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EXHIBIT 10.6
December 22, 1995
The ADI Group Limited.
ADI U.K. Limited
Aviation Defence International Germany Limited
Re: Facility Letter
Gentlemen:
This letter (the "Letter") is the Facility Letter contemplated by that
certain Loan and Security Agreement (the "Agreement") of even date by and among
us, you, and certain corporations and companies associated with you and
provides the terms and conditions on which we will extend to you jointly and
severally the European Revolver Facility. This Letter is subject to, and will
have the benefit of, all of the terms and conditions of the Agreement, unless
the specific terms of this Letter conflict with terms of the Agreement, in
which case, the terms of this Letter will control. All capitalized terms not
defined in this Letter are to have the meanings provided in the Agreement. In
addition, certain terms are to have the meanings specified in the Glossary
attached hereto.
In consideration of the premises and the agreements, provisions and
covenants herein contained and for TEN U.S. DOLLARS ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the European Borrowers and Lender agree as follows:
1. Credit Facility
(a) Subject to all of the terms and conditions of this Letter
and the Agreement, in reliance upon the representations and warranties
made herein and in the other Loan Documents and the representations
contained in the
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Schedules, and so long as no Default or Event of Default then exists,
Lender, during the Interim Period, and, if the Withholding Ruling is
provided to Lender during the Interim Period, during the period from
the date hereof through the day before the last day of the Original
Term or the last Renewal Term, will make the European Revolver Loans
to the European Borrowers jointly and severally, as requested by the
European Borrowers in accordance with the terms herein, up to a
maximum principal amount at any time outstanding under the European
Revolver Facility whose Dollar Equivalent is equal to the European
Borrowing Base at such time. If any of the unpaid European Loans are
Overadvances or exceed any other limitation set forth in this Letter
or the Agreement, such European Revolver Loans are nevertheless to
constitute Obligations that are secured by the European Collateral and
the U.S. Collateral and entitled to all of the benefits thereof.
(b) The European Revolver Loans, which are to be evidenced by
the European Revolver Notes (the "European Revolver Notes"), are to be
made by Lender as Foreign Currency Loans in the Foreign Currency from
time to time designated by European Borrowers, if such Foreign
Currency is available to Lender, or as Dollar Loans; are to be repaid
in the same currency as which the Loans were made by Lender; and are
to be used solely for Permitted Proceeds Uses. Each Foreign Currency
Loan shall be in a minimum Dollar Equivalent amount of five hundred
thousand Dollars ($500,000) and upward increments of two hundred fifty
thousand Dollars ($250,000).
(c) Borrowings under the European Revolver Facility are to be
as follows:
(i) Each European Revolver Loan is to be made, or is
to be deemed to be made, in the following manner: (a) the European
Borrower shall give Lender written, telephonic or electronic notice
(provided that telephonic notice shall be promptly, and in any event
within one Business Day, confirmed in writing by delivery of a written
notice to Lender that conforms to the requirements of this paragraph),
or notice in such other manner as may be agreed upon from time to time
by Lender and European Borrowers, of its intention to borrow (which
notice is to be irrevocable) before 11:30 a.m. (Atlanta, Georgia
time), specifying the amount of the proposed borrowing; whether the
requested Loan is to be a Dollar Loan or a Foreign Currency Loan, and,
if the latter, the Foreign Currency in which the borrowing is to be
made, with no more than two Foreign Currency Loans to be requested
each calendar month; and the proposed borrowing date for the Loan,
which must be no earlier than the third Business Day after the date or
receipt of the request by ▇▇▇▇▇▇ in Atlanta, Georgia (with the date of
request not to count as the first of such three Business Days); (b)
unless payment is otherwise timely made by the European Borrowers, the
becoming due of any
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amount required to be paid by the European Borrowers under this Letter
or under the Agreement as principal or accrued interest is to be
deemed irrevocably to be a request by European Borrowers for a
European Revolver Loan on the due date of, and in the currency due,
with respect to such principal and accrued interest; (c) unless
payment is otherwise timely made by the European Borrowers, the
becoming due of any other Obligations due from the European Borrowers
is to be deemed irrevocably to be a request for a European Revolver
Loan on the due date of, and in the currency due, with respect to such
Obligation; and (d) the presentation by European Borrowers for payment
by Bank of any check or other item of payment drawn on a Controlled
Disbursement Account is to be deemed irrevocably to be a request for a
Dollar Loan in the Dollar Equivalent amount of such check or other
item of payment.
(ii) The proceeds of each European Revolver Loan
requested as described above are to be disbursed by ▇▇▇▇▇▇ in the
requested Dollars or Foreign Currency by wire transfer to such bank
account as may be agreed upon by European Borrowers and Lender from
time to time; and the proceeds of each European Revolver Loan
requested to satisfy an Obligation as described above are to be
disbursed by Lender by way of direct payment of the relevant
Obligation.
(iii) Each request, including specifically, but
without limitation, a telephonic request, for a European Revolver Loan
is to be conclusively presumed to be made by a Person authorized by
European Borrowers to do so; and the making of the requested European
Revolver Loan will conclusively establish European Borrowers'
obligation to repay such European Revolver Loan in accordance with
this Letter and the Agreement.
(d) The European Revolver Facility will be in effect for a
period commencing on the date hereof and ending on the last day of the
Interim Term, or, if the Withholding Ruling is provided to Lender
during the Interim Period, the Original Term and, should the Original
Term come into effect, will automatically renew itself for one (1)
year periods thereafter (each a "Renewal Term"), unless terminated as
hereinafter provided.
(e) Lender or European Borrowers may terminate the European
Revolver Facility at the end of either the Original Term or any
Renewal Term upon not less than one hundred twenty (120) days prior
written notice; but ▇▇▇▇▇▇ may immediately terminate the European
Revolver Facility, without notice, upon or after the occurrence of an
Event of Default and during the continuation thereof.
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(f) Upon at least ninety (90) days prior written notice to
Lender, European Borrowers may terminate the European Revolver
Facility on a day other than the last day of the Original Term;
provided that European Borrowers may, at any time prior to ten (10)
days before the noticed termination date, give Lender written notice
extending the termination date up to an additional ten (10) days.
(g) Upon the effective date of any termination of the
European Revolver Facility, all of the Obligations will become due and
payable and Lender may discontinue making further Loans to European
Borrowers. No termination (regardless of cause or procedure) of the
European Revolver Facility is to in any way affect or impair the
rights, powers or privileges of Lender or the obligations, duties or
liabilities of European Borrowers in any way relating to (i) any
transaction or event occurring prior to the effective date of such
termination or (ii) any of the undertakings, agreements, covenants,
warranties or representations of European Borrowers contained in this
Letter or the Agreement or any of the other Loan Documents.
(h) The European Revolver Loans are to constitute general
obligations of the European Borrowers, and are to be secured by
▇▇▇▇▇▇'s security interest in and Lien upon all of the European
Collateral and the U.S. Collateral, and by all other security
interests and Liens heretofore, now or at any time or times hereafter
granted by Obligated Borrowers to Lender to the extent provided in the
Security Documents under which any such Lien arises.
(i) European Revolver Loans constituting Dollar Loans shall
bear interest from the date such European Revolver Loans are made to
the date paid at the Regular Rate or the Loan LIBOR Rate. European
Revolver Loans constituting Foreign Currency Loans shall bear interest
from the date such European Revolver Loans are made to the date paid
at the Foreign Currency Rate. The applicable basis for determining
the rate of interest shall be selected by European Borrowers initially
at the time a notice of borrowing is given. The basis for determining
the interest rate with respect to any European Revolver Loan may be
changed from time to time pursuant to paragraph (4) hereinafter. If
on any day a European Revolver Loan constituting a Dollar Loan is
outstanding with respect to which notice has not been delivered to
Lender in accordance with the terms of this Letter and the Agreement
specifying the basis for determining the rate of interest, then for
that day that Dollar Loan shall bear interest at the Regular Rate.
2. Interest Periods
In connection with each Foreign Currency Loan and LIBOR Rate
Loan, European Borrowers shall elect an Interest Period to be
applicable to such Loan, which Interest Period shall be a one month
period, if such Loan
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is a Foreign Currency Loan, and either a one, two, three or six month
period, if such Loan is a Dollar Loan; provided that:
(a) the initial Interest Period for any European
Revolver Loan shall commence on the funding date of such
European Revolver Loan;
(b) in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(c) if an Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, that if
any Interest Period would otherwise expire on a day that is
not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(d) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to part (e)
below, end on the last Business Day of a calendar month;
(e) no Interest Period shall extend beyond the
Interim Term, or, if the Withholding Ruling is provided to
Lender during the Interim Period, the Original Term, or any
Renewal Term;
(f) the Interest Period for a European Revolver Loan
that is converted pursuant to paragraph (4) shall commence on
the date of such conversion and shall expire on the date on
which the Interest Period for the European Revolver Loans so
converted expires; and
(g) there shall be no more than two (2) Interest
Periods relating to European Revolver Loans at any time.
3. Payments
All payments of principal, interest and fees and all other
amounts to be made by any party pursuant to this Letter and the
Agreement with respect to any Loan or fee relating thereto shall be
paid without deduction for, and free from, any tax, imposts, levies,
duties, deductions, or withholdings of any nature now or at anytime
hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding (i) in the case of Lender,
taxes imposed on or measured by its net income, and franchise taxes
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imposed on it, by the jurisdiction under the laws of which such Bank
(as the case may be) is organized or any political subdivision thereof
and (ii) in the case of European Revolver Loans, any applicable
withholding taxes pertaining thereto (all such non-excluded taxes,
imposts, levies, duties, deductions or withholdings of any nature
being "Taxes"). In the event that any party is required by applicable
law to make any such withholding or deduction of Taxes with respect to
any Loan or fee or other amount, such party shall pay such deduction
or withholding to the applicable taxing authority, shall promptly
furnish to Lender in respect of which such deduction or withholding is
made all receipts and other documents evidencing such payment and
shall pay to the Lender additional amounts as may be necessary in
order that the amount received by the Lender after the required
withholding or other Tax is the full amount due to Lender under this
Letter and the Agreement. In computing interest on any European
Revolver Loan, the date of funding of the European Revolver Loan or
the first day of an Interest Period applicable to such European
Revolver Loan or, with respect to a Base Rate Loan being converted
from a LIBOR Rate Loan or a Dollar Loan being converted from a
Foreign Currency Loan, the date of conversion shall be included and
the date of payment of such European Revolver Loan or the expiration
date of an Interest Period applicable to such European Revolver Loan,
or with respect to a Base Rate Loan being converted to a LIBOR Rate
Loan or a Dollar Loan being converted to a Foreign Currency Loan, the
date of conversion shall be excluded; provided, that if a European
Revolver Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that European Revolver Loan.
European Borrowers may repay a Foreign Currency Loan on a day
other than the last day of the applicable Interest Period, but only if
European Borrowers shall compensate Lender for each such repayment, by
the payment in Dollars of the greater of (i) two thousand Dollars
(U.S. $2,000) or (ii) all losses, expenses and liabilities (including,
without limitation, any loss (including interest paid) sustained by
Lender in connection with the reemployment of such funds) which Lender
may incur because of such prepayment, upon ▇▇▇▇▇▇'s written request
(which request shall set forth in reasonable detail the basis for
requesting any amounts pursuant to subsection (ii) and which shall,
absent manifest error, be conclusive and binding upon all parties
hereto).
4. Conversion or Continuation
Subject to the provisions of this paragraph (4) and the
limitation on the number of Interest Periods, European Borrowers shall
have the option to (1) convert at any time all or any part of
outstanding Loans equal to Dollar Equivalent $500,000 and integral
multiples of Dollar Equivalent $250,000 in excess of that amount from
Dollar Loans to Foreign Currency Loans or from
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Regular Rate Loans to LIBOR Rate Loans, or (2) upon the expiration of
any Interest Period applicable to a Foreign Currency Loan or LIBOR
Rate Loan, to continue all or any portion of such Loan equal to Dollar
Equivalent $500,000 and integral multiples of Dollar Equivalent
$250,000 in excess of that amount as a Foreign Currency Loan or LIBOR
Rate Loan and the succeeding Interest Period(s) of such continued Loan
shall commence on the last day of the Interest Period of the European
Revolver Loan to be continued; provided, that any such conversion of a
Loan may only take place on the expiration date of an Interest Period
applicable thereto; and provided, further, that no outstanding
European Revolver Loan may be continued as, or be converted into, a
Foreign Currency Loan or LIBOR Rate Loan when any Event of Default or
Default has occurred and is continuing; and provided, further, that no
European Revolver Loan may be converted into a LIBOR Rate Loan or a
Foreign Currency Loan until five (5) days after the Closing Date.
European Borrowers shall deliver a fully and properly
completed notice of conversion/continuation to Lender no later than
11:00 a.m. (Atlanta time) at least three (3) Business Days in advance
of the proposed conversion/continuation date. In lieu of delivering
the above-described notice of conversion/continuation, European
Borrowers may give Lender telephonic notice by the required time of
any proposed conversion/continuation under this paragraph (4);
provided, that such notice shall be promptly confirmed in
writing by delivery of a notice of conversion/continuation to Lender
on or before the proposed conversion/continuation date.
▇▇▇▇▇▇ shall not incur any liability to European Borrowers in
acting upon any telephonic notice referred to above that ▇▇▇▇▇▇
believes in good faith to have been given by a duly authorized officer
or other person authorized to act on behalf of Obligated Borrowers or
for otherwise acting in good faith under this paragraph (4).
Except as provided in this subsection, a notice of
conversion/continuation for conversion to, or continuation of, a LIBOR
Rate Loan or a Foreign Currency Loan (or telephonic notice in lieu
thereof) shall be irrevocable once given, European Borrowers shall be
bound to convert or continue in accordance therewith and Lender shall
have no liability for acting in accordance with European Borrowers'
instructions contained therein.
Interest is to be calculated on a daily basis (computed on the
actual number of days elapsed over a year of 360 days unless reference
to a 365 or 366-day year is necessary in order not to exceed the
Maximum Rate), commencing on the date hereof, and is to be payable
monthly, in arrears, on the first day of each month.
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5. Default Interest
Upon the occurrence of an Event of Default, at ▇▇▇▇▇▇'s sole
discretion, the principal amount of the Obligations will bear interest
at the Default Rate.
The provisions herein relating to the Default Rate represent a
fair and reasonable estimate by European Borrowers and Lender of a
fair average compensation for the loss that may be sustained by Lender
due to the failure of Obligated Borrowers to make timely payments with
respect to the Obligations and for the cost and expenses that may be
incurred by Lender by reason of the occurrence of an Event of Default,
the parties recognizing that the damages caused by such extra
administrative expenses and loss of the use of funds is impracticable
or extremely difficult to ascertain or estimate. Interest at the
Default Rate shall be paid without prejudice to the rights of Lender
to collect any other amounts provided to be paid hereunder, under the
Agreement or under any of the other Loan Documents or to declare a
default under this Letter, the Agreement or any of the other Loan
Documents.
6. Financial Covenants
During the term of the Agreement, and thereafter for so long
as there are any Obligations to Lender, European Guarantor and
European Borrowers shall:
(i) Maintain at all times for the European
Guarantor (computed on a consolidated basis) an Adjusted Tangible Net
Worth during the fiscal year ending December 31, 1996 of not less than
Dollar Equivalent $800,000 and, during each fiscal year thereafter, of
not less than the sum of (i) Dollar Equivalent L.516,000 British
pounds sterling plus (ii) the greater of (a) Dollar Equivalent
L.320,000 British pounds sterling or (b) seventy-five percent (75%) of
the preceding fiscal year's net income after tax (computed in
accordance with GAAP) plus (iii) the aggregate of the amounts added
pursuant to clause (ii) above for all previous fiscal years occurring
after the fiscal year ending December 31, 1996.
(ii) Maintain at each month-end for the European
Guarantor (computed on a consolidated basis) a ratio of (i) average
Funded Indebtedness over the immediately preceding twelve (12) months
to (ii) EBIDAT for the immediately preceding twelve (12) months, of
not less than 3.0 to 1 (provided that for the fiscal year ending
December 31, 1996, such calculations shall be based upon the
cumulative monthly average annualized for such fiscal year).
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(iii) Maintain at each month-end for the European
Guarantor (on a consolidated basis) an aggregate Debt Service Coverage
for such month for the immediately preceding twelve (12) months of not
less than 2.0 to 1 (provided that for the fiscal year ending December
31, 1996, such calculations shall be based upon the cumulative monthly
average annualized for such fiscal year).
(iv) Maintain at all times for the European
Borrowers (computed without regard to Subsidiaries) an aggregate
excess availability under the European Revolver Facility (the excess
of the amount of the European Borrowing Base on such date in Dollar
Equivalent over the then outstanding Dollar Equivalent amount of the
European Revolver Loans and face amount in Dollar Equivalent of the
Letters of Credit issued for the account of European Borrowers) of not
less than the amount shown below for the period corresponding thereto:
Period Amount
------ ------
Closing Date through Dollar Equivalent
December 31, 1997 $500,000
January 1, 1998 and Dollar Equivalent
thereafter $-0-
(v) Maintain at all times for all Subsidiaries of
European Guarantor an Adjusted Tangible Net Worth of not less than its
Adjusted Tangible Net Worth as of January 1, 1996.
Sincerely,
FIRST UNION COMMERCIAL
CORPORATION
By: /s/
-------------------------------
The undersigned, by and through their duly authorized officers,
evidence their acceptance of and agreement to this Letter by executing below:
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THE ADI GROUP LIMITED
By: /s/
----------------------------
Its:
---------------------------
ADI U.K. LIMITED
By: /s/
----------------------------
Its:
---------------------------
AVIATION DEFENCE INTERNATIONAL GERMANY LIMITED
By: /s/
----------------------------
Its:
---------------------------
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Glossary of Defined Terms to the Facility Letter
Dollar Equivalent - means the exact equivalent, in the case of
Dollars, and the Dollar equivalent of Foreign Currency, as determined by Lender
with respect to any determination date on the basis of Bank's or other Lender
Affiliate's (as chosen by Lender) spot rate for the purchase of the appropriate
Foreign Currency in U.S. Dollars.
Dollar Loan - means a European Revolver Loan made and repayable in U.S.
Dollars.
Eligible European Account - an Account arising in the ordinary course
of the business of European Borrowers, which ▇▇▇▇▇▇, in its sole credit
judgment, deems to be an Eligible European Account. Without limiting the
generality of the foregoing, no Account is to be an Eligible European Account
if: (i) it represents unearned Accounts that have been invoiced but as to which
the European Borrower has not rendered the invoiced services as of the date of
the invoice; or (ii) it does not constitute a complete bona fide transaction
which requires no further act under any circumstances to make such Account
payable by such Account Debtor; or (iii) it is owed by a Subsidiary or an
Affiliate of an Obligated Borrower or Guarantor; or (iv) it is due for payment
more than thirty (30) days after the original invoice date or it is unpaid more
than ninety (90) days after the original invoice date; or (v) thirty percent
(30%) or more of the Accounts from the Account Debtor are not deemed Eligible
European Accounts hereunder; or (vi) any covenant, representation or warranty
contained in the Agreement or this Letter with respect to such Account has been
breached; or (vii) the Account Debtor is also a creditor or supplier of any
Obligated Borrower or Guarantor, or has disputed liability with respect to such
Account, or the Account otherwise is or may become subject to any right of
setoff by the Account Debtor, to the extent of the amount of any offset,
dispute or claim; or (viii) the Account Debtor has commenced a voluntary case
under any insolvency or receivership law, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or a decree or
order for relief has been entered by a court having jurisdiction in the
premises in respect of the Account Debtor in an involuntary case under any
insolvency or receivership law, as now constituted or hereafter amended, or any
other creditors rights petition or other application for relief has been filed
against the Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a receiver,
trustee, liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or (ix) if ▇▇▇▇▇▇ believes, in
its sole judgment, that collection of such Account is insecure or that payment
thereof is doubtful or will be delayed by reason of the Account Debtor's
financial condition; or (x) the Account Debtor is the United States of America
or any department, agency or instrumentality thereof, unless the Account owner
assigns its right to payment of such Account to Lender, in form and substance
satisfactory to Lender, so as to comply with the Assignment of Claims Act of
1940, as amended; or (xi) the Account is subject to a Lien other than a
Permitted Lien; or (xii) the total unpaid Accounts of the Account Debtor exceed
a credit limit determined by ▇▇▇▇▇▇, in its sole discretion, to the extent such
Account exceeds such limit; or (xiii) the Account is not an open
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Account and is evidenced by an instrument of any kind, or has been reduced to
judgment; or (xiv) any European Borrower has made any agreement with the
Account Debtor for any deduction therefrom, except for discounts or allowances
which are made in the ordinary course of business for prompt payment and which
discounts or allowances are reflected in the calculation of the face value of
each invoice related to such Account; or (xv) any European Borrower has made an
agreement with the Account Debtor to extend the time of payment thereof; or
(xvi) the Account has not been invoiced to the Account Debtor for a period of
greater than 35 days from the date of rendition of services.
European Borrowing Base Certificate - the borrowing base certificate
to be submitted by the European Borrowers with such frequency as Lender may
require from time to time and in any event no less frequently by the tenth
(10th) Business Day of each month for and as of the last Business Day of the
preceding month.
European Collateral - has the meaning given that term in the General
▇▇▇▇▇▇▇▇▇ executed by ADI U.K. and the Assignment of Accounts executed by ADI
Germany in favor of ▇▇▇▇▇▇.
European Revolver Borrowing Base - at any date of determination
thereof, an amount determined by reference to the latest timely-filed European
Borrowing Base Certificate and equal to the lesser of:
(a) the Dollar Equivalent of (i) $5,000,000; minus (ii) the
face amount of any Letters of Credit issued for the account of the
European Borrowers and outstanding at such date; or
(b) the Dollar Equivalent of (i) seventy-five percent
(75%) (or such lesser percentage as Lender may in its sole and
absolute discretion determine from time to time) of the net amount of
Eligible European Accounts outstanding and reflected in the most
current European Borrowing Base Certificate; minus (ii) $500,000
(minus the Dollar amount of any Account excluded from the U.S.
Revolver Borrowing Base pursuant to clause (iv) of paragraph (b) of
the definition of U.S. Revolver Borrowing Base, in the amount so
excluded up to an aggregate of $500,000); minus (iii) an amount equal
to fifteen percent (15%) of the face amount of all Accounts
owed to ADI Germany; and minus (iv) an amount equal to the sum of (A)
any amounts which European Borrowers are obligated to pay but do not
pay when due and which Lender pays pursuant to any of the Loan
Documents for the account of European Borrowers, (B) the face amount
of any Letters of Credit issued for the account of the European
Borrowers outstanding at such date, and (C) such reserves as Lender in
its sole discretion elects to establish from time to time.
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For purposes hereof, the net amount of Eligible European
Accounts at any time shall be the face amount of such Eligible
European Accounts less any and all returns, rebates, discounts (which
may, at ▇▇▇▇▇▇'s option, be calculated on shortest terms), credits,
allowances, sales or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in
connection with such Accounts at such time.
Foreign Currency - means, if offered and subject to availability,
either British pounds sterling or German deutsche marks.
Foreign Currency Business Day - means any Business Day, excluding one
on which trading is not carried on by and between banks in deposits of the
applicable Foreign Currency in the applicable interbank market for such Foreign
Currency.
Foreign Currency Loan - means a European Revolver Loan made and
repayable in Foreign Currency.
Foreign Currency Margin - with respect to Foreign Currency Loans,
means the rate set forth below opposite the relevant ratio of Funded
Indebtedness to EBIDAT for the European Borrowers (computed without regard to
Subsidiaries):
Funded Indebtedness/ Foreign Currency
EBIDAT Margin
-------------------- ----------------
Greater than 2 to 1 3.05%
Greater than 1 to 1
and less than or equal
to 2 to 1 2.8%
Less than or equal to
1 to 1 2.55%
Notwithstanding the foregoing, as of the Closing Date and to and
through June 30, 1996, the Foreign Currency Margin for Dollar Loans
constituting European Revolver Loans shall be 2.8%. Thereafter, adjustments to
the Foreign Currency Margin for Foreign Currency Loans the European Revolver
Loans shall be adjusted on the fifth Business Day after receipt by Lender of
the monthly financial statement due for June, September, December and March,
based on the ratio of (i) average Funded Indebtedness as of the end of each
month during the immediately preceding four fiscal quarters ending on the first
day of the adjustment month to (ii) EBIDAT for the immediately preceding four
fiscal quarters ending on such first day of the adjustment month. In the event
that during an adjustment month, a European Borrower shall have failed to
deliver to Lender when required under the Agreement financial statements and
other reports necessary for calculation of the Foreign
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Currency Margin, the Foreign Currency Margin for all Foreign Currency Loans
shall be adjusted forty-five (45) days following such adjustment month to
3.05%.
Foreign Currency Rate - with respect to Foreign Currency Loans, means
the IBOR for the Interest Period applicable to such Loan, plus the Foreign
Currency Margin.
IBOR - means, with respect to each Foreign Currency Loan and for each
Interest Period, a rate of interest determined by Lender equal to
(a) the rate of interest at which deposits in the applicable
Foreign Currency, for a period comparable to the Interest Period and
in an amount comparable to the amount of such Foreign Currency Loan,
are offered, based on relevant information available to Lender from
Telerate (or, if it is unavailable to Lender from Telerate for any
reason, by reference to relevant information on the Reuters Screen) as
of 11:00 a.m. (London time) on the day which is two (2) Business Days
prior to the first day of such Interest Period; divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) Business Days prior
to the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve
System or other governmental authority having jurisdiction with
respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) which are required to be
maintained by a member bank of the Federal Reserve System (such rate
to be rounded upward to the next whole multiple of one-sixteenth of
one percent (1/16 of 1%).
Interest Margin - with respect to Dollar Loans made under the European
Revolver Facility, the rate set forth below opposite the relevant ratio of
Funded Indebtedness to EBIDAT for the European Borrowers (computed without
regard to Subsidiaries):
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Funded Indebtedness/ Libor Rate Base Rate
EBIDAT Loans Loans
-------------------- ----------- ---------
Greater than 2 to 1 3.05% 0.55%
Greater than 1 to 1
and less than or equal
to 2 to 1 2.8% 0.3%
Less than or equal to
1 to 1 2.55% 3%
Notwithstanding the foregoing, as of the Closing Date and to and
through June 30, 1996, the Interest Margin for Dollar Loans constituting
European Revolver Loans shall be 2.8% for LIBOR Rate Loans and 0.3% for Base
Rate Loans. Thereafter, adjustments to the Interest Margin for the European
Revolver Loans shall be adjusted on the fifth Business Day after receipt by
Lender of the monthly financial statement due for June, September, December and
March, based on the ratio of (i) average Funded Indebtedness as of the end of
each month during the immediately preceding four fiscal quarters ending on the
first day of the adjustment month to (ii) EBIDAT for the immediately preceding
four fiscal quarters ending on such first day of the adjustment month. In the
event that during an adjustment month, a European Borrower shall have failed to
deliver to Lender when required under the Agreement financial statements and
other reports necessary for calculation of the Interest Margin, the Interest
Margin for the Dollar Loan shall be adjusted forty-five (45) days following
such adjustment month to 3.05% for LIBOR Rate Loans and .55% for Base Rate
Loans.
Interim Term - the period beginning at the Closing Date and ending on
the 330th day after the Closing Date.
Withholding Ruling - a ruling from the Inland Revenue Department of
the United Kingdom that the interest paid on the European Revolver Loan may be
paid to Lender without withholding or other deduction, said ruling to be
satisfactory in form and substance to Lender.
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