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EXHIBIT 10.38
REVOLVING CREDIT
AND TERM LOAN AGREEMENT
dated as of January 28, 1998
among
WESTERN DIGITAL CORPORATION,
BANKBOSTON, N.A.
and the other lending institutions listed on Schedule 1 hereto
and
BANCBOSTON SECURITIES INC.
having acted as arranger for this transaction
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION. .................................. 1
1.1. Definitions. .................................................... 1
1.2. Rules of Interpretation. ........................................22
2. THE REVOLVING CREDIT FACILITY. ............................................23
2.1. Commitment to Lend. .............................................23
2.2. Commitment Fee. .................................................23
2.3. Reduction of Total Commitment. ..................................23
2.4. The Revolving Credit Notes. .....................................24
2.5. Interest on Revolving Credit Loans. .............................24
2.6. Requests for Revolving Credit Loans. ............................24
2.7. Conversion Options. .............................................25
2.7.1. Conversion to Different Type of Revolving Credit Loan..25
2.7.2. Continuation of Type of Revolving Credit Loan. .......25
2.7.3. Eurodollar Rate Loans. ...............................26
2.8. Funds for Revolving Credit Loan. ................................26
2.8.1. Funding Procedures. ..................................26
2.8.2. Advances by Agent. ...................................26
2.9. Change in Borrowing Base. .......................................27
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. ..................................27
3.1. Maturity. .......................................................27
3.2. Mandatory Repayments of Revolving Credit Loans. .................27
3.3. Optional Repayments of Revolving Credit Loans. ..................28
4. THE TERM LOAN. ............................................................28
4.1. Commitment to Lend. .............................................28
4.2. The Term Notes. .................................................28
4.3. Schedule of Installment Payments of Principal of Term Loan. .....29
4.4. Optional Prepayment of Term Loan. ...............................29
4.5. Interest on Term Loan. ..........................................29
4.5.1. Interest Rates. ......................................29
4.5.2. Notification by Borrower. ............................29
4.5.3. Amounts, etc. ........................................30
5. LETTERS OF CREDIT. ........................................................30
5.1. Letter of Credit Commitments......................................30
5.1.1. Commitment to Issue Letters of Credit. ...............30
5.1.2. Letter of Credit Applications. .......................31
5.1.3. Terms of Letters of Credit. ..........................31
5.1.4. Reimbursement Obligations of Banks. ..................31
5.1.5. Participations of Banks. .............................31
5.2. Reimbursement Obligation of the Borrower. .......................31
5.3. Letter of Credit Payments. ......................................32
5.4. Obligations Absolute. ...........................................33
5.5. Reliance by Issuer. .............................................33
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5.6. Letter of Credit Fee. ..........................................34
6. CERTAIN GENERAL PROVISIONS. ..............................................34
6.1. Closing Fee. ...................................................34
6.2. Agent's Fee. ...................................................34
6.3. Funds for Payments. ............................................34
6.3.1. Payments to Agent. ..................................34
6.3.2. No Offset, etc. .....................................34
6.3.3. Currency Matters......................................35
6.3.3.1...................................................35
6.3.3.1. Currency of Account. .....................35
6.3.3.2. Currency Fluctuations. ...................35
6.4. Computations. ..................................................36
6.5. Inability to Determine Eurodollar Rate. ........................37
6.6. Illegality. ....................................................37
6.7. Additional Costs, etc. .........................................37
6.8. Capital Adequacy. ..............................................39
6.9. Certificate. ...................................................39
6.10. Indemnity. ....................................................39
6.11. Interest After Default. .......................................40
6.11.1. Overdue Amounts. ...................................40
6.11.2. Amounts Not Overdue. ...............................40
7. COLLATERAL SECURITY AND GUARANTIES. ......................................40
7.1. Security of Borrower. ..........................................40
7.2. Guaranties and Security of Subsidiaries. .......................40
8. REPRESENTATIONS AND WARRANTIES. ..........................................41
8.1. Corporate Authority. ...........................................41
8.1.1. Incorporation; Good Standing. .......................41
8.1.2. Authorization. ......................................41
8.1.3. Enforceability. .....................................41
8.2. Governmental Approvals. ........................................41
8.3. Title to Properties; Leases. ...................................42
8.4. Financial Statements and Projections. ..........................42
8.4.1. Financial Statements. ...............................42
8.4.2. Financial Statements. ...............................42
8.4.3. Projections. ........................................42
8.5. No Material Changes, etc. ......................................42
8.6. Franchises, Patents, Copyrights, etc. ..........................43
8.7. Litigation. ....................................................43
8.8. No Materially Adverse Contracts, etc. ..........................43
8.9. Compliance with Other Instruments, Laws, etc. ..................43
8.10. Tax Status. ...................................................44
8.11. No Event of Default. ..........................................44
8.12. Holding Company and Investment Company Acts. ..................44
8.13. Absence of Financing Statements, etc. .........................44
8.14. Perfection of Security Interest. ..............................44
8.15. Certain Transactions. .........................................44
8.16. Employee Benefit Plans. .......................................45
8.16.1. In General. ........................................45
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8.16.2. Terminability of Welfare Plans. ....................45
8.16.3. Guaranteed Pension Plans. ..........................45
8.16.4. Multiemployer Plans. ...............................46
8.17. Use of Proceeds. ..............................................46
8.17.1. General. ...........................................46
8.17.2. Regulations U and X. ...............................46
8.17.3. Ineligible Securities. .............................46
8.18. Environmental Compliance. .....................................47
8.19. Subsidiaries, etc. ............................................48
8.20. Chief Executive Office. .......................................48
8.21. Disclosure. ...................................................49
8.22. Insurance. ....................................................49
8.23. Status of Loan as Senior Debt. ................................49
8.24. No Other Designated Senior Debt. ..............................49
9. AFFIRMATIVE COVENANTS OF THE BORROWER. ..................................49
9.1. Punctual Payment. ..............................................49
9.2. Maintenance of Office. .........................................49
9.3. Records and Accounts. ..........................................50
9.4. Financial Statements, Certificates and Information. ............50
9.5. Notices. .......................................................51
9.5.1. Defaults. ...........................................51
9.5.2. Environmental Events. ...............................52
9.5.3. Notification of Claim against Collateral. ...........52
9.5.4. Notice of Litigation and Judgments. .................52
9.6. Corporate Existence; Maintenance of Properties. ................52
9.7. Insurance. .....................................................53
9.8. Taxes. .........................................................53
9.9. Inspection of Properties and Books, etc. .......................53
9.9.1. General. ............................................53
9.9.2. Collateral Reports. .................................54
9.9.3. Communications with Accountants. ....................54
9.10. Compliance with Laws, Contracts, Licenses, and Permits. .......54
9.11. Employee Benefit Plans. .......................................55
9.12. Use of Proceeds. ..............................................55
9.13. Guarantors. ...................................................55
9.14. Additional Subsidiaries. ......................................55
9.15. Subordinated Guarantees. ......................................56
9.16. Status of Loan as Senior Debt. ................................56
9.17. Foreign Subsidiary Notes. .....................................56
9.18. Accounts. .....................................................56
9.19. Further Assurances. ...........................................56
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ............................56
10.1. Restrictions on Indebtedness. .................................57
10.2. Restrictions on Liens. ........................................58
10.3. Restrictions on Investments. ..................................60
10.4. Distributions. ................................................61
10.5. Merger, Consolidation and Disposition of Assets. ..............61
10.5.1. Mergers and Acquisitions. ..........................61
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10.5.2. Disposition of Assets. .............................63
10.6. Sale and Leaseback. ...........................................63
10.7. Compliance with Environmental Laws. ...........................64
10.8. Subordinated Debt. ............................................64
10.9. Senior Debt. ..................................................64
10.10. Employee Benefit Plans. ......................................64
10.11. Changes in Terms of Capital Stock. ...........................65
10.12. Fiscal Year. .................................................65
10.13. Negative Pledges. ............................................65
10.14. Transactions with Affiliates. ................................65
10.15. Upstream Limitations. ........................................66
10.16. Inconsistent Agreements. .....................................66
11. FINANCIAL COVENANTS OF THE BORROWER. ...................................66
11.1. Profitable Operations. ........................................66
11.2. Fixed Rate Coverage Ratio. ....................................66
11.3. Leverage. .....................................................66
11.4. Consolidated Tangible Net Worth. ..............................67
11.5. Capital Expenditures. .........................................67
12. CLOSING CONDITIONS. ....................................................67
12.1. Loan Documents. ...............................................67
12.2. Certified Copies of Charter Documents. ........................67
12.3. Corporate, Action. ............................................68
12.4. Incumbency Certificate. .......................................68
12.5. Validity of Liens. ............................................68
12.6. Perfection Certificates and UCC Search Results. ...............68
12.7. Certificates of Insurance. ....................................68
12.8. Borrowing Base Report. ........................................68
12.9. Accounts Receivable Aging Report. .............................68
12.10. Solvency Certificate. ........................................69
12.11. Opinion of Counsel. ..........................................69
12.12. Payment of Fees. .............................................69
12.13. Payoff Letter. ...............................................69
12.14. Disbursement Instructions. ...................................69
13. CONDITIONS TO ALL BORROWINGS. ...........................................69
13.1. Representations True; No Event of Default. ....................69
13.2. No Legal Impediment. ..........................................70
13.3. Governmental Regulation. ......................................70
13.4. Borrowing Base Report. ........................................70
14. EVENTS OF DEFAULT; ACCELERATION; ETC. ...................................70
14.1. Events of Default and Acceleration. ...........................70
14.2. Termination of Commitments. ...................................74
14.3. Remedies. .....................................................74
14.4. Distribution of Collateral Proceeds. ..........................75
15. SETOFF. .................................................................75
16. THE AGENT. ..............................................................76
16.1. Authorization. ................................................76
16.2. Employees and Agents. .........................................77
16.3. No Liability. .................................................77
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16.4. No Representations. ...........................................77
16.4.1. General. ...........................................77
16.4.2. Closing Documentation, etc. ........................78
16.5. Payments. .....................................................78
16.5.1. Payments to Agent. .................................78
16.5.2. Distribution by Agent. .............................78
16.5.3. Delinquent Banks. ..................................78
16.6. Holders of Notes. .............................................79
16.7. Indemnity. ....................................................79
16.8. Agent as Bank. ................................................79
16.9. Resignation. ..................................................79
16.10. Notification of Defaults and Events of Default. ..............80
16.11. Duties in the Case of Enforcement. ...........................80
17. EXPENSES AND INDEMNIFICATION. ...........................................80
17.1. Expenses. .....................................................80
17.2. Indemnification. ..............................................81
17.3. Survival. .....................................................82
18. SURVIVAL OF COVENANTS, ETC. .............................................82
19. ASSIGNMENT AND PARTICIPATION. ...........................................82
19.1. Conditions to Assignment by Banks. ............................82
19.2. Certain Representations and Warranties; Limitations; Covenants. 83
19.3. Register. .....................................................84
19.4. New Notes. ....................................................84
19.5. Participations. ...............................................85
19.6. Disclosure. ...................................................85
19.7. Assignee or Participant Affiliated with the Borrower. .........85
19.8. Miscellaneous Assignment Provisions. ..........................86
19.9. Assignment by Borrower. .......................................86
20. NOTICES, ETC. ...........................................................86
21. GOVERNING LAW. ..........................................................87
22. HEADINGS. ...............................................................87
23. COUNTERPARTS. ...........................................................87
24. ENTIRE AGREEMENT, ETC. ..................................................87
25. WAIVER OF JURY TRIAL. ...................................................88
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. .....................................88
27. SEVERABILITY. ...........................................................89
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SCHEDULES AND EXHIBITS
EXHIBITS
Exhibit A Form of Borrowing Base Report
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Loan Request
Exhibit D Form of Term Note
Exhibit E Form of Compliance Certificate
Exhibit F Form of Instrument of Adherence
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Foreign Subsidiary Note
SCHEDULES
Schedule 1 Commitments
Schedule 8.3 Titles to Properties
Schedule 8.7 Litigation
Schedule 8.15 Transactions with Affiliates
Schedule 8.18 Environmental Matters
Schedule 8.19 Subsidiaries; Joint Ventures
Schedule 8.22 Insurance
Schedule 10.1 Existing Indebtedness
Schedule 10.2 Existing Liens
Schedule 10.3 Existing Investments
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REVOLVING CREDIT
AND TERM LOAN AGREEMENT
This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of January 28,
1998, by and among (a) WESTERN DIGITAL CORPORATION (the "Borrower"), a Delaware
corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (b) BANKBOSTON, N.A. and the other lending
institutions listed on Schedule 1 hereto, and (c) BANKBOSTON, N.A., as agent for
itself and such other lending institutions (the "Agent").
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Accounts Receivable. All rights of the Borrower or any of its
Subsidiaries to payment for goods sold, leased or otherwise marketed in the
ordinary course of business and all rights of the Borrower or any of its
Subsidiaries to payment for services rendered in the ordinary course of business
and all sums of money or other proceeds due thereon pursuant to transactions
with account debtors, except for that portion of the sum of money or other
proceeds due thereon that relate to sales, use or property taxes in conjunction
with such transactions, recorded on books of account in accordance with
generally accepted accounting principles.
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to ss.9.4(c).
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent's Head Office. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
Agent. As defined in the preamble hereto.
Agent's Special Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may
be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Liabilities to Worth Ratio as
determined for the fiscal quarter of the Borrower ending on the last day of the
fiscal quarter ended immediately prior to the first day of the applicable Rate
Adjustment Period.
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BASE RATE EURODOLLAR COMMITMENT LETTER OF
LOANS RATE LOANS FEE RATE CREDIT FEES
LEVEL LIABILITIES TO WORTH RATIO (BASIS POINTS) (BASIS POINTS) (BASIS POINTS) (BASIS POINTS)
-------- ------------------------------- --------------- --------------- --------------- ----------------
I Less than or equal to 25 150 37.50 150
1.75:1.00
II Greater than 1.75:1.00, but
less than or equal to 2.00:1.00 50 175 50 175
III Greater than 2.00:1.00 75 200 50 200
Notwithstanding the foregoing, (a) for Loans outstanding, Letter of
Credit Fees payable and the Commitment Fee Rate during the period commencing on
the Closing Date through the date immediately preceding the first Adjustment
Date to occur after June 30, 1998, the Applicable Margin shall not be lower than
Level II set forth above, and (b) if the Borrower fails to deliver any
Compliance Certificate when required by ss.9.4(c) hereof then, for the period
commencing on the next Adjustment Date to occur subsequent to such failure
through the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be the highest Applicable
Margin set forth above.
Assignment and Acceptance. See ss.20.1.
Balance Sheet Date. June 28, 1997.
Bank Guarantee Bank. BankBoston, N.A., in its individual capacity
(including acting through its London branch).
Banks. BKB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.19 hereof.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Base Rate.
BKB. BankBoston, N.A., a national banking association in its individual
capacity.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.9.4(e), as adjusted pursuant
to the provisions below, which is equal to the sum of:
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(a) 80% of Eligible Domestic Accounts Receivable for which
invoices have been issued; plus
(b) the lesser of (i) the Specified Intercompany Amount which
is guaranteed pursuant to the Guarantee and (ii) 60% of Eligible UK
Accounts Receivable for which invoices have been issued; plus
(c) to the extent any Foreign Subsidiary Note and the
Borrower's security interest in the Accounts Receivable such Foreign
Subsidiary securing such Foreign Subsidiary's Foreign Subsidiary Note
are then subject to a first priority perfected security interest in
favor of the Agent for the benefit of the Agent and the Banks, the
lesser of (i) the outstanding principal amount of such Foreign
Subsidiary Note and (ii) 60% of Eligible Foreign Accounts Receivable
for which invoices have been issued securing such Foreign Subsidiary
Note; minus
(d) Reserves;
provided, however, the Agent reserves it rights, from time to time, upon thirty
(30) days' prior notice to the Borrower, to decrease the advance rates set forth
herein if, in the Agent's reasonable discretion, the results of commercial
finance examinations indicate a material deterioration in the Borrower's or its
Subsidiaries' Eligible Accounts Receivable from the Closing Date, such that a
lower advance rate for Eligible Accounts Receivables is warranted.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer or treasurer (if such Person is an officer of the Borrower) of
the Borrower and in substantially the form of Exhibit A hereto.
Business Day. Any day on which banking institutions in each of the
cities in which each Bank's Domestic Lending Office is located are open for the
transaction of banking business and, in the case of Eurodollar Rate Loans, also
a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Borrower or any of its Subsidiaries as lessee under any Synthetic
Lease other than the Permitted Synthetic Lease to the extent that such assets
would have been Capital Assets had the Synthetic Lease been treated for
accounting purposes as a Capitalized Lease.
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Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See ss.8.18.
Closing Date. The first date on which the conditions set forth in ss.12
have been satisfied and any Revolving Credit Loans and the Term Loan are to be
made or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower
and its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
Commitment Fee. See ss.2.2.
Commitment Fee Rate. The applicable rate per annum set forth in the
chart contained in the definition of Applicable Margin under the heading
"Commitment Fee Rate".
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks, and with respect to the Term Loan, the
percentage set forth on Schedule 1 of such Bank's commitment to make the Term
Loan.
Compliance Certificate. See ss.9.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles, after eliminating therefrom all extraordinary nonrecurring items of
income.
Consolidated Intangible Assets. As to any Person and its Subsidiaries
for the relevant period of reference thereto, the sum of (a) the total book
value of all assets of the Borrower and its Subsidiaries properly classified as
intangible assets under generally accepted accounting principles, including,
without duplication, such items as goodwill, the purchase price of acquired
assets in excess of the fair market value thereof, trademarks, trade names,
service marks, brand names, copyrights, patents and licenses, and rights with
respect to the foregoing; plus (b) all amounts representing any write-up in the
book value of any assets of the Borrower or its Subsidiaries resulting from a
revaluation thereof
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subsequent to the Balance Sheet Date, excluding adjustments to translate foreign
assets and liabilities for changes in foreign exchange rates made in accordance
with Financial Accounting Standards Board Statement No. 52; plus (c) to the
extent otherwise included in the computation, any subscriptions receivable.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles.
Consolidated Net Operating Income (or Deficit). As of any date of
determination, the sum of (a) Consolidated Net Income (or Deficit) of the
Borrower and its Subsidiaries plus, to the extent otherwise deducted in the
calculation of Consolidated Net Income, (b) all taxes and Consolidated Total
Interest Expense for such period.
Consolidated Tangible Net Worth. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of Consolidated
Intangible Assets.
Consolidated Total Assets. The sum of all assets of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.
Consolidated Total Cash Interest Expense. For any period, the aggregate
amount of interest required to be paid by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether or not such interest
was or is required to be reflected as an item of expense in such period,
including payments consisting of interest in respect of Capitalized Leases,
Synthetic Leases and including commitment fees, agency fees, facility fees
(other than the closing fee set forth in ss.6.1 hereunder), balance deficiency
fees and similar fees or expenses in connection with the borrowing of money.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether or not
such interest was or is required to be reflected as an item of expense or
capitalized in such period, including payments consisting of interest in respect
of Capitalized Leases, Synthetic Leases and including commitment fees, agency
fees, facility fees (other than the closing fee set forth in ss.6.1 hereunder),
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.
Consolidated Total Liabilities. All liabilities of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of the Borrower and its
Subsidiaries, whether or not so classified; provided, however, for purposes of
calculating the Liabilities to Worth Ratio for determining the Applicable Margin
and for purposes of calculating compliance with ss.11 hereof, Consolidated Total
Liabilities shall exclude all Indebtedness which constitutes (a) a "derivative
contract" (as defined in paragraph (i) of the term Indebtedness); (b)
obligations under securities repurchase agreements; and (c) any "equity related
purchase obligations"
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(as such term is defined in paragraph (h) of the term Indebtedness) pertaining
to the Stock Option Plan.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with ss.2.7.
Credit Agreement. This Revolving Credit and Term Loan Agreement,
including the Schedules and Exhibits hereto.
Credit Instruments. Collectively, (a) a bank guarantee issued by the
Bank Guarantee Bank on October 24, 1997 in the face amount of approximately
5,000,000 British pounds sterling for the account of WD UK; and (c) a bank
guarantee issued by the Bank Guarantee Bank on November 7, 1997 in favor of ABN
Amro Bank in the face amount of 500,000 dutch guilders for the account of WD UK.
December 1997 Charge. The one time nonrecurring charge of the Borrower
taken in the fiscal quarter ended December 27, 1997 in an amount equal to
$148,000,000.
Default. See ss.14.1.
Delinquent Bank. See ss.16.5.3.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollar Equivalent. On any date of determination, with respect to an
amount denominated in Dollars, such amount of Dollars, and with respect to an
amount denominated in a currency other than Dollars, the amount (as conclusively
ascertained by the Agent absent manifest error) of Dollars which could be
purchased by the Agent in the London foreign currency deposits market with such
amount of such currency at the spot rate of exchange prevailing at or about
11:00 a.m. (London time) for delivery on such date.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Domestic Subsidiary. Any Subsidiary of the Borrower which is not a
Foreign Subsidiary; provided, however, for purposes of this Credit Agreement,
Pacifica Insurance Corporation shall not be considered a Domestic Subsidiary.
Drawdown Date. The date on which any Revolving Credit Loan or the Term
Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or
14
-7-
continued in accordance with ss.2.7 or all or any portion of the Term Loan is
converted or continued in accordance with ss.4.5(b).
EBITDA. With respect to the Borrower and its Subsidiaries for any
fiscal period, an amount equal to Consolidated Net Income for such period, plus,
to the extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation for such period, (b) amortization for such period,
(c) income tax expense for such period and (d) Consolidated Total Interest
Expense paid or accrued for such period, all as determined in accordance with
generally accepted accounting principles.
Eligible Accounts Receivable. Collectively, the Eligible Domestic
Accounts Receivable, the Eligible UK Accounts Receivable and the Eligible
Foreign Accounts Receivable.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) 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 total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld.
Eligible Domestic Accounts Receivable. The aggregate of the unpaid
portion of Accounts Receivable (net of any credits, rebates, offsets, amounts in
dispute, holdbacks or other adjustments or commissions payable to third parties
that are adjustments to such Accounts Receivable) of the Borrower and the
Guarantors (a) that the Borrower reasonably and in good faith determines to be
collectible; (b) that are with account debtors or other obligors that (i) are
not Affiliates of the Borrower, (ii) purchased the goods or services giving rise
to the relevant Account Receivable in an arm's length transaction, (iii) are not
insolvent or involved in any case or proceeding, whether voluntary or
involuntary, under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, dissolution, liquidation or similar law of any jurisdiction
and (iv) are, in the Agent's reasonable judgment, creditworthy; (c) that are in
payment of obligations that have been fully performed; (d) that are not subject
to any pledge, restriction, security interest or other lien or encumbrance other
than those created by the Loan Documents; (e) in which the Agent has a valid and
perfected first priority security interest; (f) that are not more than sixty
(60) days past due; (g) that are not due from an account debtor or other obligor
located in Minnesota unless the Borrower (i) has received a certificate of
authority to do business and is in good standing in such state or (ii) has filed
a notice of business activities report with the appropriate office or agency of
such state for the current year; (h) that are not due from
15
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any single account debtor or other obligor if more than fifty percent (50%) of
the aggregate amount of all Accounts Receivable owing from such account debtor
or other obligor are more than ninety (90) days past due; (i) that are payable
in Dollars; (j) that are not payable from an office outside of any country in
which an account debtor of the Borrower or any Guarantor on the Closing Date is
located on the Closing Date, or such other location which is acceptable to the
Agent; and (k) that if such Accounts Receivable are secured by a letter of
credit, the Agent has a prior, perfected security interest in such letter of
credit.
Eligible Foreign Accounts Receivable. The aggregate of the unpaid
portion of Accounts Receivable (net of any credits, rebates, offsets, amounts in
dispute, holdbacks or other adjustments or commissions payable to third parties
that are adjustments to such Accounts Receivable) of WD Germany (a) that the
Borrower and WD Germany reasonably and in good faith determines to be
collectible; (b) that are with account debtors or other obligors that (i) are
not Affiliates of the Borrower or WD Germany, (ii) purchased the goods or
services giving rise to the relevant Account Receivable in an arm's length
transaction, (iii) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (iv) are, in the Agent's reasonable judgment,
creditworthy; (c) that are in payment of obligations that have been fully
performed; (d) that are not subject to any pledge, restriction, security
interest or other lien or encumbrance other than those created by the Loan
Documents or expressly required by subparagraph (k) hereof; (e) that are not
more than sixty (60) days past due; (f) that are not due from an account debtor
or other obligor located in Minnesota unless WD Germany (i) has received a
certificate of authority to do business and is in good standing in such state or
(ii) has filed a notice of business activities report with the appropriate
office or agency of such state for the current year; (g) that are not due from
any single account debtor or other obligor if more than fifty (50%) of the
aggregate amount of all Accounts Receivable owing from such account debtor or
other obligor are more than ninety (90) days past due; (h) that are payable in
Dollars, German deutsche marks, French francs, British pounds sterling,
Norwegian kroners, Singapore dollars or any other currency acceptable to the
Agent; (i) that are not payable from an office outside of any country in which
an account debtor of WD Germany on the Closing Date is located on the Closing
Date, or such other location as is acceptable to the Agent; (j) that are not
secured by a letter of credit; and (k) that is subject to a first priority
perfected security interest in favor of the Borrower as security for WD
Germany's Foreign Subsidiary Note and assigned as security to the Agent for the
benefit of the Agent and the Banks.
Eligible UK Accounts Receivable. The aggregate of the unpaid portion of
Accounts Receivable (net of any credits, rebates, offsets, amounts in dispute,
holdbacks or other adjustments or commissions payable to third parties that are
adjustments to such Accounts Receivable) of WD UK (a) that the Borrower and WD
UK reasonably and in good faith determines to be collectible; (b) that are with
account debtors or other obligors that (i) are not Affiliates of the Borrower or
WD UK, (ii) purchased the goods or services giving rise to the relevant Account
Receivable in an arm's length transaction, (iii) are not insolvent or involved
in any case or proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the
Agent's reasonable judgment, creditworthy; (c) that are in payment of
obligations that have been fully
16
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performed; (d) that are not subject to any pledge, restriction, security
interest or other lien or encumbrance other than those created by the Loan
Documents; (e) in which the Agent has a valid and perfected first priority
security interest; (f) that are not more than sixty (60) days past due; (g) that
are not due from an account debtor or other obligor located in Minnesota unless
WD UK (i) has received a certificate of authority to do business and is in good
standing in such state or (ii) has filed a notice of business activities report
with the appropriate office or agency of such state for the current year; (h)
that are not due from any single account debtor or other obligor if more than
fifty percent (50%) of the aggregate amount of all Accounts Receivable owing
from such account debtor or other obligor are more than ninety (90) days past
due; (i) that are payable in Dollars, German deutsche marks, French francs,
British pound sterling, Norwegian kroners, Singapore dollars or any other
currency acceptable to the Agent; (j) that are not payable from an office
outside of any country in which an account debtor of WD UK on the Closing Date
is located on the Closing Date, or such other location which is acceptable to
the Agent; and (k) that are not secured by a letter of credit unless the Agent
has a prior, perfected security interest in such letter of credit.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.8.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars and the relevant Optional Currencies are offered by
international banking units of United States banking institutions and by foreign
banking institutions to each other and in which foreign currency and exchange
operations or eurocurrency funding operations are customarily conducted.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other
17
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eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate per annum for the
Reference Bank (rounded upwards to the nearest 1/16 of one percent) at which the
Reference Bank's Eurodollar Lending Office is offered Dollar deposits two (2)
Eurodollar Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations of such Eurodollar Lending Office are customarily conducted,
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Rate Loan of the Reference Bank to which such Interest Period applies, divided
by (b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if
applicable.
Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of
the Term Loan bearing interest calculated by reference to the Eurodollar Rate.
Event of Default. See ss.14.1.
Fee Letter. The Fee Letter dated on or prior to the Closing Date by and
among the Borrower and the Agent, as the same may be amended, modified, restated
or supplemented from time to time.
Foreign Pledge Agreements. Collectively, (a) the Charges Over Shares by
the Borrower in the shares of WD UK and WD Malaysia; (b) the Share Mortgage by
the Borrower in the shares of WD Cayman Islands; and (c) the Share Pledge
Agreement by the Borrower in the shares of WD Germany, each dated as of a date
on or prior to the Closing Date and each in form and substance satisfactory to
the Banks and the Agent.
Foreign Subsidiary. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
Foreign Subsidiary Loan. Any intercompany loan to be made by the
Borrower to WD Germany on or after the Closing Date, in the amounts and on the
terms permitted by ss.10.1.
Foreign Subsidiary Note. A promissory note from WD Germany to the
Borrower in substantially the form of Exhibit H, which note evidences
intercompany loans made by the Borrower to WD Germany, and which is in form and
substance satisfactory to the Agent.
Foreign Subsidiary Note Assignment. That certain Collateral Assignment,
dated on or prior to the Closing Date, from the Borrower to the Agent,
collaterally assigning to the Agent all of the Borrower's rights, title and
interest in the Foreign Subsidiary Note and
18
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Foreign Subsidiary Security Documents, and in form and substance satisfactory to
the Agent and the Banks.
Foreign Subsidiary Security Documents. As to any Foreign Subsidiary
which is the obligor on a Foreign Subsidiary Note, the instruments, agreements,
filings, notices, registrations, certificates and other documents delivered to
the Agent pursuant to the terms of this Credit Agreement, and all other
instruments, agreements, filings, notices, registrations, certificates and other
documents delivered to the Agent or any Bank in connection with or to secure any
Foreign Subsidiary Loan or Foreign Subsidiary Note.
generally accepted accounting principles. (a) When used in ss.11,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantee. That Guarantee and Indemnity Agreement, dated or to be dated
after the Closing Date, made by WD UK in favor of the Banks and the Agent
pursuant to which WD UK guaranties to the Banks and the Agent the payment and
performance of certain of the Obligations, and in form and substance
satisfactory to the Agent and the Banks.
Guarantors. All Domestic Subsidiaries of the Borrower existing on the
Closing Date other than Pacifica Insurance Corporation and each other Person
which is required to be or become guarantors from time to time pursuant to
ss.9.13 hereof.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
Date, made by each Guarantor in favor of the Banks and the Agent pursuant to
which each Guarantor guaranties to the Banks and the Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Banks and the Agent.
Hazardous Substances. See ss.8.18(b).
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Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with respect
to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person under any lease (a
"Synthetic Lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(g) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(h) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(i) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices (a
"derivative contract"),
(j) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such
20
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Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is
not liable therefor and such terms are enforceable under applicable
law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (a) through (i) (the "primary obligation") of another Person
(the "primary obligor"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (i) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (ii) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (iii) to maintain working
capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to
pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
derivative contract shall be the maximum amount of any termination or loss
payment required to be paid by such Person if such derivative contract were, at
the time of determination, to be terminated by reason of any event of default or
early termination event thereunder, whether or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
Indenture Trustee. The Person who is designated as the "Indenture
Trustee" under the Subordinated Indenture.
Ineligible Securities. 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 1993 (12 U.S.C. ss.24, Seventh), as amended.
Instrument of Adherence. See ss.10.5.1.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar quarter with respect to interest accrued during such calendar
quarter, including, without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan; and (b) as to any Eurodollar Rate Loan in
respect of which the Interest Period is (i) 3
21
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months or less, the last day of such Interest Period, and (ii) more than three
(3) months , the date that is three (3) months from the first day of such
Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(i) for any Base Rate Loan, the last day of the calendar quarter; and (ii) for
any Eurodollar Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless 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 immediately preceding Eurodollar
Business Day;
(b) if the Borrower shall fail to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(c) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar 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 Eurodollar Business Day of a calendar month; and
(d) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Revolving Credit Loan Maturity
Date (if comprising a Revolving Credit Loan) or the Term Loan Maturity
Date (if comprising the Term Loan or a portion thereof) shall end on
the Revolving Credit Loan Maturity Date or (as the case may be) the
Term Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest
22
-15-
included as provided in the foregoing clause (b) may be deducted when paid; and
(e) there shall not be deducted from the aggregate amount of Investments any
decrease in the value thereof.
Letter of Credit. See ss.5.1.1.
Letter of Credit Application. See ss.5.1.1.
Letter of Credit Fee. See ss.5.6.
Letter of Credit Participation. See ss.5.1.4.
Liabilities to Worth Ratio. As of any date of determination, the ratio
of (a) the sum of (i) Consolidated Total Liabilities of the Borrower and its
Subsidiaries for the fiscal quarter most recently ended plus to the extent not
otherwise included in the calculation of Consolidated Total Liabilities and
without duplication, (ii) all other Indebtedness of the Borrower and its
Subsidiaries which does not appear on the Borrower's consolidated balance sheet
as a liability for the fiscal quarter of the Borrower and its Subsidiaries most
recently ended (other than Indebtedness which constitutes (A) a "derivative
contract" (as defined in paragraph (i) of the term Indebtedness); (B)
obligations under securities repurchase agreements; and (C) any "equity related
purchase obligations" (as such term is defined in paragraph (h) of the term
Indebtedness) pertaining to the Stock Option Plan), less (iii) the aggregate
amount of the outstanding Subordinated Notes on such date to (b) Consolidated
Tangible Net Worth of the Borrower and its Subsidiaries for such period.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Security Documents.
Loan Request. See ss.2.6.
Loans. The Revolving Credit Loans and the Term Loan.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitutes at least fifty-one percent (51%) of the Total Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Notes. The Term Notes and the Revolving Credit Notes.
Obligations. Collectively, (a) all indebtedness, obligations and
liabilities of any of the Borrower and its Subsidiaries to any of the Banks and
the Agent, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or
23
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indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred under this Credit Agreement or any of
the other Loan Documents or in respect of any of the Loans made or Reimbursement
Obligations incurred or any of the Notes, Letter of Credit Application, Letters
of Credit or arising or incurred in connection with any interest rate protection
arrangements provided by the Banks, foreign exchange an/or currency risk
protection arrangements entered into with any of the Banks, or any documents or
instruments executed in connection therewith, or other instruments at any time
evidencing any thereof; and (b) all indebtedness, obligations and liabilities of
any of the Borrower and/or WD UK to the Bank Guarantee Bank, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under the Credit
Instruments, the WDC Guaranty or any other loan documents executed in connection
therewith or in respect of any of the reimbursement obligations incurred
thereunder, or any documents or instruments executed in connection therewith, or
other instruments at any time evidencing any thereof.
Optional Currency. Any currency other than Dollars which is freely
convertible into Dollars and which is traded on any recognized Eurocurrency
Interbank Market selected by the Agent in good faith; provided, however, that in
the event the Borrower requests an Optional Currency for a Letter of Credit
consisting of a currency other than British pounds/Sterling, the issuance of
such Letter of Credit shall be subject to the consent of the Agent.
outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
Patent Assignments. The several Patent Assignments, dated or to be
dated on or prior to the Closing Date, made by the Borrower and the Guarantors
in favor of the Agent and in form and substance satisfactory to the Banks and
the Agent.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates defined in the
Security Agreements.
Permitted Acquisition. As defined in ss.10.5.1.
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.10.2.
Permitted Synthetic Lease. See ss.10.1(c).
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
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Rate Adjustment Period. See the definition of Applicable Margin.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Receivables Charge. The Receivables Charge, dated or to be dated on or
prior to the Closing Date, between WD UK and the Agent and in form and substance
satisfactory to the Agent and the Banks.
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Reference Bank. BKB.
Reference Period. The period of four (4) consecutive fiscal quarters of
the Borrower ending on the relevant date (or, if such date is not a fiscal
quarter end date, the period of four (4) consecutive fiscal quarters most
recently ended).
Register. See ss.19.3.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.5.2.
Rental Obligations. All present or future obligations of the Borrower
or any of its Subsidiaries under any rental agreements or leases of real or
personal property, other than (a) obligations that can be terminated by the
giving of notice without liability to the Borrower or such Subsidiary in excess
of the liability for rent due as of the date on which such notice is given and
under which no penalty or premium is paid as a result of any such termination,
and (b) current obligations in respect of Capitalized Leases or Synthetic
Leases.
Reserves. As determined by the Agent, such amounts as the Agent may
from time to time establish and revise (a) to reflect events, conditions,
contingencies or risks which do or may (i) adversely affect either (A) any
Eligible Accounts Receivable, the rights of the Agent or any of the Banks in any
Eligible Accounts Receivable or its value or (B) the security interest and other
rights of the Agent or any of the Banks in the Eligible Accounts Receivable
(including the enforceability, perfection and priority thereof) or (ii)
adversely affect in any material respect the assets (other than any Eligible
Accounts Receivable) or business or financial condition of the Borrower or any
of its Subsidiaries or (b) to reflect the belief of the Agent that any Borrowing
Base Report or other collateral report or financial information furnished by or
on behalf of the Borrower to the Agent or any of the Banks is or may have been
incomplete, inaccurate or misleading in any material respect. Reserves may
include, but are not limited to: in store customer credits; payables based upon
past due normal trade terms; gift certificates; frequent shopper programs;
layaways and customer deposits; and taxes and other governmental charges,
whether voluntary or involuntary, personal property or otherwise and whether or
not the tax claims therefor may have priority over the Agent's security interest
in any of the Eligible Accounts Receivable.
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Restricted Payment. In relation to the Borrower and its Subsidiaries,
any (a) Distribution; or (b) payment by the Borrower or any of its Subsidiaries
to any Affiliate other than payments to such Affiliate other than payments to
such Affiliate for goods and services in the ordinary course of business on
terms equivalent to those obtainable in arms length transactions.
Revolving Credit Loan Maturity Date. January 26,2001.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to ss.2.
Revolving Credit Note Record. A Record with respect to a Revolving
Credit Note.
Revolving Credit Notes. See ss.2.4.
Section 20 Subsidiary. A Subsidiary of the Bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The several Security Agreements, dated or to be
dated on or prior to the Closing Date, between the Borrower and the Guarantors
and the Agent and in form and substance satisfactory to the Banks and the Agent.
Security Documents. The Guaranty, the Guarantee, the Receivables
Charge, the Security Agreements, the Foreign Stock Pledges, the Foreign
Subsidiary Note Assignment, the Patent Assignments, the Trademark Assignments,
the Stock Pledge Agreement and all other instruments and documents, including
without limitation Uniform Commercial Code financing statements, required to be
executed or delivered pursuant to any Security Document.
Specified Intercompany Amount. As of any date of determination, the
amount which is identified as the "Specified Intercompany Amount" on line item
2(h) of the Borrower's Borrowing Base Report most recently delivered to the
Agent.
Stock Option Plan. The Borrower's employee and non-employee director
stock option plans existing on the Closing Date and more fully described on
Schedule 10.1 hereto.
Stock Pledge Agreement. The Stock Pledge Agreement, dated or to be
dated on or prior to the Closing Date, between the Borrower and the Agent and in
form and substance satisfactory to the Banks and the Agent.
Strategic Partners. Any corporation or other business entity with which
the Borrower or any of its Subsidiaries has or seeks to have a substantial or
continuing commercial relationship involving the purchase and/or sale of
products or materials or the development, acquisition or use of products,
technology or intellectual property, and which Strategic Partner and any
Investment in such Strategic Partner by the Borrower has been approved by the
Board of Directors of the Borrower prior to making any Investment in such
Strategic Partner.
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Subordinated Debt. Unsecured Indebtedness of the Borrower or any of its
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations, and evidenced as such by the
Subordinated Indenture or by another written instrument containing subordination
provisions in form and substance approved by the Agent and the Majority Banks in
writing.
Subordinated Debt Documents. The Subordinated Purchase Agreement, the
Subordinated Indenture, the Subordinated Registration Right Agreement, the
Subordinated Notes, and any other document, agreement or instrument evidencing
any Subordinated Debt.
Subordinated Indenture. The Indenture dated as of a date subsequent to
the Closing Date between the Borrower and the Indenture Trustee relating to the
Subordinated Notes, which Subordinated Indenture shall be in form and substance
reasonably satisfactory to the Agent and the Majority Banks.
Subordinated Notes. The subordinated notes issued pursuant to the
Subordinated Indenture, which notes shall be in form and substance reasonably
satisfactory to the Agent and the Majority Banks.
Subordinated Purchase Agreement. The Purchase Agreement, as such term
is defined in the Subordinated Indenture, relating to the issuance and sale by
the Borrower of the Subordinated Notes, which shall be in form and substance
reasonably satisfactory to the Agent and the Majority Banks.
Subordinated Registration Rights Agreement. The Registration Rights
Agreement, as such term is defined in the Subordinated Indenture, relating to
the issuance and sale by the Borrower of the Subordinated Notes, which shall be
in form and substance reasonably satisfactory to the Agent and the Majority
Banks.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Supermajority Banks. As of any date, the Banks holding at least
sixty-six and two-thirds percent (66 2/3%) of the outstanding principal amount
of the Notes on such date, and if no such principal is outstanding, the Banks
whose aggregate Commitments constitute at least sixty-six and two-thirds percent
(66 2/3%) of the Total Commitment.
Synthetic Lease. As such term is defined in subparagraph (f) of the
definition of "Indebtedness".
Term Loan. The term loan made or to be made by the Banks to the
Borrower on the Closing Date in the aggregate principal amount of $50,000,000
pursuant to ss.4.1.
Term Loan Maturity Date. January 26, 2001.
Term Notes. See ss.4.2.
Term Note Record. A Record with respect to a Term Note.
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Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Trademark Assignments. The several Trademark Assignments, dated or to
be dated on or prior to the Closing Date, made by the Borrower and the
Guarantors in favor of the Agent and in form and substance satisfactory to the
Banks and the Agent.
Type. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, ss.5.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
WDC Guaranty. That certain guaranty dated as of October 17, 1997 issued
by the Borrower in favor of the Bank Guarantee Bank guaranteeing the payment and
performance in full of WD UK's reimbursement obligations to the Bank Guarantee
Bank under the Credit Instruments.
WD Cayman Islands. Western Digital Ireland, Ltd., an entity formed
under the laws of the Cayman Islands and a wholly-owned Subsidiary of the
Borrower.
WD Germany. Western Digital (Deutschland) GmbH, an entity formed under
the laws of Germany and a wholly-owned Subsidiary of the Borrower.
WD Malaysia. Western Digital (Malaysia) SDN BHD, an entity formed under
the laws of Malaysia and a wholly-owned Subsidiary of the Borrower.
WD UK. Western Digital (U.K.) Limited., an entity formed under the laws
of the United Kingdom and a wholly-owned Subsidiary of the Borrower.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
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(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, 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."
(k) This Credit Agreement and the 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, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and
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the Revolving Credit Loan Maturity Date upon notice by the Borrower to the Agent
given in accordance with ss.2.6, such sums as are requested by the Borrower up
to a maximum aggregate amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the sum of the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) plus
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not at
any time exceed the lesser of (a) the Total Commitment and (b) the Borrowing
Base. The Revolving Credit Loans shall be made pro rata in accordance with each
Bank's Commitment Percentage. Each request for a Revolving Credit Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in ss.12 and ss.13, in the case of the initial Revolving
Credit Loans to be made on the Closing Date, and ss.13, in the case of all other
Revolving Credit Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee (the "Commitment Fee") calculated at the applicable Commitment
Fee Rate on the average daily amount during each calendar quarter or portion
thereof from the Closing Date to the Revolving Credit Loan Maturity Date by
which the Total Commitment minus the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving
Credit Loans during such calendar quarter. The Commitment Fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $5,000,000 or a whole multiple of $500,000 in
excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any Commitment Fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit B hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
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appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in ss.6.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate plus the Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum
equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin.
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to
the Agent written notice in the form of Exhibit C hereto (or telephonic notice
confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") not later than (a) 11:00 a.m.
(Boston time) on the proposed Drawdown Date of any Base Rate Loan and (b) 11:00
a.m. (Boston time) two (2) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify (i)
the principal amount of the Revolving Credit Loan requested, (ii) the proposed
Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such
Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan. Promptly
upon receipt of any such notice, the Agent shall notify each of the Banks
thereof. Each Loan Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Revolving Credit Loan requested from
the Banks on the proposed Drawdown Date. Each Loan Request shall for a Base Rate
Loan shall be in a minimum aggregate amount of $1,000,000 or a larger integral
multiple of $100,000 in excess thereof, and each Loan Request for a Eurodollar
Rate Loan shall be in a minimum aggregate amount of $5,000,000 or a larger
integral multiple of $1,000,000 in excess thereof.
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2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (a) with respect to any such conversion of a Revolving
Credit Loan to a Base Rate Loan, the Borrower shall give the Agent at
least one (1) Business Days prior written notice of such election; (b)
with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrower shall give the Agent at least two (2)
Eurodollar Business Days prior written notice of such election; (c)
with respect to any such conversion of a Eurodollar Rate Loan into a
Revolving Credit Loan of another Type, such conversion shall only be
made on the last day of the Interest Period with respect thereto; and
(d) no Revolving Credit Loan may be converted into a Eurodollar Rate
Loan for an Interest Period of more than thirty (30) days if at the
date of such conversion the Borrower cannot satisfy the conditions set
forth in ss.13 hereof; and (e) no Revolving Credit Loan may be
converted into a Eurodollar Rate Loan when any Default or Event of
Default has occurred and is continuing. On the date on which such
conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its Eurodollar Lending
Office, as the case may be. All or any part of outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided herein, provided that any partial
conversion into a Base Rate Loan shall be in an aggregate principal
amount of $1,000,000 or a larger integral multiple of $100,000 in
excess thereof, and any partial conversion into a Eurodollar Rate Loan
shall be in an aggregate principal amount of $5,000,000 or a larger
integral multiple of $1,000,000 in excess thereof. Each Conversion
Request relating to the conversion of a Revolving Credit Loan to a
Eurodollar Rate Loan shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in ss.2.7.1; provided that no Eurodollar Rate Loan
may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a
Base Rate Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default; and provided, further, to the extent any Revolving Credit Loan
was converted or continued as a Eurodollar Rate Loan on a date when the
Borrower was unable to satisfy the conditions set forth in ss.13
hereof, such Loan may not be continued as such if on the date of such
conversion the Borrower remains unable to satisfy the conditions set
forth in ss.13 hereof, but shall be automatically converted to a Base
Rate Loan on the last day of the Interest Period relating thereto. In
the event that the Borrower fails to provide any such notice with
respect to the continuation of any Eurodollar Rate Loan as such, then
such Eurodollar Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating
thereto. The Agent
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shall notify the Banks promptly when any such automatic conversion
comtemplated by this ss.2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. In addition, there shall not be more than
fifteen (15) Eurodollar Rate Loans outstanding at any one time.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 1:00 p.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by ss.ss.12 and 13 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such
Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Revolving Credit Loans to
be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(b) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, times (c) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 360. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Agent shall be entitled to recover such amount from the
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Borrower on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans made on such Drawdown Date.
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
monthly (or at such other interval as may be specified pursuant to ss.9.4(e)) by
the Agent by reference to the Borrowing Base Report delivered to the Banks and
the Agent pursuant to ss.9.4(e) and other information obtained by or provided to
the Agent. The Agent shall give to the Borrower written notice of any change in
the Borrowing Base determined by the Agent. In the case of a reduction in the
lending formula with respect to Eligible Accounts Receivable, such notice shall
be effective thirty (30) days after its receipt by the Borrower, and in the case
of any change in the general criteria for Eligible Accounts Receivable, such
notice shall be effective upon its receipt by the Borrower. Prior to the time
that such notice becomes effective the Borrowing Base shall be computed as it
would have been computed in the absence of such notice.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (a) the
Total Commitment and (b) the Borrowing Base, then the Borrower shall immediately
pay the amount of such excess to the Agent for the respective accounts of the
Banks for application: first, to any Unpaid Reimbursement Obligations; second,
to the Revolving Credit Loans; and third, to provide to the Agent cash
collateral for Reimbursement Obligations as contemplated by ss.5.2(b) and (c).
Each payment of any Unpaid Reimbursement Obligations or prepayment of Revolving
Credit Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, but subject to ss.6.10. The Borrower shall give the Agent, no later
than 1:00 p.m., Boston time, at least one (1) Business Day prior written notice
of any proposed prepayment pursuant to this ss.3.3 of Base Rate Loans, and two
(2) Eurodollar Business Days notice of any proposed prepayment pursuant to this
ss.3.3 of Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid.
Each such partial prepayment of the Revolving Credit Loans shall be in a minimum
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall be applied, in the absence of instruction by the Borrower, first to the
principal of Base Rate Loans and then to the principal of Eurodollar Rate Loans.
Each partial prepayment shall be allocated among the Banks, in proportion, as
nearly as practicable, to the respective unpaid principal
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amount of each Bank's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
4. THE TERM LOAN.
4.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each Bank agrees to lend to the Borrower on the
Closing Date the amount of its Commitment Percentage of the principal amount of
$50,000,000.
4.2. THE TERM NOTES. The Term Loan shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit D hereto
(each a "Term Note"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Term Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or, if less, the outstanding amount of such Bank's Commitment Percentage
of the Term Loan, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made a notation
on such Bank's Term Note Record reflecting the original principal amount of such
Bank's Commitment Percentage of the Term Loan and, at or about the time of such
Bank's receipt of any principal payment on such Bank's Term Note, an appropriate
notation on such Bank's Term Note Record reflecting such payment. The aggregate
unpaid amount set forth on such Bank's Term Note Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Term Note Record shall not affect the obligations of the Borrower hereunder or
under any Term Note to make payments of principal of and interest on any Term
Note when due.
4.3. SCHEDULE OF INSTALLMENT PAYMENTS OF PRINCIPAL OF TERM LOAN. The
Borrower promises to pay to the Agent for the account of the Banks the principal
amount of the Term Loan in one payment of $50,000,000, which payment shall be
due and payable on the Term Loan Maturity Date in an amount equal to the unpaid
balance of the Term Loan.
4.4. OPTIONAL PREPAYMENT OF TERM LOAN. The Borrower shall have the
right at any time to prepay the Term Notes on or before the Term Loan Maturity
Date, as a whole, or in part, upon not less than five (5) Business Days prior
written notice to the Agent, without premium or penalty but subject to ss.6.10,
provided that (a) each partial prepayment shall be in the principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, and (b) each
partial prepayment shall be allocated among the Banks, in proportion, as nearly
as practicable, to the respective outstanding amount of each Bank's Term Note,
with adjustments to the extent practicable to equalize any prior prepayments not
exactly in proportion. Any prepayment of principal of the Term Loan shall
include all interest accrued to the date of prepayment and shall be applied
against the scheduled installments of principal due on the Term Loan in the
inverse order of maturity. No amount repaid with respect to the Term Loan may be
reborrowed.
4.5. INTEREST ON TERM LOAN.
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4.5.1. INTEREST RATES. Except as otherwise provided in
ss.6.11, the Term Loan shall bear interest during each Interest Period
relating to all or any portion of the Term Loan at the following rates:
(a) To the extent that all or any portion of the Term
Loan bears interest during such Interest Period at the Base
Rate, the Term Loan or such portion shall bear interest during
such Interest Period at the rate per annum equal to the Base
Rate plus the Applicable Margin.
(b) To the extent that all or any portion of the Term
Loan bears interest during such Interest Period at the
Eurodollar Rate, the Term Loan or such portion shall bear
interest during such Interest Period at the rate of per annum
equal to the Eurodollar Rate determined for such Interest
Period plus the Applicable Margin.
The Borrower promises to pay interest on the Term Loan or any portion
thereof outstanding during each Interest Period in arrears on each
Interest Payment Date applicable to such Interest Period.
4.5.2. NOTIFICATION BY BORROWER. The Borrower shall notify the
Agent, such notice to be irrevocable, at least three (3) Eurodollar
Business Days prior to the Drawdown Date of the Term Loan if all or any
portion of the Term Loan is to bear interest at the Eurodollar Rate.
After the Term Loan has been made, the provisions of ss.2.7 shall apply
mutatis mutandis with respect to all or any portion of the Term Loan so
that the Borrower may have the same interest rate options with respect
to all or any portion of the Term Loan as it would be entitled to with
respect to the Revolving Credit Loans.
4.5.3. AMOUNTS, ETC. Any portion of the Term Loan bearing
interest at the Eurodollar Rate relating to any Interest Period shall
be in the amount of $5,000,000 or an integral multiple thereof. No
Interest Period relating to the Term Loan or any portion thereof
bearing interest at the Eurodollar Rate shall extend beyond the date on
which a regularly scheduled installment payment of the principal of the
Term Loan is to be made unless a portion of the Term Loan at least
equal to such installment payment has an Interest Period ending on such
date or is then bearing interest at the Base Rate.
5. LETTERS OF CREDIT.
5.1. LETTER OF CREDIT COMMITMENTS.
5.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
ss.5.1.4 and upon the representations and warranties of the Borrower
contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby letters
of credit (individually, a "Letter of Credit"), denominated in Dollars
or any Optional Currency in such form
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as may be requested from time to time by the Borrower and agreed to by
the Agent; provided, however, that, after giving effect to such
request, (a) the sum of the Dollar Equivalent of the aggregate Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $100,000,000 at any one time and (b) the sum of the Dollar
Equivalent (i) of the Maximum Drawing Amount on all Letters of Credit,
(ii) of all Unpaid Reimbursement Obligations, and (iii) of the amount
of all Revolving Credit Loans outstanding shall not exceed the lesser
of (A) the Total Commitment and (B) the Borrowing Base. Notwithstanding
the foregoing, the Agent shall have no obligation to issue any Letter
of Credit to support or secure any Indebtedness of the Borrower or any
of its Subsidiaries to the extent that such Indebtedness was incurred
prior to the proposed issuance date of such Letter of Credit, unless in
any such case the Borrower demonstrates to the satisfaction of the
Agent that (x) such prior incurred Indebtedness were then fully secured
by a prior perfected and unavoidable security interest in collateral
provided by the Borrower or such Subsidiary to the proposed beneficiary
of such Letter of Credit or (y) such prior incurred Indebtedness were
then secured or supported by a letter of credit issued for the account
of the Borrower or such Subsidiary and the reimbursement obligation
with respect to such letter of credit was fully secured by a prior
perfected and unavoidable security interest in collateral provided to
the issuer of such letter of credit by the Borrower or such Subsidiary.
5.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
5.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, (b) have an expiry date no later than
the date which is fourteen (14) days (or, if the Letter of Credit is
confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Revolving Credit
Loan Maturity Date and (c) have an expiry date no longer than one (1)
year from the date of issuance. Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs.
5.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to ss.5.2 (such
agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
5.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.5.2 in an
amount equal to such payment. Each
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Bank shall share in accordance with its participating interest in any
interest which accrues pursuant to ss.5.2.
5.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in ss.5.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (i) the Dollar Equivalent of the amount paid by the
Agent under or with respect to such Letter of Credit, and (ii) the
Dollar Equivalent of the amount of any taxes, fees, charges or other
costs and expenses whatsoever incurred by the Agent or any Bank in
connection with any payment made by the Agent or any Bank under, or
with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.14, an amount equal to the
Dollar Equivalent of then Maximum Drawing Amount on all Letters of
Credit, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.5.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.5.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.6.11 for overdue principal on the
Revolving Credit Loans.
5.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in ss.5.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation and shall
specify such amount in Dollars (which, to the extent of any Letter of Credit
issued in an Optional Currency, is based upon the actual exchange rate at which
the Agent anticipates being able to obtain the applicable Optional Currency on
the date payment is to be made by the Banks, with any excess payment being
refunded to the Banks and any deficiency being payable by
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such Banks) required from each of the Banks. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, times (b) the amount equal to such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a
fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit. From and after such purchase of the applicable Letter of Credit
Participation, such Unpaid Reimbursement Obligations shall be deemed to have
been converted into Base Rate Loans made by the Banks, and all amounts from time
to time accruing, and all amounts from time to time payable, on account of such
Unpaid Reimbursement Obligations shall be payable in Dollars as if such Letter
of Credit had originally been issued in Dollars.
5.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.5
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.5.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
5.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.5.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document 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, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any
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action under this Agreement unless it shall first have received such advice or
concurrence of the Majority Banks as it reasonably deems appropriate or it shall
first be indemnified to its reasonable 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 in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of the Revolving Credit Notes or of a Letter of Credit
Participation.
5.6. LETTER OF CREDIT FEE. The Borrower shall pay quarterly in arrears
on the last day of each calendar quarter following the issuance, extension or
renewal of any Letter of Credit and at such other time or times as such charges
are customarily made by the Agent, pay a fee (in each case, a "Letter of Credit
Fee") to the Agent in respect of each Letter of Credit issued pursuant to this
Credit Agreement, calculated at the applicable rate set forth in the definition
of Applicable Margin under the column headed "Letter of Credit Fees" per annum
on the average daily undrawn face amount of each such Letter of Credit which
shall be for the accounts of the Banks in accordance with their respective
Commitment Percentages, plus an amount equal to 1/8% per annum on the face
amount of such Letter of Credit which shall be for the account of the Agent as
an issuing fee. In respect of each Letter of Credit, the Borrower shall also pay
to the Agent for the Agent's own account, on the date of any issuance,
extension, renewal or amendment of any Letter of Credit, or at such time or
times as such charges are customarily made to the Agent; plus the Agent's
customary issuance, negotiation or document examination or other administrative
fees as in effect from time to time.
6. CERTAIN GENERAL PROVISIONS.
6.1. CLOSING FEE. The Borrower agrees to pay to the Agent a closing fee
in the amounts and at the times set forth in the Fee Letter.
6.2. AGENT'S FEE. The Borrower shall pay to the Agent an agent's fee in
the amounts and at the times set forth in the Fee Letter.
6.3. FUNDS FOR PAYMENTS.
6.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of
the Banks and the Agent, at the Agent's Head Office or at such other
location in the Boston, Massachusetts, area that the Agent may from
time to time designate, in each case in immediately available funds.
6.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrower is
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compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks or (as the
case may be) either of the Agent, on the date on which such amount is
due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Banks
or either of the Agent to receive the same net amount which the Banks
or either of the Agent would have received on such due date had no such
obligation been imposed upon the Borrower; provided, however, the
Borrower shall have no obligations to make any such payment to any Bank
which is organized under the laws of any jurisdiction other than the
United States or any state thereof in respect of United States federal
withholding taxes unless such Bank shall have delivered to the Borrower
a duly completed and executed IRS form 1001 or 4224 that shows complete
exemption of such Bank from such withholding tax. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for
all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan
Document.
6.3.3. CURRENCY MATTERS.
6.3.3.1. CURRENCY OF ACCOUNT. (a) Dollars are the currency
of account and payment for each and every sum at any time due
from the Borrower hereunder; provided that:
(i) each payment in respect of costs, expenses and
indemnities shall be made in the currency in which the same
were incurred; and
(ii) any amount expressed to be payable in a currency
other than Dollars shall be paid in that other currency.
(b) No payment to the Agent or any Bank (whether
under any judgment or court order or otherwise) shall
discharge the obligation or liability in respect of which it
was made unless and until the Agent or such Bank shall have
received payment in full in the currency in which such
obligation or liability was incurred, and to the extent that
the amount of any such payment shall, on actual conversion
into such currency, fall short of such obligation or liability
actual or contingent expressed in that currency, the Borrower
shall indemnify and hold harmless the Agent or such Bank, as
the case may be, with respect to the amount of the shortfall.
6.3.3.2. CURRENCY FLUCTUATIONS.
(a) Not later than 1:00 p.m. (Boston time) on the
last Business Day of each calendar month (the "Calculation
Date"), the Agent shall determine the Dollar Equivalent as of
such date. The Dollar Equivalent so determined shall become
effective on the first Business Day immediately following such
determination (a "Reset Date") and shall remain effective
until the next succeeding Reset Date.
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(b) If, on any Reset Date and on the Revolving Credit
Loan Maturity Date, the aggregate outstanding amount
(expressed in Dollars) of all Revolving Credit Loans, the sum
of the Maximum Drawing Amount on such date and all Unpaid
Reimbursement Obligations on such date, exceeds the lesser of
(i) Total Commitment and (ii) the Borrowing Base by more than
$100,000, then (i) the Agent shall give notice thereof to the
Borrower and the Banks and (ii) within two (2) Business Days
thereafter, the Borrower shall repay or prepay the Revolving
Credit Loans in accordance with this Credit Agreement in an
aggregate principal amount such that, after giving effect
thereto, the aggregate outstanding amount (expressed in
Dollars) of all Revolving Credit Loans and the sum of the
Maximum Drawing Amount on such date and all Unpaid
Reimbursement Obligations on such date, no longer exceeds the
lesser of (i) the Total Commitment (expressed in Dollars) and
(ii) the Borrowing Base.
(c) Without limiting subsection ss.6.3.3.2(b), if, on
any day prior to the Revolving Credit Loan Maturity Date, the
aggregate outstanding amount (expressed in Dollars) of all
Revolving Credit Loans and the sum of the Maximum Drawing
Amount on such date and all Unpaid Reimbursement Obligations
on such date, exceeds the lesser of (i) the Total Commitment
and (ii) the Borrowing Base by five percent (5%) or more, then
(i) the Agent shall give notice thereof to the Borrower and
the Banks and (ii) within two (2) Business Days thereafter,
the Borrower shall repay or prepay the Revolving Credit Loans
in accordance with this Credit Agreement in an aggregate
principal amount such that, after giving effect thereto, the
aggregate outstanding amount (expressed in Dollars) of all
Revolving Credit Loans and the sum of the Maximum Drawing
Amount on such date and all Unpaid Reimbursement Obligations
on such date, no longer exceeds the lesser of (i) the Total
Commitment (expressed in Dollars) and (ii) the Borrowing Base.
Nothing set forth in this ss.6.3.3.2 shall be construed to
require the Agent to calculate daily compliance under this
ss.6.3.3.2 unless expressly requested to do so by a Bank.
(d) If on any Reset Date, the sum of the Maximum
Drawing Amount on such date and all Unpaid Reimbursement
Obligations on such date (expressed in Dollars) exceeds the
Letter of Credit sublimit set forth in ss.4.1 (expressed in
Dollars) by more than five percent (5%), then the Borrower
shall immediately upon demand provide cash collateral to the
Agent such that, after giving effect thereto, the aggregate
outstanding amount of the sum of the Maximum Drawing Amount on
such date and all Unpaid Reimbursement Obligations on such
date (expressed in Dollars) no longer exceed the Letter of
Credit sublimit set forth in ss.4.1.
6.4. COMPUTATIONS. All computations of interest on Base Rate Loans
shall be based on a 365-day year and paid for the actual number of days elapsed.
All computations of interest on the Eurodollar Rate Loans and of Commitment
Fees, Letter of Credit Fees or other fees shall be based on a 360-day year and
paid for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to
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Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Records from time to time shall be considered correct and
binding on the Borrower unless within five (5) Business Days after receipt of
any notice by the Agent or any of the Banks of such outstanding amount, the
Agent or such Bank shall notify the Borrower to the contrary.
6.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
6.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's Loans
then outstanding as Eurodollar Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such Eurodollar Rate Loans or within such earlier period as may be
required by law. The Borrower hereby agrees promptly to pay the Agent for the
account of such Bank, upon demand by such Bank, any additional amounts necessary
to compensate such Bank for any costs incurred by such Bank in making any
conversion in accordance with this ss.6.6, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
6.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
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(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Loans (other than taxes based
upon or measured by the income or profits of such Bank or the Agent or
based upon any United States withholding tax for any non U.S. Bank to
the extent such non-U.S. Bank failed to comply with ss.6.3.2), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts payable
to any Bank or the Agent under this Credit Agreement or any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of
the Loans or such Bank's Commitment forms a part, and the result of any
of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Loans or such Bank's Commitment or any Letter of Credit,
or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.
6.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy,
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guideline or directive (whether or not having the force of law) regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (b) compliance by such Bank or the Agent or any
corporation controlling such Bank or the Agent with any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) of any such entity regarding capital adequacy, has the effect of reducing
the return on such Bank's or the Agent's commitment with respect to any Loans to
a level below that which such Bank or the Agent could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or the
Agent's then existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed by such Bank or
(as the case may be) the Agent to be material, then such Bank or the Agent may
notify the Borrower of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate, the
Borrower and such Bank shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrower receives such notice,
an adjustment payable hereunder that will adequately compensate such Bank in
light of these circumstances. If the Borrower and such Bank are unable to agree
to such adjustment within thirty (30) days of the date on which the Borrower
receives such notice, then commencing on the date of such notice (but not
earlier than the effective date of any such increased capital requirement), the
fees payable hereunder shall increase by an amount that will, in such Bank's
reasonable determination, provide adequate compensation. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
6.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.6.7 or 6.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
6.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (excluding loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request, notice (in the case of all or any
portion of the Term Loan pursuant to ss.4.5.2) or a Conversion Request relating
thereto in accordance with ss.2.6, ss.2.7 or ss.4.5 or (c) the making of any
payment of a Eurodollar Rate Loan or the making of any conversion of any such
Eurodollar Rate Loan to a Base Rate Loan on a day that is not the last day of
the applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Eurodollar Rate Loans.
6.11. INTEREST AFTER DEFAULT.
6.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other
overdue amounts payable
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hereunder or under any of the other Loan Documents shall bear interest
compounded monthly and payable on demand at a rate per annum equal to
two percent (2%) above the Base Rate until such amount shall be paid in
full (after as well as before judgment).
6.11.2. AMOUNTS NOT OVERDUE. During the continuance of a
Default or an Event of Default the principal of the Loans not overdue
shall, until such Default or Event of Default has been cured or
remedied or such Default or Event of Default has been waived by the
Majority Banks pursuant to ss.27, bear interest at a rate per annum
equal to the greater of (a) four percent (4%) above the rate of
interest otherwise applicable to such Revolving Credit Loans pursuant
to ss.2.5 and the Term Loan pursuant to ss.4.5 and(b) the rate of
interest applicable to overdue principal pursuant to ss.6.11.1.
7. COLLATERAL SECURITY AND GUARANTIES.
7.1. SECURITY OF BORROWER. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets (other than Real
Estate) of the Borrower, whether now owned or hereafter acquired, pursuant to
the terms of the Security Documents to which the Borrower is a party, including,
without limitation, a pledge by the Borrower of 100% of the capital stock of
each Domestic Subsidiary and 66% of the capital stock of each Foreign
Subsidiary.
7.2. GUARANTIES AND SECURITY OF SUBSIDIARIES. The Obligations shall
also be guaranteed pursuant to the terms of the Guaranty. The obligations of the
Guarantors under the Guaranty shall be in turn secured by a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of the assets (other than Real Estate) of each such
Guarantor, whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which such Guarantor is a party.
7.3. CHARGE OVER SHARES IN MALAYSIAN FOREIGN SUBSIDIARY. The charge
over shares in WD Malyasia executed by the Borrower as Collateral shall be
subject to the relevant governmental approvals being obtained.
8. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
8.1. CORPORATE AUTHORITY.
8.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
its Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation, (b)
has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (c) is in
good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a materially
46
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adverse effect on the business, assets or financial condition of the
Borrower or the Borrower and such Subsidiary, taken as a whole.
8.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by
all necessary corporate proceedings, (c) do not conflict with or result
in any breach or contravention of any provision of law, statute, rule
or regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Subsidiaries and (d) do not
conflict with any provision of the corporate charter or bylaws of, or
any agreement or other instrument binding upon, the Borrower or any of
its Subsidiaries.
8.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it
in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
8.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Domestic Subsidiaries of this Credit Agreement and
the other Loan Documents to which the Borrower or any of its Domestic
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
8.3 TITLE TO PROPERTIES: LEASES. Except as indicated on Schedule 8.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
8.4. FINANCIAL STATEMENTS AND PROJECTIONS.
8.4.1. FINANCIAL STATEMENTS. The Borrower and each of its
Subsidiaries has a fiscal year which is the twelve months ending on the
last Saturday of every June of each calendar year.
8.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a consolidated balance sheet and statement of cash flow of
the Borrower and
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its Subsidiaries as at the Balance Sheet Date, and a consolidated
statement of income of the Borrower and its Subsidiaries for the fiscal
year then ended, certified by KPMG Peat Marwick. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.
8.4.3. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 1998 to 1999 fiscal
years, copies of which have been delivered to each Bank, disclose all
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge of
the Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change
in any of such projections or to the cash flow statements delivered to
the Banks. The projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the assumptions stated
therein and reflect the reasonable estimates of the Borrower and its
Subsidiaries of the results of operations and other information
projected therein.
8.5. NO MATERIAL CHANGES, ETC. Since December 27, 1997 there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at December 27, 1997, or
the consolidated statement of income for the fiscal year then ended, other than
changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of the Borrower or any of its Subsidiaries. Since December
27, 1997, neither the Borrower nor any of its Subsidiaries has made any
Distributions which are prohibited by ss.10.4 hereof.
8.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others where such conflict could reasonably be
expected to have a materially adverse effect on the business, assets or
financial condition of the Borrower or any of its Subsidiaries.
8.7. LITIGATION. Except as set forth in Schedule 8.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending against the
Borrower or any of its Subsidiaries before any court, tribunal or administrative
agency or board that, if adversely determined, might, either in any case or in
the aggregate, materially adversely affect the properties, assets, financial
condition or business of the Borrower and its Subsidiaries or materially impair
the right of the Borrower and its Subsidiaries, considered as a whole, to carry
on business substantially as now conducted by them, or result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not
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maintained on the consolidated balance sheet of the Borrower and its
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries.
Neither the Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of the Borrower or any of
its Subsidiaries.
8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of the Borrower or any of its Subsidiaries.
8.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
8.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
8.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
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8.14. PERFECTION OF SECURITY INTEREST. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses which could reasonably be
expected to have a material adverse effect on the business, assets or financial
condition of the Borrower or the Borrower and its Subsidiaries, taken as a
whole, or the Agent's rights with respect to the Collateral. The Borrower or a
Subsidiary of the Borrower which is a party to one of the Security Agreements is
the owner of the Collateral free from any lien, security interest, encumbrance
and any other claim or demand, except for Permitted Liens.
8.15. CERTAIN TRANSACTIONS. Except as set forth on Schedule 8.15 hereto
and except for arm's length transactions pursuant to which the Borrower or any
of its Subsidiaries makes payments in the ordinary course of business upon terms
no less favorable than the Borrower or such Subsidiary could obtain from third
parties or which could otherwise have a material adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries, none
of the officers, directors, or employees of the Borrower or any of its
Subsidiaries is presently a party to any transaction with the Borrower or any of
its Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
8.16. EMPLOYEE BENEFIT PLANS.
8.16.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by ss.412 of ERISA. The Borrower has heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under ss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
8.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws. The Borrower may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrower without liability to any Person other than for claims
arising prior to termination.
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8.16.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and neither the Borrower nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to
a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension
Plan and there has not been any ERISA Reportable Event (other than an
ERISA Reportable Event as to which the requirement of 30 days notice
has been waived), or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets
of any Guaranteed Pension Plan with assets in excess of benefit
liabilities.
8.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale of assets described in
ss.4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of ss.4241 or ss.4245 of ERISA or is at
risk of entering reorganization or becoming insolvent, or that any
Multiemployer Plan intends to terminate or has been terminated under
ss.4041A of ERISA.
8.17. USE OF PROCEEDS.
8.17.1. GENERAL. The proceeds of the Loans shall be used (a)
to refinance existing Indebtedness of the Borrower and (b) for working
capital and general corporate purposes. The Borrower will obtain
Letters of Credit solely for working capital and general corporate
purposes.
8.17.2. REGULATIONS U AND X. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
8.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of
any Loans is to be used, and no portion of any Letter of Credit is to
be obtained, for the purpose of (a) knowingly purchasing, or providing
credit support for the purchase of, Ineligible
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Securities from a Section 20 Subsidiary during any period in which such
Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of,
during the underwriting or placement period, any Ineligible Securities
being underwritten or privately placed by a Section 20 Subsidiary, or
(c) making, or providing credit support for the making of, payments of
principal or interest on Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary and issued by or for the
benefit of the Borrower or any Subsidiary or other Affiliate of the
Borrower.
8.18. ENVIRONMENTAL COMPLIANCE. To the best of the Borrower's
knowledge, based upon a reasonable investigation, the Borrower has determined
that:
(a) none of the Borrower, its Subsidiaries or any operator of
the Real Estate located in the United States or any operations thereon
is in violation, or alleged violation, of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation would
have a material adverse effect on the environment or the business,
assets or financial condition of the Borrower or any of its
Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as defined by 42
U.S.C. ss.6903(5), any hazardous substances as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or
has ordered that any Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) except to the extent that the following
would not have a material adverse effect on the business, assets or
financial condition of the Borrower or any of its Subsidiaries, that it
is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances;
(c) except as set forth on Schedule 8.18 attached hereto: (i)
no portion of the Real Estate located in the United States has been
used for the handling,
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processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws the noncompliance with
which would have a material adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries; and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate in violation of
any Environmental Laws the noncompliance with which would have a
material adverse effect on the business, assets or financial condition
of the Borrower and its Subsidiaries; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on the Real Estate located in the United States except in
accordance in all material respects with applicable Environmental Laws;
(iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened releases of
Hazardous Substances on, upon, into or from the properties of the
Borrower or its Subsidiaries, which releases would have a material
adverse effect on the value of the business, assets or financial
condition of the Borrower or any of its Subsidiaries; (iv) to the best
of the Borrower's knowledge, there have been no releases on, upon, from
or into any real property in the vicinity of any of the Real Estate
located in the United States which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, the Real Estate located in the
United States; and (v) in addition, except to the extent that the
following would not have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its
Subsidiaries, any Hazardous Substances that have been generated on any
of the Real Estate located in the United States have been transported
offsite only by carriers having an identification number issued by the
EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are, to the best
of the Borrower's knowledge, operating in compliance with such permits
and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the
Real Estate located in the United States is subject to any applicable
environmental law requiring the performance of Hazardous Substances
site assessments, or the removal or remediation of Hazardous
Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the effectiveness of any
other transactions contemplated hereby.
8.19. SUBSIDIARIES, ETC. Schedule 8.19(a) sets forth the only
Subsidiaries of the Borrower. Except as set forth on Schedule 8.19(b) hereto,
neither the Borrower nor any Subsidiary of the Borrower is engaged in any joint
venture or partnership with any other Person.
8.20. CHIEF EXECUTIVE OFFICE. The Borrower's chief executive office is
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at which location its
books and records are kept.
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8.21. DISCLOSURE. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact (known to the Borrower or any of its Subsidiaries in the
case of any document or information not furnished by it or any of its
Subsidiaries) necessary in order to make the statements herein or therein not
misleading. There is no fact known to the Borrower or any of its Subsidiaries
which materially adversely affects, or which is reasonably likely in the future
to materially adversely affect, the business, assets, financial condition or
prospects of the Borrower or any of its Subsidiaries, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.
8.22. INSURANCE. The Borrower and each of its Subsidiaries maintains
with financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practice, with the details of such coverage being
more fully described on Schedule 8.22 hereto.
8.23. STATUS OF LOAN AS SENIOR DEBT. From and after such time as the
Borrower has incurred or assumed any Subordinated Debt, all Indebtedness of the
Borrower and its Subsidiaries to the Banks and the Agent in respect of the Loans
and the Reimbursement Obligations constitutes "Superior Indebtedness", "Senior
Indebtedness" or "Senior Debt" (or the analogous term used therein) under the
terms of the Subordinated Debt Documents or any other instrument evidencing or
pursuant to which there is issued Indebtedness which purports to be Subordinated
Debt of the Borrower or any Subsidiary.
8.24. NO OTHER DESIGNATED SENIOR DEBT. From and after such time as the
Borrower has incurred or assumed any Subordinated Debt, the Borrower has not
designated any Indebtedness of the Borrower or any of its Subsidiaries as, and
has no, "Designated Senior Debt" (or the analogous term used therein) for
purposes of (and as defined in) the Subordinated Indenture, other than the
Obligations.
9. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
9.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the Commitment Fees, the administrative
fee and all other amounts provided for in this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is a party, all
in accordance with the terms of this Credit Agreement and such other Loan
Documents.
9.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place in the United States of America as the Borrower shall designate
upon written notice to the Agent,
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where notices, presentations and demands to or upon the Borrower in respect of
the Loan Documents to which the Borrower is a party may be given or made.
9.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles; (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves; and (c) at all times engage KPMG Peat Marwick
or another independent certified public accountants satisfactory to the Agent as
the independent certified public accountants of the Borrower and its
Subsidiaries and will not permit more than thirty (30) days to elapse between
the cessation of such firm's (or any successor firm's) engagement as the
independent certified public accountant of the Borrower and its Subsidiaries and
the appointment in such capacity of a successor firm as shall be satisfactory to
the Agent.
9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such year, and the related consolidated statement of income
and consolidated statement of cash flow for such year, each setting
forth in comparative form the figures for the previous fiscal year and
all such consolidated statements to be in reasonable detail, prepared
in accordance with generally accepted accounting principles, and
certified without qualification by KPMG Peat Marwick or by other
independent certified public accountants satisfactory to the Agent,
together with a written statement from such accountants to the effect
that they have read a copy of this Credit Agreement, and that, in
making the examination necessary to said certification, they have
obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default
or Event of Default they shall disclose in such statement any such
Default or Event of Default; provided that such accountants shall not
be liable to the Banks for failure to obtain knowledge of any Default
or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarter, and the
related consolidated statement of income and consolidated statement of
cash flow for the portion of the Borrower's fiscal year then elapsed,
all in reasonable detail and prepared in accordance with generally
accepted accounting principles, together with a certification by the
principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the
financial position of the Borrower and its Subsidiaries on the date
thereof (subject to year-end adjustments);
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(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Borrower in substantially the form of Exhibit E hereto (the "Compliance
Certificate") and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in ss.11 and (if
applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Borrower;
(e) within thirty (30) days after the end of each calendar
month ending on or prior to July 31, 1998 and fifteen (15) days after
the end of each calendar month ending thereafter or at such earlier
time as the Agent may reasonably request, a Borrowing Base Report
setting for the Borrowing Base as at the end of such calendar month or
such other date so requested by the Agent;
(f) within thirty (30) days after the end of each calendar
month ending on or prior to July 31, 1998 and fifteen (15) days after
the end of each calendar month ending thereafter, an Accounts
Receivable aging report;
(g) as soon as practicable, but in any event not later than
thirty (30) days prior to the end of each fiscal year, the budget of
the Borrower for the next fiscal year, and from time to time upon the
reasonable request of the Agent, projections of the Borrower and its
Subsidiaries updating those projections delivered to the Banks and
referred to in ss.8.4.3. or, if applicable, updating any later such
projections delivered in response to this ss.9.4(g); and
(h) from time to time such other financial data and
information (including accountants and management letters) as either of
the Agent or any Bank may reasonably request.
9.5. NOTICES.
9.5.1. DEFAULTS. The Borrower will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower or any of its Subsidiaries is a
party or obligor, whether as principal, guarantor, surety or otherwise,
the Borrower shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature
of the claimed default.
9.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is
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made) to any federal, state or local environmental agency and (b) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or
other action, including a notice from any agency of potential
environmental liability, of any federal, state or local environmental
agency or board, that has the potential to materially affect the
assets, liabilities, financial conditions or operations of the Borrower
or any of its Subsidiaries, or the Agent's security interests pursuant
to the Security Documents.
9.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Collateral, or the Agent's rights
with respect to the Collateral, are subject, if such setoff, claims,
withholdings or defenses could reasonably be expected to have a
material adverse effect in the assets, business or financial condition
of the Borrower or the Borrower and its Subsidiaries taken as a whole
or the Agent's rights with respect to the Collateral.
9.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
materially adverse effect on the Borrower or the Borrower and any of
its Subsidiaries, taken as a whole, and stating the nature and status
of such litigation or proceedings. The Borrower will, and will cause
each of its Subsidiaries to, give notice to the Agent and each of the
Banks, in writing, in form and detail satisfactory to the Agent, within
ten (10) days of any judgment not covered by insurance, final or
otherwise, against the Borrower or any of its Subsidiaries in an amount
in excess of $5,000,000.
9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
ss.9.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that do not in the
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aggregate materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.
9.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements.
9.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
9.9.1. GENERAL. The Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request.
9.9.2. COLLATERAL REPORTS. No more frequently than once during
each calendar year, or more frequently as determined by the Agent if an
Event of Default shall have occurred and be continuing, upon the
request of the Agent, the Borrower will obtain and deliver to the
Agent, or, if the Agent so elects, will cooperate with the Agent in the
Agent's obtaining, (a) a report of an independent collateral auditor
satisfactory to the Agent (which may be affiliated with one of the
Banks) with respect to the Accounts Receivable component included in
the Borrowing Base, which report shall indicate whether or not the
information set forth in the Borrowing Base Report most recently
delivered is accurate and complete in all material respects based upon
a review by such auditors of the Accounts Receivable (including
verification with respect to the amount, aging, identity and credit of
the respective account debtors and the billing practices of the
Borrower or its applicable Subsidiary) and (b) appraisal reports in
form and substance and from appraisers satisfactory to the Agent,
stating (i) the then current fair market, orderly liquidation
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and forced liquidation values of all or any portion of the equipment or
real estate owned by the Borrower or any of its Subsidiaries and (ii)
the then current business value of each of the Borrower and its
Subsidiaries. All such appraisals and collateral value reports shall be
conducted and made at the expense of the Borrower. In addition, no more
frequently than once each calendar year, or more frequently as
determined by the Agent if an Event of Default shall have occurred and
be continuing, the Agent shall be entitled to conduct a commercial
finance examination of the Borrower at its Subsidiaries, such
commercial finance examinations to be at the Borrower's expense.
9.9.3. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower
authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent
and the Banks any and all financial statements and other supporting
financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other
affairs of the Borrower or any of its Subsidiaries. At the request of
the Agent, the Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this
ss.9.9.3
9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, unless the failure to so comply would not have a
material adverse effect on the business, assets or financial condition of the
Borrower or such Subsidiary, (b) the provisions of its charter documents and
by-laws, (c) all agreements and instruments by which it or any of its properties
may be bound, unless the failure to so comply would not have a material adverse
effect on the business, assets or financial condition of the Borrower or such
Subsidiary and (d) all applicable decrees, orders, and judgments, unless the
failure to so comply would not have a material adverse effect on the business,
assets or financial condition of the Borrower or such Subsidiary. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
9.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service furnish
to the Agent a copy of the most recent actuarial statement required to be
submitted under ss.103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under ss.ss.302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
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9.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
solely (a) to refinance existing Indebtedness of the Borrower and (b) for
working capital and general corporate purposes (including, without limitation,
the repurchase by the Borrower of its capital stock). The Borrower will obtain
Letters of Credit solely for working capital and general corporate purposes.
9.13. GUARANTORS. The Borrower will cause each Domestic Subsidiary
created, acquired or existing on or after the Closing Date, or any other
Subsidiary which is otherwise required to become a guarantor under any
Subordinated Debt Document, to become a Guarantor immediately and shall cause
such Subsidiary to execute and deliver to the Agent for the benefit of the Agent
and the Banks (a) a Guaranty (or an Instrument of Adherence to the Guaranty
executed on the Closing Date), and (b) further Security Documents or other
instruments and documents as the Agent may reasonably require in order to grant
to the Agent a first priority perfected security interest in such Subsidiary's
assets, together with legal opinions in form and substance reasonably
satisfactory to the Agent to be delivered to the Agent and the Banks opining as
to the authorization, validity and enforceability of such Guaranty or Instrument
of Adherence and Security Documents and (as to the applicable Security
Documents) the perfection of such security interests.
9.14. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrower
or any of its Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Agent and the Banks if such
creation or acquisition, as the case may be, and provide the Agent and the Banks
with an updated Schedule 8.19(a) hereof and take all other actions required by
ss.9.13 and ss.10.5.1 hereof.
9.15. SUBORDINATED GUARANTEES. From and after the time the Borrower has
incurred or assumed any Subordinated Debt, the Borrower will promptly advise the
Agent of any guarantee entered into in connection with any provision of the
Subordinated Indenture or similar agreement requiring any Subsidiary guarantees,
and identifying the guarantor thereunder.
9.16. STATUS OF LOAN AS SENIOR DEBT. The Borrower shall, on the date
the Subordinated Indenture becomes effective and the Subordinated Notes are
issued, and at such other times as may reasonably be requested by the Agent,
deliver to the Agent certificates and, if requested, legal opinions, evidencing
that the Indebtedness of the Borrower and its Subsidiaries to the Banks and the
Agent in respect of the Loans and Reimbursement Obligations constitute "Superior
Indebtedness", "Senior Indebtedness" or "Senior Debt" (or the analogous terms
used therein) under the terms of the Subordinated Debt Documents or of any other
instrument evidencing or pursuant to which there is issued indebtedness which
purports to be Subordinated Debt of the Borrower or any Subsidiary and that, (a)
this Credit Agreement constitutes the "Senior Bank Facility" (or the analogous
term used therein) under the terms of the Subordinated Indenture, and (b) the
Indebtedness of the Borrower and its Subsidiaries to the Banks and the Agents in
respect of the Loans and the Reimbursement Obligations constitutes "Designated
Senior Debt" (or the analogous term used therein).
9.17. FOREIGN SUBSIDIARY NOTES. At any time in which the Borrower is
including in its Borrowing Base any items set forth in subparagraph (c) of such
definition, until the
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Foreign Subsidiary Loan has been indefeasibly repaid in full in cash, the
Borrower shall at all times maintain a first priority perfected security
interest on all WD Germany's Accounts Receivable pursuant to the Foreign
Subsidiary Security Documents as security for each such Foreign Subsidiary Loan.
9.18. ACCOUNTS. The Borrower will at all times continue to require any
financial institution which maintains the Borrower's primary depository lockbox
accounts to transfer each Business Day, the collected available balance of funds
standing to the credit of such account by wire transfer (or other means
acceptable to the Agent) to a designated account with the Agent.
9.19. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
10.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) obligations of the Borrower under a Synthetic Lease
arrangement not exceeding $100,000,000 in the aggregate pursuant to
which the Borrower will lease that certain Real Estate located at th
north corner of Irvine Center Drive and Sand Canyon Drive in Irvine,
California (the "Property") and the improvements to be constructed
thereon from the lessor (the "Permitted Synthetic Lease") provided that
(i) no Default or Event of Default shall have occurred and be
continuing at the time of incurring such Indebtedness or would exist as
a result of entering into such Permitted Synthetic Lease; and (ii) all
documents, instruments and agreements to be entered into in connection
therewith shall be in form and substance satisfactory to the Agent
(including, without limitation, all documents pertaining to any
security interests granted in connection therewith);
(d) obligations under Capitalized Leases and Synthetic Leases
(other than the Permitted Synthetic Lease) not exceeding $20,000,000 in
aggregate amount in any fiscal year;
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(e) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such Subsidiary, provided that the aggregate principal amount of
such Indebtedness of the Borrower and its Subsidiaries shall not exceed
the aggregate amount of $5,000,000 at any one time;
(f) Indebtedness existing on the date hereof and listed and
described on Schedule 10.1 hereto;
(g) Indebtedness of a Guarantor to the Borrower;
(h) Indebtedness of a Foreign Subsidiary of the Borrower
existing on the Closing Date to the Borrower, provided that (a) the
aggregate principal amount of such Indebtedness of all the Foreign
Subsidiaries to the Borrower does not exceed $15,000,000 at any time
and (b) such Indebtedness is on a demand basis and is at all times
evidenced by a proper demand promissory note pledged to the Agent for
the benefit of the Banks, as provided in ss.10.3 hereof;
(i) the unsecured Subordinated Debt evidenced by the
Subordinated Notes; provided, (i) the aggregate principal amount of
such Indebtedness shall not exceed the aggregate amount of
$500,000,000; (ii) no Default or Event of Default has occurred and is
continuing at the time of incurrence of such Subordinated Debt or would
exist as a result of the incurrence of such Indebtedness; (iii) the
Borrower has demonstrated to the satisfaction of the Agent pro forma
compliance with the covenants contained in ss.11 hereof both before and
after giving effect to such incurrence; and (iv) the terms of such
Subordinated Debt are satisfactory in all respects (including, without
limitation, no requirement to make any cash principal payments during
the term of this Credit Agreement) to the Agent and the Majority Banks;
(j) Indebtedness of the Borrower or any of its Subsidiaries
pursuant to any "derivative contract" as such term is defined in
paragraph (i) of the definition of Indebtedness, so long as such
derivative contracts are entered into in the ordinary course of
business consistent with past practices and are not for speculative
purposes; and
(k) other unsecured Indebtedness of the Borrower or any of its
Subsidiaries (other than Indebtedness of a Foreign Subsidiary to the
Borrower or any Domestic Subsidiary) not otherwise permitted hereunder,
provided, that the aggregate amount of all such Indebtedness does not
exceed $25,000,000 in the aggregate at any time;
provided, however, notwithstanding the foregoing provisions of this
ss.10.1, all Indebtedness hereunder must qualify as "Permitted Debt",
"Debt" or "Permitted Indebtedness" (or such analogous term used
therein) (as such terms are defined in the Subordinated Indenture)
permitted to be incurred pursuant to the Subordinated Indenture.
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10.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; provided that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(ii) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(iii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance, old
age pensions or other social security obligations;
(iv) liens on properties in respect of judgments or awards
that have been in force for less than the applicable period for taking
an appeal so long as execution is not levied thereunder or in respect
of which the Borrower or such Subsidiary shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect
of which a stay of execution shall have been obtained pending such
appeal or review;
(v) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less than
120 days from the date of creation thereof in respect of obligations
not overdue;
(vi) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate
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have a materially adverse effect on the business of the Borrower
individually or of the Borrower and its Subsidiaries on a consolidated
basis;
(vii) liens existing on the date hereof and listed on Schedule
10.2 hereto;
(viii) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.10.1(e), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired;
(ix) liens in favor of the lessor under the Permitted
Synthetic Lease or any Capitalized Lease to secure the Indebtedness
permitted by ss.10.1(c) and ss.10.1(d), provided, such liens cover only
such real or personal property subject to such Synthetic Leases and
Capitalized Leases permitted by ss.ss.10.1(c) and (d), and are in such
amounts as are approved in writing by the Agent and the Majority Banks;
(x) liens in favor of the lessor under any permitted sale and
leaseback transaction, provided such liens cover only such real
property subject to such sale and leaseback transaction and are in such
amounts as are approved in writing by the Agent and the Majority Banks;
(xi) liens in favor of the Agent for the benefit of the Banks
and the Agent under the Loan Documents.
10.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America or any other country which is a member of the OECD
that mature within one (1) year from the date of purchase by the
Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks or banks of any
other country which is a member of the OECD having total assets in
excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by ▇▇▇▇▇'▇ Investors Services, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
Schedule 10.3 hereto (including those Investments in the Strategic
Partners set forth on Schedule 10.3);
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(e) Investments with respect to Indebtedness permitted by
ss.10.1(g) so long as such entities remain Guarantors, and Investments
with respect to Indebtedness permitted by ss.10.1(h) so long as such
entities remain Subsidiaries of the Borrower;
(f) Investments consisting of the Guaranty or Investments by
the Borrower in Guarantors so long as such entities remain Guarantors
hereunder;
(g) Investments of the Borrower made after the Closing Date in
Strategic Partners, provided that no Default or Event of Default has
occurred and is continuing on the date of such Investment or would
exist as a result of such Investment and the aggregate amount of all
such Investments made after the Closing Date shall not exceed
$15,000,000 at any time; and
(h) Investments made in the ordinary course of business
consistent with past practices consisting (and not for speculative
purposes) of contracts entered into for foreign exchange hedging
purposes;
provided, however, that, with the exception of demand deposits referred
to in ss.10.3(b), such Investments will be considered Investments
permitted by this ss.10.3 only if all actions have been taken as
required by the Security Documents and the Agent has a first priority
perfected security interest in all of such Investments free of all
encumbrances other than Permitted Liens.
10.4. DISTRIBUTIONS. The Borrower will not make any Restricted
Payments; provided, however, so long as no Default or Event of Default has
occurred and is continuing or would exist as a result thereof, at such time as
the Borrower has demonstrated to the satisfaction of the Agent that the
Borrower's Consolidated Net Operating Income for each of the two fiscal quarters
most recently ended is not less than $1.00, the Borrower shall be permitted to
(a) make repurchases of its capital stock from the holders thereof and (b) make
any Distributions required pursuant to its Stock Option Plan.
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
10.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except, so long as
no Default or Event of Default has occurred and is continuing, or would
exist after giving effect thereto, (a) the merger or consolidation of
one or more of the Subsidiaries of the Borrower with and into the
Borrower so long as the Borrower is the survivor and has taken or
caused to be taken all action necessary to grant to the Agent a first
priority perfected security interest in all of the Borrower's assets
after such merger or consolidation; (b) the merger or consolidation of
two or more Subsidiaries of the Borrower so long as, in the event the
parties to such merger or consolidation are a Guarantor and a Foreign
Subsidiary, the Guarantor is the survivor of such merger and has taken
or caused to be taken all action necessary to grant to the Agent a
first priority perfected security interest in all of the Borrower's
assets after such merger or consolidation; and (c)
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other asset or stock acquisitions of Persons in the same or a similar
line of business as the Borrower (the "Permitted Acquisitions") where
(i) the Borrower has provided the Agent with thirty (30) days prior
written notice of such Permitted Acquisition, which notice shall
include a reasonably detailed description of such Permitted
Acquisition; (ii) the business to be acquired would not subject the
Agent or the Banks to regulatory or third party approvals in connection
with the exercise of its rights and remedies under this Credit
Agreement or the other Loan Documents; (iii) the business and assets so
acquired in such Permitted Acquisition shall be acquired by the
Borrower free and clear of all liens (other than liens permitted by
ss.10.2) and all Indebtedness (other than Indebtedness permitted by
ss.10.1); (iv) no contingent obligations or liabilities will be
incurred or assumed in connection with such Permitted Acquisition which
could be expected to have a material adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries; (v)
the Borrower has demonstrated to the satisfaction of the Agent, based
on a pro forma Compliance Certificate, compliance with ss.11 on a pro
forma basis immediately prior to and after giving effect to such
Permitted Acquisition; (vi) the aggregate purchase price constituting
cash or Indebtedness (A) from the Closing Date until such time as the
Borrower has demonstrated to the satisfaction of the Agent that the
Borrower's Consolidated Net Operating Income for each of the two fiscal
quarters most recently ended is not less than $1.00, for any one
Permitted Acquisition or a series of related Permitted Acquisitions
does not exceed $10,000,000 and the aggregate purchase price for all
Permitted Acquisitions does not exceed $50,000,000 during the term of
this Credit Agreement and (B) thereafter for any one Permitted
Acquisition or a series of related Permitted Acquisitions does not
exceed $30,000,000 and the aggregate purchase price for all Permitted
Acquisitions does not exceed $150,000,000 during the term of this
Credit Agreement; (vii) the required majority of the Board of Directors
of the target Person incumbent at the time such Permitted Acquisition
is proposed has acquiesced, or the transaction is otherwise deemed in
the reasonable judgment of the Banks to be a "friendly" acquisition and
(viii) the Borrower has taken, or caused to be taken, all necessary
action to grant to the Agent a first priority perfected lien in all
assets and stock acquired in connection with such Permitted
Acquisition, provided, however, the Borrower or any Guarantor, as the
case may be, shall only be required to pledge 66% of the capital stock
of any Foreign Subsidiary or any other Person not incorporated or
otherwise organized in the United States of America (a "Foreign
Entity"), and such Foreign Entity shall not be required to ▇▇▇▇▇ ▇ ▇▇▇▇
on its assets to secure the Obligations of the Borrower or any
Guarantor.
In the event any new Domestic Subsidiary is formed or acquired
as a result of or in connection with any Permitted Acquisition, such
Domestic Subsidiary shall, immediately upon its creation or
acquisition, execute and deliver to the Agent for the benefit of the
Agent and the Banks, an Instrument of Adherence in substantially the
form of Exhibit F hereto (an "Instrument of Adherence") and the Loan
Documents shall be amended and/or supplemented as necessary to make the
terms and conditions of the Loan Documents applicable to such Domestic
Subsidiary. Such Domestic Subsidiary shall become a Guarantor hereunder
and shall become party to the Guaranty and the Security Documents and
shall execute and deliver to the Agent any and all other agreements,
documents, instruments and financing
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statements necessary to grant to the Agent a first priority perfected
line in such Domestic Subsidiary's assets. The Borrower and its
Subsidiaries shall, immediately upon the creation or acquisition of
such Domestic Subsidiary, pledge all of such Domestic Subsidiary's
capital stock to the Agent for the benefit of the Agent and the Banks.
In addition, the Borrower and its Subsidiaries shall, immediately upon
the creation or acquisition of a Foreign Subsidiary, pledge 66% of such
Foreign Subsidiary's capital stock to the Agent for the benefit of the
Agent and the Banks.
10.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than the disposition of assets
in the ordinary course of business, consistent with past practices;
provided, however, so long as no Default or Event of Default shall have
occurred and is continuing or would exist after giving effect thereto,
the Borrower shall be permitted to enter into a sale and leaseback
arrangement in respect of the real property located at Irvine,
California and/or Rochester, Minnesota in an arms-length transaction
for fair and reasonable value.
Notwithstanding anything to the contrary contained in this
ss.10.5.2, (a) the Borrower and its Subsidiaries shall not be permitted
to dispose of any assets or take (or omit to take) any action in
connection with any asset sale or other disposition or engage in any
other transaction which action (or omission) would require any
repayment, repurchase or redemption (or any mandatory offer to repay,
repurchase or redeem) by the Borrower or any of its Subsidiaries of the
Subordinated Notes or any other Subordinated Debt pursuant to the
Subordinated Indenture or any other Subordinated Debt Document prior to
the repayment in full in cash of all the Obligations and the
termination in full of the Total Commitment, or would violate the
provisions of the Subordinated Indenture or similar agreement; (b) the
Borrower shall not directly or indirectly sell or otherwise dispose of
all or substantially all of its assets; and (c) except as expressly
permitted in this ss.10.5.2, neither the Borrower nor its Subsidiaries
shall sell or otherwise dispose of all or substantially all of the
capital stock of any Person which is a Guarantor or is an entity the
capital stock of which is pledged under the Loan Documents by the
Borrower or any Guarantor, except for transfers to the Borrower or
another Guarantor (with each such transfer to the Borrower or another
Guarantor to be subject to the Agent's security interest therein for
the benefit of the Agent and the Banks).
10.6. SALE AND LEASEBACK. Except as permitted by ss.10.5.2, the
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby the Borrower or any Subsidiary
of the Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the Borrower or
any Subsidiary of the Borrower intends to use for substantially the same purpose
as the property being sold or transferred, other than the sale or transfer and
subsequent lease by the Borrower or any Subsidiary of new equipment purchased by
the Borrower or such Subsidiary within ninety (90) days of such sale or
transfer.
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the
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handling, processing, storage or disposal of Hazardous Substances in violation
of any Environmental Law the noncompliance with which would have a material
adverse effect on the business, assets or financial condition of the Borrower or
such Subsidiary, (b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances in violation of any Environmental Law the noncompliance with which
would have a material adverse effect on the business, assets or financial
condition of the Borrower or such Subsidiary, (c) generate any Hazardous
Substances on any of the Real Estate in violation of any Environmental Law the
noncompliance with which would have a material adverse effect on the business,
assets or financial condition of the Borrower or such Subsidiary, (d) conduct
any activity at any Real Estate or use any Real Estate in any manner so as to
cause a release (i.e. releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping) or
threatened release of Hazardous Substances on, upon or into the Real Estate or
(e) otherwise conduct any activity at any Real Estate or use any Real Estate in
any manner that would violate any Environmental Law or bring such Real Estate in
violation of any Environmental Law in each case if such violation would have a
materially adverse effect on the business, assets or financial condition of the
Borrower or such Subsidiary.
10.8. SUBORDINATED DEBT. The Borrower will not, and will not permit any
of its Subsidiaries to, amend, supplement or otherwise modify the terms of any
of the Subordinated Debt or prepay, redeem or repurchase any of the Subordinated
Debt or send any notice of redemption, repayment, repurchase or defeasance with
respect to any of the Subordinated Debt.
10.9. SENIOR DEBT. The Borrower will not, and will not permit any of
its Subsidiaries to, in any manner designate or permit to exist and other
Indebtedness of the Borrower or any of its Subsidiaries as "Designated Senior
Debt" (or such analogous term used therein) for purposes of (and as defined in)
the Subordinated Indenture, other than the Indebtedness arising under this
Credit Agreement and the other Loan Documents.
10.10. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to ss.302(f)
or ss.4068 of ERISA; or
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(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
10.11. CHANGES IN TERMS OF CAPITAL STOCK. The Borrower will not, nor
will it permit any of its Subsidiaries to, effect or permit any change in or
amendment to any document or instrument pertaining to the terms of such Person's
capital stock unless such a change or amendment is of an immaterial or
ministerial nature that would not have any adverse effect on any of the Agent'
or the Banks' rights or interests under the Loan Documents or the Borrower's or
any of its Subsidiaries' obligations under the Loan Documents to which such
Person is a party.
10.12. FISCAL YEAR. The Borrower will not change the date of the end of
its fiscal year from that set forth in ss.8.4.1 hereof.
10.13. NEGATIVE PLEDGES. The Borrower will not, nor will it permit any
Subsidiary to, enter into any agreement (excluding this Credit Agreement, the
Subordinated Debt Documents and documents executed in connection with the
Permitted Synthetic Lease) prohibiting the creation or assumption of any lien
upon its properties, revenues or assets or those of any of its Subsidiaries,
whether now owned or hereafter acquired, other than those agreements with
Persons prohibiting any such lien on assets in which such Person has a prior
security interest which is permitted by ss.10.2.
10.14. TRANSACTIONS WITH AFFILIATES. The Borrower will not, nor will it
permit any Subsidiary to, enter into or cause, suffer or permit to exist (a) any
arrangement or contract with any of its other Affiliates of a nature customarily
entered into by Persons which are Affiliates of each other (including management
or similar contracts or arrangements relating to the allocation of revenues,
taxes and expenses or otherwise) requiring any payment to be made by the
Borrower or any of its Subsidiaries to any Affiliate unless such arrangement is
fair and equitable to the Borrower or such Subsidiary; or (b) any other
transaction, arrangement, contract with any of its other Affiliates which would
not be entered into by a prudent Person in the position of the Borrower or such
Subsidiary with, or which is on terms which are less favorable than are
obtainable from, any Person which is not one of its Affiliates.
10.15. UPSTREAM LIMITATIONS. The Borrower will not, nor will it permit
any Subsidiary to, enter into any agreement, contract, or arrangement (other
than the Credit Agreement and the other Loan Documents) restricting the ability
of any Subsidiary to pay or make dividends or distributions in cash or kind, to
make loans, advances or other payments of whatsoever nature or to make transfers
or distributions of all or any part of its assets to the Borrower.
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10.16. INCONSISTENT AGREEMENTS. The Borrower will not, nor will it
permit any Subsidiary to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower or such
Subsidiary of its obligations hereunder or under any of the other Loan
Documents.
11. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
11.1. PROFITABLE OPERATIONS. The Borrower will not permit Consolidated
Net Operating Income for (a) the end of third fiscal quarter of 1998 to be less
than ($50,000,000); (b) the end of the fourth fiscal quarter of 1998 to be less
than ($30,000,000); (c) the end of the first fiscal quarter of 1999 to be less
than ($20,000,000); and (d) each fiscal quarter ending thereafter to be less
than $1.00.
11.2. FIXED RATE COVERAGE RATIO. The Borrower will not, as of the end
of any fiscal quarter ending during any period described in the table set forth
below, permit the ratio of (a) the sum of (i) EBITDA for the Reference Period
ending on such date plus (ii) Rental Obligations for the Reference Period ending
on such date (without giving effect to the December 1997 Charge) to (b) the sum
of (i) Consolidated Total Cash Interest Expense for the Reference Period ending
on such date plus (ii) Rental Obligations for the Reference Period ending on
such date, to be less than the ratio set forth opposite such period in such
table:
PERIOD RATIO
------ -----
Closing Date - Fourth Fiscal Quarter 1998 3.00:1.00
First Fiscal Quarter 1999 1.40:1.00
Second Fiscal Quarter 1999 1.50:1.00
Third Fiscal Quarter 1999 - Fourth Fiscal Quarter 2.50:1.00
1999
each fiscal quarter thereafter 3.00:1.00
11.3. LEVERAGE. The Borrower will not at any time during any period set
forth in the table below permit the ratio of (a) the sum of (i) Consolidated
Total Liabilities plus to the extent not otherwise included in the calculation
of Consolidated Total Liabilities and without duplication, (ii) all other
Indebtedness of the Borrower and its Subsidiaries which does not appear on the
Borrower's consolidated balance sheet as a liability (other than Indebtedness
which constitutes (A) a "derivative contract" (as defined in paragraph (i) of
the term Indebtedness); (B) obligations under securities repurchase agreements;
and (C) any "equity related purchase obligations" (as such term is defined in
paragraph (h) of the term Indebtedness) pertaining to the Stock Option Plan),
less (iii) the aggregate amount of the outstanding Subordinated Notes to (b) the
sum of (i) the aggregate amount of consolidated shareholders' equity (net of any
commitments of capital to the extent not received) less (ii)
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Consolidated Intangible Assets to exceed the ratio set forth opposite such
period in such table:
PERIOD RATIO
------ -----
Closing Date - last day of the Second Fiscal 2.75:1.00
Quarter of 1999
First day of the Third Fiscal Quarter of 1999 - 2.50:1.00
last day of the Third Fiscal Quarter of 2000
any time thereafter 2.25:1.00
11.4. CONSOLIDATED TANGIBLE NET WORTH. The Borrower will not permit
Consolidated Tangible Net Worth at any time (a) from the Closing Date until such
time as the Borrower has demonstrated to the satisfaction of the Agent that the
Borrower's Consolidated Net Operating Income for each of the two fiscal quarters
most recently ended is not less than $1.00 to be less than the sum of (i)
$435,000,000 plus, on a cumulative basis, (ii) 75% of positive Consolidated Net
Income for each fiscal quarter beginning with the third fiscal quarter of 1998,
plus (iii) 100% of the proceeds of any sale by the Borrower after December 27,
1997 of (A) equity securities issued by the Borrower or (B) warrants or
subscription rights for equity securities issued by the Borrower; (b) thereafter
to be less than the sum of (i) $435,000,000 plus, on a cumulative basis, (ii)
50% of positive Consolidated Net Income for each fiscal quarter commencing with
the third fiscal quarter of 1998, plus (iii) 100% of the proceeds of any sale by
the Borrower after December 27, 1997 of (A) equity securities issued by the
Borrower or (B) warrants or subscription rights for equity securities issued by
the Borrower.
11.5. CAPITAL EXPENDITURES. The Borrower will not make, or permit any
Subsidiary of the Borrower to make, Capital Expenditures in any fiscal year that
exceed, in the aggregate, $275,000,000 for the 1998 and 1999 fiscal years and
$300,000,000 in each fiscal year thereafter.
12. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and the Term Loan and of the Agent to issue any initial Letters of Credit shall
be subject to the satisfaction of the following conditions precedent.
12.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower and each of its Subsidiaries a copy, certified
by a duly authorized officer of such Person to be true and complete on the
Closing Date, of each of (a) its charter or other incorporation documents as in
effect on such date of certification, and (b) its by-laws as in effect on such
date.
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12.3. CORPORATE, ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
12.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from the Borrower and each of its Subsidiaries an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of the Borrower or
such Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Borrower of such Subsidiary, each of the Loan Documents to which the
Borrower or such Subsidiary is or is to become a party; (b) in the case of the
Borrower, to make Loan Requests and Conversion Requests and to apply for Letters
of Credit; and (c) to give notices and to take other action on its behalf under
the Loan Documents.
12.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
12.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall
have received from each of the Borrower and the Guarantors a completed and fully
executed Perfection Certificate and the results of UCC searches with respect to
the Collateral, indicating no liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Agent.
12.7. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
12.8. BORROWING BASE REPORT. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of December 27, 1997.
12.9. ACCOUNTS RECEIVABLE AGING REPORT. The Agent shall have received
from the Borrower the most recent Accounts Receivable aging report of the
Borrower and its Subsidiaries dated as of December 27, 1997 and the Borrower
shall have notified the Agent in writing on the Closing Date of any material
deviation from the Accounts Receivable values reflected in such Accounts
Receivable aging report and shall have provided the Agent with such
supplementary documentation as the Agent may reasonably request.
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12.10. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Banks.
12.11. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., counsel to the Borrower and the
Guarantors; and
(b) local counsel to the Borrower in the United Kingdom, Germany,
Malaysia, The Netherlands and Cayman Islands.
12.12. PAYMENT OF FEES. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the closing fee and the administrative fee as set
forth in the Fee Letter.
12.13. PAYOFF LETTER. The Agent shall have received a payoff letter
from BankBoston, N.A. and NationsBank of Texas, N.A. (the "Prior Agents"),
indicating the amount of the loan obligations of the Borrower to certain lenders
party to a certain Amended and Restated Revolving Credit Agreement dated as May
5, 1997 among the Borrower, the Prior Agents and the lenders party thereto (the
"Prior Agreement") to be discharged on the Closing Date.
12.14. DISBURSEMENT INSTRUCTIONS. The Agent shall have received
disbursement instructions from the Borrower, indicating that a portion of the
proceeds of the Term Loan and the initial Revolving Credit Loan, in an aggregate
amount equal to the aggregate loan obligations of the Borrower to the lenders
under the Prior Agreement are paid to such lenders.
13. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, including making the
initial Revolving Credit Loan and the Term Loan, and of the Agent to issue,
extend or renew any Letter of Credit, in each case whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
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13.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
13.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
13.4. BORROWING BASE REPORT. The Agent shall have received the most
recent Borrowing Base Report required to be delivered to the Agent in accordance
with ss.9.4(e) and, if requested by the Agent, a Borrowing Base Report dated
within five (5) days of the Drawdown Date of such Loan or of the date of
issuance, extension or renewal of such Letter of Credit.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans,
the Commitment Fee, any Letter of Credit Fee, the Agent's fee, or other
sums due hereunder or under any of the other Loan Documents, within
three (3) days of the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in ss.9, 10 or 11;
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
ss.14.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to
or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
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(f) the Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing borrowed money or credit received or in respect of any
Capitalized Leases for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the
maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or of any substantial part of the assets of the
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of the Borrower or any Subsidiary of the Borrower in
an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against the Borrower or any of its Subsidiaries that,
with other outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate
$10,000,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of the Borrower
or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination
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that, or issue a judgment, order, decree or ruling to the effect that,
any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(k) the Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
in an aggregate amount exceeding $2,000,000 or the Borrower or any
ERISA Affiliate is assessed withdrawal liability pursuant to Title IV
of ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $2,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA), provided that the Agent determines in its
reasonable discretion that such event (A) could be expected to result
in liability of the Borrower or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding
$2,000,000 and (B) could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan or for the imposition of a lien in favor
of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed
Pension Plan; or (iii) the institution by the PBGC of proceedings to
terminate such Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
thirty (30) days;
(m) there shall occur any material damage to, or loss, theft
or destruction of, any assets of the Borrower or any of its
Subsidiaries, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue
producing activities of the Borrower or any of its Subsidiaries if such
event or circumstance is not covered by business interruption insurance
and would have a material adverse effect on the business or financial
condition of the Borrower or such Subsidiary;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Borrower
or such Subsidiary;
(o) the Borrower or any of its Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought or threatened against the Borrower or any
of its Subsidiaries, a punishment for which in any such case could
include the forfeiture of any assets of the Borrower or such Subsidiary
included in the Borrowing Base or any assets of the Borrower or such
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Subsidiary not included in the Borrowing Base but having a fair market
value in excess of $5,000,000;
(p) the holders of all or any part of the Subordinated Debt
shall accelerate the maturity of all or any part of the Subordinated
Debt or the Subordinated Debt shall be (or shall be required at such
time to be) prepaid, redeemed or repurchased in whole or in part; or
the Borrower shall be or become required under the Subordinated
Indenture to prepay, redeem or repurchase (or shall be or become
required thereunder to offer to prepay, redeem or repurchase) all or
any part of the Subordinated Debt;
(q) a "Change of Control" (or any analogous term used therein)
as such term is defined in the Subordinated Indenture or any similar
agreement governing any other Subordinated Debt occurs;
(r) the Borrower shall at any time fail legally or
beneficially own less than 100% of the capital stock of any of the
Guarantors; or
(s) any Person shall at any time be the legal or beneficial
owner (within the meaning used in Rule 13d-3 of the Securities and
Exchange Commission promulgated under the Securities Exchange Act of
1934, as amended) of more than fifty percent (50%) of the outstanding
shares of the common stock of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in ss.ss.14.1(g) or 14.1(h), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
14.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.14.1(g) or ss.14.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of the Banks shall be
relieved of all further obligations to make Loans to the Borrower and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. If any other Event of Default shall have occurred and be continuing,
or if on any Drawdown Date or other date for issuing, extending or renewing any
Letter of Credit the conditions precedent to the making of the Loans to be made
on such Drawdown Date or (as the case may be) to issuing, extending or renewing
such Letter of Credit on such other date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make Loans
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. No termination of the credit hereunder shall relieve
the Borrower or any of its Subsidiaries of any of the Obligations.
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14.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.14.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
14.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent, any Bank or the Bank Guarantee Bank, as the case may be, receives any
monies in connection with the enforcement of any of the Security Documents, or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such
monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided, however, that
(i) distributions shall be made (A) pari passu among Obligations with
respect to the Agent's fee payable pursuant to ss.6.2, the Obligations
owing to the Bank Guarantee Bank pursuant to the Credit Instruments and
all other Obligations; and (B) with respect to each type of Obligation
owing to the Banks and the Bank Guarantee Bank, such as interest,
principal, fees and expenses, among the Banks and the Bank Guarantee
Bank pro rata, and (ii) the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks, the Bank
Guarantee Bank and the Agent of all of the Obligations, to the payment
of any obligations required to be paid pursuant to ss.9-504(1)(c) of
the Uniform Commercial Code of the Commonwealth of Massachusetts; and
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(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
15. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Notes held by, or constituting Reimbursement Obligations owed to, such
Bank by proceedings against the Borrower at law or in equity or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and shall retain and apply to the payment of the Note or Notes
held by, or Reimbursement Obligations owed to, such Bank any amount in excess of
its ratable portion of the payments received by all of the Banks with respect to
the Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement obligations owed it, its
proportionate payment as contemplated by this Credit Agreement; provided that if
all or any part of such excess payment is thereafter recovered from such Bank,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
16. THE AGENT.
16.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit
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Agreement nor the other Loan Documents shall be construed to create an
agency, trust or other fiduciary relationship between any of the Agent
and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
16.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
16.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
16.4. NO REPRESENTATIONS.
16.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or
for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of the Borrower or
any of its Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect
any of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the
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Borrower or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Banks, with respect to
the credit worthiness or financial conditions of the Borrower or any of
its Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
16.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in ss.12, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent or
BancBoston Securities Inc., as arranger to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be to
be consent to or approved by or acceptable or satisfactory to such
Bank, unless an officer of the Agent or BancBoston Securities Inc.
active upon the Borrower's account shall have received notice from such
Bank not less than two (2) days prior to the Closing Date specifying
such Bank's objection thereto and such objection shall not have been
withdrawn by notice to the Agent or BancBoston Securities Inc. to such
effect on or prior to the Closing Date.
16.5. PAYMENTS.
16.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
16.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents
might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a
court of competent jurisdiction. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is
to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
16.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of ss.15 with
respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is
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in excess of its pro rata share of such payments due and payable to all
of the Banks, in each case as, when and to the full extent required by
the provisions of this Credit Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such
time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the
Borrower, whether on account of outstanding Loans, Unpaid Reimbursement
Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their
respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and
Unpaid Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
16.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
16.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
16.8. AGENT AS BANK. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
16.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance
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of any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
16.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.16.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
16.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
17. EXPENSES AND INDEMNIFICATION.
17.1. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income or
any United States withholding tax to any non-U.S. Bank arising solely out of
such Bank's failure to deliver to the Borrower a duly completed and executed IRS
form 1001 or 4224 that shows complete exemption of such Bank for such
withholding tax) on or with respect to the transactions contemplated by this
Credit Agreement (the Borrower hereby agreeing to indemnify the Agent and each
Bank with respect thereto), (c) the reasonable fees, expenses and disbursements
of the Agent's Special Counsel or any local counsel to the Agent incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, any amendments, modifications, approvals, consents or waivers hereto
or hereunder, or the cancellation of any Loan Document upon payment in full in
cash of all of the Obligations or pursuant to any terms of such Loan Document
for providing for such cancellation, (d) the fees, expenses and disbursements of
the Agent or any of its affiliates incurred by the Agent or such affiliate in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and
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other instruments mentioned herein, (e) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Bank or the Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's or the Agent's relationship with the Borrower or any of its Subsidiaries
and (f) all reasonable fees, expenses and disbursements of any Bank or the Agent
incurred in connection with UCC searches, UCC filings or mortgage recordings.
17.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Loans or Letters of Credit, (b) any actual or alleged
infringement of any patent, copyright, trademark, service ▇▇▇▇ or similar right
of the Borrower or any of the Guarantors comprised in the Collateral, (c) the
Borrower or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (d) with respect to the Borrower
and its Subsidiaries and their respective properties and assets, the violation
of any Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding, except
to the extent that any of the foregoing are directly caused by the gross
negligence or willful misconduct of the otherwise indemnified party. In
litigation, or the preparation therefor, the Banks and the Agent and its
affiliates shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this ss.17.2 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law.
17.3. SURVIVAL. The covenants contained in this ss.17 shall survive
payment or satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation
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heretofore or hereafter made by any of them, and shall survive the making by the
Banks of any of the Loans and the issuance, extension or renewal of any Letters
of Credit, as herein contemplated, and shall continue in full force and effect
so long as any Letter of Credit or any amount due under this Credit Agreement or
the Notes or any of the other Loan Documents remains outstanding or any Bank has
any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letter of Credit, and for such further time as may be
otherwise expressly specified in this Credit Agreement. All statements contained
in any certificate or other paper delivered to any Bank or the Agent at any time
by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (a) each
of the Agent and, unless a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Agent and the Borrower, will not
be unreasonably withheld, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Credit Agreement and shall be made pro rata between the Revolving
Credit Loan and Term Loan, (c) each assignment shall be in an amount that is a
whole multiple of $5,000,000 (or, if less, such Bank's entire Commitment), and
(d) the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit G hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in ss.19.3, be
released from its obligations under this Credit Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this
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Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or the attachment, perfection or
priority of any security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.8.4 and ss.9.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
▇▇▇
▇▇
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ available for inspection by the Borrower and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $3,500.
19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.19.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$2,500,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
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19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.14.1 or ss.14.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Loans or Reimbursement Obligations. If any Bank
sells a participating interest in any of the Loans or Reimbursement Obligations
to a participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to ss.14.1 or ss.14.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.17 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this ss.20 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent
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by overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or at such other
address for notice as the Borrower shall last have furnished in writing
to the Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: High Technology Division, with a
copy to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President, or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
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23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.26.
25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower or any
of its Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, a decrease in the rate of interest on the Notes (other than interest
accruing pursuant to ss.6.11.2 following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto), the term of
the Notes, the date fixed for payment of any amounts owing pursuant to this
Credit Agreement or the other Loan Documents, the amount of the Commitments of
the Banks, this ss.26, and the amount of Commitment Fee or Letter of Credit fees
hereunder may not be changed without the written consent of the Borrower and the
written consent of each Bank; the release of any of the Guarantors or all or
substantially all of any Collateral held by the Agent for the benefit of
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the Banks may not be changed without the written consent of the Borrower and the
written consent of the Supermajority Banks; the definition of Majority Banks may
not be amended without the written consent of all of the Banks; the Revolving
Credit Loan Maturity Date and the Term Loan Maturity Date may not be postponed
without the written consent of each of the Banks, the amount of the Agent's fee
or any Letter of Credit fees payable for the Agent's account may not be amended
without the consent of the Agent and ss.16 may not be amended without the
written consent of the Agent. No waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of the Agent or any Bank in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
28. CONFIDENTIALITY.
28.1. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this ss.28, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction over any
Bank or the Agent, or to auditors or accountants, (e) to the Agent or any Bank,
(f) in connection with any litigation to which any one or more of the Banks or
the Agent is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Subsidiary or
affiliate of such Bank as provided in ss.28.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of ss.19.6.
28.2. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
WESTERN DIGITAL CORPORATION
By:
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Taxes and Treasurer
BANKBOSTON, N.A.,
individually and as Agent
By:
------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
92
EXHIBIT A
FORM OF
BORROWING BASE REPORT
---------- --, ----
To Each of the Banks Referred to Below
c/o BankBoston, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Revolving Credit and Term Loan Agreement,
dated as of January 28, 1998 (as amended and in effect from time to time, the
"Credit Agreement"), among Western Digital Corporation (the "Borrower"), the
lending institutions listed on Schedule 1 thereto and such other lending
institutions as may become parties thereto from time to time in accordance with
the provisions thereof (the "Banks") and BankBoston, N.A., as agent for the
Banks (the "Agent"). Capitalized terms which are used herein without definition
and which are defined in the Credit Agreement shall have the same meanings
herein as therein.
The undersigned hereby certifies as follows: (a) the information
furnished in the materials attached hereto was true, correct and complete as at
the last day of the calendar month immediately preceding the date of this
certificate; (b) as of the date hereof, there exists no Default or Event of
Default; and (c) the representations and warranties contained in ss.8 of the
Credit Agreement were correct when made and are correct at and as of the date
hereof (except to the extent of changes resulting from transactions contemplated
or permitted by the Credit Agreement and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and to the extent that such representations and warranties related expressly to
an earlier date).
IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base
Certificate on behalf of Western Digital Corporation as of the date first
written above.
WESTERN DIGITAL CORPORATION
By:
---------------------------------
Title:
▇▇
-▇-
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ WORKSHEET
WESTERN DIGITAL CORPORATION
As of _____________, ____
1. Accounts Receivable of the Borrower
and the Domestic Subsidiaries: $________________
Less: a. Accounts Receivable that the Borrower
does not reasonably and in good faith
believe are collectible $________________
Less: b. Accounts Receivable that are with account
debtors or obligors that are Affiliates, not
purchased in an arm's length transaction,
are insolvent, or are not creditworthy $________________
Less: c. Accounts Receivable which are subject
to any lien or encumbrance (other than in
favor of the Agent under the Loan
Documents) $________________
Less: d. Accounts Receivable which are more than
sixty (60) days past due $________________
Less: e. Other adjustments set forth in
the definition of Eligible Domestic
Accounts Receivable $________________
Equals: f. Eligible Domestic Accounts Receivable $________________
g. Multiplied by 0.80 $________________
2. Accounts Receivable of Western Digital (U.K) Limited: $________________
Less: a. Accounts Receivable that the Borrower
does not reasonably and in good faith
believe are collectible $________________
Less: b. Accounts Receivable that are with account
debtors or obligors that are Affiliates, not
purchased in an arm's length transaction,
are insolvent, or are not creditworthy $________________
Less: c. Accounts Receivable which are subject
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to any lien or encumbrance (other than in
favor of the Agent under the Loan
Documents) $________________
Less: d. Accounts Receivable which are more than
sixty (60) days past due $________________
Less: e. Other adjustments set forth in
the definition of Eligible UK
Accounts Receivable $________________
Equals: f. Eligible UK Accounts Receivable $________________
g. Multiplied by 0.60 $________________
h. Amount of Item 2(g) which the Borrower
elects to include in Borrowing Base and
which are subject to the Guarantee by WD UK
(the "Specified Intercompany Amount"): $________________
3. Accounts Receivable of Western Digital (Deutschland) GmbH (but only to
the extent the Foreign Subsidiary Note and the Borrower's or the
Agent's, as the case may be, security interest in the assets of such
Foreign Subsidiary securing such Foreign Subsidiary Note are subject to
a first priority perfected lien in
favor of the Agent): $________________
Less: a. Accounts Receivable that the Borrower
does not reasonably and in good faith
believe are collectible $________________
Less: b. Accounts Receivable that are with account
debtors or obligors that are Affiliates, not
purchased in an arm's length transaction,
are insolvent, or are not creditworthy $________________
Less: c. Accounts Receivable which are subject
to any lien or encumbrance (other than in
favor of the Agent under the Loan
Documents) $________________
Less: d. Accounts Receivable which are more than
sixty (60) days past due $________________
Less: e. Other adjustments set forth in
the definition of Eligible Foreign
Accounts Receivable $________________
95
-4-
Equals: f. Eligible Foreign Accounts Receivable $________________
g. Multiplied by 0.60 $________________
h. Outstanding principal amount
under the Foreign Subsidiary
Note: $________________
h. The amount which is the lesser of
the outstanding amount of the
Foreign Subsidiary Note and 3(g)
above $________________
4. Reserves $________________
5. Borrowing Base Availability
Item 1(g) plus Item 2(h) plus Item 3(h) minus Item 4 $________________
6. Availability for Revolving Credit Loans:
Lesser of Total Commitment or Item 5. $________________
7. a. Revolving Credit Loans Outstanding $________________
b. Maximum Drawing Amount
of all Letters of Credit
outstanding $________________
c. Total Outstanding
Item 7(a) plus Item 7(b) $________________
8. Availability: Item 5 minus Item 7(c) $________________
96
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
$___________________ as of January 28, 1998
FOR VALUE RECEIVED, the undersigned WESTERN DIGITAL CORPORATION, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
[INSERT NAME OF LENDER] (the "Bank") at the Agent's Head Office (as such term is
defined in the Credit Agreement referred to below):
(a) prior to or on Revolving Credit Loan Maturity Date the
principal amount of ______________ DOLLARS ($______________) or, if
less, the aggregate unpaid principal amount of Revolving Credit Loans
advanced by the Bank to the Borrower pursuant to the Revolving Credit
and Term Loan Agreement dated as of January 28, 1998 (as amended and in
effect from time to time, the "Credit Agreement"), among the Borrower,
the Bank and other parties thereto;
(b) the principal outstanding hereunder from time to time at
the times provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through
and including the maturity date hereof at the times and at the rate
provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Bank and any
holder hereof is entitled to the benefits of the Credit Agreement, the Security
Documents and the other Loan Documents, and may enforce the agreements of the
Borrower contained therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Revolving Credit
97
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Loan or (as the case may be) the receipt of such payment. The outstanding amount
of the Revolving Credit Loans set forth on the grid attached to this Note, or
the continuation of such grid, or any other similar record, including computer
records, maintained by the Bank with respect to any Revolving Credit Loans shall
be prima facie evidence of the principal amount thereof owing and unpaid to the
Bank, but the failure to record, or any error in so recording, any such amount
on any such grid, continuation or other record shall not limit or otherwise
affect the obligation of the Borrower hereunder or under the Credit Agreement to
make payments of principal of and interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT
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OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the undersigned has caused this Revolving Credit
Note to be signed in its corporate name and its corporate seal to be impressed
thereon by its duly authorized officer as of the day and year first above
written.
[Corporate Seal]
WESTERN DIGITAL CORPORATION
By:
-------------------------------------
Title:
100
Amount of Balance of
Amount Principal Paid Principal Notation
Date of Loan or Prepaid Unpaid Made By:
--------- ------- -------------- ---------- ---------
101
EXHIBIT C
FORM OF LOAN REQUEST
[insert date]
BankBoston, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Loan Request
Ladies and Gentlemen:
Reference is hereby made to that certain Revolving Credit and Term Loan
Agreement, dated as of January 28, 1998 (as the same may be amended and in
effect from time to time, the "Credit Agreement"), among Western Digital
Corporation (the "Borrower"), the lending institutions which are or may become
parties thereto from time to time (collectively, the "Banks"), and BankBoston,
N.A., as agent (the "Agent") for the Banks. Capitalized terms which are used
herein without definition and which are defined in the Credit Agreement shall
have the same meanings herein as in the Credit Agreement.
Pursuant to ss.2.6 of the Credit Agreement, we hereby request that a
Revolving Credit Loan consisting of [a Base Rate Loan in the principal amount of
$__________, or a Eurodollar Rate Loan in the principal amount of $__________
with an Interest Period of _________] be made on __________ __, __. We
understand that this request is irrevocable and binding on us and obligates us
to accept the requested Revolving Credit Loan on such date.
We hereby certify (a) that the aggregate outstanding principal amount
of the Revolving Credit Loans on today's date is $_________, (b) that we will
use the proceeds of the requested Revolving Credit Loan in accordance with the
provisions of the Credit Agreement, (c) that each of the representations and
warranties contained in the Credit Agreement or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement was true as of
the date as of which it was made and is true at and as of the date hereof
(except to the extent of changes resulting from transactions contemplated or
permitted by the Credit Agreement and changes occurring in the ordinary course
of business that singly or in the aggregate are not materially adverse, and to
the extent that such representations and warranties related expressly to an
earlier date) and (d) that no Default or Event of Default has occurred and is
continuing.
Very truly yours,
WESTERN DIGITAL CORPORATION
By:
----------------------------------------
Name:
Title:
102
EXHIBIT D
FORM OF TERM NOTE
$___________________ as of January 28, 1998
FOR VALUE RECEIVED, the undersigned WESTERN DIGITIAL CORPORATION, a
Delaware corporation, (the "Borrower"), hereby promises to pay to the order of
[INSERT NAME OF LENDER] (the "Bank") at the Agent's Head Office (as defined in
the Credit Agreement referred to below):
(a) prior to or on Term Loan Maturity Date the principal
amount of _______________ DOLLARS ($___________), evidencing the Term
Loan made by the Bank to the Borrower pursuant to the Revolving Credit
and Term Loan Agreement dated as of January 28, 1998 (as amended and in
effect from time to time, the "Credit Agreement"), by and among the
Borrower, the Bank and other parties thereto;
(b) the principal outstanding hereunder from time to time at
the times provided in the Credit Agreement; and
(c) interest from the date hereof on the principal amount from
time to time outstanding to and including the maturity hereof at the
rates and terms and in all cases in accordance with the terms of the
Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Bank and any
holder hereof is entitled to the benefits of the Credit Agreement, the Security
Documents and the other Loan Documents, and may enforce the agreements of the
Borrower contained therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be
made, at the time of receipt of any payment of principal of this Note, an
appropriate notation on the grid attached to this Note, or the continuation of
such grid, or any other similar record, including computer records, reflecting
the receipt of such payment. The outstanding amount of the Term Loan set forth
on the grid attached to this Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by the Bank with
respect to the Term Loan shall be
103
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prima facie evidence of the principal amount of the Term Loan owing and unpaid
to the Bank, but the failure to record, or any error in so recording, any such
amount on any such grid, continuation or other record shall not limit or
otherwise affect the obligation of the Borrower hereunder or under the Credit
Agreement to make payments of principal of and interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any future occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the undersigned has caused this Note to be signed
in its corporate name and its corporate seal to be impressed thereon by its duly
authorized officer as of the day and year first above written.
[Corporate Seal]
WESTERN DIGITIAL CORPORATION
By:
---------------------------------------------
Title:
105
EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
[date]
BankBoston, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: High Technology Division
Ladies and Gentlemen:
Reference is made to the Revolving Credit and Term Loan Agreement, dated
as of January 28, 1998 (as amended and in effect from time to time, the "Credit
Agreement"), by and among Western Digital Corporation (the "Borrower"),
BankBoston, N.A. and the other lending institutions listed on Schedule 1 to the
Credit Agreement (collectively, the "Banks") and BankBoston, N.A. as agent for
the Banks (the "Agent"). Capitalized terms which are used herein without
definition and which are defined in the Credit Agreement shall have the
respective meanings assigned to such terms in the Credit Agreement.
Pursuant to ss.9.4(c) of the Credit Agreement, the principal financial
or accounting officer of the Borrower hereby certifies to you as follows: (a)
the information furnished in the calculations attached hereto was true and
correct as of the last day of the fiscal [year] [quarter] [month]
ended______________; (b) as of the date of this certificate, there exists no
Default or Event of Default or condition which would, with either or both the
giving of notice or the lapse of time, result in a Default or an Event of
Default; and (c) the financial statements delivered herewith were prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods.
IN WITNESS WHEREOF, the undersigned officer has executed this Compliance
Certificate as of the date first written above.
WESTERN DIGITAL CORPORATION
By:
--------------------------------------------------
Title:
106
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COMPLIANCE CERTIFICATE
WESTERN DIGITAL CORPORATION
11.1. PROFITABLE OPERATIONS
(a) Consolidated Net Operating Income for quarter ended $___________
____ (not to be less than the amounts set forth in
ss.11.1 of the Credit Agreement)
11.2. FIXED RATE COVERAGE RATIO
(a) EBITDA for Reference Period ended ________________ $__________
(i) Consolidated Net Income for such
period, plus (without duplication) $__________
(ii) depreciation for such period, plus $__________
(iii) amortization for such period, plus $__________
(iv) income tax expense for such period, plus $__________
(v) Consolidated Total Interest Expense
for such period $__________
(b) Rental Obligations for such period $__________
(c) Sum of (a) plus (b) $__________
(d) Consolidated Total Cash Interest Expense for such period $__________
(e) Rental Obligations for such period $__________
(f) Sum of (d) plus (e) $__________
(g) Ratio of (c) to (f) _____:_____
(Not to be less than the ratio set forth in ss.11.2 of the
Credit Agreement for the relevant periods described therein)
11.3. LEVERAGE
(a) Consolidated Total Liabilities as of __________ $__________
(b) Other Indebtedness specified in clauses (f), (g),
(j) or (k) of the definition of "Indebtedness" which
is not reflected on the Company's consolidated balance
sheet as a liability as of ____________________ $__________
(c) Outstanding amount of Subordinated Notes for such period $__________
(d) Sum of (a) plus (b) minus (c) $__________
(e) Shareholder equity $__________
(f) Consolidated Intangible Assets for such period $__________
(g) (e) minus (f) $__________
(h) Ratio of (d) to (g) ______:____
(Not to be less than amounts set forth in Credit Agreement)
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11.4. CONSOLIDATED TANGIBLE NET WORTH
(a) Consolidated Tangible Net Worth at time of
determination $___________
(b) $435,000,000
(c) [seventy five percent (75%)] [fifty percent (50%)] of positive
Consolidated Net Income for such period $___________
(d) one hundred percent (100%) of purchase price paid during
such period to repurchase capital stock $___________
(e) Sum of (b) plus (c), less (d) $___________
((a) not to be less than (e) at any time)
11.5 CAPITAL EXPENDITURES
(a) Capital Expenditures made in such period $___________
(b) Capital Expenditures made in such fiscal year to date $___________
(Not to exceed $275,000,000 for 1998 and 1999 fiscal
years and $300,000,000 in each fiscal year thereafter)
108
EXHIBIT F
FORM OF
INSTRUMENT OF ADHERENCE
(CREDIT AGREEMENT)
Dated as of ___________
BankBoston, N.A., as Agent
and the Banks referred to below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain Revolving Credit and Term Loan
Agreement, dated as of January 28, 1998 (as amended and in effect from time to
time, the "Credit Agreement"), by and among Western Digital Corporation, a
Delaware corporation (the "Borrower"), BankBoston, N.A. and the other lenders
which may become parties thereto from time to time (collectively, the "Banks"),
and BankBoston, N.A. as agent for the Banks (the "Agent"). Capitalized terms
which are used herein without definition and which are defined in the Credit
Agreement shall have the same meanings herein as in the Credit Agreement.
The undersigned [NAME OF GUARANTOR SUBSIDIARY], a [GUARANTOR SUBSIDIARY
ENTITY] hereby agrees to become a Guarantor under and party to the Credit
Agreement and to comply with and be bound by all of the terms, conditions and
covenants thereof all with the same effect as if it had executed the Credit
Agreement on the Closing Date. Concurrently with the execution of this
Instrument of Adherence, the undersigned has become a party to each of the
Guaranty and the Security Agreement and agrees to be bound thereby as if it had
been a party to each of the Guarantor and the Security Agreement from the
Closing Date.
The undersigned represents and warrants to the Banks and the Agent
that:
a. it is a [wholly-owned] Subsidiary of the Borrower;
b. no provision of its charter, other incorporation papers, by-laws or
stock provisions prohibits the undersigned from making distributions to
the Borrower;
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c. it is capable of complying with and is in compliance with all of the
provisions of the Credit Agreement;
d. its chief executive office and principal place of business is located
at __________ ; and
e. its books and records are kept at __________________ .
The undersigned hereby affirms that each of the representations and
warranties set forth in ss.8 of the Credit Agreement is true and correct in all
material respects with respect to the undersigned as of the date hereof (except
to the extent of changes resulting from transactions contemplated or permitted
by the Credit Agreement and the other Loan Documents and changes occurring in
the ordinary course of business that singly or in the aggregate are not
materially adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date).
The following documents shall be delivered to the Agent concurrently
with this Instrument of Adherence:
a. a legal opinion of _________________________ as to the legal, valid and
binding nature of the Loan Documents, as supplemented hereby, with
respect to the Borrower and the Guarantors, including, without
limitation, the undersigned;
b. copies, certified by a duly authorized officer of the undersigned to be
true and complete as of the date hereof, of each of (i) the charter
documents of the undersigned as in effect on the date hereof, (ii) the
by-laws of the undersigned as in effect on the date hereof, (iii) the
resolutions of the Board of Directors of the undersigned authorizing
the execution and delivery of this Instrument of Adherence and the
undersigned's performance of all of the transactions contemplated
hereby, and (iv) an incumbency certificate giving the name and bearing
a specimen signature of each individual who shall be authorized to
sign, in the undersigned's name and on its behalf, each of this
Instrument of Adherence and the other Loan Documents, and to give
notices and to take other action on its behalf under the Loan
Documents;
c. a certificate of the Secretary of State of __________ of a recent date
as to the undersigned's corporate existence, good standing and tax
payment status;
d. a security agreement in form and substance satisfactory to the Agent
and the Banks;
e. UCC-1 financing statements and other documents and instruments
necessary to perfect the Agent's security interest for the benefit of
the Banks in all of the undersigned's assets; and
f. such other documents as the Agent may reasonably request.
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This Instrument of Adherence shall take effect as a sealed instrument
and shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
Very truly yours.
[INSERT NAME OF GUARANTOR
SUBSIDIARY]
By:
------------------------------------------
Title:
Guarantor's address for purposes of ss.20 of
the Credit Agreement:
[INSERT ADDRESS]
Accepted and Agreed:
BANKBOSTON, N.A., INDIVIDUALLY AND AS AGENT
By:
-----------------------------------------
Title:
[INSERT ADDITIONAL BANKS]
111
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated as of _______________
Reference is made to the Revolving Credit and Term Loan Agreement,
dated as of January 28, 1998 (as from time to time amended and in effect, the
"Credit Agreement"), by and among WESTERN DIGITAL CORPORATION, a Delaware
corporation (the "Borrower"), the lending institutions referred to therein as
Banks (collectively, the "Banks"), and BANKBOSTON, N.A., a national banking
association, as agent (in such capacity, the "Agent") for the Banks. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement.
______________ (the "Assignor") and ______________ (the "Assignee")
hereby agree as follows:
1. ASSIGNMENT. Subject to the terms and conditions of this Assignment
and Acceptance, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes without recourse to the Assignor, a
$____________ interest in and to the rights, benefits, indemnities and
obligations of the Assignor under the Credit Agreement equal to __% in respect
of the Total Commitment and the Term Loan immediately prior to the Effective
Date (as hereinafter defined).
2. ASSIGNOR'S REPRESENTATIONS. The Assignor (a) represents and warrants
that (i) it is legally authorized to enter into this Assignment and Acceptance,
(ii) as of the date hereof, its Commitment is $_______________, its Commitment
Percentage is __%, the aggregate outstanding principal balance of its Revolving
Credit Loans equals $______________, the aggregate amount of its Letter of
Credit Participations equals $______________ and the aggregate outstanding
balance of its Term Loan equals $_____________ (in each case prior to giving
effect to the assignment contemplated hereby but after giving effect to any
contemplated assignments which have not yet become effective), and (iii)
immediately after giving effect to all assignments which have not yet become
effective, the Assignor's Commitment Percentage will be sufficient to give
effect to this Assignment and Acceptance, (b) makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant thereto or the attachment, perfection or priority of any
security interest or mortgage, other than that it is the legal and beneficial
owner
112
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of the interest being assigned by it hereunder free and clear of any claim
or encumbrance; (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Subsidiaries or any other Person primarily or secondarily liable in respect
of any of the Obligations, or the performance or observance by the Borrower or
any of its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of its obligations under the Credit
Agreement or any of the other Loan Documents or any other instrument or document
delivered or executed pursuant thereto; and (d) attaches hereto the Revolving
Credit Note and Term Note delivered to it under the Credit Agreement.
The Assignor requests that the Borrower exchange the Assignor's
Revolving Credit Note and Term Note for new Revolving Credit and Term Notes
payable to the Assignor and the Assignee as follows:
Notes Payable to Amount of Revolving Amount of
the Order of: Credit Note Term Note
Assignor $________________ $_______________
Assignee $________________ $_______________
3. ASSIGNEE'S REPRESENTATIONS The Assignee (a) represents and warrants
that (i) it is duly and legally authorized to enter into this Assignment and
Acceptance, (ii) the execution, delivery and performance of this Assignment and
Acceptance do not conflict with any provision of law or of the charter or
by-laws of the Assignee, or of any agreement binding on the Assignee, (iii) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Assignment and
Acceptance, and to render the same the legal, valid and binding obligation of
the Assignee, enforceable against it in accordance with its terms, have been
done and performed and have occurred in due and strict compliance with all
applicable laws; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to ss.ss.8.4 and 9.4 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (d) represents and warrants that it is an
Eligible Assignee; (e) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Loan Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (f) agrees that
it will perform in accordance with their terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Bank; and
(g) acknowledges that it has made arrangements with the Assignor satisfactory to
the Assignee with
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respect to its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
4. EFFECTIVE DATE. The effective date for this Assignment and
Acceptance shall be ____________ (the "Effective Date"). Following the execution
of this Assignment and Acceptance and the consent of the Borrower hereto having
been obtained, each party hereto shall deliver its duly executed counterpart
hereof to the Agent for acceptance by the Agent and recording in the Register by
the Agent. Schedule 1 to the Credit Agreement shall thereupon be replaced as of
the Effective Date by the Schedule 1 annexed hereto.
5. RIGHTS UNDER CREDIT AGREEMENT. Upon such acceptance and recording,
from and after the Effective Date, (a) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Bank thereunder, and (b) the Assignor
shall, with respect to that portion of its interest under the Credit Agreement
assigned hereunder, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, however, that the Assignor shall retain
its rights to be indemnified pursuant to ss.17 of the Credit Agreement with
respect to any claims or actions arising prior to the Effective Date.
6. PAYMENTS. Upon such acceptance of this Assignment and Acceptance by
the Agent and such recording, from and after the Effective Date, the Agent shall
make all payments in respect of the rights and interests assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and the Assignee shall make any appropriate adjustments
in payments for periods prior to the Effective Date by the Agent or with respect
to the making of this assignment directly between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO
CONFLICT OF LAWS).
8. COUNTERPARTS. This Assignment and Acceptance may be executed in any
number of counterparts which shall together constitute but one and the same
agreement.
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IN WITNESS WHEREOF, intending to be legally bound, each of the
undersigned has caused this Assignment and Acceptance to be executed on its
behalf by its officer thereunto duly authorized, as of the date first above
written.
[INSERT NAME OF ASSIGNOR]
By:
-----------------------------------------
Title:
[INSERT NAME OF ASSIGNEE]
By:
-----------------------------------------
Title:
CONSENTED TO:
WESTERN DIGITAL CORPORATION
By:
------------------------------------
Title:
BANKBOSTON, N.A., as Agent
By:
------------------------------------
Title: