Exhibit 4.16
REIMBURSEMENT AGREEMENT
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This REIMBURSEMENT AGREEMENT ("Agreement"), dated as of March 1, 2000,
is by and between AEROVOX INCORPORATED, a Delaware corporation (the "Borrower")
and KEYBANK NATIONAL ASSOCIATION, a national banking association (the "Bank").
WHEREAS, in order to provide financing for (i) a new building to be
constructed on the Premises (the "Building"), (ii) related equipment to be
purchased for the Premises (the "Equipment") and (iii) related costs and
expenses, the Borrower proposes to issue its Taxable Adjustable Rate Notes,
Series 2000, in the aggregate principal amount of up to Ten Million, One Hundred
Seventy Thousand Dollars ($10,170,000) (the "Notes") under the terms and
conditions more fully set forth in the Trust Indenture, dated as of March 1,
2000 (the "Indenture"), by and between the Borrower and The Huntington National
Bank, Columbus, Ohio, as Trustee; and
WHEREAS, to enhance the marketability of the Notes, the Borrower has
applied to the Bank for the issuance of a letter of credit (the "Letter of
Credit") in favor of the Trustee in an amount of up to Ten Million, Four Hundred
Forty-Three Thousand, Fifty-Eight Dollars ($10,443,058.00) to secure the payment
of the principal of and accrued interest on the Notes; and
WHEREAS, it is the purpose of this Agreement to set forth the Bank's
commitment to issue the Letter of Credit and the Borrower's agreement to
reimburse the Bank for any and all payments made by the Bank pursuant to the
Letter of Credit; and
NOW THEREFORE, in consideration of the mutual agreements made herein
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION ONE
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DEFINITIONS
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Section 1.1. Terms Defined. As used in this Agreement, the following
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terms have the following respective meanings. Any accounting term used but not
specifically defined herein shall be construed in accordance with GAAP. The
definition of each agreement, document, and instrument set forth in this Section
1.1 shall be deemed to mean and include such agreement, document, or instrument
as amended, restated, or modified from time to time:
"Assignment" shall mean the Assignment of Project Documents dated as of
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February 29, 2000 and given by the Borrower to the Bank with respect to the
Premises.
"Bank Obligation" shall mean an amount equal to the aggregate
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outstanding liability of the Bank from time to time under the Letter of Credit.
"Bank" shall mean KeyBank National Association, its successors and
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assigns.
"Borrower" shall mean Aerovox Incorporated, a Delaware corporation.
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"Business Day" means any day of the year other than (i) a Saturday or
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Sunday, (ii) any day on which banks located in either Albany, New York,
Portland, Maine, or the city in which the principal corporate trust office of
the Trustee is located are required or authorized by law to remain closed, or
(iii) any day on which the New York Stock Exchange is closed.
"Capital Expenditures" shall mean the Borrower's capital expenditures
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as determined in accordance with GAAP.
"Closing Date" shall mean March 22, 2000, or another date agreed upon
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in writing by the Borrower and the Bank.
"Completion Date" shall mean August 1, 2000 or another date agreed upon
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in writing by the Borrower and the Bank.
"Construction Loan Agreement" shall mean the Construction Loan
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Agreement dated as of February 29, 2000 between the Borrower and the Bank.
"Credit Documents" shall mean, collectively, this Reimbursement
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Agreement, the Mortgage, the Assignment, the Recognition Agreement, the Note
Pledge Agreement and the Construction Loan Agreement.
"Date of Issuance" shall mean the date of issuance of the Letter of
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Credit.
"Debt Service Coverage Ratio" shall mean the ratio of (i) EBITDA, less
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the sum of cash taxes paid, unfinanced capital expenditures, distributions and
dividends to (ii) the sum of the Borrower's interest expense and scheduled
payments of principal of long-term Indebtedness.
"Default Rate" shall mean interest at a rate per annum equal to one
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percent (1%) in excess of the Prime Rate, with each change in the Prime Rate
automatically changing the Default Rate.
"EBITDA" shall mean, for the previous twelve (12) months, the
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Borrower's earnings before taxes, interest expense, depreciation, amortization
and extraordinary charges.
"Environmental Law" means any federal, state, or local statute, law,
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ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability upon a Person in connection with the use, release or disposal
of any hazardous, toxic or dangerous substance, waste or material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
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as the same may from time to time be amended or supplemented, and all
regulations thereunder.
"Event of Default" shall have the meaning assigned thereto in Section 8
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hereof.
"Expiration Date" means March 22, 2005, unless extended by the Bank in
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writing pursuant to Section 2.5.
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"Fee Calculation Amount" shall have the meaning set forth in Section
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2.2(b).
"GAAP" shall mean generally accepted accounting principles as then in
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effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, consistently applied.
"General Contractor" shall mean Dacon Corporation.
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"Indebtedness" shall mean, at a particular date, the liabilities of a
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Person, as determined in accordance with GAAP, consistently applied, including,
without limitation, all indebtedness for money borrowed or for the deferred
purchase price of property and lease obligations of such Person which have been,
or which in accordance with Statement of Financial Accounting Standards No. 13,
as from time to time amended, should be, capitalized.
"Indenture" shall mean the Trust Indenture, dated as of March 1, 2000
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between the Borrower and the Trustee.
"Indenture Default" shall mean an Event of Default under and pursuant
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to the Indenture.
"Interest Commitment" shall have the meaning set forth in the Letter of
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Credit.
"Interest Drawing" shall have the meaning set forth in the Letter of
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Credit.
"Interest Payment Date" shall mean Interest Payment Date as defined in
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the Indenture.
"Letter of Credit" shall mean the Letter of Credit to be issued by the
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Bank on the Closing Date pursuant to this Agreement, such Letter of Credit to be
substantially in the form of Exhibit A attached hereto and any extensions,
renewals, amendments or replacements thereof.
"Letter of Credit Commitment" shall have the meaning set forth in the
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Letter of Credit.
"Letter of Credit Fee" shall have the meaning set forth in Section
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2.2(b) of this Agreement.
"Mortgage" shall mean the First Leasehold Mortgage, Security Agreement,
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Assignment of Leases and Rents, and Financing Statement, executed and delivered
by the Borrower, dated as of February 29, 2000 and recorded in the Bristol
County (Massachusetts), South District, Registry of Deeds in Book 4630,
beginning at Page 166.
"Note Documents" shall mean, collectively the Indenture and any other
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document executed by the Borrower in connection with the issuance of the Notes
(other than the Credit Documents).
"Note Pledge Agreement" shall mean the Note Pledge Agreement dated as
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of March 1, 2000, among the Borrower, the Bank, and the Trustee.
"Notes" shall mean the Ten Million, One Hundred Seventy Thousand
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Dollars ($10,170,000.00) Aerovox Incorporated Taxable Adjustable Rate Notes,
Series 2000, issued by
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the Borrower pursuant to the Indenture.
"Organizational Documents" shall mean with respect to a corporation,
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its articles of incorporation and bylaws, with respect to a limited liability
company, its articles of organization and operating agreement, with respect to a
partnership, its partnership agreement, and with respect to other entities, such
documents as create and continue the existence of the entity and specify the
manner in which its affairs are governed.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
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pursuant to Title IV of ERISA.
"Permitted Encumbrances" shall mean, as of any particular time, (a)
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liens for ad valorem taxes and special assessments not then delinquent, (b) this
Agreement, the Mortgage, the Assignments, the Note Pledge Agreement and any
security interest or other lien created thereby, (c) such minor defects,
irregularities, encumbrances and clouds on title as normally exist with respect
to property similar in character to the Pledged Collateral and as do not, in the
written opinion of counsel to the Borrower, interfere with or impair the use or
value of the property affected thereby, (d) any security interest granted from
time to time to the Bank, and (e) any items set forth on Exhibit B attached
hereto.
"Person" means any natural person, corporation (which shall be deemed
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to include business trust), association, partnership, political entity, or
political subdivision thereof.
"Plan" shall mean any plan defined in Section 4021(a) of ERISA in
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respect of which Borrower is an "employer" or a "substantial employer" as
defined in Section 3(5) and 4001(a)(2) of ERISA, respectively.
"Plans and Specifications" shall mean the plans and specifications for
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the Project accepted by the Bank as of the Closing Date, as the same may be
modified in accordance with section 6.12.
"Pledged Collateral" shall mean the collateral in which the Borrower
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has given the Bank a mortgage lien or a security interest pursuant to the
Mortgage, Assignment, and/or the Note Pledge Agreement.
"Premises" shall mean the leased premises which are described in the
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Mortgage and which are located in the New Bedford Industrial Park, ▇▇▇▇ ▇▇▇▇▇▇▇▇
Boulevard Extension, New Bedford, Massachusetts, consisting of Borrower's
leasehold estate in a certain Ground Sublease dated January 4, 2000, between
Borrower as sublessee and the New Bedford Redevelopment Authority as sublessor.
"Prime Rate" shall mean that interest rate established from time to
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time by the Bank as Bank's Prime Rate, whether or not such rate is publicly
announced. The Prime Rate may not be the lowest rate charged by the Bank for
commercial or other extensions of credit.
"Principal Commitment" shall have the meaning set forth in the Letter
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of Credit.
"Principal Drawing" shall have the meaning set forth in the Letter of
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Credit.
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"Prohibited Transaction" shall mean any prohibited transaction as that
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term is defined for purposes of ERISA.
"Project" shall mean the Building and the Equipment.
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"Project Fund" shall have the meaning ascribed to such term in the
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Indenture.
"Purchaser" shall mean the original purchaser or purchasers of the
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Notes.
"Recognition Agreement" shall mean the Recognition Agreement and
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Estoppel Certificate dated as of February 29, 2000 by and between Bank as
Lender, Borrower as Sublessee, New Bedford (Massachusetts) Redevelopment
Authority as Lessee and Sublessor, and the City of New Bedford (Massachusetts)
as Owner and Lessor and recorded in the Bristol County (Massachusetts), South
District, Registry of Deeds in Book 4638, beginning at Page 100.
"Remarketing Agent" shall mean, initially, McDonald Investments Inc.
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"Remarketing Commitment" shall have the meaning set forth in the Letter
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of Credit.
"Remarketing Drawing" shall have the meaning set forth in the Letter of
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Credit.
"Reportable Event" shall mean any reportable event as that term is
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defined in ERISA.
"Subordinated Debt" shall mean Indebtedness of the Borrower which is
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subordinated, in a manner satisfactory to the Bank, to all Indebtedness owing to
the Bank and to all other indebtedness which is pari passu therewith or senior
thereto.
"Subsidiary" shall mean (i) any for profit corporation more than fifty
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percent (50%) of the capital stock of which is owned or controlled, directly or
indirectly, by a Person or any Subsidiary and whose accounts are required to be
consolidated with those of such Person in accordance with GAAP and (ii) any
non-profit corporation which is controlled, directly or indirectly, by such
Person.
"Tender Agent" shall have the meaning ascribed to such term in the
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Indenture.
"Title Company" shall mean Lawyers Title Insurance Corporation.
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"Title Policy" shall mean the ALTA Loan Policy issued by the Title
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Company with respect to the Premises.
"Total Funded Debt" shall mean the sum of all debt for borrowed money
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and similar monetary obligations evidenced by bonds, notes, debentures, all
liabilities secured by any lien existing on any property owned or acquired
subject thereto, whether or not the liability secured thereby shall have been
assumed, all capitalized lease obligations, all reimbursement obligations under
outstanding letters of credit, bankers acceptances and similar instruments and
all guarantees and other contingent liabilities with respect to any obligations
or liabilities of the type described above.
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"Trustee" means The Huntington National Bank, Columbus, Ohio, or any
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successor Trustee under the Indenture.
SECTION TWO
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ISSUANCE OF LETTER OF CREDIT
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Section 2.1. Issuance of Letter of Credit. Subject to the terms and
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conditions hereof, the Bank agrees to execute and deliver the Letter of Credit.
The obligations of the Bank under the Letter of Credit shall be absolute and
irrevocable and shall be performed strictly in accordance with the terms of the
Letter of Credit and this Agreement.
The Borrower hereby confirms and approves of the issuance and terms of
the Letter of Credit. The Borrower will promptly notify the Bank of any
irregularity or claim of non-compliance with the Borrower's instructions. The
Borrower is conclusively deemed to have waived any such claim against the Bank
and its correspondents unless such notice is given.
Section 2.2. Fees and Reimbursement for Letter of Credit
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(a) The Borrower hereby agrees to pay to the Bank:
(i) Before 2:00 p.m., Albany, New York time, on each date that
any amount is drawn under the Letter of Credit pursuant to
a Principal Drawing or an Interest Drawing and/or a
Remarketing Drawing, each as defined in the Letter of
Credit, a sum equal to the amount drawn under the Letter of
Credit, plus (x) interest accrued, if any, on the amount so
drawn under the Letter of Credit as determined pursuant to
clause (iii) of this subsection (a) of this Section 2.2,
plus (y) any and all charges and expenses which the Bank
may pay or incur relative to such drawing under the Letter
of Credit, plus (z) a fee in the amount of Two Hundred
Dollars ($200) for each Principal Drawing, Remarketing
Drawing, or Interest Drawing under the Letter of Credit.
(ii) Upon a Remarketing Drawing under the Letter of Credit,
provided there is then no uncured Event of Default, the
Borrower shall have until the Expiration Date to reimburse
the Bank for the amount of the Remarketing Drawing, subject
to the right of the Bank to require redemption or
acceleration of the Notes pursuant to Section 8.2 hereof.
Any amounts received by the Bank from the remarketing of
Notes purchased out of a Remarketing Drawing and registered
to the Bank or, at the direction of the Bank, to the
Borrower, shall be applied against the Borrower's
obligation to reimburse the Bank for the amount of the
Remarketing Drawing. The amount of any unreimbursed
Remarketing Drawing shall bear interest from the date of
the Remarketing Drawing at a rate per annum equal to the
Prime Rate. Such interest shall be payable on each Interest
Payment Date for so long as such Remarketing Drawing or any
portion thereof is unreimbursed. The payments of interest
hereunder shall be credited against the interest accrued on
the Notes pledged to the Bank under the
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Note Pledge Agreement. Interest hereunder shall be
calculated based on a 360-day year, but calculated on the
number of actual days elapsed.
(iii) Upon each transfer of the Letter of Credit in accordance
with its terms and as a condition thereto, a transfer fee
of Five Hundred Dollars ($500.00) and such additional
amounts as shall be reasonably necessary to cover the
costs and expenses to the Bank incurred in connection
with such transfer;
(iv) The Borrower shall pay interest at the Default Rate,
payable on demand on any and all amounts of any Principal
Drawing, Interest Drawing and/or Remarketing Drawing not
paid by the Borrower when due under any section of this
Agreement from the date such amounts become due until
payment in full.
(v) For any payment of principal and/or interest not paid
within ten (10) days when due, the Borrower shall pay a
late charge of an amount equal to the greater of fifty
dollars ($50) or five percent (5%) of the amount of the
payment.
(vi) The Borrower shall pay on demand, reasonable costs, fees
and expenses incurred by the Bank in connection with the
issuance or sale of the Notes or issuance of the Letter
of Credit or the preparation or execution of any
documents or opinions related thereto.
(vii) The Borrower shall pay on demand, any and all reasonable
expenses incurred by the Bank in enforcing any of its
rights under the Credit Documents;
(viii) On or prior to the Closing Date, the Borrower shall pay
an origination fee equal to the greater of (A) seventy-
five hundredths of one percent (0.75%) of the principal
amount of the Notes, issued on such date, or (B) $82,500;
and
(ix) On or prior to the Closing Date, the Borrower shall pay
any and all appraisal fees relating to appraisal of all
or any portion of the Premises.
(b) The Borrower hereby agrees to pay to the Bank a fee (the "Letter
of Credit Fee") in an amount equal to the Fee Calculation Rate
(as hereinafter defined) multiplied by the Fee Calculation Amount
(as hereinafter defined) multiplied by one or any portion of a
year for which the Letter of Credit Fee is paid (using a 360-day
year but calculated on the number of actual days elapsed). The
Letter of Credit Fee shall be payable in annual installments in
advance on March 31 (the "Fee Payment Date") of each year until
the Expiration Date or the date of earlier termination of the
Letter of Credit; provided, however, that upon the Date of
Issuance, the Borrower shall pay an installment of the Letter of
Credit Fee for the period from the Date of Issuance to and
including the day prior to the Fee Payment Date in 2001. The "Fee
Calculation Amount" shall be the sum of (i) the maximum amount
available on each date of payment of the Letter of Credit Fee to
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be drawn under the Letter of Credit with respect to the Principal
Commitment plus (ii) the maximum amount available on each date of
payment of the Letter of Credit Fee to be drawn under the Letter
of Credit with respect to the Interest Commitment. On the Date of
Issuance, the "Fee Calculation Rate" shall be two percent (2.00%)
per annum. On each Fee Payment Date after the Date of Issuance,
the "Fee Calculation Rate" shall be the rate per annum, set forth
below, for certain ratios of Total Funded Debt to EBITDA, set
forth below:
(i) If the ratio of Total Funded Debt to EBITDA for the prior fiscal
year of the Borrower is less than 2.5 to 1.0, then the Fee
Calculation Rate shall be one percent (1.00%) per annum;
(ii) If the ratio of Total Funded Debt to EBITDA for the prior fiscal
year of the Borrower is less than (A) 3.75 for the fiscal year
ending December 31, 2000, or (B) 3.5 for the fiscal year ending
December 31, 2001 and each fiscal year thereafter, to 1.0 but
greater than or equal to 2.5 to 1.0, then the Fee Calculation
Rate shall be one and five tenths percent (1.5%) per annum; and
(iii) If the ratio of Total Funded Debt to EBITDA for the prior fiscal
year of the Borrower is equal to or greater than (A) 3.75 for the
fiscal year ending December 31, 2000, or (B) 3.5 for the fiscal
year ending December 31, 2001 and each fiscal year thereafter, to
1.0, then the Fee Calculation Rate shall be two percent (2.00%)
per annum.
(c) If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authority
charged with the administration thereof shall impose, modify or
deem applicable any reserve, special deposit or similar
requirement which would increase or decrease the Bank's costs (i)
generally upon the issuance or maintenance of letters of credit
by the Bank, (ii) specifically in respect of this Agreement or
the Letter of Credit, or (iii) in respect of any capital adequacy
requirement (including, without limitation, a requirement which
affects the manner in which the Bank allocates capital resources
to its commitments), and the result of such an increase or
decrease in costs as described in clause (i), (ii), or (iii)
above shall be to increase or decrease the costs to the Bank of
issuing or maintaining the Letter of Credit (which increase or
decrease in costs shall be the result of the Bank's reasonable
allocation, of the aggregate of such cost increases or decreases
resulting from such events), then, (x) within thirty (30) days of
the Bank's obtaining knowledge of such change in law, regulations
or interpretation thereof, the Bank shall so notify the Borrower
and (y) upon receipt of such notice from the Bank, accompanied by
a certificate as to such increased or decreased cost, the
Borrower shall pay or receive a refund of, as of the effective
date of such change or interpretation, all additional amounts
which are necessary to compensate the Bank or the Borrower for
such increased or decreased cost incurred by the Bank.
(d) The Borrower's obligations to make payments to the Bank under
this Section 2.2 shall be deemed satisfied to the extent of
payments made by the Trustee to the
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Bank from funds on deposit with and held by the Trustee pursuant
to the Indenture.
Section 2.3. Borrower's Obligations Unconditional. The payment
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obligations of the Borrower under this Agreement shall be absolute,
unconditional and irrevocable and shall be satisfied strictly in accordance with
the terms of this Agreement, under all circumstances whatsoever, including,
without limitation, the following circumstances:
(a) Any lack of validity or enforceability of the Credit Documents,
the Note Documents or any other agreement or instrument relating
thereto;
(b) Any amendment or waiver of or any consent to departure from the
terms of the Letter of Credit, the Credit Documents, the Note
Documents or any other agreement or instrument relating thereto;
(c) The existence of any claim, setoff, defense or right which the
Borrower may have at any time against any beneficiary or any
transferee of the Letter of Credit (or any persons or entities
for whom any such beneficiary or any such transferee may be
acting), the Bank, or any other person or entity, whether in
connection with this Agreement, the transactions contemplated by
the Credit Documents, the Note Documents, or any unrelated
transaction;
(d) Any 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;
(e) Payment by the Bank under the Letter of Credit against
presentation of a request which on its face appears to be in
accordance with the terms of the Letter of Credit; or
(f) Any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
Section 2.4. Payments. The payments and amounts due the Bank under
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Sections 2.2 and 2.3 above shall be made by the Bank's debiting the Borrower's
operating account with the Bank presently identified as Account No. 199681002614
("Operating Account"). The Borrower covenants and agrees that on the date any
payment or other amount is due under Section 2.2 above, the Borrower will have
unrestricted funds in the Operating Account in an amount no less than the amount
then due. Subject to the previous sentence, all payments by the Borrower
hereunder to the Bank shall be made in lawful currency of the United States and
in immediately available funds to the main office of the Bank at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: International Department.
Section 2.5. Letter of Credit Extension. The Bank may in writing,
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effective on each anniversary of the Date of Issuance, commencing with such
anniversary in 2001, extend the Expiration Date of the Letter of Credit for an
additional one-year period; provided, however, that such extension shall be, in
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each instance, made in the sole discretion of the Bank and the Bank may at any
time, upon written notice delivered to Borrower and Trustee, elect not to extend
the
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Expiration Date. The Bank shall notify Borrower and Trustee of its decision of
whether the Expiration Date shall be extended no later than thirty (30) days
prior to the anniversary of the Date of Issuance in each year, provided that the
failure of the Bank to deliver such notice, or to deliver any notice, shall not
mean that the Bank has elected to extend the Expiration Date. If the Bank
extends the Expiration Date, it shall do so in the form of an amendment to the
Letter of Credit, which it shall promptly deliver to Trustee.
SECTION THREE
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REPRESENTATIONS AND WARRANTIES
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The Borrower expressly represents and warrants that:
Section 3.1. Organization and Legal Authority. The Borrower is a
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corporation duly organized and validly existing and in full force and effect
under the laws of the State of Delaware and has all requisite power and
authority to own its property and to carry on its business as now being
conducted, to enter into the Credit Documents and the other agreements referred
to herein and transactions contemplated thereby, and to carry out the provisions
and conditions of the Credit Documents. The Borrower is duly qualified to do
business and is in good standing in every jurisdiction where the failure to so
qualify would have a material adverse effect on the business of the Borrower.
Section 3.2. Due Execution and Delivery. The Borrower has full power,
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authority and legal right to incur the obligations provided for in, and to
execute and deliver and to perform and observe the terms and provisions of, the
Credit Documents, and each of them has been duly executed and delivered by the
Borrower and authorized, by all required organizational action, and the Borrower
has obtained all requisite consents to the transactions contemplated thereby
under any instrument to which it is a party, and the Credit Documents constitute
the legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency or other similar
laws affecting creditors' rights generally.
Section 3.3. No Breach of Other Instruments. Neither the execution and
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delivery of the Credit Documents, nor the compliance by the Borrower with the
terms and conditions of the Credit Documents, nor the consummation of the
transactions contemplated thereby, will conflict with or result in a breach of
any of the Organizational Documents of the Borrower, or any of the terms,
conditions or provisions of any agreement or instrument or any charter or other
organizational restriction or law, regulation, rule or order of any governmental
body or agency to which the Borrower is now a party or is subject, or imposition
of a lien, charge or encumbrance of any nature whatsoever upon any of the
property or assets of the Borrower pursuant to the terms of any such agreement
or instrument.
Section 3.4. Government Authorization. Except for any consent,
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approval, authorization or filing which may be required under any federal or
state securities laws, no consent, approval, authorization or order of any court
or governmental agency or body is
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required for the consummation by the Borrower of the transactions contemplated
by the Credit Documents.
Section 3.5. Pledged Collateral. (a) As of the date hereof, the
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Borrower holds a valid leasehold interest in the Premises, free and clear of all
liens, pledges, mortgage, security interests, charges, claims and other
encumbrances, except the Permitted Encumbrances. Each of the Mortgage, the
Assignments and the Note Pledge Agreement create a valid and prior perfected
security interest and lien in favor of the Bank, subject to no other liens or
encumbrances arising by, through or under the Borrower or any other Person,
except for Permitted Encumbrances or as otherwise provided in the Note
Documents.
Section 3.6. Absence of Defaults, etc. The Borrower is not (i) in
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material default under any indenture or contract or agreement to which it is a
party or by which it is bound, (ii) in violation of any of its Organizational
Documents, (iii) in default with respect to any order, writ, injunction or
decree of any court, or (iv) in default under any order or license of any
federal or state governmental department, which default or violation in any of
the aforesaid cases materially and adversely affects its business or property.
There exists no condition, event or act which constitutes, or after notice or
lapse of time or both would constitute, an Event of Default.
Section 3.7. Indebtedness of Borrower. The Borrower does not have
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outstanding, on the date hereof, any Indebtedness, except for such Indebtedness
reflected on the financial statements referred to in Section 3.8 hereof and
except for any Indebtedness owed to the Bank.
Section 3.8. Financial Condition. The Borrower has furnished to the
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Bank true and correct copies of its financial statements accompanied by an
unqualified opinion of a certified public accountant as of December 31, 1999,
which financial statements present fairly the Borrower's financial condition as
of such date, and there has been no material adverse change in the Borrower's
financial condition since such date.
Section 3.9. No Adverse Change. Subsequent to the date of the financial
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statements referred to in Section 3.8 hereof, the Borrower has not incurred any
liabilities or obligations, direct or contingent, not in the ordinary course of
business, nor has there been any change in the business, properties or
condition, financial or otherwise, of the Borrower, except for changes arising
in the ordinary course of business or in connection with the issuance and sale
of the Notes or as may be otherwise disclosed in writing to the Bank prior to
the date hereof.
Section 3.10. Taxes. The Borrower has filed all tax returns which are
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to be filed and has paid, or has made adequate provision for the payment of, all
taxes which have or may become due pursuant to said returns or to assessments
received by it. The provisions for taxes reflected in the most recent balance
sheet referred to in Section 3.8 are believed adequate to cover any and all
accrued and unpaid taxes for which the Borrower is liable for the period ended
on the date of such balance sheet and all prior periods. The Borrower knows of
no deficiency assessment or proposed deficiency assessment of taxes against the
Borrower, except as may be otherwise disclosed in writing to the Bank prior to
the date hereof.
Section 3.11. Litigation. Except as set forth on Exhibit D attached
----------
hereto, prior to the date hereof, there are no actions, suits or proceedings
pending, or to the knowledge of the
11
Borrower, threatened against or affecting the Borrower or its property in any
court, or before or by any federal, state or municipal or other governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, which could result in any adverse change in the business, property
or assets, or in the condition, financial or otherwise, of the Borrower, except
for actions, suits or proceedings of a character normally incident to the kind
of business conducted by the Borrower, none of which, either individually or in
the aggregate, if adversely determined, would materially impair the Borrower's
right or ability to carry on its business substantially as now conducted or
materially adversely affect the financial position or operations of the
Borrower.
Section 3.12. Ownership of Property. Except for Permitted Encumbrances
---------------------
or as otherwise permitted in the Mortgage or this Agreement, the Borrower has
good and marketable fee title to, or valid leasehold interests in, its real
properties in accordance with the laws of the jurisdiction where located, and
good and marketable title to substantially all its other property and assets.
Except for Permitted Encumbrances, the real property and all other property and
assets of the Borrower are free from any liens or encumbrance securing
Indebtedness and from any other liens, encumbrances, charges or security
interests of any kind. Each lease, if any, to which the Borrower is a party is
in full force and effect, and no material default on the part of the Borrower
or, to its knowledge, any other party thereto exists.
Section 3.13. Environmental Matters. The Borrower is in compliance with
---------------------
all Environmental Laws and all applicable federal, state and local health and
safety laws, regulations, ordinances or rules, except to the extent that any
non-compliance will not, in the aggregate, have a materially adverse effect on
the Borrower or the ability of the Borrower to fulfill its obligations under
this Agreement, the Mortgage or the Assignments.
SECTION FOUR
------------
CLOSING CONDITIONS
------------------
The obligations of the Bank to issue the Letter of Credit on the
Closing Date shall be subject to the following conditions precedent:
Section 4.1. Execution and Delivery of the Credit Documents and the
------------------------------------------------------
Note Documents. With respect to issuance of the Letter of Credit, the Borrower
--------------
shall have delivered to the Bank fully executed copies of each of the Credit
Documents, and the Trustee and the Borrower shall have duly executed and
delivered the Note Documents.
Section 4.2. Issuance and Sale of the Notes. The Notes shall have been
------------------------------
duly issued and sold to the Purchaser pursuant to the Note Documents.
Section 4.3. Representations and Warranties True as of Closing and No
--------------------------------------------------------
Event of Default. The representations and warranties contained in this Agreement
----------------
and the other Credit Documents shall be true in all material respects on the
Closing Date with the same effect as though made on and as of that date and no
condition, event or act shall have occurred which constitutes an Event of
Default or, with notice or lapse of time, or both, would constitute an Event of
Default.
12
Section 4.4. Opinion of Borrower's Counsel. The Bank shall have
-----------------------------
received from counsel to the Borrower an opinion with respect to (i) the matters
described in Sections 3.1, 3.2, and 3.4 of this Agreement, (ii) the matters
described in Sections 3.3, 3.6 and 3.11 of this Agreement, to such counsel's
knowledge and belief after inquiry and (iii) such other matters incident to the
transactions contemplated hereby as the Bank may reasonably request.
Section 4.5. Proceedings Satisfactory. All proceedings taken in
------------------------
connection with the execution and delivery of this Reimbursement Agreement and
the other Credit Documents shall be satisfactory to the Bank and the Bank shall
have received copies of such certificates, documents and papers as reasonably
requested in connection therewith, all in form and substance satisfactory to the
Bank.
Section 4.6. Additional Deliveries. Except as provided below, Borrower
---------------------
shall furnish the following documentation to the Bank at least three (3)
Business Days prior to the Closing Date, all in form, substance and execution
satisfactory to Bank:
(a) A current environmental site assessment report with respect to
the Premises prepared by an environmental engineer acceptable to
the Bank disclosing that the Premises are free from petroleum
products or byproducts, hazardous substances, wastes and
materials and underground storage tanks;
(b) Evidence satisfactory to the Bank that the Borrower's remediation
reserve for cleaning up a former manufacturing facility pursuant
to an EPA Consent Order is sufficient; and
(c) Evidence satisfactory to the Bank that all written consents to
the Borrower's signing and performing the Credit Documents,
determined by the Bank in its sole discretion to be necessary,
have been obtained and that the collateral status of an
outstanding industrial revenue bond has not been altered.
SECTION FIVE
------------
DISBURSEMENTS FROM PROJECT FUND
The Borrower shall not request or receive any disbursement of funds
from the Project Fund unless and until the Bank shall have approved such
disbursement in writing and all of the following conditions shall be true with
respect to each such disbursement:
Section 5.1. Execution and Delivery of Miscellaneous Documents. The
-------------------------------------------------
Borrower shall have delivered to the Bank:
(a) Evidence that no portion of the Premises is located in a special
flood hazard area as identified by HUD;
(b) Certificates of insurance and evidence of payment of premiums
therefor with respect to the insurance required by the Bank with respect to each
portion of the Premises as set forth in
13
Section 6.2 below, including, but not limited to, general liability insurance
and hazard insurance, and flood insurance if applicable;
(c) A current certified survey of the Premises prepared by a registered
surveyor satisfactory to the Bank, and containing on the face thereof the
completed certificate of the surveyor in the form of the surveyor's certificate
required by the Bank, dated not more than ninety (90) days prior to the Date of
Issuance, and in compliance with the Minimum Standard Detail Requirements for
ALTA/ASCM Class A land title surveys, as adopted by the American Land Title
Association and American Congress on Surveying and Mapping in 1992 (the "Initial
Survey"). As construction progresses, Borrower shall furnish evidence
satisfactory to Bank that the Project is located and built within the boundaries
of the Premises. Within thirty (30) days after completion of the Project, the
Borrower shall provide the Bank with an as-built survey of the Premises which
survey shall comply with the standards set forth above for the Initial Survey;
(d) A current Phase I environmental audit of each portion of the
Premises satisfactory to the Bank in its sole discretion prepared by an
environmental consultant satisfactory to the Bank;
(e) A Commitment to issue an ALTA Loan Policy of Title Insurance issued
by the Title Company in the amount of the Letter of Credit (i) insuring that the
Mortgage, as of the time of its filing for record, is a first and best lien upon
the Premises, and that the title to the Premises is free, clear and
unencumbered, subject only to Permitted Encumbrances; (ii) insuring the priority
of the Mortgage over mechanics or materialmen's liens; (iii) obligating the
Title Company to affirmatively insure that access to the applicable portion of
the Premises is by a dedicated and accepted public right-of-way; and (iv)
including such endorsements and affirmative insurance as may be required by the
Bank, including, but not limited to, the so-called "Pending Disbursement
Endorsement" and "Revolving Credit Endorsement";
(f) Evidence satisfactory to the Bank that the Project, when completed,
and the Premises, and the proposed and actual use thereof, will comply with all
applicable laws, statutes, codes, ordinances, rules and regulations, including,
but not limited to, zoning and Environmental Laws, of all governmental
authorities having jurisdiction over the same, and that there is no action or
proceeding pending (or any time for an appeal of any decision rendered) before
any court, quasi-judicial body or administrative agency at the Date of Issuance
relating to the validity of this Reimbursement Agreement or the transactions
contemplated hereby or the proposed or actual use or operation of each portion
of the Premises.
(g) A written appraisal (the "Appraisal") of the Premises satisfactory
to the Bank in all respects, prepared by an appraiser selected and
directly engaged by the Bank pursuant to an engagement letter
issued by the Bank, the cost of which Appraisal will be charged to
the Borrower at Closing Date, and which Appraisal shall be prepared
in accordance with the Uniform Standards of Professional Appraisal
Practice applicable to Federally Related Transactions as set out in
Appendix A to the real estate appraisal regulations adopted by the
Office of the Comptroller of the Currency pursuant to the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") (Sub-part C of 12 C.F.R. 34) and which Appraisal shall
be updated, at the Borrower's cost, upon the occurrence of an event
of default under any of the Credit Documents;
14
provided that the sum of (i) the appraised value of the Building
multiplied by 85% and (ii) the appraised value of the Equipment
multiplied by 100% shall be an amount equal to or greater than the
Letter of Credit Commitment.
(h) Copies of all documentation relating to the Borrower's credit
facilities with lenders who will or may have liens and security
interests superior to the Bank's liens, a review of which by the
Bank shall establish, in the Bank's sole judgment, that the Bank is
sufficiently collateralized and otherwise protected in issuing the
Letter of Credit.
Section 5.2. Bank's Inspector's Certificate. As directed by the Bank
------------------------------
from time to time, the Bank's inspector shall inspect the Premises to verify
that the request for disbursement accurately indicates the amount of
construction completed. The Bank shall have received a certificate from the
Bank's inspector certifying (i) that the construction of the Project theretofore
completed, if any, has been performed substantially in accordance with the Plans
and Specifications; (ii) that the quality of construction of the Project
theretofore completed is in accordance with generally accepted standards in the
construction industry for the cost of the construction of the Project; (iii)
that the undisbursed portion of the Project Fund together with other monies to
be provided by Borrower are adequate to complete the construction and equipping
of the Project pursuant to the Plans and Specifications by the Completion Date;
and (iv) that it is reasonable to expect that the completion of the Project will
occur on or before the Completion Date. It is understood and agreed that the
Bank shall not be liable for any reason as a result of such inspections, the
parties hereby agreeing that the inspections are solely for the benefit of the
Bank.
Section 5.3. No Liens. The Bank shall have received evidence
--------
satisfactory to the Bank that since the last preceding disbursement from the
Project Fund there has been no change in the state of title to the Premises. The
Borrower shall pay the cost of the title update required by the Bank from the
Title Company in connection with each request for approval of disbursement
relating to the Project and each endorsement to the Title Policy insuring the
Premises.
Section 5.4. Request for Approval of Disbursement. Not later than ten
------------------------------------
(10) business days before the date on which the Borrower desires a disbursement
from the Project Fund, the Borrower shall submit to the Bank (i) a written
request for approval of the disbursement from the Project Fund; (ii) a
certification of the Borrower that, among other things, the Borrower has paid or
actually incurred the costs for which the request is being made; (iii) a revised
Project Budget showing the balance of each category of Project costs; and (iv) a
requisition using AIA Form G702 and/or G703 if the draw is used for construction
or such other form as the Bank may request, accompanied by a cost breakdown, the
accuracy of which shall be verified by the Bank's Inspector.
Section 5.5. Timing. The Borrower will submit draw requests not more
------
often than once every month. Each disbursement shall not be more than 95% of the
value of work-in-place and the balance will be paid upon completion based on
requirements set forth below. Retainage will be held on a subcontract by
subcontract basis, and released in connection with a particular subcontract upon
the expiration of the time for filing of any mechanic's lien with respect to
such subcontract provided all work thereunder has been completed to the
satisfaction of the Bank and
15
its inspector and a mechanic's lien waiver has been received from the
subcontractor for all their work done on the Premises.
Section 5.6. Supporting Documentation. The Borrower shall furnish the
------------------------
Bank with an affidavit of the Borrower identifying all subcontractors and
materialmen who have performed work or furnished materials in connection with
the portion of the Project for which disbursement is being sought, together with
lien waivers from the General Contractor for the Project and from all
subcontractors and materialmen who have provided notices of furnishing or who
have performed work or furnished materials in connection with such portion of
the Project, current through the end of the period covered by the Borrower's
most recent request, and such other evidence or affidavits required by the Bank
at the time of each request to ensure that all bills then due and payable for
labor and materials used in constructing such portion of the Project and all
bills due and payable to the General Contractor, subcontractors, materialmen and
their respective subcontractors, laborers, and material suppliers have been paid
in full, except those bills to be paid with the proceeds of such disbursement,
and except for retainages.
Section 5.7. Material Damage. Notwithstanding any provision of this
---------------
Reimbursement Agreement to the contrary, if any portion of the Premises shall
have suffered any material damage or destruction prior to any disbursement from
the Project Fund, such damaged or destroyed portion shall be restored or
replaced in a manner acceptable to the Bank without cost to the Bank prior to
the approval by the Bank of any further disbursement from the Project Fund.
Section 5.8. Other Disbursement Approval Conditions. The Bank shall not
--------------------------------------
be obligated to approve any disbursement from the Project Fund if, at the time
of a proposed disbursement, (i) an Event of Default or an event which, with the
passage of time or service of notice, or both, would be an Event of Default
under any of the Credit Documents has occurred, or (ii) any representation or
warranty made by the Borrower in any of the Credit Documents proves to be untrue
in any material respect, or (iii) the Bank determines, at any time, that the
Project or a portion thereof will not be approved by the appropriate
governmental regulatory authorities.
Section 5.9. Permits. The Borrower shall have delivered to the Bank
-------
building, zoning, and other required permits covering construction of any
portion of the Project together with evidence satisfactory to the Bank that all
approvals required with respect to the Premises from third parties or any
governmental or quasi-governmental authorities have been obtained or, in the
case of approvals relating to the operation of any portion of the Project which
cannot be obtained until completion of construction, evidence satisfactory to
the Bank that such approvals are obtainable. Such evidence shall include copies
of all letters of grant or approval of all zoning changes and other site plan
approvals and subdivision approvals, all variances of zoning regulations
affecting the height, bulk, location or configuration of any portion of the
Project and the Premises (or satisfactory opinion of counsel that the same are
not required), and all approvals or variances relating to parking or loading
areas (both on-street and off-street) and all appurtenant easements required by
governmental authorities with respect to the Premises.
Section 5.10. Utilities. The Borrower shall have delivered to the Bank
---------
evidence satisfactory to the Bank that (i) the Premises have available to it
adequate water, gas and electrical supply, storm and sanitary sewage facilities,
other required public utilities, and means
16
of access between the Premises and public highways; and (ii) that all such
facilities comply with all applicable laws, rules and regulations, and all
necessary easements to provide such utility service to the Premises have been
obtained.
Section 5.11. Borrower's Affidavit. The Borrower shall have delivered
--------------------
to the Bank the affidavit of the Borrower affirming (among other things) as of
the date of each disbursement, (i) that all costs for labor and material for the
construction and equipping of all improvements comprising any part of the
Project furnished to the date of Borrower's affidavit have been paid in full (in
accordance with Section 5.6 above), and (ii) that no bankruptcy or other
insolvency proceedings have been instituted by or against the Borrower.
Section 5.12. Subordination of Leases. Prior to each disbursement
-----------------------
following the initial disbursement, the Borrower shall have furnished to the
Bank (i) a subordination agreement from each tenant possessing any portion of
the Premises wherein such tenant subordinates its leasehold interest to the lien
of the Mortgage or (ii) an endorsement to the Title Policy affirmatively
insuring the superiority of the lien of the Mortgage against any such tenant's
leasehold interest.
Section 5.13. Construction Loan Agreement. Prior to each disbursement
---------------------------
following the initial disbursement, the Borrower shall have furnished to the
Bank all materials required pursuant to the Construction Loan Agreement not
otherwise required hereunder prior to any disbursement.
SECTION SIX
-----------
COVENANTS
---------
The Borrower covenants and agrees that, from the date of this Agreement
and until the obligations of the Borrower to the Bank hereunder are satisfied in
full, it will comply with the following provisions:
Section 6.1. Accounting; Financial Statements and Other Information.
------------------------------------------------------
The Borrower will maintain a standard system of accounting, established and
administered in accordance with GAAP consistently followed throughout the
periods involved, and will set aside on its books, for each fiscal year, the
proper amounts for depreciation, obsolescence, amortization, bad debts, current
and deferred taxes, and other purposes as shall be required by GAAP. The
Borrower will deliver to the Bank or cause to be delivered to the Bank:
(a) Within thirty (30) days after the close of each fiscal quarter,
the Borrower's internally prepared financial statements
including: balance sheet, profit and loss statement, comparison
of actual results to budget, explanation from significant
variances, with such additional information and in such form as
the Bank may require, signed by a representative of the Borrower
who has principal responsibility for financial matters;
(b) Within ninety (90) days after the close of the Borrower's fiscal
year, audited financial statements accompanied by an unqualified
opinion prepared by an independent certified
17
public accountant satisfactory to the Bank and such certified
public accountant's management letter with respect to the
Borrower;
(c) No less than thirty (30) days prior to the commencement of each
fiscal year of the Borrower, a budget for the Borrower for such
fiscal year, in form and substance satisfactory to the Bank;
(d) Promptly upon receipt thereof, copies of all other written
reports submitted to the Borrower by independent accountants in
connection with any annual or interim audit of the corporate
books of the Borrower; and
(e) With reasonable promptness, such other data and information as
from time to time may be reasonably requested by the Bank,
including Borrower's annual tax return.
Section 6.2. Insurance and Maintenance of Properties and Business. The
----------------------------------------------------
Borrower shall maintain insurance in responsible companies in such amounts and
against such risks as is satisfactory to the Bank, and all such policies shall
provide that the proceeds thereof shall be payable to it and Bank, as their
respective interests may appear. All said policies or certificates thereof,
including the endorsements, shall be deposited with the Bank; and such policies
shall contain provisions that no such insurance may be canceled or decreased
without thirty (30) days prior written notice to the Bank. In the event of
acquisition by the Borrower of additional insurable Pledged Collateral, it shall
cause such insurance coverage to be increased or amended in such manner and to
such extent as prudent business judgment would dictate. If the Borrower shall at
any time or times hereafter fail to obtain and/or maintain any of the policies
of insurance required herein, or fail to pay any premium in whole or in part
relating to such policies, Bank may, but shall not be obligated to, obtain
and/or cause to be maintained insurance coverage with respect to the Pledged
Collateral, including, at Bank's option, the coverage provided by all or any of
the policies of the Borrower, and pay all or any part of the premium therefor,
without waiving any default by Borrower; any sums disbursed by Bank shall be
additional loans to Borrower by Bank payable on demand. Bank shall have the
right to settle and compromise any and all claims under any of the policies
required to be maintained by Borrower hereunder and the Borrower hereby appoints
Bank as its attorney-in-fact, with power to demand, receive, and receipt for all
monies payable thereunder, to execute in its name or the name of the Bank or
both any proof of loss, notice, draft, or other instruments in connection with
such policies or any loss thereunder and generally to do and perform any and all
acts as Borrower, but for this appointment, might or could perform. The Borrower
will, upon request, furnish to the Bank a schedule of all insurance carried by
it, setting forth in detail the amount and type of such insurance. The Borrower
will maintain, in good repair, working order and condition, all properties used
or useful in its the business.
Section 6.3. Payment of Indebtedness and Taxes. The Borrower will pay
---------------------------------
(a) all of its Indebtedness (not required to be subordinated hereunder) and
other obligations in accordance with normal terms or any applicable grace
periods and (b) all taxes, assessments, and other governmental charges levied
upon any of its respective properties or assets or in respect of its respective
franchises, business, income, or profits before the same become delinquent,
except that no such Indebtedness, obligations, taxes, assessments, or other
charges need be paid if contested by the Borrower in good faith and by
appropriate proceedings promptly initiated and
18
diligently conducted and if appropriate provision, if any, as shall be required
by GAAP, shall have been made therefor.
Section 6.4. Litigation; Adverse Changes. The Borrower will promptly
---------------------------
notify the Bank in writing of (a) any event which, if existing at the date
hereof, would require a material qualification of the representations and
warranties set forth in Section 3.6 and (b) any material adverse change in the
condition, business, or prospects, financial or otherwise, of the Borrower.
Section 6.5. Notice of Default. The Borrower will promptly notify the
-----------------
Bank of (a) any Event of Default or event which with the passage of time or
service of notice or both would constitute an Event of Default hereunder and (b)
any demands made upon the Borrower by any Person for the acceleration and
immediate payment of any material Indebtedness owed to such Person.
Section 6.6. Inspection. The Borrower will make available for
----------
inspection by duly authorized representatives of the Bank, its books, records,
and properties, and will furnish the Bank such information regarding its
respective business affairs and financial condition within a reasonable time
after written request therefor.
Section 6.7. Environmental Matters. The Borrower:
---------------------
(a) Shall comply in all material respects with all Environmental
Laws;
(b) Shall deliver promptly to the Bank (i) copies of any documents
received from the United States Environmental Protection Agency
or any state, county or municipal environmental or health agency,
and (ii) copies of any documents submitted by the Borrower to the
United States Environmental Protection Agency or any state,
county or municipal environmental or health agency concerning its
operations; and
(c) Hereby indemnifies and holds the Bank harmless from all liability
or loss arising out of the application of any Environmental Law
to the Bank or to any collateral (including without limitation
the Premises) for any loan to the Borrower, including, without
limitation, any Environmental Law creating a lien upon property
or imposing any liability upon the Bank for any clean up costs;
provided, however, that this indemnity shall not apply to
liability arising out of willful violation of Environmental laws
by the Bank.
Section 6.8. Payment Schedule of Notes. The Borrower shall cause the
-------------------------
principal amount of the Notes to be repaid not later than the scheduled payments
as indicated on Exhibit C attached hereto and made a part hereof. On the Date of
Issuance, the Borrower shall direct the Trustee to redeem Notes on the dates and
in the amounts set forth on Exhibit C pursuant to the Borrower's right to
optionally redeem Notes pursuant to the Indenture.
Section 6.9. Existence; Business. The Borrower will cause to be done
-------------------
all things reasonably necessary to preserve and keep in full force and effect
its existence and rights, to conduct its business in a prudent manner, to
maintain in full force and effect, and renew from time to time, its franchises,
permits, licenses, patents, and trademarks that are necessary to
19
operate its business. The Borrower will comply in all material respects with all
valid laws and regulations now in effect or hereafter promulgated by any
properly constituted governmental authority having jurisdiction, and the
Borrower will act to eliminate any nuisance or nuisances which it creates on any
portion of the Premises; provided, however, the Borrower shall not be required
to comply with any law or regulation which it is contesting in good faith by
appropriate proceedings as long as either the effect of such law or regulation
is stayed pending the resolution of such proceedings or the effect of not
complying with such law or regulation is not to jeopardize any franchise,
license, permit, patent, or trademark necessary to conduct the Borrower's
business.
Section 6.10. Total Funded Debt to EBITDA. The Borrower shall maintain
---------------------------
a ratio of Total Funded Debt to EBITDA of 4.0 to 1.0 as of December 31, 2000;
3.5 to 1.0 as of December 31, 2001; and 3.0 to 1.0 as of December 31, 2002 and
December 31 of each fiscal year thereafter. The Borrower will provide the Bank
with a certificate of an authorized officer of the Borrower demonstrating
compliance with this section 6.10 within the period required for the delivery of
financial statements pursuant to subsection 6.1(b) of this Agreement.
Section 6.11. Minimum Debt Service Coverage Ratio. The Borrower shall
-----------------------------------
maintain a minimum Debt Service Coverage Ratio of 1.25 to 1.0 as of the end of
each fiscal quarter, calculated using information for the previous twelve (12)
months, beginning with the fiscal quarter ending June 30, 2000 and continuing
quarterly thereafter. The Borrower will provide the Bank with a certificate of
an authorized officer of the Borrower demonstrating compliance with this section
6.11 within each applicable period required for the delivery of financial
statements pursuant to subsections 6.1(a) and (b) of this Agreement.
Section 6.12. Changes to Plans and Specifications, General Contract.
-----------------------------------------------------
The Borrower will not make or permit to be made (a) any material change in the
Plans and Specifications; (b) any changes in excess of 10% in any line item of
the Project budget, (c) any material change in the terms and conditions of the
construction contract with the General Contractor or (d) any change in the
identity of the General Contractor.
Section 6.13. Construction of Project. The Borrower will cause the
-----------------------
construction of the Project to be carried forward with diligence and continuity
and to be completed by the Completion Date, and in accordance with the Plans and
Specifications and all applicable zoning, building and other laws, statutes,
codes, ordinances, rules and regulations. The Borrower will comply with its
obligations under its construction contract with the General Contractor.
Section 6.14. Additional Funds. The Borrower will, at any time or times
----------------
upon request of the Bank, deposit with the Bank such additional funds as are
determined by the Bank or the Bank's Inspector to be necessary (in excess of the
proceeds of the Bonds) to pay for completion of the Project and all costs and
expenses related thereto.
Section 6.15. Evidence of Payment of Costs. The Borrower will furnish
----------------------------
to the Bank copies of all affidavits, lien waivers, releases or other evidence
requested by the Bank from time to time to establish that all bills for labor
and materials performed or furnished in connection with the Project and all
bills of the General Contractor and its subcontractors and material suppliers,
have been paid in full, except for retainages.
20
Section 6.16. Entry; Correction of Defective Work. The Borrower will
-----------------------------------
allow the Bank, through the Bank's Inspector, and the Bank's officers, agents or
employees, at all reasonable times, (a) the right of entry and free access to
the Premises to inspect all work done, labor performed and materials furnished
in furtherance of the Project and (b) to require to be replaced or otherwise
corrected any materials or work which fails to comply with the Plans and
Specifications.
Section 6.17. Title. The Borrower will keep the title to the Premises
-----
free and clear of all liens, encumbrances, easements, restrictions and claims,
except for (a) the Permitted Encumbrances, (b) any lien, restriction or
encumbrance created in connection with this Agreement or otherwise approved by
the Bank, and (c) real estate taxes and installments of special assessments, if
any, which are a lien but not yet due and payable.
SECTION SEVEN
-------------
NEGATIVE COVENANTS
The Borrower further covenants and agrees that, from the date of this
Agreement and until the obligations of the Borrower to the Bank hereunder are
satisfied in full, the Borrower will, unless the Bank shall otherwise consent or
agree, comply with the following provisions:
Section 7.1. Sale, Purchase of Assets. The Borrower will not, directly
------------------------
or indirectly, (a) purchase, lease, or otherwise acquire any assets, including
without limitation shares of corporate stock or other equity interests in
entities (other than Borrower and its Subsidiaries), except in connection with
the Project or in the ordinary course of business or as otherwise permitted
under this Agreement, or (b) sell, lease, transfer, or otherwise dispose of any
building or real property or other assets except for (i) tangible assets sold
for full and adequate consideration which the Borrower has determined to be worn
out or obsolete or not useful in the ordinary course of its business or (ii)
tangible assets sold in the ordinary course of business provided that the
Borrower receives full and adequate consideration in exchange for such assets
sold.
Section 7.2. Mortgage, Security Interests, and Liens. The Borrower will
---------------------------------------
not, directly or indirectly, create, incur, assume, or permit to exist any
mortgage, security interest, lien, charge, encumbrance on, or pledge,
conditional sale or other title retention agreement with respect to, the Pledged
Collateral now owned or hereafter acquired (herein called "Liens") other than:
(a) Liens for taxes, assessments, or governmental charges or levies
the payment of which is not at the time required by Section 6.3
hereof;
(b) Liens imposed by law, such as Liens of landlords, carriers,
warehousemen, mechanics, and materialmen arising in the ordinary
course of business for sums not yet due or being contested by
appropriate proceedings promptly initiated and diligently
conducted, provided other appropriate provision, if any, as shall
be required by GAAP shall have been made therefor;
21
(c) 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, and surety and
appeal bonds, or to secure the performance and return of money
bonds and other similar obligations, excluding obligations for
the payment of borrowed money;
(d) Any judgment Lien, unless the judgment it secures shall not,
within thirty (30) days after the entry thereof, have been
discharged or execution therefor stayed pending appeal, or shall
not have been discharged within thirty (30) days after the
expiration of any such stay;
(e) Other Liens incidental to the conduct of the business or
ownership of properties and assets of the Borrower, which are not
incurred or granted in connection with the borrowing of money or
the obtaining of advances or credits, and which do not in the
aggregate materially detract from the value of its or their
respective property or assets or materially impair the use
thereof in the ordinary course of business; and
(f) Liens evidenced by or permitted under the terms of the Mortgage,
as well as any other Permitted Encumbrances.
Section 7.3. Assumptions; Guaranties. The Borrower will not assume,
-----------------------
guarantee, endorse, or otherwise become directly or contingently liable for
(including, without limitation, liable by way of agreement, contingent or
otherwise, to purchase, to provide funds for payment, to supply funds to, or
otherwise invest in any debtor, other than to a Subsidiary, or otherwise to
assure the creditor against loss) any obligation or Indebtedness of any other
Person, other than a Subsidiary, except guaranties by endorsement of negotiable
instruments for deposit, collection, or similar transactions in the ordinary
course of business.
Section 7.4. Mergers; Consolidation. The Borrower will not merge or
----------------------
consolidate with any Person, dissolve, wind up its affairs, or sell, assign,
lease, or otherwise dispose of (whether in one transaction or in a series of
transactions), all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person.
Section 7.5. Investments and Loans. The Borrower will not, directly or
---------------------
indirectly, (a) purchase or otherwise acquire or own any stock or other
securities of any Person, other than a Subsidiary, including without limitation,
the Borrower's own securities or stock, except pursuant to agreements to which
the Borrower is a party as of the date of this Agreement, or pursuant to the
provisions of any current or future awards under Borrower's employee stock
incentive plans, or (b) make or permit to be outstanding any loan or advance or
enter into any arrangements to provide funds or credit, to any other Person,
except that it may purchase or otherwise acquire and own marketable U.S.
Treasury and Agency obligations, and certificates of deposit and bankers'
acceptances issued or created by any domestic commercial bank.
Section 7.6. Subordinated Debt. The Borrower will not make any payment
-----------------
upon its outstanding Subordinated Debt, except in such manner and amounts as may
be expressly
22
authorized in any subordination agreement presently or hereafter held by the
Bank.
Section 7.7. Note Documents. The Borrower will not enter into an
--------------
amendment of the Note Documents, without the prior written consent of the Bank.
Section 7.8. Indebtedness. The Borrower will not, and the Borrower will
------------
not permit any Subsidiary to, directly or indirectly, create, incur or assume
Indebtedness, or otherwise become, be, or remain liable with respect to, any
Indebtedness, provided that the foregoing restrictions shall not apply to:
(a) The Indebtedness evidenced by the Credit Documents, Indebtedness
evidenced by the Note Documents, and any other Indebtedness now
or hereafter payable by it to the Bank;
(b) current accounts, payable or accrued, incurred by it or any of
its Subsidiaries in the ordinary course of its business, provided
that the same shall be paid when due in accordance with customary
trade terms unless contested by appropriate proceedings; and
(c) Existing Indebtedness which is reflected on its financial
statements referred to in Section 3.8 hereof.
SECTION EIGHT
-------------
EVENTS OF DEFAULT
-----------------
Section 8.1. Events of Default. The occurrence of any one or more of
-----------------
the following events shall constitute an Event of Default under this Agreement:
(a) If Borrower fails to make or cause to be made any payment to the
Bank required to be made pursuant to the terms of this Agreement
or any of the other Credit Documents, or
(b) If any representation or warranty made by the Borrower herein, in
any of the other Credit Documents or in any other written
statement, certificate, report, or financial statement at any
time furnished by or for the Borrower in connection herewith,
proves to be incorrect in any material respect when made, or
(c) If the Borrower fails to perform or observe any other provision,
covenant, or agreement contained in this Agreement or in any of
the other Credit Documents, and such failure remains unremedied
for thirty (30) calendar days after the Bank shall have given
written notice thereof to the Borrower, or
(d) If the Borrower (i) fails to pay any Indebtedness (other than as
arising under this Agreement) owing by the Borrower when due,
whether at maturity, by acceleration, or otherwise or (ii) fails
to perform any term, covenant, or agreement
23
on its part to be performed under any agreement or instrument
(other than this Agreement) evidencing, securing or relating to
such Indebtedness when required to be performed, or is otherwise
in default thereunder, if the effect of such failure is to
accelerate, or to permit the holder(s) of such Indebtedness or
the trustee(s) under any such agreement or instrument to
accelerate, the maturity of such Indebtedness, whether or not
such failure shall be waived by such holder(s) or trustee(s), or
(e) An Indenture Default shall have occurred, or
(f) If the Borrower discontinues business, or if there occurs a
material adverse change in the business, property, or the
condition or operations, financial or otherwise, of the Borrower,
or
(g) If any of the following events occur: (i) any Reportable Event,
which the Bank determines in good faith might constitute grounds
for the termination of any Plan or for the appointment by the
appropriate United States district court of a trustee to
administer any Plan, continues for thirty (30) days after the
Bank has given written notice thereof to the Borrower, (ii) any
Plan incurs any "accumulated funding deficiency" (as such term is
defined in ERISA) whether waived or not, (iii) the Borrower
engages in any Prohibited Transaction, (iv) a trustee is
appointed by an appropriate United States district court to
administer any Plan, or (v) the PBGC institutes proceedings to
terminate any Plan or to appoint a trustee to administer any
Plan, or
(h) If the Borrower is adjudicated a debtor or insolvent, or ceases,
is unable, or admits in writing its inability to pay its debts as
they mature, or makes an assignment for the benefit of creditors,
(ii) applies for, or consents to, the appointment of any
receiver, trustee, or similar officer for it or for all or any
substantial part of its property, or any such receiver, trustee,
or similar officer is appointed without the application or
consent of the Borrower, (iii) institutes, or consents to the
institution of, by petition, application, or otherwise, any
bankruptcy reorganization, arrangement, readjustment of debt,
dissolution, liquidation, or similar proceeding relating to it
under the laws of any jurisdiction, (iv) has any such proceeding
described in clause (iii) instituted against it which remains
thereafter undismissed for a period of sixty (60) days, or (v)
has any judgment, writ, warrant of attachment or execution or
similar process issued or levied against a substantial part of
its property and such judgment, writ, or similar process is not
released, vacated, or fully bonded within sixty (60) days after
its issue or levy; or
(i) If an event of default occurs under any of the Credit Documents;
or
(j) Except as otherwise permitted in this Agreement, if at any time,
(i) the sum of the undisbursed portion of the Project Fund is
less than the amount determined by the Bank to be necessary for
the timely and full payment of (a) all work done and not
theretofore paid for or to be done in connection with the
completion of the Project
24
in accordance with the Plans and Specifications, including
installation of all fixtures, furniture and equipment
contemplated by the Plans and Specifications, and (b) all other
costs incurred and not theretofore paid for, or to be incurred in
connection with the Project, and (ii) the Borrower fails, within
fifteen (15) Business Days after written request by the Bank, to
deposit the deficiency with the Bank.
Section 8.2. No Waiver; Remedies. If an Event of Default occurs, the
-------------------
Bank may exercise any and all remedies, legal or equitable on behalf of the
Bank, to collect the amounts due from the Borrower pursuant to this Agreement,
and, in its sole discretion, may instruct the Trustee to accelerate the maturity
of the Notes or redeem the Notes. Upon receipt by the Trustee of such
instructions from the Bank, the Notes shall be accelerated or redeemed pursuant
to the Indenture. No failure on the part of the Bank to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or equity.
SECTION NINE
------------
TRANSFER, REDUCTION OR TERMINATION OF LETTER OF CREDIT
------------------------------------------------------
Section 9.1. Transfer of Letter of Credit; Reduction of Letter of
----------------------------------------------------
Credit Commitment and Termination of Letter of Credit and Related Matters.
-------------------------------------------------------------------------
(a) The Letter of Credit may be transferred in accordance with the
provisions set forth therein.
(b) The Borrower shall be entitled to a credit against the principal
amount of the Notes prior to maturity (the "Credit") pursuant to
an optional redemption of a portion of the Notes or to the
purchase of Notes in the open market and cancellation of such
Notes in accordance with the provisions of the Indenture, if such
amounts have been paid by or on behalf of the Borrower other than
by the Bank. If the Borrower is entitled to a Credit, the
Borrower shall have the right at any time thereafter to reduce
permanently, without penalty or premium, the Letter of Credit
Commitment in the manner set forth below. The Letter of Credit
Commitment will be reduced by an amount equal to the sum of the
following corresponding reductions in the Principal Commitment
and the Interest Commitment: (a) the Principal Commitment will be
reduced by an amount equal to the amount of such Credit; and (b)
the Interest Commitment will be reduced by an amount equal to
ninety-eight (98) days' interest on the amount of such Credit at
the rate of ten percent (10%) per annum (calculated on the basis
of a 365-day year; 366 days in a leap year). The aforementioned
reduction will occur not less than three (3) Business Days' after
written notice to the Bank, accompanied by the original Letter of
Credit and the written certificate of the Trustee and the
Borrower stating that the Borrower is entitled to such Credit and
designating the amount of such Credit and the date upon which
such Credit and the corresponding
25
reduction in the Letter of Credit Commitment shall become
effective (which shall be a Business Day).
(c) If the Letter of Credit Commitment shall be reduced pursuant to
paragraph (b) hereof, and the Bank shall have received the
certificate required by paragraph (b) hereof, then the Bank shall
deliver to the Trustee an amendment to the Letter of Credit,
dated as of the effective date of the reduction as indicated,
which amendment shall reduce the Letter of Credit Commitment
accordingly, but otherwise does not change the terms of the
Letter of Credit.
(d) The obligation of the Bank to honor Interest Drawings, under the
Letter of Credit, up to the amount of the Interest Commitment,
(as same may have been reduced pursuant to subsection (b) of this
Section 9.1), will be automatically reinstated after each
Interest Drawing to an amount equal to the Interest Commitment.
(e) The Bank shall reinstate amounts drawn under the Letter of Credit
pursuant to a Remarketing Drawing, as to the Interest Commitment,
immediately and, as to the Principal Commitment, to the extent
money is received by the Bank (other than from drawings under the
Letter of Credit) from the tender agent described in the
Indenture, which money was held by such tender agent for the sole
purpose of reimbursing the Bank for all or a portion of amounts
drawn under the Letter of Credit pertaining to such Remarketing
Drawing for Notes tendered for purchase to and remarketed by the
Remarketing Agent, or upon the Trustee's certification that the
Trustee or the tender agent is holding for the Bank's benefit
Notes together with an amount of money, the aggregate amount of
which Notes and money is equal to or greater than the principal
portion of the Remarketing Drawing.
The Letter of Credit shall terminate automatically on the earliest of
(i) the payment by the Bank to the Trustee of the final drawing available to be
made under the Letter of Credit; (ii) receipt by the Bank of the Letter of
Credit and a certificate signed by an officer of the Trustee and an authorized
representative of Borrower stating that no Notes remain outstanding; (iii)
receipt by the Bank of the Letter of Credit and a certificate signed by an
officer of the Trustee and an authorized representative of Borrower stating that
an "Alternate Credit Facility" in substitution for the Letter of Credit has been
accepted by the Trustee and is in effect"; or (iv) the stated Expiration Date.
This Reimbursement Agreement will terminate on the later of the
Expiration Date or Borrower's satisfaction in full of all of the Borrower's
obligations pursuant to this Reimbursement Agreement, subject to any provision
of this Reimbursement Agreement for survival of any provision of this
Reimbursement Agreement.
SECTION TEN
-----------
MISCELLANEOUS
-------------
Section 10.1. Liability of the Bank. Between the Borrower and the Bank,
---------------------
the Borrower assumes all risks of the acts or omissions of the Trustee and any
transferee of the Letter of Credit
26
with respect to its use of the Letter of Credit or its proceeds. Neither the
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use which may be made of the Letter of Credit or any of the proceeds
thereof, or for any acts or omissions of the Trustee and any transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
inaccuracy of any of the statements or representations contained therein or of
any endorsement(s) thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c) payment by
the Bank against presentation of documents which do not strictly comply with the
terms of the Letter of Credit, including any failure of any documents to bear
any reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under the Letter
of Credit, except the Borrower shall have a claim against the Bank, and the Bank
shall be liable to the Borrower, to the extent, but only to the extent of any
direct, as opposed to consequential, damages suffered by the Borrower which the
Borrower proves were caused by (i) the Bank's willful misconduct or gross
negligence in honoring a draft under the Letter of Credit, or (ii) the Bank's
willful failure to pay under the Letter of Credit after presentation to it by
the Trustee (or a successor trustee under the Indenture to whom the Letter of
Credit has been transferred in accordance with its terms) of a sight draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Bank may
accept documents that appear on their face to be in order, and may assume the
genuineness and rightfulness of any signature thereon, without responsibility
for further investigation, regardless of any notice or information to the
contrary unless actually received by the Bank; provided, that if the Bank shall
receive written notification from both the Trustee and the Borrower that
documents conforming to the terms of the Letter of Credit to be presented to the
Bank are not to be honored, the Bank agrees that it will not honor such
documents and the Borrower shall indemnify and hold the Bank harmless from such
failure to honor.
In the event any claim, demand, action or suit, loss, or liability is
asserted against Bank arising in any manner from the issuance, presentation or
acceptance of drafts under the Letter of Credit or the interpretation of or
actions under the Letter of Credit, the Borrower agrees to indemnify, hold
harmless and defend Bank, its agents, officers and directors from any loss or
damage, including without limitation, reasonable attorneys' fees and costs,
except for Bank's obligations stated in the Letter of Credit and for loss or
liability incurred by Bank's willful misconduct or gross negligence as
referenced above. The agreements in this paragraph will survive any payment
under or termination of this Reimbursement Agreement.
Section 10.2. Right to Set-Off. Upon the occurrence of any Event of
----------------
Default hereunder the Bank is hereby irrevocably authorized at any time and from
time to time without notice to the Borrower, any such notice being expressly
waived by the Borrower, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, any other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect or contingent or matured or unmatured, at any
time held or owing by the Bank to or for the credit or the account of the
Borrower, or any part thereof in such amounts as such Bank may elect, against
and on account of the obligations and liabilities of the Borrower to the Bank
hereunder and claims of every nature and description of the Bank against the
Borrower, whether arising hereunder or otherwise, as the Bank may elect, whether
or not the Bank has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Bank agrees to notify
the Borrower promptly of any such set-off and the
27
application made by the Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Bank under this subsection are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Bank may
have.
Section 10.3. Additional Collateral. As additional security for this
---------------------
Agreement, the Borrower agrees that in the event that Trustee shall, at any time
or from time to time, draw upon the Letter of Credit, the Bank shall be and
become the assignee of all rights and interests of the Borrower and the Trustee.
The Borrower does hereby consent to such assignment, and does agree to execute
any and all such documents, instruments and certificates in connection therewith
as the Bank shall deem appropriate.
Section 10.4. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be deemed to have been
made when delivered, or mailed first-class postage prepaid, or sent by wire,
telex, telecopier or similar electronic means of communication or delivered to a
telegraph office for transmission, addressed to the appropriate address set
forth below,
if to the Bank, at:
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice President
KeyBank National Association
Commercial Banking Division
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may have been furnished for such purpose to the
Borrower by the Bank in writing; or
if to the Borrower, at:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and Chief Executive Officer
Aerovox Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may have been furnished for such purpose to the Bank
by the Borrower in writing.
Section 10.5. Survival of Representations and Warranties. All
------------------------------------------
agreements, representations and warranties contained in the Credit Documents
shall survive the execution and delivery of this Agreement, any investigation at
any time made by or on behalf of the Bank and the issuance and acceptance of the
Letter of Credit. All statements contained in any certificates or other
instruments delivered by the Borrower pursuant hereto shall constitute
representations and warranties by the Borrower under this Agreement.
Section 10.6. Payments on Holidays. Whenever any payment to be made
--------------------
pursuant to this Agreement shall be stated to be due on a public holiday in the
State of Maine, Saturday or Sunday, such payment may be made on the next
succeeding business day and such extension of time shall in such case be
included in computing interest, if any, in connection with such payment.
Section 10.7. Computation of Interest. Except as otherwise provided,
-----------------------
all computations of interest with respect to the Letter of Credit hereunder
shall be made on the basis of a three hundred sixty-five (365) day year.
Section 10.8. Entire Agreement. The Credit Documents and the Letter of
----------------
Credit embody the entire agreement and understanding among the parties hereto
and supersede all prior agreements and understandings relating to the subject
matter hereof.
Section 10.9. Parties in Interest. All the terms and provisions of this
-------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto.
Section 10.10. Expenses. Regardless of whether or not the Notes are
--------
eventually issued and sold and regardless of whether or not the transactions
contemplated hereby shall be consummated, Borrower will pay or reimburse Bank,
on demand, for all expenses incurred or paid by Bank in connection with (i) the
preparation, interpretation or amendment of this Agreement, the Letter of Credit
or the Credit Documents, (ii) the administration, supervision, protection or
realization of any Pledged Collateral, (iii) any action or participation by Bank
in connection with any bankruptcy case or proceeding involving Borrower or any
of the Pledged Collateral, and (iv) the defense, settlement or satisfaction of
any action, claim or demand asserted against Bank with respect to Bank's rights
or liabilities under the Credit Documents (exclusive of any final judgment
rendered by a court of competent jurisdiction pursuant to which the Bank has
been found expressly liable for willful misconduct or gross negligence in
honoring, or failing to honor, a draft under the Letter of Credit), including,
but not limited to, with respect to all of the foregoing, all reasonable
out-of-pocket expenses incurred by the Bank for the Bank's
29
attorneys (whether special outside counsel or attorneys in its Law Group) and
paralegal fees, disbursements, and costs, all at such reasonable rates and with
respect to such services as the Bank in its discretion may elect to pay (as such
rates may vary from time to time during the course of the performance of such
services) including the costs of appraisers, engineers, investment bankers,
environmental consultants and other experts that may be retained by the Bank in
connection with such efforts. At its option, and without limiting any other
rights or remedies, the Bank may pay or discharge taxes, liens, security
interests or other encumbrances at any time levied against or placed on any of
the Pledged Collateral, and may procure and pay any premiums on any insurance to
be carried by Borrower, or provide for the maintenance and preservation of any
of the Pledged Collateral, and add the expense thereof to the amount due from
the Borrower pursuant to subsection 2.2(a).
Section 10.11. Payments. Borrower irrevocably waives the right to
--------
direct the application of any and all payments at any time or times hereafter
received by Bank from Borrower, and Borrower does hereby irrevocably agree that
Bank shall have the continuing exclusive right to apply and reapply any and all
payments received at any time or times hereafter against the Borrower's
obligations hereunder or under Bank's other loans with Borrower in such manner
as Bank may deem advisable.
Borrower agrees that to the extent that Borrower makes a payment or
payments to Bank, which payment or payments, or any part thereof, are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to Borrower, its estate, trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment or repayment, the liability
or part thereof which has been paid, reduced or satisfied by the amount so
repaid shall be reinstated and included within the Credit Documents as of the
date such initial payment, reduction or satisfaction occurred.
Section 10.12. Counterparts. This Agreement may be executed in any
------------
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.13. Maine Contract. This Agreement shall be construed and
--------------
enforced in accordance with and be governed by the laws of the State of Maine.
Section 10.14. Waiver of Jury Trial. THE BORROWER HEREBY KNOWINGLY,
--------------------
VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A JURY TRIAL, WHETHER ARISING
UNDER THE MAINE CONSTITUTION, THE UNITED STATES CONSTITUTION, OR ANY STATE OR
FEDERAL STATUTE, REGULATION, COMMON LAW, OR RULE OF CIVIL PROCEDURE, WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH ANY
OF THE CREDIT DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO
ENTER INTO THE
30
CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE WAIVER AND CERTIFICATION CONTAINED
HEREIN.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
AEROVOX INCORPORATED
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and
Chief Executive Officer
KEYBANK NATIONAL ASSOCIATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice
President
31
EXHIBIT A
KEYBANK NATIONAL ASSOCIATION
International Department
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Date of Issuance: March 22, 2000
Irrevocable Transferable Direct Pay Letter of Credit No. NSL093053
Beneficiary: Applicant:
The Huntington National Bank, Trustee Aerovox Incorporated
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 740 Belleville Avenue
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Amount: USD $10,443,058.00
Expiration Date: March 22, 2005
Dear Sirs:
You, as Trustee under the Trust Indenture dated as of March 1, 2000
(the "Indenture") between you and Aerovox Incorporated, a Delaware corporation
(the "Borrower"), pursuant to which Ten Million, One Hundred Seventy Thousand
Dollars ($10,170,000.00) in aggregate principal amount of Taxable Adjustable
Rate Notes, Series 2000 (such Notes, together with beneficial Ownership
Interests (as defined in the Indenture) in such Notes, are hereinafter referred
to as the "Notes") are being issued by the Borrower, are hereby irrevocably
authorized to draw on KeyBank National Association pursuant to our Irrevocable
Transferable Direct Pay Letter of Credit, for the account of the Borrower,
available by one or more of your drafts at sight, upon the terms and conditions
hereinafter set forth, an amount (subject to reinstatement as hereinafter set
forth) not exceeding Ten Million, Four Hundred Forty-Three Thousand, Fifty-Eight
Dollars ($10,443,058.00) (the "Letter of Credit Commitment") of which (a) an
amount not exceeding Ten Million, One Hundred Seventy Thousand Dollars
($10,170,000.00) may be drawn with respect to the payment of (i) the unpaid
principal amount of the Notes as and when the same become due at maturity or by
acceleration or by redemption, or pursuant to any mandatory sinking fund
requirements, (the "Principal Commitment") or (ii) that portion of the purchase
price of the Notes corresponding to the principal thereof when delivered to the
Remarketing Agent for remarketing and not remarketed and an amount not exceeding
Two Hundred Seventy Three Thousand, Fifty-Eight Dollars ($273,058.00) may be
drawn with respect to the payment of up to ninety-eight (98) days' interest at a
maximum rate of ten percent (10%) per annum (calculated on the basis of a year
of 365 days; 366 days in a leap year) (the "Maximum Rate") accrued on the Notes
on or prior to their stated maturity dates or (ii) the portion of the purchase
32
price of Notes corresponding to up to 98 days' interest accrued on such Notes at
the Maximum Rate when delivered to the Remarketing Agent for remarketing and not
remarketed (the "Interest Commitment"), effective immediately and expiring at
the close of business on March 22, 2005 (the "Expiration Date").
Funds under this Letter of Credit are available to you against your
executed sight draft(s) drawn on us, stating on their face: "Drawn under KeyBank
National Association Irrevocable Transferable Direct Pay Letter of Credit No.
NSL093053" and accompanied by: (A) if the drawing is being made with respect to
the payment of principal on the Notes, whether due at maturity, upon call for
redemption, upon acceleration or pursuant to any mandatory sinking fund
requirements (a "Principal Drawing"), a certificate signed by you in the form of
Schedule 1 attached hereto appropriately completed; (B) if the drawing is being
made with respect to a payment of purchase price corresponding to the unpaid
principal amount of, and the interest accrued on, the Notes when delivered to
the Remarketing Agent for remarketing and not remarketed (a "Remarketing
Drawing"), a certificate signed by you in the form of Schedule 2 attached hereto
appropriately completed; and (C) if the drawing is being made with respect to a
payment of interest on the Notes (an "Interest Drawing"), a certificate signed
by you in the form of Schedule 3 hereto appropriately completed. Presentation of
such draft(s) and certificate(s) shall be made by telephone facsimile confirmed
in writing at our Main Office, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: International Department, or at any other office of ours
which may be designated by us by written notice delivered to you.
We hereby agree that all drafts drawn under and in compliance with the
terms of this Letter of Credit will be duly honored by us by 12:00 noon (Albany,
New York time) of the Business Day following the transmission of the telephone
facsimile of the draft(s) and certificate(s) (originals thereof to be presented
before 10:00 a.m. (Albany, New York time) within one (1) Business Day following
a telephone facsimile transmission) as specified at such office on or before the
Expiration Date; provided, however, if a drawing is presented to pay the
purchase price of Notes which have not been remarketed by the Remarketing Agent
and if conforming drawing documentation is presented at or prior to 11:00 a.m.
(Albany, New York time) on a Business Day, payments shall be made to you on such
Business Day. If requested by you, payment under this Letter of Credit may be
made by wire transfer of federal funds to your account at the Federal Reserve
Bank of New York, or by deposit of immediately available funds into a designated
account that you maintain with us. All payments under this Letter of Credit
shall be made from our own funds. As used herein, "Business Day" shall mean any
day of the year other than (i) a Saturday or Sunday, (ii) any day on which banks
located in either Albany, New York, or the city in which the principal corporate
trust office of the Trustee pursuant to the Indenture is located are required or
authorized by law to remain closed, or (iii) any day on which the New York Stock
Exchange is closed.
Drawings hereunder shall not exceed the Letter of Credit Commitment, as
the Letter of Credit Commitment may be reduced or reinstated pursuant hereto,
and, except as hereinafter modified, each drawing honored by us shall pro tanto
--- -----
reduce the amount available under this
___________________________________ ___________________________________
Authorized Signature Authorized Signature
33
Letter of Credit.
In connection with any Interest Drawing, the Interest Commitment will
be automatically decreased by the amount of such Interest Drawing and will be
automatically reinstated by the amount of such Interest Drawing on the date of
such Interest Drawing
We will reinstate amounts drawn pursuant to a Remarketing Drawing
hereunder, as to the Interest Commitment, immediately and, as to the Principal
Commitment, to the extent that money is received by us (other than from drawings
under this Letter of Credit) from the Tender Agent described in the Indenture,
which money was held by the Tender Agent for the sole purpose of reimbursing us
for all or a portion of amounts drawn hereunder pertaining to such Remarketing
Drawing, or upon your certification that you or the Tender Agent is holding for
our benefit Notes together with an amount of money, the aggregate amount of
which Notes and money is equal to or greater than the principal portion of the
Remarketing Drawing.
Upon presentation by you of any Principal Drawing, the amount of this
Letter of Credit and the amounts available to be drawn by you by any subsequent
Principal Drawing shall be automatically and permanently decreased by an amount
equal to the amount of such Principal Drawing plus the amount of corresponding
interest allocable to such Principal Drawing in the Interest Commitment.
If the Borrower shall be entitled to a credit against the principal
amount of the Notes prior to maturity (the "Credit") pursuant to an optional
redemption of a portion of the Notes or to the purchase of Notes in the open
market and cancellation thereof in accordance with the provisions of the
Indenture, and such amounts have been paid by or on behalf of the Borrower other
than by us, the Borrower shall have the right at any time thereafter to reduce
permanently, without penalty or premium, the Letter of Credit Commitment in the
manner set forth below. The Letter of Credit Commitment will be reduced by an
amount equal to the sum of the following corresponding reductions in the
Principal Commitment and the Interest Commitment: (i) the Principal Commitment
will be reduced by an amount equal to the amount of such Credit and (ii) the
Interest Commitment will be reduced by an amount equal to ninety-eight (98)
days' interest on the amount of such Credit at the Maximum Rate.
The reduction in the Letter of Credit Commitment pursuant to such
Credit will occur not less than three (3) Business Days after written notice to
us, accompanied by this Letter of Credit and the written certificate of you and
the Borrower in the form of Schedule 4 attached hereto stating that the Borrower
is entitled to such reduction and designating the amount of such Credit and the
date of the Business Day upon which such reduction shall become effective. Upon
such presentation we will either reissue this Letter of Credit in the maximum
amount available hereunder or otherwise amend this Letter of Credit to reflect
such maximum amount then available.
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment
___________________________________ ___________________________________
Authorized Signature Authorized Signature
34
to you or your account of the amount specified in a sight draft drawn hereunder,
we shall be fully discharged on our obligation under this Letter of Credit with
respect to such sight draft, and we shall not thereafter be obligated to make
any further payments under this Letter of Credit in respect of such sight draft
to you or to any other person who may have made to you or who makes to you a
demand for payment of principal of or interest on any of the Notes.
Except as otherwise provided herein, this Letter of Credit shall be
governed by and construed in accordance with the Uniform Customs and Practice
for Documentary Credits (1993 Revision), Publication No. 500 of the
International Chamber of Commerce (the "UCP"); provided, however, that Article
41, paragraphs d, e, f, g, h, i and j of Article 48 and the second sentence of
Article 17 shall not apply to this Letter of Credit. Furthermore, as provided in
the first sentence of Article 17 of the UCP, we assume no liability or
responsibility for consequences arising out of the interruption of our business
by Acts of God, riots, civil commotions, insurrections, wars or any other causes
beyond our control, or strikes or lockouts. As to matters not covered by the UCP
and to the extent not inconsistent with the UCP or made inapplicable by this
Letter of Credit, this Letter of Credit shall be governed by the laws of the
State of Ohio, including the Uniform Commercial Code as in effect in the State
of Ohio.
Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to KeyBank National Association, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: International Department
specifically referring thereon to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. NSL093053.
This Letter of Credit is transferable in its entirety (but not in part)
to any transferee who has succeeded you as Trustee under the Indenture and such
transferred Letter of Credit may be successively transferred to any Successor
Trustee or Co-Trustee thereunder, but may not be assigned, transferred or
conveyed under any other circumstance. Transfer of the amount available under
this Letter of Credit to such transferee shall be effected by the presentation
to us of this Letter of Credit accompanied by a transfer fee of $500.00 and the
transfer form in the form attached hereto as Schedule 5 and, unless this Letter
of Credit is so presented to us, we shall have no obligation hereunder to any
transferee. Upon such transfer, we will either reissue this Letter of Credit in
the maximum amount then available hereunder or otherwise amend this Letter of
Credit to reflect such maximum amount then available.
Upon the earliest of (i) the payment by us to the Trustee of the final
drawing available to be made under the Letter of Credit, (ii) our receipt of
this outstanding Letter of Credit and a written certificate signed by your
officer and an authorized representative of the Borrower in the form of Schedule
6 hereto appropriately completed, stating that: (a) no Notes remain outstanding
within the meaning of the Indenture; and (b) such officer and representative are
duly authorized to sign such certificate on behalf of you and the Borrower,
(iii) the twentieth (20th) Business Day after our receipt of this Letter of
Credit and a written certificate signed by your officer and an authorized
representative of the Borrower in the form of Schedule 7 hereto appropriately
completed, stating that: (a) an Alternate Credit Facility in substitution of
this Letter of Credit has
___________________________________ ___________________________________
Authorized Signature Authorized Signature
35
been accepted by you and is in effect; and (b) such officer and representative
are duly authorized to sign such certificate on behalf of you and the Borrower,
or (iv) the stated Expiration Date, this Letter of Credit shall automatically
terminate and be delivered to us for cancellation.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Notes or the Reimbursement Agreement),
except only the certificate(s) and the sight draft(s) referred to herein; and
any such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for such certificate(s) and such sight
draft(s).
___________________________________ ___________________________________
Authorized Signature Authorized Signature
36
Exhibit 4.16
SCHEDULE 1
----------
CERTIFICATE FOR THE PAYMENT OF PRINCIPAL
OF AEROVOX INCORPORATED
TAXABLE ADJUSTABLE RATE NOTES, SERIES 2000
(THE "NOTES")
-------------
The undersigned, a duly authorized officer of The Huntington National Bank
(the "Trustee"), hereby certifies to KeyBank National Association (the "Bank"),
with reference to Irrevocable Transferable Direct Pay Letter of Credit No.
NSL093053 (the term "Letter of Credit" and other capitalized terms used herein
and not defined shall have its respective meaning as set forth in the Letter of
Credit) issued by the Bank in favor of the Trustee, that:
The Trustee is the Trustee under the Indenture for the holders of the
Notes.
The Trustee is making a drawing under the Letter of Credit with respect to
the payment of the principal of the Notes.
The amount of principal of the Notes which will be due and payable on ______,
______________ is $____________________.
The amount of the sight draft accompanying this Certificate ($ ), together
with the aggregate of all prior payments made pursuant to Principal Drawings
under this Letter of Credit for the payment of the Notes, does not exceed
$______________.
The amount of the sight draft accompanying this Certificate was computed in
accordance with the terms and conditions of the Letter of Credit, Reimbursement
Agreement, the Notes, and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as
of the _____ day of _________, _____.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:___________________________________
Its:__________________________________
___________________________ ________________________________
Authorized Signature Authorized Signature
37
Exhibit 4.16
SCHEDULE 2
----------
CERTIFICATE FOR THE PAYMENT OF REMARKETING DRAWING
OF AEROVOX INCORPORATED
TAXABLE ADJUSTABLE RATE NOTES, SERIES 2000
(THE "NOTES")
The undersigned, a duly authorized officer of The Huntington National Bank,
as Trustee (the "Trustee"), hereby certifies to KeyBank National Association
(the "Bank") with reference to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. NSL093053 (the "Letter of Credit",
the capitalized terms defined therein and not defined herein being used as
therein defined) issued by the Bank in favor of the Trustee that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Notes. The total amount of Notes outstanding (as defined in the Indenture) is
$_________________.
2. The Trustee is making a drawing under the Letter of Credit at the
written request of the Remarketing Agent (as defined in the Indenture), to pay,
pursuant to the terms of the Remarketing Agreement (as defined in the
Indenture), the purchase price equal to the principal amount of those Notes
which the Remarketing Agent has been unable to remarket and the interest accrued
on such Notes but not paid.
3. The Trustee: (a) is delivering or causing to be delivered to the Bank,
or its designated agent, a principal amount of the Notes, registered in the
names of the Borrower as pledgor and the Bank as pledgee, equal to the amount of
the draft accompanying this Certificate; (b) acknowledges the pledge by the
Borrower to the Bank of the Notes delivered pursuant to subparagraph (a) and (c)
agrees that all payments of principal, premium, if any, and interest made on
such Notes shall be made to the Bank, so long as the Bank is the pledgee of such
Notes.
4. The principal amount of the Notes delivered to the Remarketing Agent
which the Remarketing Agent has been unable to remarket is $____________. The
amount of interest upon such Notes which has accrued but is unpaid is
$_________________. The amount of the draft accompanying this Certificate does
not exceed such amount due as the purchase price of such Notes corresponding to
such principal amount of, and interest on, such Notes.
5. The amount of the draft accompanying this Certificate, together with
the aggregate of all prior payments pursuant to Remarketing Drawings which have
not been reinstated under the Letter of Credit for the payment of purchase price
of the Notes, does not exceed the Letter of Credit Commitment.
Upon receipt by the Trustee of the amount demanded hereby, (a) the Trustee
will deliver it to Note holders only for the purpose of payment of the principal
amount of the Notes referenced in the second paragraph hereof, (b) no portion of
it shall be applied by the Trustee for any other purpose, and (c) no portion of
it shall be commingled with other funds held by the Trustee. This drawing is
made in accordance with the provisions of the Indenture and the Letter of
Credit.
The amount of the draw accompanying this Certificate was computed in
accordance with the
__________________________ _____________________________
Authorized Signature Authorized Signature
38
Exhibit 4.16
terms and conditions of the Notes and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate
as of the _____ day of ________, ______.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:___________________________________
Its:__________________________________
__________________________ ______________________________________
Authorized Signature Authorized Signature
39
Exhibit 4.16
SCHEDULE 3
----------
CERTIFICATE FOR THE PAYMENT OF INTEREST
OF AEROVOX INCORPORATED
TAXABLE ADJUSTABLE RATE NOTES, SERIES 2000
(THE "NOTES")
-------------
The undersigned, a duly authorized officer of The Huntington National Bank
(the "Trustee"), hereby certifies to KeyBank National Association (the "Bank"),
with reference to Irrevocable Transferable Direct Pay Letter of Credit No.
NSL093053 (the term "Letter of Credit" and other capitalized term used herein
and not defined shall have its respective meaning as set forth in the Letter of
Credit) issued by the Bank in favor of the Trustee, that:
The Trustee is the Trustee under the Indenture for the holders of the
Notes.
The Trustee is making a drawing under the Letter of Credit with respect to
a payment of interest accrued on the Notes on or prior to their stated maturity
date.
The amount of interest on the Notes which will be due and payable on _____,
_________, is $_________________.
The amount of the sight draft accompanying this Certificate
($______________) does not exceed the amount available on the date hereof to be
drawn under the Letter of Credit in respect of the payment of interest accrued
on the Notes on or prior to their stated maturity date.
The amount of the sight draft accompanying this Certificate was computed in
accordance with the terms and conditions of the Letter of Credit, the
Reimbursement Agreement, the Notes and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the day of _______________, ___________.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:___________________________________
Its:__________________________________
__________________________ ______________________________________
Authorized Signature Authorized Signature
40
Exhibit 4.16
SCHEDULE 4
----------
CERTIFICATE AS TO REDUCTION
OF LETTER OF CREDIT COMMITMENT
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
RE: KeyBank National Association Irrevocable Transferable
Direct Pay Letter of Credit No. NSL093053
Gentlemen:
The undersigned, a duly authorized officer of The Huntington National Bank,
as Trustee (the "Trustee"), and a duly authorized representative of Aerovox
Incorporated ("Borrower"), respectively, hereby certify to KeyBank National
Association with reference to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. NSL093053 (the "Letter of Credit"),
the capitalized terms defined therein and not defined herein being used as
therein defined, issued by KeyBank National Association in favor of the Trustee
that:
The Trustee is the Trustee under the Indenture for the holders of the
Notes.
The Borrower is entitled to a reduction in the Letter of Credit Commitment.
The Letter of Credit Commitment shall be reduced, effective as of , as follows:
(i) The Principal Commitment shall be reduced to $ __________________.
(ii) The Interest Commitment shall be reduced to $ ___________________.
__________________________ _____________________________
Authorized Signature Authorized Signature
41
Exhibit 4.16
The undersigned officer and representative are duly authorized to sign this
certificate on behalf of the Trustee, and on behalf of the Borrower,
respectively.
IN WITNESS WHEREOF, the Trustee and the Borrower have executed and delivered
this Certificate as of the ______ day of _______________, ___.
TRUSTEE: THE HUNTINGTON NATIONAL BANK,
as Trustee
By:____________________________________
Title:_________________________________
BORROWER: AEROVOX INCORPORATED
By:____________________________________
Title:_________________________________
__________________________ _______________________________________
Authorized Signature Authorized Signature
42
Exhibit 4.16
SCHEDULE 5
----------
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
Date:_______________, _____
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. NSL093053
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to the following (the "Transferee"):
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the Transferee and the Transferee shall have the
sole rights as beneficiary thereof, including sole rights relating to any
amendments of the Letter of Credit, whether increases in the amount to be drawn
thereunder, extensions of the Expiration Date thereof, or other amendments, and
whether such amendments now exist or are made after the date hereof. All
amendments of the Letter of Credit are to be advised direct to the Transferee
without necessity of any consent of or notice to the undersigned beneficiary.
The undersigned hereby certifies that the Transferee has become successor
Trustee under the Trust Indenture dated as of ______________ ______, between the
undersigned and Aerovox Incorporated (the "Borrower") relating to the Borrower's
$10,170,000 Taxable Adjustable Rate Notes, Series 2000, and has accepted such
appointment in writing.
We enclose our check in the amount of $500.00 representing your transfer
fee.
The original of such Letter of Credit is returned herewith, and in
accordance therewith we ask you to endorse the within transfer on the reverse
thereof, and forward it directly to the Transferee with your customary notice of
transfer, or issue a replacement Letter of Credit to the Transferee as provided
therein.
__________________________ _____________________________
Authorized Signature Authorized Signature
43
Exhibit 4.16
Very truly yours,
SIGNATURE AUTHENTICATED THE HUNTINGTON NATIONAL BANK,
as Trustee
By:________________________ By:___________________________
(Bank) (Authorized Officer)
__________________________ ______________________________
Authorized Signature Authorized Signature
44
Exhibit 4.16
SCHEDULE 6
----------
CERTIFICATE THAT NO NOTES ARE OUTSTANDING
-----------------------------------------
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. NSL093053
Gentlemen:
The undersigned, a duly authorized officer of The Huntington National Bank,
as Trustee (the "Trustee"), and a duly authorized representative of Aerovox
Incorporated ("Borrower"), hereby certify to KeyBank National Association with
reference to KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. NSL093053 (the "Letter of Credit," the capitalized terms
defined therein and not defined herein being used as therein defined) issued by
KeyBank National Association in favor of the Trustee that:
(i) The Trustee is the Trustee under the Indenture for the holders of
the Notes.
(ii) No Notes are Outstanding within the meaning of the Indenture.
(iii) The undersigned officer and representative are duly authorized to
sign this certificate on behalf of the Trustee and on behalf of the
Borrower, respectively.
IN WITNESS WHEREOF, the Trustee and the Borrower have executed and
delivered this certificate as of the ____ day of _______, ______.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:______________________________
Its:_____________________________
AEROVOX INCORPORATED
By:______________________________
Its:_____________________________
__________________________ _________________________________
Authorized Signature Authorized Signature
45
Exhibit 4.16
SCHEDULE 7
----------
CERTIFICATE OF ACCEPTANCE OF ALTERNATE SECURITY
-----------------------------------------------
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
RE: KeyBank National Association Irrevocable Transferable Direct Pay
Letter of Credit No. NSL093053
Gentlemen:.
The undersigned, a duly authorized officer of The Huntington National Bank,
as Trustee (the "Trustee"), and a duly authorized representative of Aerovox
Incorporated ("Borrower"), respectively, hereby certify to KeyBank National
Association with reference to KeyBank National Association Irrevocable
Transferable Direct Pay Letter of Credit No. NSL093053 (the "Letter of Credit",
and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by KeyBank
National Association in favor of the Trustee that:
(i) The Trustee is the Trustee under the Indenture for the holders of
the Notes.
(ii) An Alternate Credit Facility in substitution for the Letter of
Credit has been accepted by the Trustee.
(iii) The undersigned officer of the Trustee and representative of the
Borrower are duly authorized to sign this certificate on behalf of
the Trustee and the Borrower, respectively.
IN WITNESS WHEREOF, the Trustee and the Borrower have executed and
delivered this certificate as of the _____ day of ________, _____.
THE HUNTINGTON NATIONAL BANK,
as Trustee
By:____________________________________
Its:___________________________________
AEROVOX INCORPORATED
By:____________________________________
Its:___________________________________
__________________________ _______________________________________
Authorized Signature Authorized Signature
46
Exhibit 4.16
EXHIBIT B
PERMITTED ENCUMBRANCES
----------------------
All items set forth in Schedule B, Section 2 of
the Title Policy
__________________________ _____________________________
Authorized Signature Authorized Signature
47
EXHIBIT C
PAYMENT SCHEDULE OF NOTES
-------------------------
--------------------------------------------------------------------------------
Payment Due Date Principal Amount Payment Due Date Principal Amount
================================================================================
March 1, 2001 $95,000.00 June 1, 2008 $175,000.00
--------------------------------------------------------------------------------
June 1, 2001 $100,000.00 September 1, 2008 $175,000.00
--------------------------------------------------------------------------------
September 1, 2001 $100,000.00 December 1, 2008 $180,000.00
--------------------------------------------------------------------------------
December 1, 2001 $105,000.00 March 1, 2009 $185,000.00
--------------------------------------------------------------------------------
March 1, 2002 $105,000.00 June 1, 2009 $185,000.00
--------------------------------------------------------------------------------
June 1, 2002 $105,000.00 September 1, 2009 $190,000.00
--------------------------------------------------------------------------------
September 1, 2002 $110,000.00 December 1, 2009 $195,000.00
--------------------------------------------------------------------------------
December 1, 2002 $110,000.00 March 1, 2010 $200,000.00
--------------------------------------------------------------------------------
March 1, 2003 $115,000.00 June 1, 2010 $200,000.00
--------------------------------------------------------------------------------
June 1, 2003 $115,000.00 September 1, 2010 $205,000.00
--------------------------------------------------------------------------------
September 1, 2003 $120,000.00 December 1, 2010 $210,000.00
--------------------------------------------------------------------------------
December 1, 2003 $120,000.00 March 1, 2011 $215,000.00
--------------------------------------------------------------------------------
March 1, 2004 $125,000.00 June 1, 2011 $220,000.00
--------------------------------------------------------------------------------
June 1, 2004 $125,000.00 September 1, 2011 $225,000.00
--------------------------------------------------------------------------------
September 1, 2004 $130,000.00 December 1, 2011 $230,000.00
--------------------------------------------------------------------------------
December 1, 2004 $130,000.00 March 1, 2012 $235,000.00
--------------------------------------------------------------------------------
March 1, 2005 $135,000.00 June 1, 2012 $235,000.00
--------------------------------------------------------------------------------
June 1, 2005 $135,000.00 September 1, 2012 $240,000.00
--------------------------------------------------------------------------------
September 1, 2005 $140,000.00 December 1, 2012 $245,000.00
--------------------------------------------------------------------------------
December 1, 2005 $140,000.00 March 1, 2013 $250,000.00
--------------------------------------------------------------------------------
March 1, 2006 $145,000.00 June 1, 2013 $255,000.00
--------------------------------------------------------------------------------
June 1, 2006 $150,000.00 September 1, 2013 $260,000.00
--------------------------------------------------------------------------------
September 1, 2006 $150,000.00 December 1, 2013 $265,000.00
--------------------------------------------------------------------------------
December 1, 2006 $155,000.00 March 1, 2014 $270,000.00
--------------------------------------------------------------------------------
March 1, 2007 $155,000.00 June 1, 2014 $280,000.00
--------------------------------------------------------------------------------
June 1, 2007 $160,000.00 September 1, 2014 $285,000.00
--------------------------------------------------------------------------------
September 1, 2007 $165,000.00 December 1, 2014 $290,000.00
--------------------------------------------------------------------------------
December, 2007 $165,000.00 March 1, 2015 $295,000.00
--------------------------------------------------------------------------------
March 1, 2008 $170,000.00
--------------------------------------------------------------------------------
48
EXHIBIT D
LITIGATION
----------
None
49