend
that the proper and exclusive forum for any litigation of any disputes or
controversies arising out of or related to the Loan Documents shall be the
Superior Court of the State of California for the County of Los Angeles.
Notwithstanding the foregoing, the parties agree that, with respect to any
Collateral given by Borrower or any Affiliate thereof to any of the Creditors
located in states or jurisdictions other than California, or in counties of
California other than Los Angeles County, the Agent shall be entitled on behalf
of such Creditors to commence actions in such states or jurisdictions, or in
such counties of California, against Borrower or any Affiliate thereof or other
Persons for the purpose of seeking provisional remedies, including actions for
claim and delivery of Property, or for injunctive relief or appointment of a
receiver, or actions to foreclose upon Liens granted to the Creditors. Each
party to any Loan Document, to the extent permitted by applicable laws, hereby
expressly waives any defence or objection to jurisdiction or venue based on the
doctrine of forum non conveniens, and stipulates that the Superior Court of the
State of California for the County of Los Angeles shall have in personam
jurisdiction and venue over such party for the purpose of litigating any dispute
or controversy arising out of or related to the Loan Documents. In the event
Borrower or any Affiliate thereof should commence or maintain any action or
proceeding arising out of or related to the Loan Documents in a forum other than
the Superior Court of the State of California for the County of San Francisco,
the Creditors shall be entitled to request the dismissal or stay of such action
or proceeding, and Borrower and its Affiliates stipulate that such action or
proceeding shall be dismissed or stayed.
-61-
68
11.22 GOVERNING LAW. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY
PROVIDED THEREIN, EACH LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF CALIFORNIA.
11.23 PURPORTED ORAL AMENDMENTS. THE PARTIES HERETO EXPRESSLY
ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED
OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. THE PARTIES HERETO AGREE
THAT THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL
OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE AGENT OR ANY LENDER THAT DOES
NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR
SUPPLEMENT TO THIS AGREEMENT OF THE OTHER LOAN DOCUMENTS.
11.24 WAIVER OF JURY TRIAL. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH THEIR COUNSEL, BORROWER, THE AGENT, THE ISSUING LENDER AND
EACH LENDER HEREBY KNOWINGLY, INTELLIGENTLY AND INTENTIONALLY WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING BASED
ON OR ARISING OUT OF, UNDER, IN CONNECTION WITH, OR RELATING TO THIS AGREEMENT,
THE LETTERS OF CREDIT, ANY OF THE NOTES, ANY OF THE OTHER LOAN DOCUMENTS, THE
TRANSACTIONS
-62-
69
CONTEMPLATED HEREBY, OR ANY RELATED COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF BORROWER, THE AGENT, OR ANY
LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE
LOANS TO AND ISSUE LETTERS OF CREDIT FOR THE ACCOUNT OF BORROWER.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
Borrower:
XXXXX INSTRUMENTS CORP.,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXXX
-------------------------------------
Xxxxx Xxxxxxxxxxx,
Chief Financial Officer
Address for notices:
Xxxxx Instruments Corporation
0000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: 949/451-1450 ext. 241
Telecopier: 949/ 451-1460
with a copy to :
Xxxxx Instruments Corporation
0000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Telephone: 949/451-1450 ext. 238
Telecopier: 949/ 451-1460
and with a copy to:
O'Melveny & Xxxxx LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxxxx X. Xxxxxx, Esquire
415/984-8930 direct
415/984-8700 general
415/984-8701 FAX
E-Mail: xxxxxxx@xxx.xxx
-63-
70
BANK OF AMERICA, N.A.,
as Administrative Agent, as
Issuing Lender and as a Lender
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Address for notices:
Bank of America, N.A.
000 Xxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
