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CREDIT AGREEMENT
Dated as of February 6, 1998
among
MENTOR GRAPHICS CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..................................................... 1
1.01 Certain Defined Terms........................................... 1
1.02 Other Interpretive Provisions................................... 17
1.03 Accounting Principles........................................... 18
1.04 Designation of Unrestricted Subsidiaries........................ 18
ARTICLE II THE CREDITS..................................................... 19
2.01 Amounts and Terms of Commitments................................ 19
2.02 Loan Accounts................................................... 19
2.03 Procedure for Borrowing......................................... 20
2.04 Conversion and Continuation Elections........................... 21
2.05 Voluntary Termination or Reduction of Commitments............... 22
2.06 Optional Prepayments............................................ 22
2.07 Repayment....................................................... 22
2.08 Interest........................................................ 23
2.09 Fees............................................................ 23
(a) Arrangement, Agency Fees................................... 23
(b) Commitment Fees............................................ 23
(c) Participation Fees......................................... 24
2.10 Computation of Fees and Interest................................ 24
2.11 Payments by the Company......................................... 24
2.12 Payments by the Banks to the Agent.............................. 25
2.13 Sharing of Payments, Etc........................................ 25
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.......................... 26
3.01 Taxes........................................................... 26
3.02 Illegality...................................................... 27
3.03 Increased Costs and Reduction of Return......................... 28
3.04 Funding Losses.................................................. 28
3.05 Inability to Determine Rates.................................... 29
3.06 Reserves on Offshore Rate Loans................................. 29
3.07 Certificates of Banks........................................... 30
3.08 Delay........................................................... 30
3.09 Substitution of Banks........................................... 30
3.10 Survival........................................................ 30
ARTICLE IV CONDITIONS PRECEDENT............................................ 31
4.01 Conditions of Initial Loans..................................... 31
(a) Credit Agreement and Notes................................. 31
(b) Resolutions; Incumbency.................................... 31
(c) Organization Documents; Good Standing...................... 31
(d) Legal Opinions............................................. 31
(e) Payment of Fees............................................ 31
i.
(f) Certificate................................................ 32
(i) Other Documents............................................ 32
4.02 Conditions to All Borrowings.................................... 32
(a) Notice of Borrowing or Conversion/Continuation............. 32
(b) Continuation of Representations and Warranties............. 32
(c) No Existing Default........................................ 32
ARTICLE V REPRESENTATIONS AND WARRANTIES.................................. 33
5.01 Corporate Existence and Power................................... 33
5.02 Corporate Authorization; No Contravention....................... 33
5.03 Governmental Authorization...................................... 33
5.04 Binding Effect.................................................. 34
5.05 Litigation...................................................... 34
5.06 No Default...................................................... 34
5.07 ERISA Compliance................................................ 34
5.08 Use of Proceeds; Margin Regulations............................. 35
5.09 Title to Properties............................................. 35
5.10 Taxes........................................................... 35
5.11 Financial Condition............................................. 35
5.12 Environmental Matters........................................... 36
5.13 Regulated Entities.............................................. 36
5.14 No Burdensome Restrictions...................................... 36
5.15 Copyrights, Patents, Trademarks and Licenses, etc............... 36
5.16 Subsidiaries.................................................... 37
5.17 Insurance....................................................... 37
5.18 Swap Obligations................................................ 37
5.19 Year 2000....................................................... 37
5.20 Full Disclosure................................................. 37
ARTICLE VI AFFIRMATIVE COVENANTS........................................... 38
6.01 Financial Statements............................................ 38
6.02 Certificates; Other Information................................. 38
6.03 Notices......................................................... 39
6.04 Preservation of Corporate Existence, Etc........................ 40
6.05 Maintenance of Property......................................... 40
6.06 Insurance....................................................... 40
6.07 Payment of Obligations.......................................... 40
6.08 Compliance with Laws............................................ 41
6.09 Compliance with ERISA........................................... 41
6.10 Inspection of Property and Books and Records.................... 41
6.11 Environmental Laws.............................................. 41
6.12 Use of Proceeds................................................. 42
ARTICLE VII NEGATIVE COVENANTS.............................................. 42
7.01 Limitation on Liens............................................. 42
7.02 Disposition of Assets........................................... 44
ii.
7.03 Consolidations and Mergers...................................... 45
7.04 Loans and Investments........................................... 45
7.05 Limitation on Indebtedness...................................... 47
7.06 Transactions with Affiliates.................................... 48
7.07 Use of Proceeds................................................. 48
7.08 Contingent Obligations.......................................... 48
7.09 Lease Obligations............................................... 49
7.10 Restricted Payments............................................. 49
7.11 ERISA........................................................... 50
7.12 Change in Business.............................................. 50
7.13 Accounting Changes.............................................. 50
7.14 Financial Covenants............................................. 50
(a) Adjusted Quick Ratio....................................... 50
(b) Minimum Tangible Net Worth................................. 51
(c) Leverage Ratio............................................. 51
(d) Minimum Cash and Accounts Receivable....................... 51
ARTICLE VIII EVENTS OF DEFAULT.............................................. 51
8.01 Event of Default................................................ 51
(a) Non-Payment................................................ 51
(b) Representation or Warranty................................. 52
(c) Specific Defaults.......................................... 52
(d) Other Defaults............................................. 52
(e) Cross-Acceleration......................................... 52
(f) Insolvency; Voluntary Proceedings.......................... 52
(g) Involuntary Proceedings.................................... 53
(h) ERISA...................................................... 53
(i) Monetary Judgments......................................... 53
(j) Non-Monetary Judgments..................................... 53
(k) Change of Control.......................................... 53
(l) Loss of Licenses........................................... 53
8.02 Remedies........................................................ 54
8.03 Rights Not Exclusive............................................ 54
ARTICLE IX THE AGENT....................................................... 55
9.01 Appointment and Authorization; "Agent "......................... 55
9.02 Delegation of Duties............................................ 55
9.03 Liability of Agent.............................................. 55
9.04 Reliance by Agent............................................... 56
9.05 Notice of Default............................................... 56
9.06 Credit Decision................................................. 56
9.07 Indemnification of Agent........................................ 57
9.08 Agent in Individual Capacity.................................... 57
9.09 Successor Agent................................................. 57
9.10 Withholding Tax................................................. 58
iii.
ARTICLE X MISCELLANEOUS................................................... 59
10.01 Amendments and Waivers.......................................... 59
10.02 Notices......................................................... 60
10.03 No Waiver; Cumulative Remedies.................................. 61
10.04 Costs and Expenses.............................................. 61
10.05 Company Indemnification......................................... 61
10.06 Payments Set Aside.............................................. 62
10.07 Successors and Assigns.......................................... 62
10.08 Assignments, Participations, etc................................ 62
10.09 Confidentiality................................................. 64
10.10 Set-off......................................................... 64
10.11 Automatic Debits of Fees........................................ 65
10.12 Notification of Addresses, Lending Offices, Etc................. 65
10.13 Counterparts.................................................... 65
10.14 Severability.................................................... 65
10.15 No Third Parties Benefited...................................... 65
10.16 Governing Law and Jurisdiction.................................. 66
10.17 Waiver of Jury Trial............................................ 66
10.18 Entire Agreement................................................ 66
SCHEDULES
Schedule 1.01 Existing Facilities
Schedule 2.01 Commitments and Pro Rata Shares
Schedule 2.09 Participation Fees
Schedule 5.05 Litigation
Schedule 5.07 ERISA
Schedule 5.12 Environmental Matters
Schedule 5.15 Intellectual Property Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 7.01 Permitted Liens
Schedule 7.02 Permitted Asset Dispositions
Schedule 7.05 Permitted Indebtedness
Schedule 7.08 Contingent Obligations
Schedule 10.02 Offshore and Domestic Lending Offices, Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Opinion of Borrower's Counsel
Exhibit E Form of Assignment and Acceptance Agreement
Exhibit F Form of Promissory Note
Exhibit G Form of Subordination Agreement
iv.
Exhibit H Form of Notice of Designation of Unrestricted Subsidiary
v.
CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of February 6, 1998, among Mentor
Graphics Corporation, an Oregon corporation (the "Company"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), and Bank of America National Trust and
Savings Association, as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a revolving
credit facility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.01 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
any line of business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests, membership
interests or equity of any Person, or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary)
provided that the Company or the Subsidiary is the surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder,
and any successor agent arising under Section 9.09.
"Agent-Related Persons" means BofA and any successor agent arising
under Section 9.09, together with their respective Affiliates (including,
in the case of BofA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
1.
"Agent's Payment Office" means the address for payments set forth on
Schedule 10.02 or such other address as the Agent may from time to time
specify.
"Agreement" means this Credit Agreement.
"Applicable Margin" means, for any day, with respect to any Base Rate
Loan or Offshore Rate Loan, the applicable margin (on a per annum basis)
set forth on the pricing grid attached as Annex I in accordance with the
parameters for calculation and adjustment of such applicable margin also
set forth on Annex I.
"Arranger" means BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Assignee" has the meaning specified in subsection 10.08(a).
"Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss. 101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the rate of interest in effect
for such day as publicly announced from time to time by BofA in San
Francisco, California, as its "reference rate." (The "reference rate" is a
rate set by BofA based upon various factors including BofA's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.)
Any change in the reference rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement
of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the
same Type made to the Company on the same day by the Banks under Article
II, and, other than in the case of Base Rate Loans, having the same
Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.03.
2.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City, San Francisco, California,
or Portland, Oregon, are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, means such a day
on which dealings are carried on in the applicable offshore dollar
interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof having maturities of
not more than 12 months from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than 12
months, issued by any U.S. commercial bank or any commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (but including,
in any event, Singapore), or a political subdivision of any such
country, in each case having combined capital and surplus of not less
than $100,000,000 and whose short-term securities are rated at least
A-1 by Standard & Poor's Corporation ("S&P") or at least P-1 by
▇▇▇▇▇'▇ Investor Service, Inc. ("Moody's");
(c) taxable and tax-exempt commercial paper of an issuer rated at
least A-l by S&P or at least P-l by Moody's and in either case having
a tenor of not more than 270 days;
(d) medium term notes of an issuer rated at least AA by S&P or at
least Aa2 by Moody's and having a remaining term of not more than 12
months after the date of acquisition by the Company or its
Subsidiaries;
(e) municipal notes and bonds which are rated at least SP-2 or AA
by S&P or at least MIG-2 or Aa by Moody's with tenors of not more than
12 months;
(f) investments in taxable or tax-exempt money market funds with
assets greater than $500,000,000 and whose assets have average
maturities less than or equal to 180 days and are rated at least A-l
by S&P or at least P-l by Moody's;
3.
(g) money market preferred instruments of an issuer rated at
least A-1 by S&P or at least P-1 by Moody's with tenors of not more
than 12 months; or
(h) other similar investments, subject to the Majority Banks'
prior written approval.
"Change of Control" means (a) any "person" (as such term is used in
subsections 13(d) and 14(d) of the Exchange Act) or group of persons on or
after the Closing Date is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the
Company's then-outstanding voting securities, or (b) the existing directors
for any reason cease to constitute a majority of the Company's board of
directors. "Existing directors" means (x) individuals constituting the
Company's board of directors on the Closing Date, and (y) any subsequent
director whose election by the board of directors or nomination for
election by the Company's shareholders was approved by a vote of at least a
majority of the directors then in office, which directors either were
directors on the Closing Date or whose election or nomination for election
was previously so approved.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.01 are satisfied or waived by all Banks (or, in the case
of subsection 4.01(e), waived by the Person entitled to receive such
payment).
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
2.01.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Consolidated Current Liabilities" means, at any time of
determination, all amounts which would, in accordance with GAAP, be
included under current liabilities on a consolidated balance sheet of the
Company and its Subsidiaries, but in any event including all outstanding
Loans, at such time.
"Consolidated Tangible Net Worth" means, at any time of determination,
in respect of the Company and its Subsidiaries, determined on a
consolidated basis, total assets (exclusive of goodwill, trademarks, trade
names, organization expense, treasury stock, unamortized debt discount and
premium, deferred charges (other than deferred tax assets) and other like
intangibles) minus total liabilities (including accrued and deferred income
taxes), at such time.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with
4.
respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of
any such primary obligation, or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition
of the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (iv) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety Instrument issued
for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services of,
another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in
respect of any Swap Contract. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the stated
or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof, and in the
case of other Contingent Obligations other than in respect of Swap
Contracts, shall be equal to the maximum reasonably anticipated liability
in respect thereof and, in the case of Contingent Obligations in respect of
Swap Contracts, shall be equal to the Swap Termination Value.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"EBITDA" means, with respect to the Company and its Subsidiaries on a
consolidated basis for any rolling four-quarter period, net income for such
period
5.
plus, to the extent deducted in computing such net income, the sum of (a)
income tax expense, (b) interest expense, (c) depreciation and amortization
expense, and (d) non-cash merger and Acquisition-related charges recorded
on and after the Closing Date of up to $50,000,000 in the aggregate, all as
determined in accordance with GAAP.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and (c) a Person
that is primarily engaged in the business of commercial banking and that is
(i) a Subsidiary of an Initial Bank or Eligible Assignee, (ii) a Subsidiary
of a Person of which an Initial Bank or Eligible Assignee is a Subsidiary,
or (iii) a Person of which an Initial Bank or Eligible Assignee is a
Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, including for
release or injury to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and
land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition
6.
which could reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition
of any liability under Title IV of ERISA in excess of $1,000,000, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
in Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Facilities" means the credit facilities identified on
Schedule 1.01.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.09(a).
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"Further Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including, without limitation, net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant to Section
3.01.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with
7.
similar functions of comparable stature and authority within the U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment obligations with
respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets
or businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of
such property); (f) all obligations with respect to capital leases; (g) all
indebtedness referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through
(g) above. Provided, Indebtedness shall not include sales of Permitted
Receivables or Permitted Offshore Receivables sold pursuant to Permitted
Receivables Purchase Facilities and indemnification, recourse or repurchase
obligations thereunder. For all purposes of this Agreement, the
Indebtedness of any Person shall include all recourse Indebtedness of any
partnership or joint venture in which such Person is a general partner or a
joint venturer.
"Indemnified Liabilities" has the meaning specified in Section 10.05.
"Indemnified Person" has the meaning specified in Section 10.05.
"Independent Auditor" has the meaning specified in subsection 6.01(a).
"Initial Bank" means a Bank party to this Agreement on the Closing
Date.
8.
"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and, as
to any Base Rate Loan, the last Business Day of each calendar quarter,
provided, however, that if any Interest Period for an Offshore Rate Loan
exceeds three months, the date that falls three months after the beginning
of such Interest Period and after each Interest Payment Date thereafter is
also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by the Company in its Notice of
Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall
end on the preceding Business Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend beyond
February 6, 2001.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Joint Venture" means a partnership, limited liability company, joint
venture or other similar legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter formed by the
Company or any of its
9.
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"Lending Office" means, as to any Bank, the office or offices of such
Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 10.02, or such
other office or offices as such Bank may from time to time notify the
Company and the Agent.
"Leverage Ratio" means, as of any date of determination, the ratio of
(a) total consolidated liabilities of the Company and its Subsidiaries on
such date to (b) Consolidated Tangible Net Worth, in each case as
determined in accordance with GAAP.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing
lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the Uniform Commercial
Code or any comparable law) and any contingent or other agreement to
provide any of the foregoing, but not including the interest of a lessor
under an operating lease or the interest of a purchaser of Permitted
Receivables or Permitted Offshore Receivables under any Permitted
Receivables Purchase Facility.
"Loan" means an extension of credit by a Bank to the Company under
Article II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a
"Type" of Loan).
"Loan Documents" means this Agreement, any Notes, any Subordination
Agreement, the Fee Letter and all other documents delivered to the Agent or
any Bank in connection herewith.
"Majority Banks" means at any time at least two Banks then holding at
least 66-2/3% of the then aggregate unpaid principal amount of the Loans,
or, if no such principal amount is then outstanding, at least two Banks
then having at least 66-2/3% of the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Company
to perform under any Loan Document and
10.
to avoid any Event of Default; or (c) a material impairment of the rights
of or benefits available to the Banks or the Agent under any Loan Document.
"Material Subsidiary" means any Subsidiary which, for any period, has
revenues or assets equal to or greater than five percent (5%) of the
consolidated revenues or assets of the Company and its Subsidiaries, taken
as a whole, but in any event shall not include any Unrestricted Subsidiary.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"Net Issuance Proceeds" means, as to any issuance of debt or equity by
any Person, cash proceeds and non-cash proceeds received or receivable by
such Person in connection therewith, net of commissions, underwriting
discounts and reasonable out-of-pocket costs and expenses paid or incurred
in connection therewith in favor of any Person not an Affiliate of such
Person.
"Note" means a promissory note executed by the Company in favor of a
Bank pursuant to subsection 2.02(b), in substantially the form of Exhibit
F.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially
the form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company
to any Bank, the Agent, or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined by
the Agent as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day (whether or not applicable to any Bank) under regulations issued
from time to time by the FRB
11.
for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum determined by the
Agent to be the arithmetic mean (rounded upward to the next 1/16th of
1%) of the rates of interest per annum notified to the Agent by the
Reference Bank as the rate of interest at which dollar deposits in the
approximate amount of the amount of the Loan to be made or continued
as, or converted into, an Offshore Rate Loan by the Reference Bank and
having a maturity comparable to such Interest Period would be offered
to major banks in the London interbank market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate.
"Organization Documents" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination
or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"Other Taxes" means any present or future stamp, court or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents.
"Participant" has the meaning specified in subsection 10.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Company sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or
in the case of a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the immediately preceding
five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.01.
12.
"Permitted Investments" means:
(a) securities issued or fully guaranteed or insured by the
United States Government or any agency thereof having maturities of
not more than three years from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or
bankers' acceptances, having in each case a tenor of not more than
three years, issued by any U.S. commercial bank or any commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (but including,
in any event, Singapore), or a political subdivision of any such
country, in each case having combined capital and surplus of not less
than $100,000,000 and whose short-term securities are rated at least
A-2 by Standard & Poor's Corporation ("S&P") or at least P-2 by
▇▇▇▇▇'▇ Investor Service, Inc. ("Moody's");
(c) taxable and tax-exempt commercial paper of an issuer rated at
least A-2 by S&P or at least P-2 by Moody's and in either case having
a tenor of not more than 270 days;
(d) medium term notes of an issuer rated at least AA by S&P or at
least Aa2 by Moody's and having a remaining term of not more than
three years after the date of acquisition by the Company or its
Subsidiaries;
(e) municipal notes and bonds which are rated at least SP-2 or AA
by S&P or at least MIG-2 or Aa by Moody's with tenors of not more than
three years;
(f) investments in taxable or tax-exempt money market funds with
assets greater than $500,000,000 and whose assets have average
maturities less than or equal to 180 days and are rated at least A-2
by S&P or at least P-2 by Moody's;
(g) money market preferred instruments of an issuer rated at
least A-2 by S&P or at least P-2 by Moody's with tenors of not more
than three years; or
(h) other similar investments, subject to the Majority Banks'
prior written approval.
"Permitted Offshore Receivables" shall mean all obligations of any
obligor who is not a resident of or located in the United States (whether
now existing or hereafter arising) under a contract for sale of goods or
services by the Company or any of its Subsidiaries, including any
obligation of such obligor (whether now existing or hereafter arising) to
pay interest, finance charges or amounts with respect thereto,
13.
and, with respect to any of the foregoing receivables or obligations, (a)
all of the interest of the Company or any of its Subsidiaries in the goods
(including returned goods) the sale of which gave rise to such receivable
or obligation after the passage of title thereto to any obligor, (b) all
other Liens and property subject thereto from time to time purporting to
secure payment of such receivables or obligations, and (c) all guarantees,
insurance, letters of credit and other agreements or arrangements of
whatever character from time to time supporting or securing payment of any
such receivables or obligations.
"Permitted Receivables" shall mean all obligations of any obligor
(whether now existing or hereafter arising) under a contract for sale of
goods or services by the Company or any of its Subsidiaries having a final
maturity date which is 12 months or more after the date such obligations
arise, including any obligation of such obligor (whether now existing or
hereafter arising) to pay interest, finance charges or amounts with respect
thereto, and, with respect to any of the foregoing receivables or
obligations, (a) all of the interest of the Company or any of its
Subsidiaries in the goods (including returned goods) the sale of which gave
rise to such receivable or obligation after the passage of title thereto to
any obligor, (b) all other Liens and property subject thereto from time to
time purporting to secure payment of such receivables or obligations, and
(c) all guarantees, insurance, letters of credit and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of any such receivables or obligations, but shall not include
Permitted Offshore Receivables.
"Permitted Receivables Purchase Facility" shall mean any agreement of
the Company or any of its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables or Permitted Offshore Receivables
purporting to be sales (and considered sales under GAAP) that do not
provide, directly or indirectly, for recourse against the seller of such
Permitted Receivables or Permitted Offshore Receivables (or against any of
such seller's Affiliates) by way of a guaranty or any other support
arrangement, with respect to the amount of such Permitted Receivables or
Permitted Offshore Receivables (based on the financial condition or
circumstances of the obligor thereunder), other than such limited recourse
as is reasonable given market standards for transactions of a similar type,
taking into account such factors as historical bad debt loss experience and
obligor concentration levels.
"Permitted Swap Obligations" means all obligations (contingent or
otherwise) of the Company or any Subsidiary existing or arising under Swap
Contracts, provided that each of the following criteria is satisfied: (a)
such obligations are (or were) entered into by such Person in the ordinary
course of business for the purpose of directly mitigating risks associated
with liabilities, commitments or assets held by such Person, or changes in
the value of securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited hereunder, and not
for purposes of speculation or taking a "market view;" and (b) such Swap
Contracts do not contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make payments
on outstanding transactions
14.
to the defaulting party, or (ii) any provision creating or permitting the
declaration of an event of default, termination event or similar event upon
the occurrence of an Event of Default hereunder (other than an Event of
Default under subsection 8.01(a).
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company sponsors or maintains or to which the Company
makes, is making, or is obligated to make contributions and includes any
Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the combined Commitments of
all Banks.
"Reference Bank" means BofA.
"Replacement Bank" has the meaning specified in Section 3.09.
"Reportable Event" means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Responsible Officer" means the chief financial officer, the chief
operating officer or the treasurer of the Company, or any other officer
having substantially the same authority and responsibility; or, with
respect to compliance with financial covenants, any of the above officers
or the chief accounting officer of the Company, or any other officer having
substantially the same authority and responsibility.
"Revolving Termination Date" means the earlier to occur of:
(a) February 6, 2001; and
(b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Subordination Agreement" has the meaning specified in subsection
7.05(g).
15.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of
the Subsidiaries of the Person, or a combination thereof, but in any event
shall not include any Unrestricted Subsidiary other than for purposes of
Section 6.01. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or ▇▇▇▇ option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a) the amount(s)
determined as the ▇▇▇▇-to-market value(s) for such Swap Contracts, as
determined by the Company based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Swap
Contracts (which may include any Bank).
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case
of each Bank and the Agent, respectively, taxes imposed on or measured by
its net income by the jurisdiction (or any political subdivision thereof)
under the laws of which such Bank or the Agent, as the case may be, is
organized or maintains a lending office.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
16.
"United States" and "U.S." each means the United States of America.
"Unrestricted Subsidiary" shall mean any Subsidiary designated as such
by the Company in accordance with Section 1.04.
"Wholly-Owned Subsidiary" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of
each class having ordinary voting power, and 100% of the capital stock of
every other class, in each case, at the time as of which any determination
is being made, is owned, beneficially and of record, by the Company, or by
one or more of the other Wholly-Owned Subsidiaries, or both.
"Wilsonville Facility" means the Company's principal facility and
headquarters located in Wilsonville, Oregon.
1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding," and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
17.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms. Unless otherwise expressly provided,
any reference to any action of the Agent or the Banks by way of consent,
approval or waiver shall be deemed modified by the phrase "in its/their sole
discretion."
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
(c) If the Company or the Majority Banks notify the Agent that the
Company or the Majority Banks, as the case may be, desire to amend any covenant
in Article VII or any definition relating thereto to eliminate the effect of any
change in GAAP occurring after the Closing Date on the operation of any such
covenant, then the Company's compliance with such covenant shall be determined
in accordance with GAAP as in effect immediately prior to such change in GAAP
until either such notice is withdrawn or such covenant or related definition is
amended in a manner reasonably satisfactory to the Company and the Majority
Banks.
1.04 Designation of Unrestricted Subsidiaries. (a) The Company, at its
option, may from time to time designate any Subsidiary as an "Unrestricted
Subsidiary" for purposes hereof in accordance with the following: (i) any
Subsidiary that is not a Material Subsidiary may be designated by the Company as
an Unrestricted Subsidiary in its sole discretion; (ii) any Material Subsidiary
may be designated by the Company as an Unrestricted Subsidiary only with the
prior written consent of the Majority Banks; provided, however, no Subsidiary
may be designated as an Unrestricted Subsidiary if (A) immediately after giving
effect to any such designation, the aggregate revenues or aggregate assets of
all Unrestricted Subsidiaries shall exceed 15% of the aggregate revenues or
aggregate assets of the Company, its Subsidiaries and its Unrestricted
Subsidiaries, taken as a whole or (B) any Default or Event of Default then
exists or would result from any such designation.
18.
(b) The Company shall provide to the Agent a Notice of Designation of
Unrestricted Subsidiary (a "Notice of Designation") in substantially the form of
Exhibit H signed by a Responsible Officer. Subject to the preceding subsection
(a), any designation by the Company of an Unrestricted Subsidiary shall become
effective (i) in the case of any Subsidiary that is not a Material Subsidiary,
three Business Days after the Agent's receipt of a completed Notice of
Designation in respect of such Subsidiary, and (ii) in the case of any Material
Subsidiary, upon the written consent of the Majority Banks. In the case of the
preceding clause (ii), the Majority Banks shall use good-faith efforts to
consent to or deny the Company's request to designate a Material Subsidiary as
an Unrestricted Subsidiary within 30 days of the Agent's receipt of a completed
Notice of Designation.
ARTICLE II
THE CREDITS
-----------
2.01 Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company from time to
time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount set forth on Schedule 2.01 (such amount as the same may
be reduced under Section 2.05 or as a result of one or more assignments under
Section 10.08, the Bank's "Commitment"); provided, however, that, after giving
effect to any Borrowing, the aggregate principal amount of all outstanding Loans
shall not at any time exceed the combined Commitments. Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, the
Company may borrow under this Section 2.01, prepay under Section 2.06 and
reborrow under this section 2.01.
2.02 Loan Accounts.
(a) The Loans made by each Bank shall be evidenced by one or more loan
accounts or records maintained by such Bank in the ordinary course of business.
The loan accounts or records maintained by the Agent and each Bank shall be
conclusive absent manifest error of the amount of the Loans made by the Banks to
the Company and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to the
Loans.
(b) Upon the request of any Bank made through the Agent, the Loans
made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules annexed
to its Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect thereto.
Each such Bank is irrevocably authorized by the Company to endorse its Note(s)
and each Bank's record shall be conclusive absent manifest error; provided,
however, that the failure of a Bank to make, or an error in making, a notation
thereon with respect to any Loan shall not limit or otherwise affect the
obligations of the Company hereunder or under any such Note to such Bank.
19.
2.03 Procedure for Borrowing.
(a) Each Borrowing shall be made upon the Company's irrevocable
written notice delivered to the Agent in the form of a Notice of Borrowing
(which notice must be received by the Agent prior to 9:00 a.m. (San Francisco
time) (i) three Business Days prior to the requested Borrowing Date, in the case
of Offshore Rate Loans, and (ii) on the requested Borrowing Date, in the case of
Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $10,000,000, in the case of Offshore Rate
Loans, or $5,000,000, in the case of Base Rate Loans, or any multiple
of $1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing; and
(D) in the case of Offshore Rate Loans, the duration of the
Interest Period applicable to such Loans included in such notice. If
the Notice of Borrowing fails to specify the duration of the Interest
Period for any Borrowing comprised of Offshore Rate Loans, such
Interest Period shall be three months.
provided, however, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
9:00 a.m. (San Francisco time) one Business Day before the Closing Date and such
Borrowing will consist of Base Rate Loans only; and further provided that if so
requested by the Agent, all Borrowings during the first 60 days following the
Closing Date shall have the same Interest Period and shall be Base Rate Loans or
Offshore Rate Loans for Interest Periods no longer than one month.
(b) The Agent will promptly notify each Bank of its receipt of any
Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Company at the Agent's
Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of
BofA with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent shall
otherwise consent, there may not be more than six (6) different Interest Periods
in effect.
20.
2.04 Conversion and Continuation Elections.
(a) The Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case
of any other Type of Loans, to convert any such Loans (or any part thereof
in an amount not less than $10,000,000, or that is in an integral multiple
of $1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $10,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $10,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation to
be received by the Agent not later than 9:00 a.m. (San Francisco time) (i) three
Business Days in advance of the Conversion/Continuation Date, if the Loans are
to be converted into or continued as Offshore Rate Loans, and (ii) on the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, (i) the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, or (ii) any Default or
Event of Default then exists, the Company shall be deemed to have elected to
convert such Offshore Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
21.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise consent, during the existence
of a Default or Event of Default, the Company may not elect to have a Loan
converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
unless the Agent shall otherwise consent, there may not be more than six (6)
different Interest Periods in effect.
2.05 Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $10,000,000 or any multiple of $5,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then-outstanding principal amount of the Loans would
exceed the amount of the combined Commitments then in effect. Once reduced in
accordance with this Section, the Commitments may not be increased. Any
reduction of the Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including the effective date
of any reduction or termination of Commitments, shall be paid on the effective
date of such reduction or termination.
2.06 Optional Prepayments. Subject to Section 3.04, the Company may, at any
time or from time to time, (a) in the case of Offshore Rate Loans, upon not less
than three Business Days' irrevocable notice to the Agent, ratably prepay Loans
in whole or in part, in minimum amounts of $10,000,000 or any multiple of
$1,000,000 in excess thereof, or (b) in the case of Base Rate Loans, upon
irrevocable notice to the Agent given no later than 9:00 a.m. (San Francisco
time) on the date of prepayment, ratably prepay Loans in whole or in part, in
minimum amounts of $5,000,000 or any multiple of $1,000,000 in excess thereof.
Such notice of prepayment shall specify the date and amount of such prepayment
and the Type(s) of Loans to be prepaid. The Agent will promptly notify each Bank
of its receipt of any such notice, and of such Bank's Pro Rata Share of such
prepayment. If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
3.04.
2.07 Repayment. The Company shall repay to the Banks on the Revolving
Termination Date the aggregate principal amount of Loans outstanding on such
date.
22.
2.08 Interest.
(a) Each Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date at a rate per annum equal to the
Offshore Rate or the Base Rate, as the case may be (and subject to the Company's
right to convert to other Types of Loans under Section 2.04), plus the
Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Offshore Rate Loans under Section 2.06 for the portion of the Offshore Rate
Loans so prepaid and upon payment (including prepayment) in full thereof and,
during the existence of any Event of Default, interest shall be paid on demand
of the Agent at the request or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Company agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Company shall pay such Bank interest at the highest rate permitted by
applicable law.
2.09 Fees.
(a) Arrangement, Agency Fees. The Company shall pay an arrangement fee
to the Arranger for the Arranger's own account, and shall pay an agency fee to
the Agent for the Agent's own account, as required by the letter agreement ("Fee
Letter") between the Company and the Arranger and Agent dated August 28, 1997.
(b) Commitment Fees. The Company shall pay to the Agent for the
account of each Bank a commitment fee on the average daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization for that
quarter as calculated by the Agent, equal to the applicable "Commitment Fee" set
forth on the pricing grid attached as Annex I in accordance with the parameters
for calculation and adjustment of such Commitment Fee also set forth on Annex I.
Such commitment fee shall accrue from the Closing Date to the
23.
Revolving Termination Date and shall be due and payable quarterly in arrears on
the last Business Day of each calendar quarter commencing on March 31, 1998
through the Revolving Termination Date, with the final payment to be made on the
Revolving Termination Date; provided that, in connection with any reduction or
termination of Commitments under Section 2.05, the accrued commitment fee
calculated for the period ending on such date shall also be paid on the date of
such reduction or termination, with the following quarterly payment being
calculated on the basis of the period from such reduction or termination date to
such quarterly payment date. The commitment fees provided in this subsection
shall accrue at all times after the above-mentioned commencement date, including
at any time during which one or more conditions in Article IV are not met.
(c) Participation Fees. The Company shall pay to the Agent for the
account of each Bank a participation fee in the amounts set forth on Schedule
2.09.
2.10 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans when the Base
Rate is determined by BofA's "reference rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error. The Agent will, at the request of the Company or any Bank, deliver to the
Company or the Bank, as the case may be, a statement showing the quotations used
by the Agent in determining any interest rate and the resulting interest rate.
2.11 Payments by the Company.
(a) All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Company shall be made to the Agent for the account
of the Banks at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (San Francisco time) on
the date specified herein. The Agent will promptly distribute to each Bank its
Pro Rata Share (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any payment received by the Agent later than
11:00 a.m. (San Francisco time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
24.
(c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full to the Agent, each Bank shall repay to the Agent on demand such
amount distributed to such Bank, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Bank
until the date repaid.
2.12 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, at least
one Business Day prior to the date of such Borrowing, that such Bank will not
make available as and when required hereunder to the Agent for the account of
the Company the amount of that Bank's Pro Rata Share of the Borrowing, the Agent
may assume that each Bank has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Bank shall
not have made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to the Company such
amount, that Bank shall on the Business Day following such Borrowing Date make
such amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this subsection (a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Agent shall constitute such Bank's Loan on the date of Borrowing
for all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Borrowing Date, the Agent will notify
the Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing. Such payment by the Company to the Agent shall be
without prejudice to the Company's rights, if any, against the Bank which failed
to fund.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.13 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately
25.
(a) notify the Agent of such fact, and (b) purchase from the other Banks such
participations in the Loans made by them as shall be necessary to cause such
purchasing Bank to share the excess payment pro rata with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.10) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
3.01 Taxes.
(a) Any and all payments by the Company to each Bank or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section),
such Bank or the Agent, as the case may be, receives and retains an amount
equal to the sum it would have received and retained had no such deductions
or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Company shall also pay to each Bank or the Agent for the
account of such Bank, at the time interest is paid, Further Taxes in the
amount that
26.
the respective Bank specifies as necessary to preserve the after-tax yield
the Bank would have received if such Taxes, Other Taxes or Further Taxes
had not been imposed.
(c) The Company agrees to indemnify and hold harmless each Bank and
the Agent for the full amount of i) Taxes, ii) Other Taxes, and iii) Further
Taxes in the amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the Company of
Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Bank or
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank or the
Agent pursuant to subsection (b) or (c) of this Section, then such Bank shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
3.02 Illegality.
(a) If any Bank determines that the introduction of any Requirement of
Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make Offshore Rate Loans, then,
on notice thereof by the Bank to the Company through the Agent, any obligation
of that Bank to make Offshore Rate Loans shall be suspended until the Bank
notifies the Agent and the Company that the circumstances giving rise to such
determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore
Rate Loan, the Company shall, upon its receipt of notice of such fact and demand
from such Bank (with a copy to the Agent), prepay in full such Offshore Rate
Loans of that Bank then outstanding, together with interest accrued thereon and
amounts required under Section 3.04, either on the last day of the Interest
Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate
Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loan. If the Company is required to so prepay any
Offshore Rate Loan, then concurrently with such prepayment, the Company shall
borrow from the affected Bank, in the amount of such repayment, a Base Rate
Loan.
27.
(c) If the obligation of any Bank to make or maintain Offshore Rate
Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.03 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i) the introduction of
or any change (other than any change by way of imposition of or increase in
reserve requirements included in the calculation of the Offshore Rate) in or in
the interpretation of any law or regulation or (ii) the compliance by that Bank
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Bank of agreeing to make or making, funding or maintaining
any Offshore Rate Loans, then the Company shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to the Agent),
pay to the Agent for the account of such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Bank to the Company through the Agent, the Company shall pay to
the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
3.04 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Loan;
28.
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment in accordance
with any notice delivered under Section 2.06;
(d) the prepayment (including pursuant to Section 2.07) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a day
that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under the proviso of subsection 2.04(a)
of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day
of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Banks under this Section and
under subsection 3.03(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the LIBOR used in determining the Offshore Rate
for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.05 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable pursuant to subsection 2.09(a) for
any requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and fairly reflect the cost to the Banks of funding such Loan,
the Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans, as the case may
be, hereunder shall be suspended until the Agent revokes such notice in writing.
Upon receipt of such notice, the Company may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does not
revoke such Notice, the Banks shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans instead of Offshore Rate Loans.
3.06 Reserves on Offshore Rate Loans. The Company shall pay to each Bank,
as long as such Bank shall be required under regulations of the FRB to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities"),
additional costs on the unpaid principal amount of each Offshore Rate Loan equal
to the actual costs of such reserves allocated to such Loan by the Bank (as
determined by the Bank in good faith, which determination shall be conclusive
absent manifest error), payable on each date on which interest is payable on
29.
such Loan, provided the Company shall have received at least 15 days' prior
written notice (with a copy to the Agent) of such additional interest from the
Bank. If a Bank fails to give notice 15 days prior to the relevant Interest
Payment Date, such additional interest shall be payable 15 days from receipt of
such notice.
3.07 Certificates of Banks. Any Bank claiming reimbursement or compensation
under this Article III shall deliver to the Company (with a copy to the Agent) a
certificate setting forth in reasonable detail the amount payable to the Bank
hereunder and such certificate shall be conclusive and binding on the Company in
the absence of manifest error.
3.08 Delay. Failure or delay on the part of any Bank to demand compensation
under this Article III shall not constitute a waiver of such Bank's right to
demand such compensation; provided, that no Bank shall be entitled to
compensation under this Article III for any increased costs or reductions
incurred or suffered with respect to any date unless such Bank shall have
notified the Company not more than 90 days after the later of (a) such date and
(b) the date on which such Bank shall have become aware of such costs or
reductions.
3.09 Substitution of Banks. Upon the receipt by the Company from any Bank
(an "Affected Bank") of a claim for compensation under Section 3.03 or if the
Company is required to pay any amount to any Affected Bank or the Agent for the
account of an Affected Bank pursuant to subsection 3.01(b) or 3.01(c) and such
Affected Bank has not changed the jurisdiction of its Lending Office so as to
eliminate such additional payment by the Company within 30 days after a request
by the Company to effect such change, the Company may: (i) request the Affected
Bank to use its best efforts to obtain a replacement bank or financial
institution satisfactory to the Company (which shall, in any event, be an
Eligible Assignee) to acquire and assume all or a ratable part of all of such
Affected Bank's Loans and Commitment (a "Replacement Bank"); (ii) request one
more of the other Banks to acquire and assume all or part of such Affected
Bank's Loans and Commitment; or (iii) designate a Replacement Bank. Any such
designation of a Replacement Bank under clause (i) or (iii) or of an existing
Bank under clause (ii) shall be subject to the prior written consent of the
Agent (which consent shall not be unreasonably withheld or delayed), and shall
be effected in accordance with all requirements for an assignment set forth in
Section 10.08 hereof. Without limiting the generality of the foregoing, the
Company agrees to pay to each Affected Bank any amounts arising under Section
3.04 by virtue of such Affected Bank's replacement on a date other than the last
day of an Interest Period, with respect to any Offshore Rate Loans then
outstanding.
3.10 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.
30.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.01 Conditions of Initial Loans. The obligation of each Bank to make its
initial Loan hereunder is subject to the condition that the Agent shall have
received on or before the Closing Date all of the following, in form and
substance reasonably satisfactory to the Agent and each Bank, and in sufficient
copies for each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes, if any,
executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of the
Company authorizing the transactions contemplated hereby, certified as of
the Closing Date by the Secretary or an Assistant Secretary of the Company;
and
(ii) A certificate of the Secretary or Assistant Secretary of the
Company certifying the names and true signatures of the officers of the
Company authorized to execute and deliver this Agreement, and all other
Loan Documents to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles of incorporation and the bylaws of the Company
as in effect on the Closing Date, certified by the Secretary or Assistant
Secretary of the Company as of the Closing Date; and
(ii) a status certificate for the Company from the Secretary of
State of Oregon and certificates of foreign qualification and good standing
of the Company in California and New Jersey, in each case, as of a recent
date, together with a bring-down certificate by facsimile, dated the
Closing Date;
(d) Legal Opinions. An opinion of ▇▇▇▇ ▇▇▇▇▇, Vice President and
General Counsel of the Company substantially in the form of Exhibit D-1 and of
Stoel Rives LLP substantially in the form of Exhibit D-2, each addressed to the
Agent and the Banks;
(e) Payment of Fees. Evidence of payment by the Company of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BofA to the extent invoiced prior
to or on the Closing Date; including any such costs, fees and expenses arising
under or referenced in Sections 2.09 and 10.04;
31.
(f) Certificate. A certificate signed by a Responsible Officer, dated
as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V are
true and correct on and as of such date, as though made on and as of such
date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing; and
(iii) there has occurred since September 30, 1997, no event or
circumstance that has resulted or could reasonably be expected to result in
a Material Adverse Effect;
(g) Evidence reasonably satisfactory to the Agent that all amounts
owing under the Existing Facilities have been paid in full and all commitments
to lend thereunder terminated, including without limitation, if so requested by
the Agent, written confirmation in respect of the foregoing from any lender or
bank agent party to the Existing Facilities;
(h) A completed Compliance Certificate for the fiscal quarter ended
September 30, 1997; and
(i) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may reasonably request.
4.02 Conditions to All Borrowings. The obligation of each Bank to make any
Loan to be made by it (including its initial Loan) or to continue or convert any
Loan under Section 2.04 is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or Conversion/Continuation
Date:
(a) Notice of Borrowing or Conversion/Continuation. The Agent shall
have received (with, in the case of any Loan on the Closing Date, a copy for
each Bank) a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of such Borrowing Date or Conversion/Continuation Date with the same effect as
if made on and as of such Borrowing Date or Conversion/Continuation Date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by the
Company hereunder shall constitute a representation and warranty by the Company
hereunder, as of the
32.
date of each such notice and as of each Borrowing Date or Conversion/
Continuation Date, as applicable, that the conditions in this Section 4.02 are
satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
5.01 Corporate Existence and Power. The Company and each of its Material
Subsidiaries:
(a) is a corporation duly organized, validly existing and, if
applicable in such jurisdiction, in good standing under the laws of the
jurisdiction of its incorporation;
(b) has (i) the power and authority and (ii) all governmental
licenses, authorizations, consents and approvals to own its assets, carry on its
business and to execute, deliver, and perform its obligations under the Loan
Documents to which it is a party;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law; except, in each
case referred to in clause (b)(ii), clause (c) or clause (d), to the extent that
the failure to do so is not reasonably expected to have a Material Adverse
Effect.
5.02 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and each other Loan Document to
which the Company is party, have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of the Company's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Company is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its property is subject; or
(c) violate any Requirement of Law.
5.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or
33.
required in connection with the execution, delivery or performance by, or
enforcement against, the Company of the Agreement or any other Loan Document.
5.04 Binding Effect. This Agreement and each other Loan Document to which
the Company is a party constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.05 Litigation. Except as specifically disclosed in Schedule 5.05, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.06 No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Company. As of the Closing Date, neither
the Company nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Closing Date, create an
Event of Default under subsection 8.01(e).
5.07 ERISA Compliance. Except as specifically disclosed in Schedule 5.07:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable federal or state
law, except to the extent that the failure to comply is not reasonably expected
to have a Material Adverse Effect. Each Plan which is intended to qualify under
Section 401(a) of the Code has received or has applied for when due and not been
denied a favorable determination letter from the IRS and to the best knowledge
of the Company, nothing has occurred which would cause the loss of such
qualification. The Company and each ERISA Affiliate has made or duly provided
for all required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.
34.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
5.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely for the purposes set forth in and permitted by Section 6.12 and
Section 7.07. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock. To the extent that the Company
uses Loan proceeds to acquire shares of its own stock which is Margin Stock, the
Company intends to cause such acquired shares to be retired.
5.09 Title to Properties. The Company and each Subsidiary have good record
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. As of
the Closing Date, the property of the Company and its Material Subsidiaries is
subject to no Liens, other than Permitted Liens.
5.10 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
5.11 Financial Condition.
(a) The unaudited consolidated balance sheets of the Company and its
Subsidiaries as of September 30, 1997, and the related consolidated statements
of operations and cash flows for the fiscal quarter ended on that date:
35.
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except for the absence of footnotes
and as otherwise expressly noted therein and subject to ordinary, good
faith year end audit adjustments;
(ii) fairly present the financial condition of the Company and
its Subsidiaries as of the date thereof and results of operations for the
period covered thereby.
(b) The audited financial statements of the Company at December 31,
1996, reflect or disclose all material Indebtedness and other liabilities of the
Company and its consolidated Subsidiaries, including liabilities for taxes,
material commitments and Contingent Obligations.
(c) Since September 30, 1997, there has been no Material Adverse
Effect.
5.12 Environmental Matters. The Company conducts in the ordinary course of
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that, except as specifically
disclosed in Schedule 5.12, such Environmental Laws and Environmental Claims are
not, individually or in the aggregate, reasonably expected to have a Material
Adverse Effect.
5.13 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. The Company is not subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary is
a party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc. Except as disclosed
on Schedule 5.15, the Company or its Subsidiaries own or are licensed or
otherwise have the right to use all of the patents, trademarks, service marks,
trade names, copyrights, contractual franchises, authorizations and other rights
that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of
the Company, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Company or any Subsidiary infringes upon any rights held by any
other Person. Except as specifically disclosed in Schedule 5.05, no claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the
36.
knowledge of the Company, proposed, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
5.16 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
other than those specifically disclosed in part (a) of Schedule 5.16 hereto and
has no material equity investments in any other corporation or entity other than
those specifically disclosed in part (b) of Schedule 5.16.
5.17 Insurance. Except as specifically disclosed in Schedule 5.17, the
properties of the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Company or such Subsidiary operates.
5.18 Swap Obligations. Neither the Company nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.
5.19 Year 2000. On the basis of comprehensive review and assessment
undertaken by the Company of the Company's and its Subsidiaries' computer
applications and an assessment by the Company of its and its Subsidiaries'
material suppliers, vendors and customers, the Company reasonably believes that
the "Year 2000 Problem" (that is, the risk that computer applications used by
any person may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31, 1999)
will not result in a Material Adverse Effect.
5.20 Full Disclosure. None of the representations or warranties made by the
Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
37.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
6.01 Financial Statements. The Company shall deliver to the Agent and each
Bank, in form and detail reasonably satisfactory to the Agent and the Majority
Banks:
(a) as soon as available, but not later than 100 days after the end of
each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of operations and cash flows for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized independent public
accounting firm ("Independent Auditor") which report shall state that such
consolidated financial statements present fairly the financial position for the
periods indicated in conformity with GAAP consistently applied. Such opinion
shall not be qualified or limited because of a restricted or limited examination
by the Independent Auditor of any material portion of the Company's or any
Material Subsidiary's records; and
(b) as soon as available, but not later than 50 days after the end of
each of the first three fiscal quarters of each fiscal year, a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such quarter and the related consolidated statements of operations
and cash flows for the period commencing on the first day and ending on the last
day of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to the absence of footnotes and
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of the Company and the Subsidiaries.
6.02 Certificates; Other Information. The Company shall furnish to the
Agent and each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.01(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer;
(c) promptly, but in no event later than 10 days of filing the same,
copies of all financial statements and reports that the Company sends to its
shareholders, and copies of all financial statements and regular, periodical or
special reports (including Forms 10K, 10Q and 8K) that the Company or any
Subsidiary may make to, or file with, the SEC; and
38.
(d) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the Agent, at
the request of any Bank, may from time to time reasonably request.
6.03 Notices. The Company shall promptly notify the Agent and each Bank:
(a) of the occurrence of any Default or Event of Default;
(b) as soon as a Responsible Officer becomes aware thereof, of any
matter that could reasonably be expected to result in a Material Adverse Effect,
including (i) breach or non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any Subsidiary
and any Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Material Subsidiary; including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(iii) the adoption of, or the commencement of contributions to,
any Plan subject to Section 412 of the Code by the Company or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to Section
412 of the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability.
(d) upon the request from time to time (but not more frequently than
once each fiscal quarter unless a Default or an Event of Default exists) of the
Agent, the Swap Termination Values, together with a description of the method by
which such values were determined, relating to any then-outstanding Swap
Contracts to which the Company or any of its Subsidiaries is party; and
(e) of any materially adverse change in the status of any material
technology license of the Company or any Material Subsidiary which reasonably
could be expected to result in a Material Adverse Effect.
Each notice under this Section shall be accompanied by a written statement
by a Responsible Officer setting forth details of the occurrence referred to
therein, and stating
39.
what action the Company or any affected Subsidiary proposes to take with respect
thereto and at what time. Each notice under subsection 6.03(a) shall describe
with particularity any and all clauses or provisions of this Agreement or other
Loan Document that have been breached or violated, but the reasonable failure to
identify all such clauses or provisions shall not, of itself, constitute a
failure to comply with subsection 6.03(a).
6.04 Preservation of Corporate Existence, Etc. The Company shall, and shall
cause each Material Subsidiary to:
(a) except as otherwise permitted by this Agreement, preserve and
maintain in full force and effect its corporate existence and good standing
under the laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except (i) in connection with
transactions permitted by Section 7.03 and sales of assets permitted by Section
7.02 or (ii) where such failure to preserve or maintain could not reasonably be
expected to result in a Material Adverse Effect;
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.05 Maintenance of Property. The Company shall maintain, and shall cause
each Subsidiary to maintain, and preserve all of its material property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted, except as permitted by Section 7.02. The Company and
each Subsidiary shall use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.06 Insurance. The Company shall maintain, and shall cause each Material
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
6.07 Payment of Obligations. Unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Company or such Subsidiary, the Company shall, and
shall cause each Material Subsidiary to, pay and discharge as the same shall
become due and payable, all their respective obligations and liabilities,
including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets;
40.
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and
(c) all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.08 Compliance with Laws. The Company shall comply, and shall cause each
Material Subsidiary to comply, in all material respects with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.09 Compliance with ERISA. The Company shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code, except in each case to the extent
that any failure to maintain such compliance or qualification or to make such
contributions could not reasonably be expected to have a Material Adverse
Effect.
6.10 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Material Subsidiary to maintain adequate books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company or such Material
Subsidiary. The Company shall permit, and shall cause each Material Subsidiary
to permit, representatives and independent contractors of the Agent or any Bank
to visit and inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and make copies thereof
or abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants at such reasonable times during normal business hours and as often
as may be reasonably necessary upon reasonable advance notice to the Company
and, in the case of any discussion with independent public accountants of the
Company or any Material Subsidiary, upon providing the Company's representatives
with a reasonable opportunity to participate in and/or be present at any such
discussion; provided, however, when an Event of Default exists the Agent or any
Bank may do any of the foregoing at the expense of the Company and at any time
during normal business hours without advance notice (except that the Company's
representatives shall be given a reasonable opportunity to participate in and/or
be present at any discussions with independent public accountants of the Company
or any Material Subsidiary).
6.11 Environmental Laws. The Company shall, and shall cause each Subsidiary
to, conduct its operations and keep and maintain its property in compliance, in
all material respects, with all Environmental Laws.
41.
6.12 Use of Proceeds. The Company shall use the proceeds of the Loans for
working capital, acquisitions, share repurchases and other general corporate
purposes not in contravention of any Requirement of Law or of any Loan Document.
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Majority Banks
waive compliance in writing:
7.01 Limitation on Liens. The Company shall not, and shall not suffer or
permit any Material Subsidiary to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) any Lien existing on property of the Company or any Subsidiary on
the Closing Date and set forth in Schedule 7.01 securing Indebtedness
outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, levies, imposts, assessments or other
governmental charges which are not delinquent or remain payable without penalty,
or to the extent that non-payment thereof is permitted by Section 6.07, provided
that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Company or its Subsidiary securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
42.
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $20,000,000;
(h) easements, rights-of-way, zoning or use restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets of Persons which become Subsidiaries after the
date of this Agreement, provided, however, that such Liens existed at the time
the respective Persons became Subsidiaries and were not created in anticipation
thereof;
(j) purchase money security interests on any property acquired,
constructed or held by the Company or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided that (i) any
such Lien attaches to such property concurrently with or within 30 days after
the acquisition or construction thereof, (ii) such Lien attaches solely to the
property so acquired or constructed in such transaction, (iii) the principal
amount of the debt secured thereby does not exceed 100% of the cost of such
property, and (iv) the principal amount of the Indebtedness secured by any and
all such purchase money security interests shall not at any time exceed
$10,000,000;
(k) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
(m) Liens consisting of pledges of cash collateral or government
securities to secure on a ▇▇▇▇-to-market basis Permitted Swap Obligations only,
provided that (i) the counterparty to any Swap Contract relating to any such
Permitted Swap Obligation is under a similar requirement to deliver similar
collateral from time to time to the Company or the Subsidiary party thereto on a
▇▇▇▇-to-market basis; and (ii) the aggregate value of such collateral so pledged
by the Company and the Subsidiaries together in favor of any counterparty does
not at any time exceed $10,000,000.
(n) Liens securing Refinancing Indebtedness (as defined in subsection
7.05(f)) which was originally secured by a Lien permitted by this Section 7.01,
43.
provided that such Lien does not apply to any other property or assets of the
Company or any Subsidiary other than the proceeds of the property or assets
subject to such Lien;
(o) Liens pursuant to Permitted Receivables Purchase Facilities
permitted by the terms hereof;
(p) other non-consensual Liens arising in the ordinary course of
business the existence or enforcement of which would not result in a Material
Adverse Effect; and
(q) other Liens securing Indebtedness and obligations in an aggregate
principal amount at any time outstanding not exceeding $5,000,000, provided that
any such Lien shall not encumber cash (other than to the extent such cash
constitutes proceeds of the property subject to any such Lien), inventory or
accounts receivable.
7.02 Disposition of Assets. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus equipment,
all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment; and
(c) dispositions of inventory or equipment by the Company or any
Subsidiary to the Company or any Subsidiary pursuant to reasonable business
requirements;
(d) dispositions of (i) Permitted Receivables pursuant to Permitted
Receivables Purchase Facilities, provided that the value of all Permitted
Receivables so sold by the Company and its Subsidiaries shall not exceed
$15,000,000 at any time outstanding; and (ii) Permitted Offshore Receivables
pursuant to Permitted Receivables Purchase Facilities, provided that the value
of all Permitted Offshore Receivables so sold by the Company and its
Subsidiaries shall not exceed $20,000,000 at any time outstanding;
(e) the sale of the Wilsonville Facility for fair market value (as
determined in good faith at the time of such sale by the board of directors of
the Company); provided that no Default or Event of Default then exists or would
result from such sale;
(f) the sale of any property listed on Schedule 7.02 for fair market
value (as determined in good faith at the time of such sale by the board of
directors of the Company or the applicable Subsidiary, as the case may be);
provided that no Default or Event of Default then exists or would result from
such sale; and
44.
(g) dispositions not otherwise permitted hereunder which are made for
fair market value; provided, that (i) at the time of any disposition, no Event
of Default shall exist or shall result from such disposition, (ii) the aggregate
net book value of all assets so sold by the Company and its Subsidiaries,
together, shall not exceed in any fiscal year $10,000,000, and (iii) any such
disposition made pursuant to this subsection (g) shall not be of accounts
receivable of the Company or any of its Subsidiaries.
7.03 Consolidations and Mergers. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, 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 or in favor of any Person, except:
(a) any Subsidiary may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly- Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Company or another
Wholly-Owned Subsidiary;
(c) the Company or any Subsidiary may merge with any Person in an
Acquisition so long as (i) the Company or such Subsidiary shall be the
continuing or surviving entity, provided that in any such merger involving the
Company, the Company shall be the surviving entity, (ii) such Acquisition is
otherwise permitted hereunder and (iii) immediately before and after giving
effect to such merger no Default or Event of Default shall exist; and
(d) any Subsidiary may merge with any Person pursuant to a disposition
of such Subsidiary or the assets of such Subsidiary, in each case, permitted
under Section 7.02.
7.04 Loans and Investments. The Company shall not purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire, for cash or property, or
make any commitment therefor for cash or property, any capital stock, equity
interest, or any obligations or other securities of, or any interest in, any
Person, or make or commit to make any Acquisitions, or make or commit to make
any advance, loan, extension of credit or capital contribution to or any other
investment in, any Person including any Affiliate of the Company (together,
"Investments"), except for:
(a) Investments held by the Company or Subsidiary in the form of Cash
Equivalents or short term marketable securities or Permitted Investments;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
45.
(c) Investments by the Company in any of its Wholly-Owned Subsidiaries
or by any of its Wholly-Owned Subsidiaries in the Company or another of its
Wholly-Owned Subsidiaries;
(d) Investments incurred in order to consummate Acquisitions otherwise
permitted herein, provided that (i) the cash consideration given for any such
Acquisition, together with the cash consideration given for all prior
Acquisitions undertaken by the Company and its Subsidiaries after the Closing
Date, shall not exceed $50,000,000 in any fiscal year, (ii) such Acquisitions
are undertaken in accordance with all applicable Requirements of Law; and (iii)
the prior, effective written consent or approval to such Acquisition of the
board of directors or equivalent governing body of the acquiree is obtained;
(e) Subject to clause (i) in subsection 7.04(d) above, Investments
incurred in order to consummate Acquisitions otherwise permitted herein for
which all or a portion of the consideration given for any such Acquisition is
common stock of the Company or any Subsidiary, provided that (i) such
Acquisitions are undertaken in accordance with all applicable Requirements of
Law; and (ii) the prior, effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of the
acquiree is obtained (notwithstanding this clause (ii), if all of the
consideration given for any such Acquisition is common stock of the Company or
any Subsidiary, then the prior, effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of the
acquiree shall not be required hereby);
(f) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations;
(g) Investments permitted under subsections 7.10(b) and (c);
(h) Investments incurred in order to consummate Acquisitions not
otherwise permitted herein subject to the prior written consent of the Majority
Banks;
(i) loans made by the Company or any Subsidiary in the ordinary course
of business to a person not an Affiliate of the Company in an aggregate
principal amount not exceeding $15,000,000 at any time outstanding;
(j) loans made by the Company or any Subsidiary to employees in the
ordinary course of business consistent with past practice in principal amounts
not exceeding $2,500,000 in the aggregate at any time outstanding and not more
than $500,000 to any individual employee; and
(k) other Investments not exceeding $30,000,000 in any fiscal year as
to all such Investments in the aggregate; provided that if all such Investments
permitted by this subsection (k) exceed $15,000,000 in the aggregate in any
fiscal year, then the $50,000,000 limitation set forth in the preceding
subsection (d) shall be reduced for such fiscal year by the amount of such
excess.
46.
7.05 Limitation on Indebtedness. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 7.08;
(c) Indebtedness existing on the Closing Date and set forth in
Schedule 7.05;
(d) Indebtedness secured by Liens permitted by subsection 7.01(i),
(j), (k), (m) and (n);
(e) Indebtedness incurred in connection with leases permitted pursuant
to Section 7.09;
(f) extensions, renewals or refinancings of Indebtedness permitted
under this Section 7.05, so long as (i) such Indebtedness (the "Refinancing
Indebtedness") is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being extended, renewed or
refinanced plus the amount of any premiums required to be paid therefor and fees
and expenses associated therewith, (ii) such Refinancing Indebtedness has a
later or equal final maturity and a longer or equal weighted average life as the
Indebtedness being extended, refinanced or renewed, (iii) the interest rate
applicable to such Refinancing Indebtedness shall be a market rate (as
determined in good faith by the board of directors of the Company or the
relevant Subsidiary, as the case may be) as of the time of such extension,
renewal or refinancing, (iv) if the Indebtedness being extended, renewed or
refinanced is subordinated to the Obligations, such Refinancing Indebtedness is
subordinated to the Obligations to the same extent as the Indebtedness being
extended, renewed or refinanced and (v) at the time of and after giving effect
to such extension, renewal or refinancing, no Default or Event of Default shall
exist;
(g) Indebtedness incurred by the Company or any Subsidiary as
consideration given for an Acquisition permitted hereunder (i) in an aggregate
principal amount at any time outstanding not to exceed $10,000,000 plus (ii) any
additional Indebtedness that is subordinated to the Obligations pursuant to a
subordination agreement in substantially the form of Exhibit G (a "Subordination
Agreement"), with such changes as the Agent or the Majority Banks may reasonably
request or desire;
(h) Indebtedness incurred by the Company or any Subsidiary pursuant to
Permitted Receivables Purchase Facilities permitted hereunder; and
(i) other unsecured Indebtedness in an aggregate principal amount
outstanding not exceeding $10,000,000 at any time.
47.
7.06 Transactions with Affiliates. Except as otherwise expressly permitted
hereunder, the Company shall not, and shall not suffer or permit any Subsidiary
to, enter into any transaction with any Affiliate of the Company, except upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person not an
Affiliate of the Company or such Subsidiary; provided, that the loans permitted
by subsection 7.04(j) and the Company's or any Subsidiary's employee relocation
program as in effect on the Closing Date, as such programs may be amended or
otherwise modified after the Closing Date in the ordinary course of business,
shall not be subject to the application of this Section 7.06.
7.07 Use of Proceeds.
(a) The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds, directly or indirectly,
otherwise than in connection with the purchase of shares of its own stock for
immediate cancellation, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Company or others incurred to purchase
or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, in each case, in violation of Regulation G, T, U or X
of the FRB, or (iv) to acquire any security in any transaction that is subject
to Section 13(d) or 14(d) of the Exchange Act.
(b) The Company shall not, directly or indirectly, use any portion of
the Loan proceeds (i) knowingly to purchase Ineligible Securities from the
Arranger during any period in which the Arranger makes a market in such
Ineligible Securities, (ii) knowingly to purchase during the underwriting or
placement period Ineligible Securities being underwritten or privately placed by
the Arranger, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by the Arranger and issued by or for
the benefit of the Company or any Affiliate of the Company. The Arranger is a
registered broker-dealer and permitted to underwrite and deal in certain
Ineligible Securities; and "Ineligible Securities" means securities which may
not be underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. ss. 24, Seventh), as
amended.
7.08 Contingent Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in Schedule 7.08;
48.
(d) Contingent Obligations with respect to Surety Instruments incurred
in the ordinary course of business;
(e) unsecured Guaranty Obligations by the Company of Indebtedness and
other obligations of a Subsidiary, or by any Subsidiary of the Indebtedness and
other obligations of any other Subsidiary, provided that, in each case, such
Indebtedness and other obligations are otherwise permitted hereunder; and
(f) Contingent Obligations under the Company's or any Subsidiary's
employee relocation plan as in effect on the Closing Date, as such plans may be
amended or otherwise modified after the Closing Date in the ordinary course of
business.
7.09 Lease Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) operating leases existing on or entered into by the Company or any
Subsidiary after the Closing Date in the ordinary course of business and
reported in the Company's consolidated financial statements in accordance with
GAAP provided that payments in respect of all such operating leases, together
with all payments in respect of capital leases permitted under clause (c) of
this Section, do not exceed $30,000,000 in the aggregate in any fiscal year;
(b) leases entered into by the Company or any Subsidiary after the
Closing Date pursuant to sale-leaseback transactions (i) permitted under
subsection 7.02(g) and (ii) in connection with a sale of the Wilsonville
Facility permitted under subsection 7.02(e);
(c) capital leases, other than those permitted under clause (b) of
this Section, entered into by the Company or any Subsidiary after the Closing
Date to finance the acquisition of equipment; provided that the aggregate annual
rental payments for all such capital leases, together with all payments in
respect of operating leases permitted under clause (a) of this Section, shall
not exceed $30,000,000 in the aggregate in any fiscal year; and
(d) leases entered into by Persons which become Subsidiaries after the
date of this Agreement, provided that such leases existed at the time the
respective Persons became Subsidiaries and were not created in anticipation
thereof.
7.10 Restricted Payments. The Company shall not declare or make any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its capital
stock, or purchase, redeem or otherwise acquire for value any shares of its
capital stock or any warrants, rights or options to acquire such shares, now or
hereafter outstanding; except that:
(a) the Company may declare and make dividend payments or other
distributions payable solely in its common stock;
49.
(b) so long as no Default or Event of Default exists or would result
therefrom, the Company may purchase, redeem or otherwise acquire shares of its
common stock or warrants or options to acquire any such shares pursuant to any
employee stock option or purchase plan; provided that all such purchases,
redemptions or other acquisitions otherwise permitted under this clause (b) do
not exceed $15,000,000 in the aggregate in any fiscal year; and
(c) so long as no Default or Event of Default exists or would result
therefrom, the Company may otherwise purchase, redeem or acquire shares of its
common stock or warrants or options to acquire any such shares; provided that
all such purchases, redemptions or other acquisitions otherwise permitted under
this clause (c) do not exceed (i) $180,000,000 in the aggregate and (ii)
20,100,000 shares (as such number may be adjusted for stock dividends and stock
splits occurring after the Closing Date). For the sake of clarity, the parties
hereto acknowledge and agree that whenever assets or property other than cash is
given for any purchase, redemption or other acquisition otherwise permitted
under this clause (c), the value of such purchase, redemption or other
acquisition shall be equal to the net book value at such time of such non-cash
assets or property for purposes of determining the Company's compliance with the
$180,000,000 limitation set forth in the preceding clause (i).
7.11 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan or engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA which has
resulted or could reasonably be expected to result in liability of the Company
in an aggregate amount in excess of $5,000,000.
7.12 Change in Business. The Company shall not, and shall not suffer or
permit any Material Subsidiary to, engage in any material line of business
substantially different from design automation and reasonably related lines of
business.
7.13 Accounting Changes. The Company shall not make any significant change
in accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of the Company.
7.14 Financial Covenants.
(a) Adjusted Quick Ratio. The Company shall not as of the end of any
fiscal quarter suffer or permit its ratio (determined on a consolidated basis)
of (i) cash plus the value (valued in accordance with GAAP) of all Cash
Equivalents, other than cash and Cash Equivalents subject to a Lien securing
Indebtedness, plus net current accounts receivable (valued in accordance with
GAAP) to (ii) Consolidated Current Liabilities (other than liabilities secured
by a Lien on cash or Cash Equivalents), to be less than (A) 1.00 to 1.00 from
the Closing Date through the fiscal quarter ending September 30, 1999, and (B)
1.10 to 1.00 thereafter.
50.
(b) Minimum Tangible Net Worth. As long as cumulative stock
repurchases and cash Acquisitions by the Company and its Subsidiaries are less
than $100,000,000 in the aggregate after the Closing Date, the Company shall not
permit Consolidated Tangible Net Worth as of the end of any fiscal quarter to be
less than (i) 90% of Consolidated Tangible Net Worth as of June 30, 1997, plus
(ii) 50% of consolidated net income (before non-cash merger and acquisition
related expense) earned in each quarterly accounting period beginning with the
quarter ended September 30, 1997 (to the extent such number is positive), plus
(iii) 100% of the Net Issuance Proceeds of any new equity the Company issues
after June 30, 1997 minus any acquisition-related write-offs for Acquisitions
financed with the issuance of the stock, minus (iv) up to $180,000,000 for (A)
the repurchase of stock, (B) the capitalization of intangible assets and (C)
write-offs, in each case, resulting from cash Acquisitions; provided, however,
if at any time after the Closing Date the cumulative stock repurchases and cash
Acquisitions by the Company and its Subsidiaries equals or exceeds $100,000,000,
then the "Minimum Tangible Net Worth" covenant set forth in this subsection
7.14(b) shall be recalculated (and applied retroactively) so that the percentage
in clause (i) above will be 95% and in clause (ii) above will be 75%.
(c) Leverage Ratio. The Company shall not as of the end of any fiscal
quarter suffer or permit its Leverage Ratio to be greater than (i) 1.25 to 1.00
from the Closing Date through the fiscal quarter ending September 30, 1999, and
(ii) 1.10 to 1.00 thereafter.
(d) Minimum Cash and Accounts Receivable. The Company shall not as of
the end of any fiscal quarter suffer or permit its ratio (determined on a
consolidated basis) of (i) cash plus the value (valued in accordance with GAAP)
of all Cash Equivalents, other than cash and Cash Equivalents subject to a Lien
securing Indebtedness, plus 75% of net current accounts receivable (valued in
accordance with GAAP) owing by account obligors located in the United States, to
(ii) the then outstanding principal amount of the Loans, to be less than 1.25 to
1.00.
For the avoidance of doubt, (i) Unrestricted Subsidiaries shall not be included
in the calculation of any of the financial measures set forth in the preceding
clauses (a), (c) or (d), and (ii) Permitted Receivables and Permitted Offshore
Receivables sold pursuant to any Permitted Receivables Purchase Facility
permitted hereunder shall not be included in the calculation of any of the
financial measures set forth in the preceding clauses (a) through (d).
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
8.01 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. The Company fails to pay, (i) when and as required to
be paid herein, any amount of principal of any Loan, or (ii) within five days
after the same
51.
becomes due, any interest, fee or any other amount payable hereunder or under
any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. The Company fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.03(a) or 6.12 or
in Article VII; or
(d) Other Defaults. The Company fails to perform or observe any other
term or covenant contained in this Agreement or any other Loan Document, and
such default shall continue unremedied for a period of 30 days after the earlier
of (i) the date upon which a Responsible Officer knew of such failure or (ii)
the date upon which written notice thereof is given to the Company by the Agent
or any Bank; or
(e) Cross-Acceleration. (i) The Company or any Material Subsidiary (A)
fails to make any payment in respect of any Indebtedness or Contingent
Obligation (other than in respect of Swap Contracts), having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $10,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure, or (B) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or condition under
the preceding clauses (A) or (B) is to cause such Indebtedness to be declared to
be due and payable prior to its stated maturity, or such Contingent Obligation
to become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (2) any Termination Event (as so defined) as
to which the Company or any Subsidiary is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by the Company or such
Subsidiary as a result thereof is greater than $10,000,000; or
(f) Insolvency; Voluntary Proceedings. The Company or any Material
Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the
52.
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; or (iv) takes any action to effectuate or authorize any of the
foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding
is commenced or filed against the Company or any Material Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Company's or any Material
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Company or any Material Subsidiary admits
the material allegations of a petition against it in any Insolvency Proceeding,
or an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any Material Subsidiary
acquiesces in the appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other similar Person
for itself or a substantial portion of its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $10,000,000; or (iii) the Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$10,000,000; or
(i) Monetary Judgments. One or more non-interlocutory judgments, non-
interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $20,000,000 or more, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of 10 days after
the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or decree
is entered against the Company or any Subsidiary which has a Material Adverse
Effect, and there shall be any period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) Change of Control. There occurs any Change of Control; or
(l) Loss of Licenses. Any Governmental Authority revokes or fails to
renew any material license, permit or franchise of the Company or any Material
Subsidiary, or the Company or any Material Subsidiary for any reason loses any
material license, permit or franchise, or the Company or any Material Subsidiary
suffers the imposition of any
53.
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any material license,
permit or franchise where the effect of such revocation, failure, loss or
imposition is to cause a Material Adverse Effect; or
(m) Adverse Change. There occurs a Material Adverse Effect; or
(n) Invalidity of Subordination Provisions. Any Subordination
Agreement or the subordination provisions of any agreement or instrument
governing any Indebtedness which is subordinated to the Indebtedness hereunder
is for any reason revoked, invalidated or otherwise breached by the Company or
any Subsidiary, or otherwise ceases to be in full force and effect as a result
of any act or omission of the Company or any Subsidiary, or the Company or any
Subsidiary otherwise contests in any manner the validity or enforceability
thereof or denies that it has any further liability or obligation thereunder.
8.02 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans to be
terminated, whereupon such commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 8.01 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans shall automatically terminate and the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Bank.
8.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
54.
ARTICLE IX
THE AGENT
---------
9.01 Appointment and Authorization; "Agent". Each Bank hereby irrevocably
(subject to Section 9.09) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
9.02 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.03 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
55.
9.04 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
9.05 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
9.06 Credit Decision. Each Bank acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken, including any review of the affairs of the Company and
its Subsidiaries, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Bank. Each Bank represents to the Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and credit worthiness of the Company and
its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions
56.
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Company hereunder. Each Bank also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and credit
worthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or credit worthiness of the Company which may come
into the possession of any of the Agent-Related Persons.
9.07 Indemnification of Agent. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
for the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Company. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
9.08 Agent in Individual Capacity. BofA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
9.09 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the
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Banks which successor agent shall be approved by the Company. If no successor
agent is appointed prior to the effective date of the resignation of the Agent,
the Agent may appoint, after consulting with the Banks and the Company, a
successor agent from among the Banks. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean such
successor agent and the retiring Agent's appointment, powers and duties as Agent
shall be terminated. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Article IX and Sections 10.04 and 10.05 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above.
9.10 Withholding Tax.
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed
and executed copies of IRS Form 1001 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid
under this Agreement; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company to such Bank, such Bank agrees to notify the
Agent of the percentage amount in which it is
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no longer the beneficial owner of Obligations of the Company to such Bank. To
the extent of such percentage amount, the Agent will treat such Bank's IRS Form
1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Company to such
Bank, such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all amounts paid, directly
or indirectly, by the Agent as tax or otherwise, including penalties and
interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Banks under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
9.11 Agent Bank's Commitment. Unless the Company otherwise consents (which
consent shall not be unreasonably withheld), the Bank acting as Agent hereunder
shall at all such times hold not less than 15% of the Loans and Commitments;
provided, however, that so long as BofA is the Agent hereunder, BofA shall at
all such times hold not less than 20% of the Loans and Commitments.
ARTICLE X
MISCELLANEOUS
-------------
10.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Company and acknowledged by the Agent,
and then any such waiver or consent shall be
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effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Banks and the Company and acknowledged
by the Agent, do any of the following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 8.02);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section, or Section 2.13, or any provision herein
providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (ii) the Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed by the parties
thereto.
10.02 Notices.
(a) All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by the Company by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on Schedule 10.02, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 10.02; or, as directed to the Company or the Agent, to such
other address as shall be designated by such party in a written notice to the
other parties, and as directed to any other party, at such other address as
shall be designated by such party in a written notice to the Company and the
Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon
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delivery; except that notices pursuant to Article II or IX to the Agent shall
not be effective until actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Company. The Agent and the Banks shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Company to
give such notice and the Agent and the Banks shall not have any liability to the
Company or other Person on account of any action taken or not taken by the Agent
or the Banks in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans shall not be affected in any way or
to any extent by any failure by the Agent and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the Agent
and the Banks of a confirmation which is at variance with the terms understood
by the Agent and the Banks to be contained in the telephonic or facsimile
notice.
10.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
10.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent) within
five Business Days after demand (subject to subsection 4.01(e)) for all
reasonable costs and expenses incurred by BofA (including in its capacity as
Agent) in connection with the development, preparation, delivery,
administration, syndication and execution of, and any amendment, supplement,
waiver or modification to (in each case, whether or not consummated), this
Agreement, any Loan Document and any other documents prepared in connection
herewith or therewith, and the consummation of the transactions contemplated
hereby and thereby, including reasonable Attorney Costs incurred by BofA
(including in its capacity as Agent) with respect thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank within five
Business Days after demand (subject to subsection 4.01(e)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
10.05 Company Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify, defend and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any
61.
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time (including at any
time following repayment of the Loans and the termination, resignation or
replacement of the Agent or replacement of any Bank) be imposed on, incurred by
or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, with respect to any
demand, claim, investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement
or the Loans or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Company shall have no obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
10.06 Payments Set Aside. To the extent that the Company makes a payment to
the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
10.07 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
10.08 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of the Company at all times
other than during the existence of an Event of Default and the Agent, which
consents shall not be unreasonably withheld, at any time assign and delegate to
one or more Eligible Assignees (provided that no written consent of the Company
or the Agent shall be required in connection with any assignment and delegation
by a Bank to an Eligible Assignee that is an Affiliate of such Bank) (each an
"Assignee") all, or any ratable part of all, of the Loans, the Commitments and
the other rights and obligations of such Bank hereunder, in a minimum amount of
$10,000,000; provided, however, that the Company and the Agent may continue to
deal solely and directly with such Bank in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the
62.
Company and the Agent by such Bank and the Assignee; (ii) such Bank and its
Assignee shall have delivered to the Company and the Agent an Assignment and
Acceptance in the form of Exhibit E ("Assignment and Acceptance") and (iii) the
assignor Bank or Assignee has paid to the Agent a processing fee in the amount
of $4,000.
(b) From and after the date that the Agent notifies the assignor Bank
that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the Agent
that it has received an executed Assignment and Acceptance and payment of the
processing fee, (and provided that it consents to such assignment in accordance
with subsection 10.08(a)), the Company shall, if requested by the Agent or any
Bank, execute and deliver to the Agent new Notes evidencing such Assignee's
assigned Loans and Commitment and, if the assignor Bank has retained a portion
of its Loans and its Commitment, replacement Notes in the principal amount of
the Loans retained by the assignor Bank (such Notes to be in exchange for, but
not in payment of, the Notes held by such Bank). Immediately upon each
Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "Participant") participating
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations under this
Agreement shall remain unchanged, (ii) the originating Bank shall remain solely
responsible for the performance of such obligations, (iii) the Company and the
Agent shall continue to deal solely and directly with the originating Bank in
connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Bank shall transfer or grant
any participating interest under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent of the Banks as described in the first proviso
to Section 10.01. In the case of any such participation, the Participant shall
be entitled to the benefit of Sections 3.01, 3.03 and 10.05 (provided that the
Participant shall not be entitled to receive any greater payment under Sections
3.01 or 3.03 than the originating Bank would have been entitled to receive with
respect to the participation sold to such Participant and the Participant shall
not be entitled to indemnification for
63.
Attorney Costs of counsel selected solely by and representing the interests only
of the Participant) as though it were also a Bank hereunder, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss. 203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
10.09 Confidentiality. Each Bank agrees to take and to cause its Affiliates
to take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Company and provided to it by the Company or any Subsidiary, or by the Agent
on the Company's or such Subsidiary's behalf, under this Agreement or any other
Loan Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process (provided that such Bank shall use its good faith efforts to
give the Company notice of such subpoena or other court process); (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party (provided that the such Bank shall use its good faith
efforts to provide notice to the Company of such litigation or proceeding); (E)
to the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Bank's independent
auditors and other professional advisors; (G) to any Participant or Assignee,
actual or potential, provided that such Person agrees in writing to be subject
to the provisions of this Section 10.09; (H) as to any Bank or its Affiliate, as
expressly permitted under the terms of any other document or agreement regarding
confidentiality to which the Company or any Subsidiary is party or is deemed
party with such Bank or such Affiliate; and (I) to its Affiliates.
10.10 Set-off. In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists or the Loans have been accelerated, each
Bank is authorized at
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any time and from time to time, without prior notice to the Company, any such
notice being waived by the Company to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, such Bank to or for the credit or the account of the Company against
any and all Obligations owing to such Bank, now or hereafter existing,
irrespective of whether or not the Agent or such Bank shall have made demand
under this Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Bank agrees promptly to notify the Company and the
Agent after any such set-off and application made by such Bank; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
10.11 Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, or other fee, or any other cost or expense (including Attorney
Costs) due and payable to the Agent, BofA or the Arranger under the Loan
Documents, the Company hereby irrevocably authorizes BofA to debit any deposit
account of the Company with BofA in an amount such that the aggregate amount
debited from all such deposit accounts does not exceed such fee or other cost or
expense. If there are insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such debits will be
reversed (in whole or in part, in BofA's sole discretion) and such amount not
debited shall be deemed to be unpaid. No such debit under this Section shall be
deemed a set-off.
10.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
10.14 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
10.15 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Banks, the Agent
and the Agent- Related Persons and the Indemnified Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents.
65.
10.16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT
AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
OR OREGON OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA OR
OREGON, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY,
THE AGENT AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT
AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
CALIFORNIA LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the
66.
Agent, and supersedes all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California, by their proper and
duly authorized officers as of the day and year first above written.
MENTOR GRAPHICS CORPORATION
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
67.
BANQUE NATIONALE DE PARIS
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By: ▇▇▇▇▇▇▇ ▇. DAY
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Day
Title: Assistant Vice President
FLEET NATIONAL BANK, N.A.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Officer
THE FUJI BANK, LIMITED
By: KEIICHI OZAWA
---------------------------------
Name: Keiichi Ozawa
Title: Joint General Manager
68.
UNION BANK OF CALIFORNIA, N.A.
By: ▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: Vice President
69.
ANNEX I
PRICING GRID
Leverage less than or equal to .90 Leverage greater than .90
EBITDA (x) x less $50MM $75MM x greater x less $50MM $75MM x greater
than than than than
$50MM less than x less than x $100MM $50MM less than x less than x $100MM
less than less than less than less than
$75MM $100MM $75MM $100MM
Commitment 37.5 32.5 27.5 25.0 45.0 37.5 35.0 30.0
Fee
Offshore Rate 150.0 112.5 87.5 62.5 200.0 162.5 125.0 100.0
Loan Spread
Base Rate 25.0 0.0 0.0 0.0 75.0 37.5 0.0 0.0
Loan Spread
The Leverage Ratio and EBITDA used to compute the Commitment Fee and the
Applicable Margin shall be the Leverage Ratio and EBITDA set forth in the
Compliance Certificate most recently delivered by the Company to the Agent
pursuant to Section 6.02(b) of the Credit Agreement; changes in the Commitment
Fee and the Applicable Margin resulting from a change in the Leverage Ratio or
EBITDA shall become effective on the date of delivery by the Company to the
Agent of a new Compliance Certificate and accompanying financial statements
pursuant to Section 6.02(b). If the Company shall fail to deliver a Compliance
Certificate within the number of days after the end of any fiscal quarter or
fiscal year as required pursuant to Section 6.02(b) (without giving effect to
any grace period), the Commitment Fee and the Applicable Margin from the first
day after the date on which such Compliance Certificate was required to be
delivered to the Agent until the day on which the Company delivers to the Agent
a Compliance Certificate and accompanying financial statements shall
conclusively equal the highest Commitment Fee and Applicable Margin set forth
above. Notwithstanding the foregoing, during the period from the Closing Date
until the earlier of (i) the date of the Agent's receipt of a Compliance
Certificate and accompanying financial statements for the fiscal year ending
December 31, 1997, and (ii) 100 calendar days after the end of such fiscal year,
the Commitment Fee and the Applicable Margin shall be calculated based on the
Leverage Ratio and EBITDA set forth in the Compliance Certificate for the fiscal
quarter ended September 30, 1997 delivered by the Company to the Agent on the
Closing Date pursuant to Section 4.01(h) of the Credit Agreement.
1
ANNEX I
SCHEDULE 2.01
COMMITMENTS AND PRO RATA SHARES
-------------------------------
Bank Commitment Pro Rata Share
---- ---------- --------------
Bank of America National Trust $ 25,000,000 25.00000%
and Savings Association
Banque Nationale de Paris 15,000,000 15.00000%
Fleet National Bank, N.A. 15,000,000 15.▇▇▇▇▇%
The Bank of Nova Scotia 15,000,000 15.▇▇▇▇▇%
The Fuji Bank, Limited 15,000,000 15.00000%
Union Bank of California, N.A. 15,000,000 15.00000%
$100,000,000 100.00000%
TOTAL
1
SCHEDULE 2.01