Exhibit 10.1
$127,500,000
CREDIT AGREEMENT
among
PACIFIC CIRCUITS, INC.,
as Borrower,
CIRCUIT HOLDINGS, LLC,
and
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES,
as Syndication Agent
and
SUNTRUST BANK, ATLANTA,
as Documentation Agent
and
FIRST UNION CAPITAL MARKETS CORP.,
as Lead Arranger
Dated as of July 13, 1999
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TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS .........................................................1
Section 1.1 DEFINED TERMS ............................................1
Section 1.2 OTHER DEFINITIONAL PROVISIONS ...........................26
Section 1.3 ACCOUNTING TERMS ........................................27
ARTICLE II THE LOANS; AMOUNT AND TERMS .......................................27
Section 2.1 REVOLVING LOANS .........................................27
Section 2.2 TRANCHE A TERM LOAN FACILITY ............................29
Section 2.3 TRANCHE B TERM LOAN FACILITY ............................31
Section 2.4 LETTER OF CREDIT SUBFACILITY ............................33
Section 2.5 SWINGLINE LOAN SUBFACILITY ..............................37
Section 2.6 FEES ....................................................39
Section 2.7 COMMITMENT REDUCTIONS ...................................39
Section 2.8 PREPAYMENTS .............................................40
Section 2.9 MINIMUM PRINCIPAL AMOUNT OF TRANCHES ....................42
Section 2.10 DEFAULT RATE AND PAYMENT DATES .........................43
Section 2.11 CONVERSION OPTIONS .....................................43
Section 2.12 COMPUTATION OF INTEREST AND FEES .......................43
Section 2.13 PRO RATA TREATMENT AND PAYMENTS ........................44
Section 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT .......46
Section 2.15 INABILITY TO DETERMINE INTEREST RATE ...................47
Section 2.16 ILLEGALITY .............................................47
Section 2.17 REQUIREMENTS OF LAW ....................................48
Section 2.18 INDEMNITY ..............................................49
Section 2.19 TAXES ..................................................49
Section 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES......51
Section 2.21 REPLACEMENT OF LENDERS . ...............................53
ARTICLE III REPRESENTATIONS AND WARRANTIES ...................................53
Section 3.1 FINANCIAL CONDITION .....................................53
Section 3.2 NO CHANGE . .............................................54
Section 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW ................54
Section 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS .54
Section 3.5 NO LEGAL BAR; NO DEFAULT . ..............................55
Section 3.6 NO MATERIAL LITIGATION . ................................55
Section 3.7 INVESTMENT COMPANY ACT . ................................55
Section 3.8 MARGIN REGULATIONS . ....................................55
Section 3.9 ERISA ...................................................55
Section 3.10 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE
3.10, which in the aggregate, could not be reasonably expected to
have a Material Adverse Effect ......................................56
Section 3.11 PURPOSE OF LOANS .......................................57
Section 3.12 SUBSIDIARIES ...........................................57
Section 3.13 OWNERSHIP ..............................................57
Section 3.14 INDEBTEDNESS ...........................................58
Section 3.15 TAXES ..................................................58
Section 3.16 INTELLECTUAL PROPERTY ..................................58
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Section 3.17 SOLVENCY ...............................................58
Section 3.18 INVESTMENTS ............................................58
Section 3.19 LOCATION OF COLLATERAL .................................59
Section 3.20 NO BURDENSOME RESTRICTIONS .............................59
Section 3.21 BROKERS' FEES ..........................................59
Section 3.22 LABOR MATTERS ..........................................59
Section 3.23 SECURITY DOCUMENTS .....................................59
Section 3.24 ACCURACY AND COMPLETENESS OF INFORMATION ...............60
Section 3.25 YEAR 2000 ISSUE ........................................60
ARTICLE IV CONDITIONS PRECEDENT ..............................................60
Section 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS,
TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS .......................60
Section 4.2 CONDITIONS TO INITIAL REVOLVING LOANS, TRANCHE A TERM
LOANS AND TRANCHE B TERM LOANS ......................................62
Section 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT ..................66
ARTICLE V AFFIRMATIVE COVENANTS ..............................................67
Section 5.1 FINANCIAL STATEMENTS ....................................67
Section 5.2 CERTIFICATES; OTHER INFORMATION .........................69
Section 5.3 PAYMENT OF OBLIGATIONS ..................................70
Section 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE ........70
Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE ......................70
Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS ..71
Section 5.7 NOTICES .................................................71
Section 5.8 ENVIRONMENTAL LAWS ......................................72
Section 5.9 FINANCIAL COVENANTS .....................................72
Section 5.10 ADDITIONAL SUBSIDIARY GUARANTORS .......................75
Section 5.11 COMPLIANCE WITH LAW ....................................75
Section 5.12 PLEDGED ASSETS .........................................75
Section 5.13 YEAR 2000 COMPLIANCE ...................................76
Section 5.14 INTEREST RATE PROTECTION ...............................76
Section 5.15 SENIOR DEBT RATING .....................................76
Section 5.16 FURTHER ASSURANCES .....................................76
ARTICLE VI NEGATIVE COVENANTS ................................................77
Section 6.1 INDEBTEDNESS ............................................77
Section 6.2 LIENS ...................................................78
Section 6.3 GUARANTY OBLIGATIONS ....................................78
Section 6.4 NATURE OF BUSINESS ......................................78
Section 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. .78
Section 6.6 ADVANCES, INVESTMENTS AND LOANS .........................80
Section 6.7 TRANSACTIONS WITH AFFILIATES ............................80
Section 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS .................80
Section 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL
CONTRACTS ...........................................................80
Section 6.10 LIMITATION ON RESTRICTED ACTIONS .......................81
Section 6.11 RESTRICTED PAYMENTS . ..................................81
Section 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC. ......................81
Section 6.13 SALE LEASEBACKS ........................................82
Section 6.14 NO FURTHER NEGATIVE PLEDGES ............................82
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Section 6.15 PARENT HOLDING COMPANY..................................82
Section 6.16 OTHER PAYMENTS .........................................82
Section 6.17 OPERATING LEASES .......................................83
ARTICLE VII EVENTS OF DEFAULT ................................................83
Section 7.1 EVENTS OF DEFAULT .......................................83
Section 7.2 ACCELERATION; REMEDIES ..................................85
ARTICLE VIII THE AGENT .......................................................86
Section 8.1 APPOINTMENT .............................................86
Section 8.2 DELEGATION OF DUTIES ....................................86
Section 8.3 EXCULPATORY PROVISIONS ..................................86
Section 8.4 RELIANCE BY ADMINISTRATIVE AGENT ........................87
Section 8.5 NOTICE OF DEFAULT .......................................87
Section 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS ..88
Section 8.7 INDEMNIFICATION .........................................88
Section 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY .........89
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT ..........................89
ARTICLE IX MISCELLANEOUS .....................................................89
Section 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL ...........89
Section 9.2 NOTICES .................................................91
Section 9.3 NO WAIVER; CUMULATIVE REMEDIES ..........................92
Section 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES ..............93
Section 9.5 PAYMENT OF EXPENSES AND TAXES ...........................93
Section 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING
LENDERS .............................................................93
Section 9.7 ADJUSTMENTS; SET-OFF ....................................96
Section 9.8 TABLE OF CONTENTS AND SECTION HEADINGS ..................97
Section 9.9 COUNTERPARTS ............................................97
Section 9.10 EFFECTIVENESS ..........................................98
Section 9.11 SEVERABILITY ...........................................98
Section 9.12 INTEGRATION ............................................98
Section 9.13 GOVERNING LAW ..........................................98
Section 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS .........98
Section 9.15 CONFIDENTIALITY ........................................99
Section 9.16 ACKNOWLEDGMENTS ........................................99
Section 9.17 WAIVER AGREEMENT ......................................100
Section 9.18 WAIVERS OF JURY TRIAL .................................100
ARTICLE X GUARANTY ..........................................................100
Section 10.1 THE GUARANTY ..........................................100
Section 10.2 BANKRUPTCY ............................................101
Section 10.3 NATURE OF LIABILITY ...................................101
Section 10.4 INDEPENDENT OBLIGATION ................................101
Section 10.5 AUTHORIZATION .........................................101
Section 10.6 RELIANCE ..............................................102
Section 10.7 WAIVER ................................................102
Section 10.8 LIMITATION ON ENFORCEMENT .............................103
Section 10.9 CONFIRMATION OF PAYMENT ...............................103
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SCHEDULES
---------
Schedule 1.1(a) Account Designation Letter
Schedule 1.1(b) Permitted Liens
Schedule 1.1(c) Investments
Schedule 1.1(d) Adjustments to EBITDA
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Tranche A Term Note
Schedule 2.3(d) Form of Tranche B Term Note
Schedule 2.5(d) Form of Swingline Note
Schedule 2.11 Form of Notice of Conversion/Extension
Schedule 2.19 Section 2.19 Certificate
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.22 Labor Matters
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.2(g) Form of Solvency Certificate
Schedule 5.2(f) Form of Borrowing Base Certificate
Schedule 5.5(b) Insurance
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 6.7 Transactions with Affiliates
Schedule 6.9(e) Fiscal Month Ends
Schedule 6.17 Operating Leases
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
Schedule 9.17 Waiver Agreement
iv
CREDIT AGREEMENT, dated as of July 13, 1999, among PACIFIC CIRCUITS,
INC., a Washington corporation (the "BORROWER"), CIRCUIT HOLDINGS, LLC, a
Delaware limited liability company (the "PARENT"), those Domestic Subsidiaries
of the Borrower identified as a "Guarantor" on the signature pages hereto and
such other Domestic Subsidiaries of the Borrower as may from time to time become
a party hereto (collectively, with the Parent, the "GUARANTORS"), the several
banks and other financial institutions as may from time to time become parties
to this Agreement (collectively, the "LENDERS"; and individually, a "LENDER"),
and FIRST UNION NATIONAL BANK, a national banking association, as administrative
agent for the Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$127,500,000, as more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"ACCOUNT DESIGNATION LETTER" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as
SCHEDULE 1.1(a).
"ACQUIRED COMPANY" shall mean Power Circuits, Inc., a California
corporation.
"ACQUISITION" shall mean the acquisition of the Acquired Company.
"ACQUISITION DOCUMENTS" shall mean the Agreement and Plan of Merger
dated June 11, 1999 among the Acquired Company, its stockholders, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
& Partners, Inc., ▇▇▇▇▇▇ Equity Investors IV, LLC, Power Holdings, LLC and Power
Acquisition Sub., Inc.
"ADDITIONAL CREDIT PARTY" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"AFFILIATE" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"PRIME RATE" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "FEDERAL
FUNDS EFFECTIVE RATE" shall mean, for any day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
2
"ALTERNATE BASE RATE LOANS" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"APPLICABLE PERCENTAGE" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans and Tranche A Term Loans
which are Alternate Base Rate Loans shall be the percentage set forth under the
column "Alternate Base Rate Margin for Revolving Loans and Tranche A Term
Loans", (ii) Revolving Loans and Tranche A Term Loans which are LIBOR Rate Loans
shall be the percentage set forth under the column "LIBOR Rate Margin for
Revolving Loans, Tranche A Term Loans and Letter of Credit Fee", (iii) Tranche B
Term Loans which are Alternate Base Rate Loans shall be the percentage set forth
under the column "Alternate Base Rate Margin for Tranche B Term Loans", (iv)
Tranche B Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Tranche B Term Loans", (v) the
Letter of Credit Fee shall be the percentage set forth under the column "LIBOR
Rate Margin for Revolving Loans, Tranche A Term Loans and Letter of Credit Fee",
and (vi) the Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":
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Alternate LIBOR Rate
Base Rate Margin for
Margin for Revolving LIBOR
Revolving Loans, Alternate Rate
Loans and Tranche A Base Rate Margin for
Tranche A Term Loans Margin for Tranche B
Leverage Term and Letter of Tranche B Term Commitment
Level Ratio Loans Credit Fee Term Loans Loans Fee
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I GREATER THAN OR EQUAL TO 1.75% 3.25% 2.25% 3.75% .50%
5.00 to 1.0
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II LESS THAN 5.00 to 1.0 but 1.50% 3.00% 2.25% 3.75% .50%
GREATER THAN OR EQUAL TO
4.50 to 1.0
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III LESS THAN 4.50 to 1.0 but 1.25% 2.75% 2.25% 3.50% .50%
GREATER THAN OR EQUAL TO
4.00 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
IV LESS THAN 4.00 to 1.0 but 1.00% 2.50% 2.25% 3.50% .50%
GREATER THAN OR EQUAL TO
3.50 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
V LESS THAN 3.50 to 1.0 .75% 2.25% 2.25% 3.50% .50%
---------------------------------------------------------------------------------------------------------------------------------
3
The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on which
the Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(b) and
5.2(b) (each an "INTEREST DETERMINATION DATE"). Such Applicable Percentage shall
be effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages shall be based on Level I
until the first Interest Determination Date occurring after September 30, 1999.
After the Closing Date, if the Borrower shall fail to provide the quarterly
financial information and certifications in accordance with the provisions of
Sections 5.1(b) and 5.2(b), the Applicable Percentage from such Interest
Determination Date shall, on the date five (5) Business Days after the date by
which the Borrower was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be based on Level I
until such time as such information and certifications are provided, whereupon
the Level shall be determined by the then current Leverage Ratio.
"ASSET DISPOSITION" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) Specified Sales, (ii) the sale, lease or transfer of
assets permitted by Section 6.5(a)(iii) or (iv) hereof, or (iii) any Equity
Issuance.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"BORROWER" shall have the meaning set forth in the first paragraph of
this Agreement.
"BORROWING BASE" shall mean the sum of (i) 85% of Eligible Receivables
PLUS (ii) 50% of Eligible Inventory.
"BORROWING BASE CERTIFICATE" shall mean a borrowing base certificate
substantially in the form of SCHEDULE 5.2(f).
"BORROWING DATE" shall mean, in respect of any Loan, the date such Loan
is made.
"BUSINESS" shall have the meaning set forth in Section 3.10.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; PROVIDED, HOWEVER, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
4
"CAPITAL LEASE" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
CAPITAL LEASE OBLIGATIONS" shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"CAPITAL STOCK" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof (any such bank being an
"APPROVED BANK"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within one year of the date of acquisition, (iv)
repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) the failure of the Sponsors or one or more of their Affiliates to
maintain beneficial ownership, directly or indirectly, of Voting Stock of the
Borrower representing at least 51% of the combined voting power of all Voting
Stock of the Borrower, (b) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership, directly or indirectly, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their acquisition of
control over, Voting Stock of the Borrower (or other securities convertible into
such Voting Stock) representing 33% or more of
5
the combined voting power of all Voting Stock of the Borrower, (c) the failure
of the Borrower to own, directly or indirectly, 100% of the combined voting
power of all Voting Stock of Power Circuits, Inc. or (d) Continuing Directors
shall cease for any reason to constitute a majority of the members of the board
of directors of the Parent then in office. As used herein, "beneficial
ownership" shall have the meaning provided in Rule l3d-3 of the Securities and
Exchange Commission promulgated under the Securities Exchange Act of 1934.
"CLOSING DATE" shall mean the date of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.
"COMMITMENT" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment, the Tranche A Term Loan Commitment and the Tranche B
Term Loan Commitment, individually or collectively, as appropriate.
"COMMITMENT FEE" shall have the meaning set forth in Section 2.6(a).
"COMMITMENT PERCENTAGE" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage, the Tranche A Term Loan Commitment Percentage
and/or the Tranche B Term Loan Commitment Percentage, as appropriate.
"COMMITMENT PERIOD" shall mean the period from and including the
Funding Date to but not including the Revolving Commitment Termination Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(c).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all capital
expenditures of the Borrower and its Subsidiaries on a consolidated basis for
such period, as determined in accordance with GAAP. The term "Consolidated
Capital Expenditures" shall not include capital expenditures in respect of the
reinvestment of proceeds derived from (i) Recovery Events or (ii) a sale of
assets pursuant to Section 6.5(a)(ii) received by the Borrower and its
Subsidiaries to the extent that such reinvestment is permitted under the Credit
Documents.
"CONSOLIDATED EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state,
6
local and foreign income, value added and similar taxes, (C) losses (or MINUS
gains) on the sale or disposition of assets outside the ordinary course of
business, (D) depreciation, amortization expense and other non-cash charges,
all as determined in accordance with GAAP, (E) amounts paid in respect of
management fees to the extent permitted hereunder and (F) other non-recurring
add-backs as set forth on SCHEDULE 1.1(d) PROVIDED THAT, notwithstanding the
foregoing, in the event such period includes the fourth fiscal quarter of
1998 and/or the first fiscal quarter of 1999, Consolidated EBITDA for such
fiscal quarters shall be the amounts set forth on SCHEDULE 1.1(d).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, all cash
interest expense of the Borrower and its Subsidiaries (including, without
limitation, the interest component under Capital Leases and the interest
component of deferred compensation under the Retention Bonus Plan), as
determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, net income (excluding
extraordinary items) after taxes for such period of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" shall mean, at any time, the excess of
(i) current assets (excluding cash) of the Borrower and its Subsidiaries on a
consolidated basis at such time less (ii) current liabilities (including the
Credit Party Obligations, but excluding the sum of (a) the current portion of
long term Indebtedness, PLUS (b) accrued and unpaid interest on Indebtedness,
PLUS (c) non-cash accruals under the Retention Bonus Plan) of the Borrower and
its Subsidiaries on a consolidated basis at such time, all as determined in
accordance with GAAP.
"CONTINUING DIRECTORS" means either during any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Parent (together with
any new director whose election by the Parent's board of directors or whose
nomination for election by the Parent's shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved).
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CREDIT DOCUMENTS" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Letters of Credit, LOC Documents and the Security
Documents.
"CREDIT PARTY" shall mean any of the Borrower or the Guarantors.
"CREDIT PARTY OBLIGATIONS" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a filing of a petition of
7
bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code) and (ii) all liabilities and obligations, whenever arising, owing from the
Borrower or any of its Subsidiaries to any Lender, or any Affiliate of a Lender,
arising under any Hedging Agreement.
"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for
borrowed money by the any Credit Party or any of its Subsidiaries (excluding,
for purposes hereof, any Equity Issuance or any Indebtedness of the Borrower and
its Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).
"DEFAULT" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"DEFAULTING LENDER" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on SCHEDULE
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"ELIGIBLE INVENTORY" means, as of the date of determination, the gross
dollar value (valued at the lower of cost (on a FIFO basis) or fair market
value) of all finished goods and raw materials inventory of the Borrower and its
Subsidiaries LESS appropriate reserves determined in accordance with GAAP
applied on a consistent basis, BUT EXCLUDING in any event (i) inventory subject
to a Lien other than a Permitted Lien, (ii) inventory upon which the
Administrative Agent does not have a perfected security interest, (iii)
inventory which fails to meet standards for sale or use imposed by Governmental
Authorities having regulatory authority over such inventory or its use or sale,
(iv) inventory which is not useable or saleable at prices approximating their
cost (after taking into account, without duplication, the amount of any reserves
for obsolescence, unsaleability or decline in value), (v) inventory which is
leased or on consignment and (vi) packaging materials, supplies and work in
process.
8
"ELIGIBLE RECEIVABLES" means, as of any date of determination and
without duplication, the aggregate book value of all accounts receivable,
receivables, and obligations for payment created or arising from the sale of
inventory or the rendering of services in the ordinary course of business
(collectively, the "RECEIVABLES"), owned by or owing to the Borrower and its
Subsidiaries, net of allowances and reserves for doubtful or uncollectible
accounts and sales adjustments consistent with the Borrower's internal policies
and in any event in accordance with GAAP, net of accrued incentive amounts
(until such time as the Administrative Agent has determined to its satisfaction
that such incentive could not be used as an offset to the applicable
Receivable), but excluding in any event (i) Receivables subject to any Lien,
other than any Permitted Lien, (ii) Receivables upon which the Administrative
Agent does not have a perfected security interest, (iii) Receivables which are
more than 90 days from the date of invoice (net of reserves for bad debts in
connection with any such Receivables but before giving effect to any applicable
credit), (iv) any Receivable not otherwise excluded by clause (iii) above but
owing from an account debtor which is the account debtor on existing Receivables
more than 50% of which are then excluded by such clause (iii), unless the
exclusion by such clause (iii) is a result of a legitimate dispute by the
account debtor and the applicable Receivables are no more than 90 days from the
date of invoice, (v) Receivables evidenced by notes, chattel paper or other
instruments, unless (a) such notes, chattel paper or instruments have been
delivered to and are in the possession of the Administrative Agent or (b) the
aggregate amount of the Receivables evidenced thereby is not greater than
$50,000, (vi) Receivables owing by an account debtor which is subject to any
bankruptcy or insolvency proceeding of any kind, (vii) Receivables owing by an
account debtor located outside of the United States (unless (a) payment for the
goods shipped is either (A) covered by credit insurance in form and substance
acceptable to the Administrative Agent or (B) secured by an irrevocable letter
of credit in a form and from an institution reasonably acceptable to the
Administrative Agent or (b) such receivables are owing by an account debtor
which is majority owned by a parent domiciled in the United States and with
respect to which such parent has an "investment grade" senior debt credit rating
by each of S&P and ▇▇▇▇▇'▇ provided that such receivables shall not be Eligible
Receivables to the extent they exceed an aggregate amount of $1,500,000 at any
time), (viii) Receivables which are contingent or subject to offset, deduction,
counterclaim, credit, dispute or other defense to payment, in each case to the
extent of such offset, deduction, counterclaim, dispute or other defense, (ix)
Receivables for which any direct or indirect Subsidiary of the Borrower or any
Affiliate of the Borrower is the account debtor, (x) Receivables representing a
sale to the government of the United States of America or any subdivision
thereof unless the Borrower or its Subsidiaries, as applicable have complied (to
the satisfaction of the Administrative Agent), with respect to the granting of a
security interest in such Receivable, with the Federal Assignment of Claims Act
or other similar applicable law and (xi) Receivables (if any) created in
connection with any sale where payment is due on delivery of inventory sold.
"ENVIRONMENTAL LAWS" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
9
"EQUITY ISSUANCE" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity. The term "Equity Issuance" shall
not include any Asset Disposition or any Debt Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"EVENT OF DEFAULT" shall mean any of the events specified in
Section 7.1; PROVIDED, HOWEVER, that any requirement for the giving of notice
or the lapse of time, or both, or any other condition, has been satisfied.
"EXCESS CASH FLOW" means, with respect to any fiscal year period of the
Borrower and its Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period PLUS (b) decreases (or minus increases) in
Consolidated Working Capital for such period MINUS (c) Consolidated Capital
Expenditures for such period MINUS (d) optional prepayments made pursuant to
Section 2.8 MINUS (e) Scheduled Funded Debt Payments made during such period
MINUS (f) Consolidated Interest Expense MINUS (g) amounts paid in respect of
federal, state, local and foreign income, value added and similar taxes with
respect to such period.
"EXTENSION OF CREDIT" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEE LETTER" shall mean the letter agreement dated June 17, 1999
addressed to the Borrower from the Administrative Agent, as amended, modified or
otherwise supplemented.
"FIRST UNION" shall mean First Union National Bank, a national banking
association.
"FIXED CHARGE COVERAGE RATIO" means, as of the end of each fiscal
quarter of the Borrower, for the Borrower and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, the ratio of (i)
Consolidated EBITDA for the applicable period MINUS Consolidated Capital
Expenditures for the applicable period to (ii) the sum of Consolidated Interest
Expense for the applicable period PLUS Scheduled Funded Debt Payments
10
for the applicable period PLUS cash taxes paid during the applicable period. For
purposes hereof, the Consolidated Interest Expense and the Scheduled Funded Debt
Payment components of the Fixed Charge Coverage Ratio for the first three
complete fiscal quarters to occur after the Closing Date shall be determined by
annualizing the Consolidated Interest Expense and the Scheduled Funded Debt
Payment components such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three fiscal quarters would be multiplied by one AND ONE-THIRD (1 %).
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis, without duplication, (a) all Indebtedness
of such Person other than Indebtedness of the types referred to in clause (e),
(f), (i) and (l) of the definition of "Indebtedness" set forth in this Section
1. 1, (b) all Funded Debt of others of the type referred to in clause (a) above
secured by (or for which the holder of such Funded Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Funded Debt of the type referred to
in clause (a) above of another Person, (d) Funded Debt of the type referred to
in clause (a) above of any partnership or unincorporated joint venture in which
such Person is legally obligated or has a reasonable expectation of being liable
with respect thereto, and (e) the full amount of all obligations under the
Subordinated Notes and the Retention Bonus Plan measured as of the maturity
dates of such obligations and not on a present value basis.
"FUNDING DATE" shall mean the date upon which the conditions in Section
4.2 shall have been satisfied and the initial Extensions of Credit shall have
been made by the Lenders.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, SUBJECT, HOWEVER, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"GOVERNMENT ACTS" shall have the meaning set forth in Section 2.20.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTY OBLIGATIONS' means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other
11
balance sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar agreements
or arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or Services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"GUARANTOR" shall mean the Parent and any of the Domestic Subsidiaries
identified as a "Guarantor" on the signature pages hereto and the Additional
Credit Parties which execute a Joinder Agreement, together with their successors
and permitted assigns.
"GUARANTY" shall mean the guaranty of the Guarantors set forth in
Article X.
"HEDGING AGREEMENTS" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of such
Person issued or assumed as the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all obligations of such Person under take-or-pay or similar arrangements
or under commodities agreements, (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements,
(j) the maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (k)
all preferred Capital Stock issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject
to mandatory sinking fund payments, redemption or other acceleration, (l) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product, (m) the Indebtedness of any partnership or
12
unincorporated joint venture in which such Person is a general partner or a
joint venturer, and (n) with respect to the Borrower, obligations owing under
the Retention Bonus Plan.
"INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"INSOLVENT" shall mean being in a condition of Insolvency.
"INTEREST COVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower and its Subsidiaries, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period. Notwithstanding the foregoing, for purposes of calculating the
Interest Coverage Ratio of the Borrower and its Subsidiaries for the first three
complete fiscal quarters to occur after the Closing Date, Consolidated Interest
Expense shall be determined by annualizing the components thereof such that for
the first complete fiscal quarter to occur after the Closing Date such
components would be multiplied by four (4), the first two complete fiscal
quarters would be multiplied by two (2) and the first three complete fiscal
quarters would be multiplied by one and one-third (1 1/3).
"INTEREST DETERMINATION DATE" shall have the meaning assigned thereto
in the definition of "Applicable Percentage".
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last day of each March, June, September and December
and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Rate Loan having an Interest Period longer than three
months, each day which is three months after the first day of such Interest
Period and the last day of such Interest Period.
"INTEREST PERIOD" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in the notice of borrowing or notice of conversion
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
PROVIDED that the foregoing provisions are subject to the
following:
13
(A) if any Interest Period pertaining to a LIBOR Rate
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
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 Business Day;
(B) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar
month;
(C) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected
an Alternate Base Rate Loan to replace the affected LIBOR Rate
Loan;
(D) any Interest Period in respect of any Loan that
would otherwise extend beyond the applicable Maturity Date
and, further with regard to the Tranche A Term Loans and the
Tranche B Term Loans, no Interest Period shall extend beyond
any principal amortization payment date unless the portion of
such Tranche A Term Loan or Tranche B Term Loan consisting of
Alternate Base Rate Loans together with the portion of such
Tranche A Term Loan and Tranche B Term Loan consisting of
LIBOR Rate Loans with Interest Periods expiring prior to or
concurrently with the date such principal amortization payment
date is due, is at least equal to the amount of such principal
amortization payment due on such date; and
(E) no more than six (6) LIBOR Rate Loans may be in
effect at any time. For purposes hereof, LIBOR Rate Loans with
different Interest Periods shall be considered as separate
LIBOR Rate Loans, even if they shall begin on the same date
and have the same duration, although borrowings, extensions
and conversions may, in accordance with the provisions hereof,
be combined at the end of existing Interest Periods to
constitute a new LIBOR Rate Loan with a single Interest
Period.
"ISSUING LENDER" shall mean First Union.
"ISSUING LENDER Fees" shall have the meaning set forth in Section
2.6(c).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of SCHEDULE 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"LENDER" shall have the meaning set forth in the first paragraph of
this Agreement.
14
"LETTERS OF CREDIT" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be
amended, modified, extended, renewed or replaced from time to time.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.6(b).
"LEVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis on the last day of such period to (b)
Consolidated EBITDA for such twelve month period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR RATE" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR RATE LOAN" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
15
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"LOAN" shall mean a Revolving Loan, a Swingline Loan, the Tranche A
Term Loan and/or the Tranche B Term Loan as appropriate.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in SCHEDULE 2.1 (a), as such amount
may be reduced from time to time in accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.1 (a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in Letters
of Credit as referenced in Section 2.4 and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.1 (a).
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC OBLIGATIONS" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit PLUS (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"MANDATORY BORROWING" shall have the meaning set forth in Section
2.5(b)(ii) or Section 2.3(b)(ii), as the context may require.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower
or any Guarantor to perform its obligations, when such obligations are required
to be performed, under this Agreement, any of the Notes or any other Credit
Document to which it is a party or (c) the validity or enforceability of this
Agreement, any
16
of the Notes or any of the other Credit Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.
"MATERIAL CONTRACT" shall mean any contract or other arrangement,
whether written or oral, to which the Borrower or any of its Subsidiaries is a
party as to which the breach, nonperformance, cancellation or failure to renew
by any party thereto could reasonably be expected to have a Material Adverse
Effect.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, friable
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" shall mean (i) with respect to the Tranche A Term Loan,
the last scheduled quarterly payment date for the Tranche A Term Loan set forth
in Section 2.2(b), (ii) with respect to the Tranche B Term Loan, the last
scheduled quarterly payment date for the Tranche B Term Loan set forth in
Section 2.3(b) and (iii) with respect to the Revolving Loans, the Revolving
Commitment Termination Date.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGE INSTRUMENTS" shall have the meaning set forth in Section
4.2(c)(i).
"MORTGAGE POLICIES" shall have the meaning set forth in Section
4.2(c)(iii).
"MORTGAGED PROPERTIES" shall have the meaning set forth in Section
4.2(c)(i).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean the aggregate cash proceeds received by
any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs (including, without
limitation, reasonable and customary legal, accounting, brokerage commissions,
finder's fees and investment banking fees, and sales commissions and other
similar fees and commissions), (b) taxes paid or payable as a result thereof and
(c) the amount of any Indebtedness secured by a Lien in such asset that is
required to be repaid upon such disposition; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by the Borrower or any
Subsidiary in any Asset Disposition, Equity Issuance or Debt Issuance.
"NOTE" or "NOTES" shall mean the Revolving Notes, the Swingline Note,
the Tranche A Term Notes and/or the Tranche B Term Notes, collectively,
separately or individually, as appropriate.
17
"NOTICE OF BORROWING" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as appropriate.
"NOTICE OF CONVERSION" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.11.
"OBLIGATIONS" shall mean, collectively, Loans and LOC Obligations.
"PARENT" shall mean Circuit Holdings, L.L.C.
"PARTICIPANT" shall have the meaning set forth in Section 9.6(b).
"PARTICIPATION Interest" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.4.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED INVESTMENTS" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its
Subsidiaries or any receivables and advances to suppliers, in each
case if created, acquired or made in the ordinary course of business
and payable or dischargeable in accordance with Customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed $1,000,000 at any
time outstanding;
(v) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(vi) investments, acquisitions or transactions permitted under
Section 6.5(b);
(vii) additional loan advances and/or investments of a nature
not contemplated by the foregoing clauses hereof, PROVIDED that such
loans, advances and/or investments made pursuant to this clause (vii)
shall not exceed an aggregate amount of $100,000;
(viii) investments existing on the date hereof and set forth
on SCHEDULE 1.1(c);
18
(ix) investments by the Borrower in Hedge Agreements permitted
under Section 6.1(e); and
(x) investments consisting of intercompany debt permitted
under Section 6.1(d).
As used herein, "INVESTMENT" means all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"PERMITTED LIENS" shall mean:
(i) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor
of the Lenders;
(ii) Liens in favor of a Lender hereunder in connection with
Hedging Agreements, but only (A) to the extent such Liens secure
obligations under Hedging Agreements with any Lender, or any Affiliate
of a Lender, (B) to the extent such Liens are on the same collateral
as to which the Administrative Agent on behalf of the Lenders also has
a Lien and (C) if such provider and the Lenders shall share PARI PASSU
in the collateral subject to such Liens;
(iii) purchase money Liens securing purchase money
indebtedness (and refinancings thereof) to the extent permitted under
Section 6.1(c);
(iv) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of grace
(not to exceed 60 days), if any, related thereto has not expired or
which are being contested in good faith by appropriate proceedings,
PROVIDED that adequate reserves with respect thereto are maintained on
the books of the Borrower or its Subsidiaries, as the case may be, in
conformity with GAAP (or, in the case of Subsidiaries with significant
operations outside of the United States of America, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(vi) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements;
19
(vii) deposits to secure the performance of bids, trade
contracts, (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses; PROVIDED that such
extension, renewal or replacement Lien shall be limited to all or a
part of the property which secured the Lien so extended, renewed or
replaced (plus improvements on such property);
(ix) Liens existing on the Closing Date and set forth on
SCHEDULE 1.1(b); provided that (a) no such Lien shall at any time be
extended to cover property or assets other than the property or assets
subject thereto on the Closing Date and (b) the principal amount of
the Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced;
(x) Liens arising in connection with Capitalized Leases to the
extent permitted under SECTION 6.1(c);
(xi) Liens on property of a Person existing at the time such
Person is acquired, merged into or consolidated with the Borrower or
any Subsidiary of the Borrower so long as such Liens were not created
in contemplation of such acquisition, merger or consolidation;
(xii) Liens set forth in Exhibit B to the real property title
reports set forth on SCHEDULE 1.1(b);
(xiii) any attachment or judgment Lien the existence of which,
individually or in the aggregate, does not result in an Event of
Default under Section 7.1(f); and
(xiv) other Liens securing debt outstanding in an aggregate
principal amount not to exceed $250,000.
"Person" shall mean an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"PLAN" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of the
Closing Date to be executed in favor of the Administrative Agent by the Borrower
and each of the other Credit Parties, as amended, modified, restated or
supplemented from time to time.
20
"PRIME RATE" shall have the meaning set forth in the definition of
Alternate Base Rate.
"PROPERTIES" shall have the meaning set forth in Section 3.10(a).
"PURCHASING LENDERS" shall have the meaning set forth in Section
9.6(c).
"RECOVERY EVENT" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"REGISTER" shall have the meaning set forth in Section 9.6(d).
"REORGANIZATION" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.
"REQUIRED LENDERS" means, at any time, (i) Lenders which are then in
compliance with their obligations hereunder (as determined by the Administrative
Agent) and holding in the aggregate at least 51% of the Revolving Commitments
(and Participation Interests therein) and the outstanding Tranche A Term Loans
(and Participation Interests therein) or if the Commitments have been
terminated, the outstanding Revolving Loans and Tranche A Term Loans and
Participation Interests (including the Participation Interests of the Issuing
Lender in any Letters of Credit and of the Swingline Lender in any Swingline
Loans) and (ii) Lenders which are then in compliance with their obligations
hereunder (as determined by the Administrative Agent) and holding in the
aggregate at least 51% of the Tranche B Term Loans (and Participation
Interests therein) or if the Commitments have been terminated, the outstanding
Tranche B Term Loans and Participation Interests.
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" shall mean, as to (a) the Borrower, the President
and the Chief Executive Officer or the Chief Financial Officer or (b) any other
Credit Party, any duly authorized officer thereof.
21
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of the Borrower or any of its Subsidiaries, now or hereafter outstanding,
or (d) any payment or prepayment of principal of, premium, if any, or interest
on, redemption, purchase, retirement, defeasance, sinking fund or similar
payment with respect to, any Subordinated Notes.
"RETENTION BONUS PLAN" shall mean that certain plan of the Borrower
dated as of December 15, 1998 for the purpose of providing certain designated
employees of the Borrower with an ongoing incentive to remain in the employ of
the Borrower as implemented pursuant to that certain Recapitalization and Stock
Purchase Agreement dated as of December 15, 1998 among the Parent, the Borrower
and certain other parties thereto.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount as
specified in SCHEDULE 2.1(a), as such amount may be reduced from time to time
in accordance with the provisions hereof.
"REVOLVING COMMITMENT PERCENTAGE" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made
in accordance with the provisions of Section 9.6(c).
"REVOLVING COMMITMENT TERMINATION DATE" shall mean June 30, 2004.
"REVOLVING COMMITTED AMOUNT" shall mean, collectively, the aggregate
amount of all Revolving Commitments as referenced in Section 2.1(a), as such
amount may be reduced from time to time in accordance with the provisions
hereof, and, individually, the amount of each Lender's Revolving Commitment as
specified on SCHEDULE 2.1(a).
"REVOLVING LOANS" shall have the meaning set forth in Section 2.1.
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of any date of
determination for the Borrower and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt
22
for the applied period ending on the date of determination (including the
principal component of payments due on Capital Leases during the applicable
period ending on the date of determination).
"SECURITY AGREEMENT" shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered in connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
"SENIOR FUNDED DEBT" shall mean any Indebtedness not specifically
subordinated in right of payment to the Credit Party Obligations.
"SENIOR LEVERAGE RATIO" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Senior Funded Debt of the
Borrower and its Subsidiaries on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such twelve month period.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is not a Multiemployer
Plan.
"SPECIFIED SALES" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business, (b)
the sale, transfer or other disposition of Permitted Investments described in
clause (i) of the definition thereof and (c) the sale of certain real property
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ provided that (i) such sale is
consummated within 180 days of the Funding Date, (ii) the consideration for such
sale shall be cash only and (iii) only $500,000 of such net proceeds shall be
excluded from the prepayment obligations set forth in Section 2.8(b)(ii).
"SPONSORS" shall mean a collective reference to each of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
& Partners Fund L.P. and ▇▇▇▇▇▇ Equity Investors IV, L.P.
"SUBORDINATED DEBT" shall mean (a) the Subordinated Notes and (b) any
other Indebtedness incurred by any Credit Party which by its terms is
specifically subordinated in right of payment to the prior payment of the Credit
Party Obligations.
"SUBORDINATED NOTES" shall mean collectively, (a) that certain
subordinated note dated December 15, 1998 in the amount of $51,043.65 from the
Borrower to The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust No. 2, (b) that certain Subordinated Note
dated December 15, 1998 in the amount of $51,043.65 from the Borrower to The ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Trust No. 2, (c) that certain subordinated note dated December 15,
1998 in the amount of $3,547,912.70 from the Borrower to ▇▇▇▇▇ 0. ▇▇▇▇▇, III,
(d) that certain subordinated note dated December 15, 1998 in the amount of
$350,000.00 from the Borrower to ▇▇▇▇▇ ▇▇▇▇▇▇ and (e) the TCW/Crescent Mezzanine
Notes.
23
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.5(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"SWINGLINE COMMITTED AMOUNT" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.5(a).
"SWINGLINE LENDER" shall mean First Union, in its capacity as such.
"SWINGLINE LOAN" or "SWINGLINE LOANS" shall have the meaning set forth
in Section 2.5(a).
"SWINGLINE NOTE" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.5(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"TAXES" shall have the meaning set forth in Section 2.19.
"TCW/CRESCENT MEZZANINE NOTES" shall mean those certain senior
subordinated notes dated as of the Closing Date in the aggregate amount of
$12,500,000, from the Borrower to TCW/Crescent Mezzanine Partners II, L.P. and
its Affiliates.
"TRANCHE A TERM LOAN" shall have the meaning set forth in Section
2.2(a).
"TRANCHE A TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche A Term
Loan in a principal amount equal to such Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche A Term Loan).
24
"TRANCHE A TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender,
the percentage identified as its Tranche A Term Loan Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.
"TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.2(a).
TRANCHE A TERM NOTE" or "TRANCHE A TERM NOTES" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche A Term Loan provided pursuant to Section 2.2(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.
"TRANCHE B TERM LOAN" shall have the meaning set forth in Section 2.3
(a).
"TRANCHE B TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche B Term
Loan in a principal amount equal to such Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan Committed Amount (and for purposes of
making determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Tranche B Term Loan).
"TRANCHE B TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender,
the percentage identified as its Tranche B Term Loan Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.
"TRANCHE B TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.3(a).
"TRANCHE B TERM NOTE" or "TRANCHE B TERM NOTES" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche B Term Loan provided pursuant to Section 2.3(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.
"TRANCHE" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"TRANSFER EFFECTIVE DATE" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.19 CERTIFICATE" shall have the meaning set forth in Section 2.19.
25
"TYPE" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan or Swingline Loan, as the case may be.
"VOTING STOCK" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"YEAR 2000 COMPLIANT" shall have the meaning set forth in Section 3.25.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined meanings when used in the
Notes or other Credit Documents or any certificate or other document
made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
PROVIDED that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a
26
reasonable estimate of the effect on the financial statements on account of such
changes in application.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
SECTION 2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("REVOLVING LOANS") to the
Borrower from time to time for the purposes hereinafter set forth;
PROVIDED, HOWEVER, that (i) with regard to each Lender individually,
the sum of such Lender's share of outstanding Revolving Loans PLUS such
Lender's Revolving Commitment Percentage of Swingline Loans PLUS such
Lender's LOC Commitment Percentage of LOC Obligations shall not exceed
such Lender's Revolving Commitment Percentage of the aggregate
Revolving Committed Amount, and (ii) with regard to the Lenders
collectively, the sum of the aggregate amount of outstanding Revolving
Loans PLUS Swingline Loans PLUS LOC Obligations shall not exceed the
lesser of (A) the Revolving Committed Amount and (B) the Borrowing
Base. For purposes hereof, the aggregate amount available hereunder
shall be FIFTEEN MILLION DOLLARS ($15,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in Section
2.6, the "REVOLVING COMMITTED AMOUNT"). Revolving Loans may consist of
Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed
in accordance with the provisions hereof. Notwithstanding any provision
herein to the contrary, provided that each of the Lenders shall be able
to provide LIBOR Rate Loans having an Interest Period of fourteen (14)
days, (x) the initial LIBOR borrowings under Section 2.1 shall be made
as LIBOR Rate Loans having an Interest Period of fourteen (14) days and
(y) subsequent to such initial LIBOR Rate Loan borrowings but prior to
the earlier to occur of (I) the closing of the initial syndication of
the Commitment and (II) the sixtieth (60th) day following the Funding
Date, all LIBOR Rate Loans under Section 2.1 shall be continued, at the
Borrower's election, as LIBOR Rate Loans having an Interest Period of
fourteen (14) days. All LIBOR Rate Loans having an Interest Period of
fourteen (14) days shall bear interest at the same rate as LIBOR Rate
Loans having an Interest Period of one month. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base Rate
Loans at its Domestic Lending Office.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall
request a Revolving Loan borrowing by written notice (or
telephone notice promptly confirmed in writing which
confirmation may be by fax) to the Administrative Agent not
later than 1:00 P.M. (Charlotte, North Carolina time) on the
Business Day prior to the
27
date of requested borrowing in the case of Alternate Base Rate
Loans, and on the third Business Day prior to the date of the
requested borrowing in the case of LIBOR Rate Loans. Each such
request for borrowing shall be irrevocable and shall specify
(A) that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, (D) whether the
borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. A form
of Notice of Borrowing (a "NOTICE OF BORROWING") is attached
as SCHEDULE 2.1(b)(i). If the Borrower shall fail to specify
in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a LIBOR Rate Loan, then such notice
shall be deemed to be a request for an Interest Period of one
month, or (II) the type of Revolving Loan requested, then such
notice shall be deemed to be a request for an Alternate Base
Rate Loan hereunder. The Administrative Agent shall give
notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender's share
thereof.
(ii) MINIMUM AMOUNTS. Each Revolving Loan
borrowing shall be in a minimum aggregate amount of (A) with
respect to LIBOR Rate Loans, $1,000,000 and integral multiples
of $500,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less) and (B) with respect to
Alternate Base Rate Loans, $500,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the
Revolving Committed Amount, if less).
(iii) ADVANCES. Each Lender will make its
Revolving Commitment Percentage of each Revolving Loan
borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative
Agent specified in SCHEDULE 9.2, or at such other office as
the Administrative Agent may designate in writing, by 3:00
P.M. (Charlotte, North Carolina time) on the date specified in
the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower
on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Lenders and
in like funds as received by the Administrative Agent.
(c) REPAYMENT. The principal amount of all Revolving
Loans shall be due and payable in full on the Revolving Commitment
Termination Date.
(d) INTEREST. Subject to the provisions of Section 2.10,
Revolving Loans shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such
periods as Revolving Loans shall be comprised of Alternate
Base Rate Loans, each such Alternate Base
28
Rate Loan shall bear interest at a per annum rate equal to the
sum of the Alternate Base Rate PLUS the Applicable Percentage;
and
(ii) LIBOR RATE LOANS. During such periods as
Revolving Loans shall be comprised of LIBOR Rate Loans, each
such LIBOR Rate Loan shall bear interest at a per annum rate
equal to the sum of the LIBOR Rate PLUS the Applicable
Percentage.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) REVOLVING NOTES. Each Lender's Revolving Commitment
Percentage of the Revolving Loans shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in substantially the
form of SCHEDULE 2.1(e).
SECTION 2.2 TRANCHE A TERM LOAN FACILITY.
(a) TRANCHE A TERM LOAN. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower on the Funding Date such Lender's Tranche A
Term Loan Commitment Percentage of a term loan in Dollars (the "TRANCHE
A TERM LOAN") in the aggregate principal amount of THIRTY-SEVEN MILLION
FIVE HUNDRED THOUSAND DOLLARS ($37,500,000) (the "TRANCHE A TERM LOAN
COMMITTED AMOUNT") for the purposes hereinafter set forth. The Tranche
A Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as the Borrower may request.
Notwithstanding any provision herein to the contrary, provided that
each of the Lenders shall be able to provide LIBOR Rate Loans having an
Interest Period of fourteen (14) days, (x) the initial LIBOR borrowings
under Section 2.2 shall be made as LIBOR Rate Loans having an Interest
Period of fourteen (14) days and (y) subsequent to such initial LIBOR
Rate Loan borrowings but prior to the earlier to occur of (I) the
closing of the initial syndication of the Commitment and (II) the
sixtieth (60th) day following the Funding Date all LIBOR Rate Loans
under Section 2.2 shall be continued, at the Borrower's election, as
LIBOR Rate Loans having an Interest Period of fourteen (14) days. All
LIBOR Rate Loans having an Interest Period of fourteen (14) days shall
bear interest at the same rate as LIBOR Rate Loans having an Interest
Period of one month. The Borrower shall request the initial Tranche A
Term Loan borrowing by written notice (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 1:00 P.M. (Charlotte, North
Carolina time) on the Business Day prior to the date of requested
borrowing. LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office. Amounts repaid on the Tranche A Term Loan may not be
reborrowed.
(b) REPAYMENT OF TRANCHE A TERM LOAN. The principal
amount of the Tranche A Term Loan shall be repaid in twenty (20)
consecutive fiscal quarterly installments as follows, unless
accelerated sooner pursuant to Section 7.2:
29
---------------------------------------------------------------
PRINCIPAL TRANCHE A TERM
AMORTIZATION LOAN PRINCIPAL
PAYMENT DATES AMORTIZATION
PAYMENT
---------------------------------------------------------------
September 30, 1999 $468,750
---------------------------------------------------------------
December 31, 1999 $468,750
---------------------------------------------------------------
March 31, 2000 $468,750
---------------------------------------------------------------
June 30, 2000 $468,750
---------------------------------------------------------------
September 30, 2000 $937,500
---------------------------------------------------------------
December 31, 2000 $937,500
---------------------------------------------------------------
March 31, 2001 $937,500
---------------------------------------------------------------
June 30, 2001 $937,500
---------------------------------------------------------------
September 30, 2001 $1,875,000
---------------------------------------------------------------
December 31, 2001 $1,875,000
---------------------------------------------------------------
March 31, 2002 $1,875,000
---------------------------------------------------------------
June 30, 2002 $1,875,000
---------------------------------------------------------------
September 30, 2002 $2,812,500
---------------------------------------------------------------
December 31, 2002 $2,812,500
---------------------------------------------------------------
March 31, 2003 $2,812,500
---------------------------------------------------------------
June 30, 2003 $2,812,500
---------------------------------------------------------------
September 30, 2003 $3,281,250
---------------------------------------------------------------
December 31, 2003 $3,281,250
---------------------------------------------------------------
March 31, 2004 $3,281,250
---------------------------------------------------------------
June 30, 2004 $3,281,250
---------------------------------------------------------------
(c) INTEREST ON THE TRANCHE A TERM LOAN. Subject to the
provisions of Section 2.10, the Tranche A Term Loan shall bear
interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such
periods as the Tranche A Term Loan shall be comprised of
Alternate Base Rate Loans, each such Alternate Base Rate Loan
shall bear interest at a per annum rate equal to the sum of
the Alternate Base Rate PLUS the Applicable Percentage; and
30
(ii) LIBOR RATE LOANS. During such periods as the Tranche A
Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
Loan shall bear interest at a per annum rate equal to the sum of
the LIBOR Rate PLUS the Applicable Percentage.
Interest on the Tranche A Term Loan shall be payable in
arrears on each Interest Payment Date.
(d) TRANCHE A TERM NOTES. Each Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan outstanding as of the Closing Date shall
be evidenced by a duly executed promissory note of the Borrower to such Lender
in substantially the form of SCHEDULE 2.2(d).
SECTION 2.3 TRANCHE B TERM LOAN FACILITY.
(a) TRANCHE B TERM LOAN. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower on the Funding Date
such Lender's Tranche B Term Loan Commitment Percentage of a term loan in
Dollars (the "TRANCHE B TERM LOAN") in the aggregate principal amount of
SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (the "TRANCHE B TERM LOAN COMMITTED
AMOUNT") for the purposes hereinafter set forth. The Tranche B Term Loan may
consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request. Notwithstanding any provision herein to
the contrary, provided that each of the Lenders shall be able to provide LIBOR
Rate Loans having an Interest Period of fourteen (14) days, (x) the initial
LIBOR borrowings under Section 2.3 shall be made as LIBOR Rate Loans having an
Interest Period of fourteen (14) days and (y) subsequent to such initial LIBOR
Rate Loan borrowings but prior to the earlier to occur of (I) the closing of the
initial syndication of the Commitment and (II) the sixtieth (60th) day following
the Funding Date. All LIBOR Rate Loans under Section 2.3 shall be continued, at
the Borrower's election, as LIBOR Rate Loans having an Interest Period of
fourteen (14) days. All LIBOR Rate Loans having an Interest Period of fourteen
(14) days shall bear interest at the same rate as LIBOR Rate Loans having an
Interest Period of one month. The Borrower shall request the initial Tranche B
Term Loan borrowing by written notice (or telephone notice promptly confirmed in
writing which confirmation may be by fax) to the Administrative Agent not later
than 1:00 P.M. (Charlotte, North Carolina time) on the Business Day prior to
the date of requested borrowing. LIBOR Rate Loans shall be made by each Lender
at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
Lending Office. Amounts repaid on the Tranche B Term Loan may not be reborrowed.
(b) REPAYMENT OF TRANCHE B TERM LOAN. The principal amount of the
Tranche B Term Loan shall be repaid in twenty-four (24) consecutive fiscal
quarterly installments as follows, unless accelerated sooner pursuant to Section
7.2:
31
---------------------------------------------------------------
PRINCIPAL TRANCHE B TERM
AMORTIZATION LOAN PRINCIPAL
PAYMENT DATES AMORTIZATION
PAYMENT
---------------------------------------------------------------
September 30, 1999 $187,500
---------------------------------------------------------------
December 31, 1999 $187,500
---------------------------------------------------------------
March 31, 2000 $187,500
---------------------------------------------------------------
June 30, 2000 $187,500
---------------------------------------------------------------
September 30, 2000 $187,500
---------------------------------------------------------------
December 31, 2000 $187,500
---------------------------------------------------------------
March 31, 2001 $187,500
---------------------------------------------------------------
June 30, 2001 $187,500
---------------------------------------------------------------
September 30, 2001 $187,500
---------------------------------------------------------------
December 31, 2001 $187,500
---------------------------------------------------------------
March 31, 2002 $187,500
---------------------------------------------------------------
June 30, 2002 $187,500
---------------------------------------------------------------
September 30, 2002 $187,500
---------------------------------------------------------------
December 31, 2002 $187,500
---------------------------------------------------------------
March 31, 2003 $187,500
---------------------------------------------------------------
June 30, 2003 $187,500
---------------------------------------------------------------
September 30, 2003 $187,500
---------------------------------------------------------------
December 31, 2003 $187,500
---------------------------------------------------------------
March 31, 2004 $187,500
---------------------------------------------------------------
June 30, 2004 $187,500
---------------------------------------------------------------
September 30, 2004 $17,812,500
---------------------------------------------------------------
December 31, 2004 $17,812,500
---------------------------------------------------------------
March 31, 2005 $17,812,500
---------------------------------------------------------------
June 30, 2005 $17,812,500
---------------------------------------------------------------
32
(c) INTEREST ON THE TRANCHE B TERM LOAN. Subject to the provisions of
Section 2.10, the Tranche B Term Loan shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as the
Tranche B Term Loan shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per annum
rate equal to the sum of the Alternate Base Rate PLUS the Applicable
Percentage; and
(ii) LIBOR RATE LOANS. During such periods as the Tranche B
Term Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
Loan shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate PLUS the Applicable Percentage.
Interest on the Tranche B Term Loan shall be payable in
arrears on each Interest Payment Date.
(d) TRANCHE B TERM NOTES. Each Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan outstanding as of the Closing Date shall
be evidenced by a duly executed promissory note of the Borrower to such Lender
in substantially the form of SCHEDULE 2.3(d).
SECTION 2.4 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Lenders shall participate in, Letters of Credit for the account
of the Borrower from time to time upon request in a form acceptable to the
Issuing Lender; PROVIDED, HOWEVER, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS ($2,500,000) (the "LOC COMMITTED AMOUNT"), (ii) the sum of the aggregate
amount of Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not at
any time exceed the lesser of (A) Revolving Committed Amount and (B) the
Borrowing Base, (iii) all Letters of Credit shall be denominated in U.S. Dollars
and (iv) Letters of Credit shall be issued for the purpose of supporting
tax-advantaged variable rate demand note financing and for other lawful
corporate purposes and may be issued as standby letters of credit, including in
connection with workers' compensation and other insurance programs, and trade
letters of credit. Except as otherwise expressly agreed upon by all the Lenders,
no Letter of Credit shall have an original expiry date more than twelve (12)
months from the date of issuance; PROVIDED, HOWEVER, so long as no Default or
Event of Default has occurred and is continuing and subject to the other terms
and conditions to the issuance of Letters of Credit hereunder, the expiry dates
of Letters of Credit may be extended annually or periodically from time to time
on the request of the Borrower or by operation of the terms of the applicable
Letter of Credit to a date not more than twelve (12) months from the date of
extension; PROVIDED, FURTHER, that no Letter of Credit, as originally issued or
as
33
extended, shall have an expiry date extending beyond the Revolving Commitment
Termination Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day. Any Letters of Credit issued hereunder shall be in a minimum
original face amount of $100,000. First Union shall be the Issuing Lender on all
Letters of Credit issued after the Closing Date.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five (5) Business Days
prior to the requested date of issuance. The Issuing Lender will promptly upon
request provide to the Administrative Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred since
the date of any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters
of Credit. The Issuing Lender will provide to the Administrative Agent promptly
upon request a summary report of the nature and extent of LOC Obligations then
outstanding.
(c) PARTICIPATIONS. Each Lender upon issuance of a Letter of Credit
shall be deemed to have purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations arising thereunder
and any collateral relating thereto, in each case in an amount equal to its LOC
Commitment Percentage of the obligations under such Letter of Credit and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its LOC Commitment Percentage of the obligations arising under such
Letter of Credit. Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that the Issuing Lender has
not been reimbursed as required hereunder or under any LOC Document, each such
Lender shall pay to the Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Lender to so reimburse the Issuing Lender shall
be absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on the day
of drawing under any Letter of Credit (either with the proceeds of a Revolving
Loan or a Swingline Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to reimburse
the Issuing Lender as provided herein, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the
34
Alternate Base Rate plus two percent (2%). Unless the Borrower shall immediately
notify the Issuing Lender and the Administrative Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Swingline Loan, or if and to the extent Swingline Loans shall be
unavailable, a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's LOC Commitment
Percentage of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such request,
such Lender shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from the date
of such drawing until such Lender pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two (2) Business Days of the date
of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to
the Alternate Base Rate. Each Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested (i) a Swingline Loan
borrowing to reimburse a drawing under a Letter of Credit, the Swingline Lender
shall make the Swingline Loan advance pursuant to the terms of the request or
deemed request in accordance with the provisions for Swingline Loan advances
hereunder or (ii) a Revolving Loan to reimburse a drawing under a Letter of
Credit, the Administrative Agent shall give notice to the Lenders that a
Revolving Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan borrowing
comprised entirely of Alternate Base Rate Loans (each such borrowing, a
"MANDATORY BORROWING") shall be immediately made (without giving effect to any
termination of the Commitments pursuant to Section 7.2) PRO RATA based on each
Lender's respective Revolving Commitment Percentage (determined before giving
effect
35
to any termination of the Commitments pursuant to Section 7.2) and in the case
of both clauses (i) and (ii) the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the same such date
NOTWITHSTANDING (i) the amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 4.3 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time otherwise
required in Section 2.1(b), (v) the date of such Mandatory Borrowing, or (vi)
any reduction in the Revolving Committed Amount after any such Letter of Credit
may have been drawn upon; PROVIDE, HOWEVER, that in the event any such
Mandatory Borrowing should be less than the minimum amount for borrowings of
Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower shall
pay to the Administrative Agent for its own account an administrative fee of
$500. In the event that any Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code), then each such
Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; PROVIDED, FURTHER,
that in the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Lender's unfunded Participation Interest therein shall bear interest
payable by such Lender to the Issuing Lender upon demand, at the rate equal to,
if paid within two (2) Business Days of such date, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.
(f) MODIFICATION, EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(g) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
SECTION 2.5 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower (each a "SWINGLINE
LOAN" and, collectively, the "SWINGLINE LOANS") for the purposes hereinafter set
forth; PROVIDED,
36
HOWEVER, (i) the aggregate amount of Swingline Loans outstanding at any time
shall not exceed TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) (the
"SWINGLINE COMMITTED AMOUNT"), and (ii) the sum of the aggregate amount of
outstanding Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall not
exceed the Revolving Committed Amount. Swingline Loans hereunder may be repaid
and reborrowed in accordance with the provisions hereof.
(b) SWINGLINE LOAN BORROWINGS.
(i) NOTICE OF BORROWING AND DISBURSEMENT. The Swingline Lender
will make Swingline Loans available to the Borrower on any Business
Day upon request made by the Borrower not later than 2:00 P.M.
(Charlotte, North Carolina time) on such Business Day. A notice of
request for Swingline Loan borrowing shall be made in the form of
SCHEDULE 2.1(b)(i) with appropriate modifications. Swingline Loan
borrowings hereunder shall be made in minimum amounts of $100,000 and
in integral amounts of $100,000 in excess thereof.
(ii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan
borrowing shall be due and payable on the Revolving Commitment
Termination Date. The Swingline Lender may, at any time, in its sole
discretion, by written notice to the Borrower and the Administrative
Agent, demand repayment of its Swingline Loans by way of a Revolving
Loan borrowing, in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans in the amount of such Swingline Loans; PROVIDED,
HOWEVER, that, in the following circumstances, any such demand shall
also be deemed to have been given one Business Day prior to each of
(i) the Revolving Commitment Termination Date, (ii) the occurrence of
any Event of Default described in Section 7.1(e), (iii) upon
acceleration of the Credit Party Obligations hereunder, whether on
account of an Event of Default described in Section 7.1(e) or any
other Event of Default, and (iv) the exercise of remedies in
accordance with the provisions of Section 7.2 hereof (each such
Revolving Loan borrowing made on account of any such deemed request
therefor as provided herein being hereinafter referred to as
"MANDATORY BORROWING"). Each Lender hereby irrevocably agrees to make
such Revolving Loans promptly upon any such request or deemed request
on account of each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the same such date
NOTWITHSTANDING (I) the amount of Mandatory Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise
required hereunder, (II) whether any conditions specified in Section
4.3 are then satisfied, (III) whether a Default or an Event of Default
then exists, (IV) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in Section
2.1(b)(i), (V) the date of such Mandatory Borrowing, or (VI) any
reduction in the Revolving Committed Amount or termination of the
Revolving Commitments immediately prior to such Mandatory Borrowing or
Contemporaneously therewith. In the event that any Mandatory
37
Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code), then each Lender hereby
agrees that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each such
Lender to share in such Swingline Loans ratably based upon its
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section
7.2), PROVIDED that (A) all interest payable on the Swingline Loans
shall be for the account of the Swingline Lender until the date as of
which the respective participation is purchased, and (B) at the time
any purchase of participations pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the Swingline
Lender interest on the principal amount of such participation
purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding
the date of payment for such participation, at the rate equal to, if
paid within two (2) Business Days of the date of the Mandatory
Borrowing, the Federal Funds Effective Rate, and thereafter at a
rate equal to the Alternate Base Rate.
(c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of Section
2.10, Swingline Loans shall bear interest at a per annum rate equal to the
Alternate Base Rate PLUS the applicable Percentage for Revolving Loans that are
Alternate Base Rate Loans. Interest on Swingline Loans shall be payable in
arrears on each Interest Payment Date.
(d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in the original
amount of the Swingline Committed Amount and substantially in the form of
Schedule 2.5(d).
SECTION 2.6 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving Commitment, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Lenders a commitment fee (the "COMMITMENT FEE") in an amount equal to the
Applicable Percentage per annum on the average daily unused amount of the
aggregate Revolving Committed Amount. For purposes hereof, Letters Of Credit
shall be considered usage but Swingline Loans shall not be considered usage
under the aggregate Revolving Commitment Amount. The Commitment Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
(b) LETTER OF CREDIT FEES. In consideration of the LOC Commitments, the
Borrower agrees to pay to the Issuing Lender a fee (the "LETTER OF CREDIT FEE")
equal to the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to
the date of expiration.
38
In addition to such Letter of Credit Fee, the Issuing Lender may charge, and
retain for its own account without sharing by the other Lenders, an additional
facing fee of one-fourth of one percent (1/4%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit issued by
it. The Issuing Lender shall promptly pay over to the Administrative Agent for
the ratable benefit of the Lenders (including the Issuing Lender) the Letter of
Credit Fee. The Letter of Credit Fee shall be payable quarterly in arrears on
the 15th day following the last day of each calendar quarter for the prior
calendar quarter.
(c) ISSUING LENDER FEES. In addition to the Letter of Credit Fees
payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing
Lender for its own account without sharing by the other Lenders the reasonable
and customary charges from time to time of the Issuing Lender with respect to
the amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "ISSUING LENDER
FEES").
(d) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the Fee
Letter.
SECTION 2.7 COMMITMENT REDUCTIONS.
(a) VOLUNTARY REDUCTIONS. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Revolving Committed
Amount at any time or from time to time upon not less than five Business Days'
prior notice to the Administrative Agent (which shall notify the Lenders thereof
as soon as practicable) of each such termination or reduction, which notice
shall specify the effective date thereof and the amount of any such reduction
which shall be in a minimum amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof and shall be irrevocable and effective upon receipt
by the Administrative Agent, PROVIDED that no such reduction or termination
shall be permitted if after giving effect thereto, and to any prepayments of the
Revolving Loans made on the effective date thereof, the sum of the then
outstanding aggregate principal amount of the Revolving Loans PLUS Swingline
Loans PLUS LOC Obligations would exceed the Revolving Committed Amount.
(b) MANDATORY REDUCTIONS. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.8(b)(ii), (iii) and
(iv), the Revolving Committed Amount shall be automatically permanently reduced
by the amount of such required prepayment and/or reduction.
(c) REVOLVING COMMITMENT TERMINATION DATE. The Revolving Commitment and
the LOC Commitment and the Swingline Commitment shall automatically terminate on
the Revolving Commitment Termination Date.
39
SECTION 2.8 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; PROVIDED, HOWEVER, that each
partial prepayment of Revolving Loans, the Tranche A Term Loan and the Tranche B
Term Loan shall be in a minimum principal amount of $1,000,000 and integral
multiples of $1,000,000 in excess thereof, and each prepayment of Swingline
Loans shall be in a minimum principal amount of $100,000 and integral multiples
of $100,000 in excess thereof. The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). Amounts prepaid under this Section 2.8(a) shall be applied first
ratably to the Tranche A Term Loan to the remaining scheduled principal
installments thereof until paid in full and the Tranche B Term Loan to the
remaining scheduled principal installments thereof until paid in full (provided,
however, promptly upon notification thereof, one or more holders of the Tranche
B Term Loan may decline to accept such payment to the extent there are
sufficient amounts under the Tranche A Term Loan outstanding to be paid with
such prepayment, in which case, such declined payments shall be allocated pro
rata among the Tranche A Term Loan and the Tranche B Term Loan held by Lenders
accepting such payments) and then to the Revolving Loans, in each case first to
Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of
Interest Period maturities. All prepayments, under this Section 2.8(a) shall be
subject to Section 2.18, but otherwise without premium or penalty; provided,
however, that optional prepayments made with respect to Tranche B Term Loans
within (i) six months of the Funding Date shall be subject to a prepayment
penalty of 1.5% and (ii) after six months but prior to the expiration of twelve
months from the Funding Date shall be subject to a 1.0% prepayment penalty.
Interest on the principal amount prepaid shall be payable on the next occurring
Interest Payment Date that would have occurred had such loan not been prepaid
or, at the request of the Administrative Agent, interest on the principal amount
prepaid shall be payable on any date that a prepayment is made hereunder through
the date of prepayment. Amounts prepaid on the Revolving Loans may be reborrowed
in accordance with the terms hereof. Amounts prepaid on the Tranche A Term Loan
and the Tranche B Term Loan may not be reborrowed.
(b) MANDATORY PREPAYMENTS.
(i) REVOLVING COMMITTED AMOUNT. If at any time after the
Closing Date, the sum of the aggregate principal amount of outstanding
Revolving Loans PLUS Swingline Loans PLUS LOC Obligations shall exceed
the lesser of (A) the Revolving Committed Amount and (B) the Borrowing
Base, the Borrower immediately shall prepay the Revolving Loans and
(after all Revolving Loans have been repaid) cash collateralize the
LOC Obligations, in an amount sufficient to eliminate such excess.
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(ii) ASSET DISPOSITIONS. Promptly following any
Asset Disposition in excess of $250,000 in any fiscal year,
the Borrower shall prepay the Loans in an aggregate amount
equal to the Net Cash Proceeds derived from such Asset
Disposition (such prepayment to be applied as set forth in
clause (vi) below); provided, however, that such Net Cash
Proceeds shall not be required to be so applied to the extent
the Borrower delivers to the Administrative Agent a
certificate stating that it intends to use such Net Cash
Proceeds to acquire fixed or capital assets in replacement of
the disposed assets within 180 days of the receipt of such Net
Cash Proceeds, it being expressly agreed that any Net Cash
Proceeds not so reinvested shall be applied to repay the Loans
immediately thereafter.
(iii) ISSUANCES. Immediately upon receipt by any
Credit Party of proceeds from (A) any Debt Issuance, the
Borrower shall prepay the Loans in an aggregate amount equal
to one hundred percent (100%) of the Net Cash Proceeds of such
Debt Issuance to the Lenders (such prepayment to be applied as
set forth in clause (vi) below) or (B) any Equity Issuance
(other than an Equity Issuance to the Sponsors in an aggregate
amount not to exceed $3,000,000 during the term of this
Agreement provided that such equity contribution shall not
enable the Borrower to cure a Default or an Event of Default
that would have otherwise existed but for such equity
contribution), the Borrower shall prepay the Loans in an
aggregate amount equal to one hundred percent (100%) of the
Net Cash Proceeds of such Equity Issuance to the Lenders;
provided, however, if the Leverage Ratio of the Borrower and
its Subsidiaries on a pro forma basis after giving effect to
such Equity Issuance would be less than 3.50 to 1.0, the
Borrower shall prepay the Loans in an amount equal to
seventy-five percent (75%) of such cash proceeds to the
Lenders (such prepayments set forth above to be applied as set
forth in clause (vi) below).
(iv) RECOVERY EVENT. To the extent of cash
proceeds received in connection with a Recovery Event which
are in excess of $250,000 in the aggregate and which are not
applied in accordance with Section 6.5(a)(ii), immediately
following the 180th day occurring after the receipt by a
Credit Party of such cash proceeds, the Borrower shall prepay
the Loans in an aggregate amount equal to one-hundred percent
(100%) of such cash proceeds to the Lenders (such prepayment
to be applied as set forth in clause (vi) below).
(v) EXCESS CASH FLOW. Within 120 days after the
end of each fiscal year (commencing with the fiscal year
ending December 31, 1999), the Borrower shall prepay the Loans
in an amount equal to (x) (1) if the Leverage Ratio of the
Borrower and its Subsidiaries as of the end of the immediately
preceding fiscal quarter was greater than or equal to 3.50 to
1.0, 75% of the Excess Cash Flow earned during such prior
fiscal year and (2) if the Leverage Ratio of the Borrower and
its Subsidiaries as of the end of the immediately preceding
fiscal quarter was less than 3.50 to 1.0, 50% of the Excess
Cash Flow earned during such prior fiscal year less (y) the
amount of any voluntary prepayments of the Tranche A Term
Loan,
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the Tranche B Term Loan and (to the extent accompanied by a
reduction in the Revolving Committed Amount) the Revolving
Loans during such prior fiscal year.
(vi) APPLICATION OF MANDATORY PREPAYMENTS. All
amounts required to be paid pursuant to this Section 2.8(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 2.8(b)(i), to Revolving Loans and
(after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations, (B) with
respect to all amounts prepaid pursuant to Section 2.8(b)(ii),
pro rata across the Revolving Loans (with a corresponding
reduction in the Revolving Commitments), the Tranche A Term
Loan and the Tranche B Term Loan outstanding as of such date
and (C) with respect to all amounts prepaid pursuant to
Sections 2.8(b)(iii) through (v), (1) FIRST PRO RATA to the
Tranche A Term Loan and the Tranche B Term Loan (ratably to
the remaining principal installments thereof); PROVIDED,
HOWEVER, promptly upon notification thereof, one or more
holders of the Tranche B Term Loan may decline to accept a
mandatory prepayment under Section 2.8(b)(ii) through (iv) to
the extent there are sufficient amounts under the Tranche A
Term Loan outstanding to be paid with such prepayment, in
which case, such declined payments shall be allocated pro rata
among the Tranche A Term Loan and the Tranche B Term Loan held
by Lenders accepting such prepayments, and (2) SECOND to the
Revolving Loans and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of LOC
Obligations. Within the parameters of the applications set
forth above, prepayments shall be applied first to Alternate
Base Rate Loans and then to LIBOR Rate Loans in direct order
of Interest Period maturities. All prepayments under this
Section 2.8(b) shall be subject to Section 2.18 and be
accompanied by interest on the principal amount prepaid
through the date of prepayment.
SECTION 2.9 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
All borrowings, payments and prepayments in respect of Revolving Loans,
the Tranche A Term Loan and the Tranche B Term Loan shall be in such amounts and
be made pursuant to such elections so that after giving effect thereto the
aggregate principal amount of the Revolving Loans, the Tranche A Term Loan and
the Tranche B Term Loan comprising any Tranche shall not be less than (i) with
respect to LIBOR Rate Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof and (ii) with respect to Base Rate Loans, $500,000 in the
aggregate or a whole multiple of $100,000 in excess thereof
SECTION 2.10 DEFAULT RATE AND PAYMENT DATES.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Alternate Base Rate PLUS
2%).
42
SECTION 2.11 CONVERSION OPTIONS.
(a) The Borrower may, in the case of Revolving Loans, the
Tranche A Term Loan and the Tranche B Term Loan, elect from time to
time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by
giving the Administrative Agent at least three Business Days' prior
irrevocable written notice of such election. A form of Notice of
Conversion/ Extension is attached as SCHEDULE 2.11. If the date upon
which an Alternate Base Rate Loan is to be converted to a LIBOR Rate
Loan is not a Business Day, then such conversion shall be made on the
next succeeding Business Day and during the period from such last day
of an Interest Period to such succeeding Business Day such Loan shall
bear interest as if it were an Alternate Base Rate Loan. All or any
part of outstanding Alternate Base Rate Loans may be converted as
provided herein, PROVIDED that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and
is continuing and (ii) partial conversions shall be in an aggregate
principal amount of $400,000 or a whole multiple of $100,000 in excess
thereof.
(b) Any LIBOR Rate Loans may be continued as such upon
the expiration of an Interest Period with respect thereto by compliance
by the Borrower with the notice provisions contained in
Section 2.11(a); PROVIDED, that no LIBOR Rate Loan may be continued as
such when any Default or Event of Default has occurred and is
continuing, in which case such Loan shall be automatically converted to
an Alternate Base Rate Loan at the end of the applicable Interest
Period with respect thereto. If the Borrower shall fail to give timely
notice of an election to continue a LIBOR Rate Loan, or the
continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR
Rate Loans shall be automatically converted to Alternate Base Rate
Loans at the end of the applicable Interest Period with respect
thereto.
SECTION 2.12 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate
Base Rate Loans shall be calculated on the basis of a year of 365 days
(or 366 days, as applicable) for the actual days elapsed. All other
fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a LIBOR Rate on the
Business Day of the determination thereof. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such
change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent
43
shall, at the request of the Borrower, deliver to the Borrower a
statement showing the computations used by the Administrative Agent in
determining any interest rate.
SECTION 2.13 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made PRO RATA according to the respective
Commitment Percentages of the Lenders. Each payment under this Agreement or any
Note shall be applied, first, to any fees then due and owing by the Borrower
pursuant to Section 2.6, second, to interest then due and owing in respect of
the Notes of the Borrower and, third, to principal then due and owing hereunder
and under the Notes of the Borrower. Each payment on account of any fees
pursuant to Section 2.6 shall be made PRO RATA in accordance with the respective
amounts due and owing (except as to the portion of the Letter of Credit retained
by the Issuing Lender and the Issuing Lender Fees). Each payment (other than
prepayments) by the Borrower on account of principal of and interest on the
Revolving Loans, the Tranche A Term Loan and on the Tranche B Term Loan shall be
made PRO RATA according to the respective amounts due and owing in accordance
with Section 2.8 hereof. Prepayments made pursuant to Section 2.16 shall be
applied in accordance with such section. Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.8(b). All
payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.19(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's office specified on SCHEDULE 9.2 in Dollars and in immediately available
funds not later than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on account of
the Credit Party Obligations or any other amounts outstanding under any of the
Credit Documents or in respect of the Collateral shall be paid over or delivered
as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Administrative Agent in connection with enforcing the rights of
the Lenders under the Credit Documents and any
44
protective advances made by the Administrative Agent with respect to
the Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees owed to the Administrative
Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of
the Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from
time to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above
in the manner provided in this Section 2.13(b).
SECTION 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been
notified in writing by a Lender prior to the date a Loan is to be made
by such Lender (which notice shall be effective upon receipt) that such
Lender does not intend to make the proceeds of such Loan available to
the Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date,
45
and the Administrative Agent may in reliance upon such assumption (but
shall not be required to) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent, the Administrative Agent shall
be able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from the Lender
or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount
was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent
at a per annum rate equal to (i) from the Borrower at the applicable
rate for the applicable borrowing pursuant to the Notice of Borrowing
and (ii) from a Lender at the Federal Funds Effective Rate.
(b) Unless the Administrative Agent shall have been
notified in writing by the Borrower, prior to the date on which any
payment is due from it hereunder (which notice shall be effective upon
receipt) that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each
Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the
Borrower has not in fact made such payment to the Administrative Agent,
such Lender shall, on demand, repay to the Administrative Agent the
amount made available to such Lender. If such amount is repaid to the
Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from the
date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent
at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted
to the Borrower or any Lender with respect to any amount owing under
this Section 2.14 shall be conclusive in the absence of manifest error.
SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of
46
such determination, confirmed in writing, to the Borrower, and the Lenders at
least two Business Days prior to the first day of such Interest Period. Unless
the Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain or be converted
into Alternate Base Rate Loans. Until any such notice has been withdrawn by the
Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the interest Periods so affected.
SECTION 2.16 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any relevant Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR, Lending Office to make or
maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain in the
interbank eurodollar market through its LIBOR Lending Office the funds with
which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrower thereof, (b) the commitment of such Lender
hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall
forthwith be suspended until the Administrative Agent shall give notice that the
condition or situation which gave rise to the suspension shall no longer exist,
and (c) such Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall
be converted on the last day of the Interest Period for such Loans or within
such earlier period as required by law as Alternate Base Rate Loans. The
Borrower hereby agrees promptly to pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct
costs (but not including anticipated profits) reasonably incurred by such Lender
in making any repayment in accordance with this Section including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; PROVIDED, HOWEVER, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its sole discretion to be material.
SECTION 2.17 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or compliance by
any Lender with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority
made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any
kind whatsoever with respect to any Letter of Credit or any
application relating thereto, any LIBOR
47
Rate Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for changes
in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds
by, any office of such Lender which is not otherwise included
in the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of
Credit or to reduce any amount receivable hereunder or under any Note,
then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such
Lender for such additional cost or reduced amount receivable which
such Lender reasonably deems to be material as determined by such
Lender with respect to its LIBOR Rate Loans or Letters of Credit.
A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Administrative Agent,
to the Borrower shall be conclusive in the absence of manifest error.
Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office,
as the case may be) to avoid or to minimize any amounts which might
otherwise be payable pursuant to this paragraph of this Section;
PROVIDED, HOWEVER, that such efforts shall not cause the imposition on
such Lender of any additional costs or legal or regulatory burdens
deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that
the adoption of or any change in any relevant Requirement of Law
regarding capital adequacy or in the interpretation or application
thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any central bank or
Governmental Authority made subsequent to the date hereof does or shall
have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a result of its commitment to lend hereunder
to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such corporation's policies with respect
to capital adequacy) by an amount reasonably deemed by such Lender to
be material, then from time to time, within fifteen (15) days after
demand by such Lender, the Borrower shall pay to such Lender such
additional amount as shall be certified by such Lender as being
required to compensate it for such reduction to the extent that such
Lender reasonably determines that such additional amount is allocable
to the existence of such Lender's commitment to lend hereunder. Such a
certificate as to any additional amounts payable under this Section
submitted by a Lender (which certificate shall include a description of
the basis for the
48
computation), through the Administrative Agent, to the Borrower shall
be conclusive absent manifest error.
(c) The agreements in this Section 2.17 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
Section 2.18 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
Section 2.19 TAXES.
(a) All payments made by the Borrower hereunder or under
any Note will be, except as provided in Section 2.19(b), made free and
clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any Governmental
Authority or by any political subdivision or taxing authority thereof
or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits (and franchise taxes
imposed in lieu thereof) of a Lender pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located
or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect thereto (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein or in such Note. The Borrower
will furnish to the Administrative Agent as soon as practicable after
the date the payment of any Taxes is due pursuant to applicable law
certified copies (to the extent reasonably available and required by
law) of
49
tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse such
Lender upon its written request, for the amount of any Taxes so levied
or imposed and paid by such Lender to the extent not paid by the
Borrower.
(b) Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) agrees to
deliver to the Borrower and the Administrative Agent on or prior to the
Closing Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section
9.6(d) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a "bank"
within the meaning of Section 81(c)(3)(A) of the Code, two accurate
and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying such Lender's entitlement
to a complete exemption from United States withholding tax with respect
to payments to be made under this Agreement and under any Note, or
(ii) if the Lender is not a "bank" within the meaning of Section 881
(c)(3)(A) of the Code, either Internal Revenue Service Form 1001 or
4224 as set forth in clause (i) above, or (x) a certificate
substantially in the form of SCHEDULE 2.19 (any such certificate, a
"2.19 CERTIFICATE") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form)
certifying such Lender's entitlement to an exemption from United States
withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Lender agrees that
it will deliver upon the Borrower's request updated versions of the
foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together with
such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments
under this Agreement and any Note. Notwithstanding anything to the
contrary contained in Section 2.19(a), but subject to the immediately
succeeding sentence, (x) each Borrower shall be entitled, to the extent
it is required to do so by law, to deduct or withhold Taxes imposed by
the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code)
for U.S. Federal income tax purposes to the extent that such Lender has
not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and
(y) the Borrower shall not be obligated pursuant to Section 2.19(a)
hereof to gross-up payments to be made to a Lender in respect of Taxes
imposed by the United States if (I) such Lender has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to
the Borrower pursuant to this Section 2.19(b) or (II) in the case of a
payment, other than interest, to a Lender described in clause (ii)
above, to the extent that such Forms do not establish a complete
exemption from withholding of such Taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this
Section 2.19, the Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 2.19(a)
(without regard to the identity of the jurisdiction
50
requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as the
case may be) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this Section; PROVIDED, HOWEVER, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to this Section
2.19 with respect to a Lender, such Lender shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of such
payment; PROVIDED that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit position
or (ii) it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the event that
such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the Borrower.
In the event that no refund or credit is obtained with respect to the Borrower's
payments to such Lender pursuant to this Section 2.19, then such Lender shall
upon request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.19 shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its determination
referred to in the proviso to the first sentence of this Section 2.19 to the
Borrower or any other party.
(e) The agreements in this Section 2.19 shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.
SECTION 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.4, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuing Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that
the Issuing Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions,
herein called "GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary
51
thereof. The Issuing Lender shall not be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
a Letter of Credit to comply fully with conditions required in order to draw
upon a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in interpretation
of technical terms; (vi) for any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under a Letter of Credit or
of the proceeds thereof; and (vii) for any consequences arising from causes
beyond the control of the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the vesting
of the Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Borrower. It is the intention of the
parties that this Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any Government Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.20 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.4(d) hereof. The obligations
of the Borrower under this Section 2.20 shall survive the termination of this
Agreement. No act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
2.20, the Borrower shall have no obligation to indemnify any Issuing Lender in
respect of any liability incurred by such Issuing Lender arising out of the
gross negligence or willful misconduct of the Issuing Lender (including action
not taken by an Issuing Lender), as determined by a court of competent
jurisdiction.
52
SECTION 2.21 REPLACEMENT OF LENDERS.
If any Lender delivers a notice pursuant to Section 2.16, 2.17 or 2.19
(hereinafter any such Lender shall be referred to as a "Replaced Lender"), then
in such case, the Borrower may, upon at least five (5) Business Days' notice to
the Administrative Agent and such Replaced Lender, designate a replacement
lender (a "Replacement Lender") acceptable to the Administrative Agent in its
reasonable discretion, to which such Replaced Lender shall, subject to its
receipt (unless a later date for the remittance thereof shall be agreed upon by
the Borrower and the Replaced Lender) of all amounts owed to such Replaced
Lender hereunder, assign all (but not less than all) of its rights and
obligations hereunder. Upon any assignment by any Lender pursuant to this
Section 2.21 becoming effective, the Replacement Lender shall thereupon be
deemed to be a "Lender" for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement
and shall have no further rights or obligations hereunder (other than pursuant
to Sections 2.15, 2.16, 2.17 or 9.5 while such Replaced Lender was a Lender).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represents
and warrants to the Administrative Agent and to each Lender that:
SECTION 3.1 FINANCIAL CONDITION.
The balance sheets and the related statements of income and of cash
flows of Power Circuits, Inc. for fiscal year 1997 and fiscal year 1998 audited
by Ernst & Young, LLP are complete and correct and present fairly the financial
condition of the Power Circuits, Inc. and its Subsidiaries as of such dates and
the balance sheets and the related statements of income and of cash flows of
Pacific Circuits, Inc. for fiscal year 1997 and fiscal year 1998 audited by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P. are complete and correct and present fairly the
financial condition of Pacific Circuits, Inc. and its Subsidiaries as of such
dates. Additionally, monthly working capital detail for the trailing twelve
months, the company-prepared pro forma balance sheets of the Borrower and the
six-year projections have been prepared in good faith based upon reasonable
assumptions and represent the Borrower's best estimate of future results. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed therein).
SECTION 3.2 NO CHANGE.
Since December 31, 1998 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial
53
statements) there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and the other Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the requisite power and authority and
the legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
the Borrower or the other Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which it is a party has been duly executed
and delivered on behalf of the Borrower or the other Credit Parties, as the
case may be. Each Credit Document to which it is a party constitutes a legal,
valid and binding obligation of the Borrower or the other Credit Parties, as the
case may be, enforceable against the Borrower or such other Credit Party, as the
case may be, in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
SECTION 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
54
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any other Credit Party is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
SECTION 3.6 NO MATERIAL LITIGATION.
Except as set forth in SCHEDULE 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against any Credit Party
or any of its Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any Credit Party is an "investment company",
or a company "controlled" by any entity which is required to register as an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
SECTION 3.9 ERISA.
Except as set forth in SCHEDULE 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to
55
such accrued benefits by an amount which, as determined in accordance with GAAP,
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Commonly Controlled Entity is currently subject to any
liability for a complete or partial withdrawal from a Multiemployer Plan which
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.10 ENVIRONMENTAL MATTERS. Except as set forth in
SCHEDULE 3.10, which in the aggregate, could not be reasonably expected to
have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and the other Credit
Parties, the facilities and properties owned, leased or operated by
the Borrower and the other Credit Parties or any of their Subsidiaries
(the "PROPERTIES") do not contain any Materials of Environmental
Concern in amounts or concentrations which (i) constitute a violation
of, or (ii) could reasonably be expected to give rise to liability
under, any Environmental Law.
(b) To the best knowledge of the Borrower and the other Credit
Parties, the Properties and all operations of the Borrower and the
other Credit Parties and/or their Subsidiaries at the Properties are
in compliance, and have in the last three years been in compliance, in
all material respects with all applicable Environmental Laws, and
there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or
the business operated by the Borrower and the other Credit Parties or
any of their Subsidiaries (the "BUSINESS").
(c) Neither the Borrower nor any of the other Credit Parties
has received any written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the Borrower
or any of the other Credit Parties nor any of their Subsidiaries have
knowledge or reason to believe that any such notice will be received
or is being threatened.
(d) To the best knowledge of the Borrower and the other Credit
Parties, Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or
to a location which could reasonably be expected to give rise to
liability under any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a manner
that could reasonably be expected to give rise to liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower and the other
Credit Parties, threatened, under any Environmental Law to which the
Borrower or any other Credit Party or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders,
administrative orders
56
or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties
or the Business.
(f) To the best knowledge of the Borrower and the other Credit
Parties, there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any other Credit Party or
any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could reasonably be expected to give rise to liability
under Environmental Laws.
SECTION 3.11 PURPOSE OF LOANS.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (i) finance the Acquisition and to pay certain fees and expenses
related thereto, (ii) refinance certain existing indebtedness of the Credit
Parties and (iii) provide for working capital, capital expenditures and other
general corporate purposes. The Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in connection
with surety and reclamation bonds, reinsurance, domestic or international trade
transactions and obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in the ordinary course
of business.
SECTION 3.12 SUBSIDIARIES.
Set forth on SCHEDULE 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of Capital
Stock or other equity interests outstanding; the number and percentage of
outstanding shares of each class of stock; and the number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and similar rights. The outstanding Capital Stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).
SECTION 3.13 OWNERSHIP.
Each Credit Party and its Subsidiaries is the owner of, and has good
and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject to
any Lien other than Permitted Liens.
SECTION 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.
57
SECTION 3.15 TAXES.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.16 INTELLECTUAL PROPERTY.
Each of the Borrower and its Subsidiaries owns, or has the legal right
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes necessary for each of them to conduct its business as currently
conducted. Set forth on SCHEDULE 3.16 is a list of all Intellectual Property
owned by each of the Borrower and its Subsidiaries or that the Borrower or any
of its Subsidiaries has the right to use. Except as provided on SCHEDULE 3.16,
no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or any
of its Subsidiaries know of any such claim, and, to the knowledge of the
Borrower or any of its Subsidiaries, the use of such Intellectual Property by
the Borrower or any of its Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. SCHEDULE 3.16 may
be updated from time to time by the Borrower to include new Intellectual
Property by giving written notice thereof to the Administrative Agent.
SECTION 3.17 SOLVENCY.
The fair saleable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Credit Agreement, debts
beyond its ability to pay such debts as they become due.
SECTION 3.18 INVESTMENTS.
All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.
SECTION 3.19 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 3.19(a) is a list of the Properties of the
Borrower and its Subsidiaries with street address, county and state where
located. Set forth on SCHEDULE 3.19(b) is
58
a list of all locations where any tangible personal property of the Borrower and
its Subsidiaries is located, including county and state where located. Set forth
on SCHEDULE 3.19(c) is the chief executive office and principal place of
business of each of the Borrower and its Subsidiaries. SCHEDULE 3.19(a), 3.19(b)
and 3.19(c) may be updated from time to time by the Borrower to include new
properties or locations by giving written notice thereof to the Administrative
Agent.
SECTION 3.20 NO BURDENSOME RESTRICTIONS.
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.21 BROKERS' FEES.
None of the Borrower or any of its Subsidiaries has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Credit Agreement.
SECTION 3.22 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, other than as set forth in SCHEDULE 3.22 hereto, and none of the
Borrower or any of its Subsidiaries (i) has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years, other
than as set forth in SCHEDULE 3.22 hereto or (ii) has knowledge of any potential
or pending strike, walkout or work stoppage.
SECTION 3.23 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements or the recordation of the applicable Mortgage Instruments in favor of
First Union, as Collateral Agent for the Lenders) perfected security interests
and Liens, prior to all other Liens other than Permitted Liens.
SECTION 3.24 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any other Credit Document (including, without limitation,
information disclosed in all financial statements and all footnotes attached
thereto, the confidential information memorandum provided to the Lenders and the
bank group presentation made by the Borrower to prospective lenders on July 8,
1999), or any transaction
59
contemplated hereby or thereby, is or will be true and accurate in all material
respects and not incomplete by omitting to state any material fact necessary to
make such information not misleading. There is no fact now known to the
Borrower, any other Credit Party or any of their Subsidiaries which has, or
could reasonably be expected to have, a Material Adverse Effect which fact has
not been set forth herein, in the financial statements of the Borrower and its
Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in any
certificate, opinion or other written statement made or furnished by any Credit
Party to the Administrative Agent and/or the Lenders.
SECTION 3.25 YEAR 2000 ISSUE.
Any reprogramming and related testing required to permit the proper
functioning of the Credit Parties' computer systems in and following the year
2000 will be completed in all material respects prior to September 29, 1999
(that is, the Credit Parties will be "Year 2000 Compliant"), and the cost to
the Credit Parties of such reprogramming and testing will not result in a
Default or Event of Default or a Material Adverse Effect. Except for such
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Credit Parties and their
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, adequate for the conduct of its
business.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS,
TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS.
This Agreement shall become effective upon the satisfaction or waiver
of the following conditions precedent:
(a) EXECUTION OF AGREEMENT. The Administrative Agent shall
have received (i) counterparts of this Agreement, executed by a duly
authorized officer of each party hereto, (ii) for the account of each
Lender, Revolving Notes, the Tranche A Term Notes and the Tranche B
Term Notes and for the account of the Swingline Lender, a Swingline
Note and (iii) counterparts of the Security Agreement and the Pledge
Agreement, in each case conforming to the requirements of this
Agreement and executed by duly authorized officers of the Credit
Parties.
(b) AUTHORITY DOCUMENTS. The Administrative Agent shall have
received the following:
(i) ARTICLES OF INCORPORATION. Copies of the articles of
incorporation or other charter documents, as applicable, of
each Credit Party certified to be true
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and complete as of a recent date by the appropriate
governmental authority of the state of its incorporation.
(ii) RESOLUTIONS. Copies of resolutions of the board
of directors of each Credit Party approving and adopting the
Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by an
officer of such Credit Party as of the Closing Date to be
true and correct and in force and effect as of such date.
(iii) BYLAWS. A copy of the bylaws of each Credit
Party certified by an officer of such Credit Party as of the
Closing Date to be true and correct and in force and effect
as of such date.
(iv) GOOD STANDING. Copies of (i) certificates of
good standing, existence or its equivalent with respect to
the each Credit Party certified as of a recent date by the
appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so
qualify and be in good standing could reasonably be expected
to have a Material Adverse Effect on the business or
operations of the Borrower and its Subsidiaries in such state
and (ii) a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) INCUMBENCY. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
(c) CLOSING DATE STRUCTURE. The Administrative Agent shall be
satisfied with management structure, legal structure, voting control,
liquidity, total leverage and total capitalization of the Borrower as
of the Closing Date.
(d) YEAR 2000 PLAN. The Administrative Agent shall have
received the Borrower's plan for becoming Year 2000 Compliant, which
plan shall be in form and substance satisfactory to the Administrative
Agent.
(e) ENVIRONMENTAL REPORTS. The Administrative Agent shall have
received satisfactory environmental reviews of all real property owned
by the Borrower and its Subsidiaries.
SECTION 4.2 CONDITIONS TO INITIAL REVOLVING LOANS, TRANCHE A TERM
LOANS AND TRANCHE B TERM LOANS.
The obligations of each Lender to make the initial Revolving Loans, the
Tranche A Term Loan and the Tranche B Term Loan on the Funding Date is subject
to the satisfaction or waiver of the following conditions precedent:
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(a) LEGAL OPINIONS OF COUNSEL. The Administrative Agent shall
have received an opinion of Shearman & Sterling, counsel for the
Credit Parties, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, in form and substance reasonably
acceptable to the Administrative Agent.
(b) PERSONAL PROPERTY COLLATERAL. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
the Administrative Agent:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Administrative Agent's security interest in the Collateral,
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's sole discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the
Lenders' security interest in the Collateral; and
(iv) in the case of any personal property Collateral
located at premises leased by a Credit Party, such estoppel
letters, consents and waivers from the landlords on such real
property as may be required by the Administrative Agent.
(e) REAL PROPERTY COLLATERAL. The Administrative Agent shall
have received, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) fully executed and notarized mortgages, deeds of
trust or deeds to secure debt (each, as the same may be
amended, modified, restated or supplemented from time to time,
a "MORTGAGE INSTRUMENT" and collectively the "MORTGAGE
INSTRUMENTS") encumbering the fee interest in the properties
listed in SCHEDULE 3.19(a) (excluding for purposes hereof, the
property located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ for
a period of 180 days following the Funding Date) as properties
owned by the Credit Parties (each a "MORTGAGED PROPERTY" and
collectively the "MORTGAGED PROPERTIES");
(ii) a title report obtained by the Credit Parties in
respect of each of the Mortgaged Properties;
(iii) with respect to each Mortgaged Property, current
form ALTA mortgagee title insurance policies issued by Lawyers
Title Insurance Corporation (the "MORTGAGE POLICIES"), in
amounts not less than the respective amounts
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designated in SCHEDULE 3.19(a) with respect to any particular
Mortgaged Property, assuring the Administrative Agent that
each of the Mortgage Instruments creates a valid and
enforceable first priority mortgage lien on the applicable
Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, shall provide for
affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the
Administrative Agent;
(iv) evidence as to (A) whether any Mortgaged Property
is in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards (a "FLOOD
HAZARD PROPERTY") and (B) if any Mortgaged Property is a Flood
Hazard Property, (1) whether the community in which such
Mortgaged Property is located is participating in the National
Flood Insurance Program, (2) the applicable Credit Party's
written acknowledgment of receipt of written notification from
the Administrative Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to
whether the community in which each such Flood Hazard Property
is located is participating in the National Flood Insurance
Program and (3) copies of insurance policies or certificates
of insurance of the Borrower and its Subsidiaries evidencing
flood insurance reasonably satisfactory to the Administrative
Agent and naming the Administrative Agent as sole loss payee
on behalf of the Lenders; and
(v) maps or plats of an as-built survey of the sites
of the Mortgaged Properties certified to the Administrative
Agent and Lawyers Title Insurance Corporation in a manner
reasonably satisfactory to them, dated a date satisfactory to
each of the Administrative Agent and Lawyers Title Insurance
Corporation by an independent professional licensed land
surveyor reasonably satisfactory to each of the Administrative
Agent and Lawyers Title Insurance Corporation, which maps or
plats and the surveys on which they are based shall be
sufficient to delete any standard printed survey exception
contained in the applicable title policy and be made in
accordance with the Minimum Standard Detail Requirements for
Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown
on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and
other improvements and the established building setback lines;
(B) the lines of streets abutting the sites and width thereof,
(C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site
is described as being on a filed map, a legend relating the
survey to said map.
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(d) LIABILITY AND CASUALTY INSURANCE. The Administrative Agent
shall have received copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance meeting the
requirements set forth herein or in the Security Documents. The
Administrative Agent shall be named as loss payee and additional
insured on all such insurance policies for the benefit of the Lenders.
(e) FEES. The Administrative Agent shall have received all
fees, if any, owing pursuant to the Fee Letter and Section 2.6.
(f) LITIGATION. There shall not exist any pending litigation
or, to the best of any Credit Party's knowledge, investigation
affecting or relating to the Borrower or any of its Subsidiaries, this
Agreement and the other Credit Documents that in the reasonable
judgment of the Administrative Agent could materially adversely affect
the Borrower or any of its Subsidiaries, this Agreement and the other
Credit Documents, that has not been settled, dismissed, vacated,
discharged or terminated prior to the Closing Date.
(g) SOLVENCY EVIDENCE. (A) The Administrative Agent shall have
received an officer's certificate for each Credit Party prepared by
the chief financial officer of each such Credit Party as to the
financial condition, solvency and related matters of each such Credit
Party, in each case after giving effect to the Acquisition and the
initial borrowings under the Credit Documents, in substantially the
form of SCHEDULE 4.2(g) hereto and (B) the Administrative Agent shall
have received a solvency opinion from a firm satisfactory to the
Administrative Agent as to the solvency and related matters of (i) the
Acquired Company on the Closing Date and (ii) the Borrower after
giving effect to the Acquisition and the initial borrowings under the
Credit Documents.
(h) ACCOUNT DESIGNATION LETTER. The Administrative Agent shall
have received the executed Account Designation Letter in the form of
SCHEDULE 1.1 (a) hereto.
(i) CORPORATE STRUCTURE. The corporate capital and ownership
structure of the Borrower and its Subsidiaries (after giving effect to
the purchase of the Acquired Company) shall be as described in
SCHEDULE 3.12. The Administrative Agent shall be satisfied with
management structure, legal structure, voting control, liquidity,
total leverage and total capitalization of the Borrower as of the
Closing Date.
(j) ACQUISITION DOCUMENTS. There shall not have been any
material modification, amendment, supplement or waiver to the
Acquisition Documents without the prior written consent of the
Administrative Agent, including, but not limited to, any modification,
amendment, supplement or waiver relating to the amount or type of
consideration to be paid in connection with the Acquisition and the
contents of all disclosure schedules and exhibits, and the Acquisition
shall have been consummated in accordance with the terms of the
Acquisition Documents (without waiver of any conditions precedent to
the obligations of the buyer thereunder) with total consideration
relating to the Acquisition including all fees and expenses incurred
in connection therewith not to exceed $101,000,000 with fees and
expenses incurred in connection therewith not to exceed
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$5,500,000. The Administrative Agent shall have received final copies
of the Acquisition Documents, together with all exhibits and schedules
thereto, certified by an officer of the Borrower.
(k) SUBORDINATED DEBT AND EQUITY. The Borrower shall have
received proceeds from the issuance of a combination of debt and
equity in an amount not less than $50,000,000 on terms and conditions
reasonably acceptable to the Administrative Agent in the aggregate,
provided that the equity component of such combination shall be in an
amount not less than $37,500,000 on terms and conditions acceptable to
the Administrative Agent.
(l) GOVERNMENT CONSENT. The Administrative Agent shall have
received evidence that all governmental, shareholder and material
third party consents and approvals necessary in connection with the
financings and other transactions contemplated hereby have been
obtained and all applicable waiting periods have expired without any
action being taken by any authority that could restrain, prevent or
impose any material adverse conditions on such transactions or that
could seek or threaten any of the foregoing.
(m) COMPLIANCE WITH LAWS. The financing and other transactions
contemplated hereby shall be in compliance with all applicable laws
and regulations (including all applicable securities and banking laws,
rules and regulations).
(n) BANKRUPTCY. There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower or any of its Subsidiaries.
(o) MATERIAL ADVERSE EFFECT. Except as disclosed on Schedule
3.2, no material adverse change shall have occurred since December 31,
1998 in the business, properties, operations or conditions (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole.
(p) FUNDED DEBT. After giving effect to the Acquisition and
the closing of this Agreement, there shall be no more than
$153,000,000 in Funded Debt of the Borrower and its Subsidiaries on a
consolidated basis.
(q) MINIMUM EBITDA. The Administrative Agent shall have
received satisfactory evidence that Consolidated EBITDA for the
immediately preceding twelve month period was not less than
$30,000,000. It being agreed that if the Funding Date shall occur
after the 15th day of any month, then Consolidated EBITDA shall be
calculated as of the end of the most recently ended month.
(r) FINANCIAL STATEMENTS. The Administrative Agent shall have
received copies of the financial statements referred to in Section 3.1
hereof, each in form and substance satisfactory to it.
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(s) BORROWING BASE CERTIFICATE. The Administrative Agent shall
have received a Borrowing Base Certificate dated as of the Closing
Date in form and substance satisfactory to the Administrative Agent.
(t) TERMINATION OF EXISTING INDEBTEDNESS. All existing
Indebtedness for borrowed money of the Borrower and its Subsidiaries
(other than the Indebtedness listed ON SCHEDULE 6.1(b)) shall have
been repaid in full and terminated.
(u) ADDITIONAL MATTERS. All other legal matters in connection
with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative
Agent and its counsel.
SECTION 4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit
hereunder is subject to the satisfaction or waiver of the following
conditions precedent on the date of making such Extension of Credit:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Credit Parties herein, in the Security
Documents or which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct in all
material respects on and as of the date of such Extension of Credit as
if made on and as of such date other than any such representations and
warranties that, by its terms, refer to a specific date other than the
date of such Extension of Credit, which shall be true and correct to
all material respects on and as of such specific date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date
unless such Default or Event of Default shall have been waived in
accordance with this Agreement.
(c) COMPLIANCE WITH COMMITMENTS. Immediately after giving
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of the aggregate
principal amount of outstanding Revolving Loans PLUS Swingline Loans
PLUS LOC Obligations shall not exceed the Revolving Committed Amount,
(ii) the LOC Obligations shall not exceed the LOC Committed Amount and
(iii) the Swingline Loans shall not exceed the Swingline Commitment.
(d) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If such Loan is
made pursuant to Section 2.1, all conditions set forth in such
Section shall have been satisfied.
(e) ADDITIONAL CONDITIONS TO TRANCHE A TERM LOAN. If such
Loan is made pursuant to Section 2.2, all conditions set forth in such
Section shall have been satisfied.
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(f) ADDITIONAL CONDITIONS TO TRANCHE B TERM LOAN. If such Loan
is made pursuant to Section 2.3, all conditions set forth in such
Section shall have been satisfied.
(g) ADDITIONAL CONDITIONS TO LETTERS OF CREDIT. If such
Extension of Credit is made pursuant to Section 2.4, all conditions
set fort in such Section shall have been satisfied.
(h) ADDITIONAL CONDITIONS TO SWINGLINE LOANS. If such
Extension of Credit is made pursuant to Section 2.5, all conditions
set forth in such Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Borrower shall, and shall cause each of its Subsidiaries (other than
in the case of Sections 5.1, 5.2 or 5.7 hereof), to:
SECTION 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within ninety (90) days after the end of each fiscal year of
the Borrower, a copy of the consolidated and consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated and consolidating
statements of income and of cash flows of the Borrower and its
consolidated Subsidiaries for such year, such consolidated statements
shall be audited by a firm of independent certified public accountants
of nationally recognized standing reasonably acceptable to the
Required Lenders, and shall set forth in each case in comparative form
the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification
indicating that the scope of the audit was inadequate to permit such
independent certified public accountants to certify such financial
statements without such qualification;
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(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within forty-five (45) days after the end of each of the
first three fiscal quarters of the Borrower, a company-prepared
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such period and related
company-prepared statements of income and cash flows for the Borrower
and its consolidated Subsidiaries for such quarterly period and for
the portion of the fiscal year ending with such period, in each case
setting forth in comparative form consolidated and consolidating
figures for the corresponding period or periods of the preceding
fiscal year (subject to normal recurring year-end audit adjustments);
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available and in
any event within thirty (30) days after the end of each month of the
Borrower (other than at the end of a fiscal quarter, in which case 45
days after the end thereof), a company-prepared consolidated and
consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such period and related company-prepared
statements of income and cash flows for the Borrower and its
consolidated Subsidiaries for such monthly period and for the portion
of the fiscal year ending with such period, in each case setting forth
in comparative form consolidated and consolidating figures for the
corresponding period or periods of the preceding fiscal year (subject
to normal recurring year-end audit adjustments); and
(d) ANNUAL BUDGET PLAN. As soon as available, but in any event
within forty five (45) days after the end of each fiscal year, a copy
of the detailed annual budget or plan of the Borrower for the next
fiscal year on quarterly basis, in form and detail reasonably
acceptable to the Administrative Agent and the Required Lenders,
together with a summary of the material assumptions made in the
preparation of such annual budget or plan;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
SECTION 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a) above, a certificate of
the independent certified public accountants reporting on such
financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
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(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of
a Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, each of the Credit Parties during such period
observed or performed in all material respects all of its covenants
and other agreements, and satisfied in all material respects every
condition, contained in this Agreement to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and such certificate shall include the calculations
in reasonable detail required to indicate compliance with Section 5.9
as of the last day of such period;
(c) within thirty (30) days after the same are sent, copies of
all material financial reports (other than those otherwise provided
pursuant to Section 5.1 and those which are of a promotional nature)
and other financial information which the Borrower sends to its
shareholders, and within thirty days after the same are filed, copies
of all financial statements and non-confidential reports which the
Borrower may make to, or file with the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year
of the Borrower, a certificate containing information regarding the
amount of all Asset Dispositions, Debt Issuances, and Equity Issuances
that were made during the prior fiscal year and amounts received in
connection with any Recovery Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other report
or "management letter" submitted by independent accountants to the
Borrower or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person;
(f) within 15 days after the end of each calendar month, a
Borrowing Base Certificate (including an accounts receivable detail
and an inventory detail) as of the end of the immediately preceding
month, substantially in the form of SCHEDULE 5.2(f) and certified by
the chief financial officer of the Borrower to be true and correct as
of such date; and
(g) promptly, such additional financial and other information
as the Administrative Agent, on behalf of any Lender, may from time to
time reasonably request.
SECTION 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being
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contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.
SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now
conducted by it on the Closing Date and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all property useful and necessary in its business in
good working order and condition (ordinary wear and tear and
obsolescence excepted) except where failure to do so would not have a
Material Adverse Effect;
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property (including without
limitation its material tangible Collateral) in at least such amounts
and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written
request, full information as to the insurance carried; PROVIDED,
HOWEVER, that the Borrower and its Subsidiaries may maintain self
insurance plans to the extent companies of similar size and in similar
businesses do so. The Administrative Agent shall be named as loss
payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Administrative Agent,
that it will give the Administrative Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or
canceled, and that no act or default of the Borrower or any of its
Subsidiaries or any other Person shall affect the rights of the
Administrative Agent or the Lenders under such policy or policies. The
present insurance coverage of the Borrower and its Subsidiaries is
outlined as to carrier, policy number, expiration date, type and
amount on SCHEDULE 5.5(b); and
(c) In case of any material loss, damage to or destruction of
the Collateral of any Credit Party or any part thereof, such Credit
Party shall promptly give written notice thereof to the Administrative
Agent generally describing the nature and extent of such damage or
destruction.
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SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent or any Lender, the Administrative Agent or any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records (other than materials protected by the
attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
SECTION 5.7 NOTICES.
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business Days
after the Borrower knows or has reason to know thereof, the occurrence
of any Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or
proceeding known to the Borrower, affecting the Borrower or any of its
Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty (30)
days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan,
the creation of any Lien in favor of the PBGC (other than a Permitted
Lien) or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
(e) promptly, any other development or event which could
reasonably be expected to have a Material Adverse Effect.
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Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
SECTION 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and use its best
efforts to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and use
its best efforts to ensure that all tenants and subtenants obtain and
comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse
Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not reasonably be expected to
have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower any of its Subsidiaries
or the Properties, or any legally binding orders, requirements or
demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph
shall survive repayment of the Notes and all other amounts payable
hereunder.
SECTION 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date,
the Borrower shall, and shall cause each of its Subsidiaries to,
comply with the following financial covenants:
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(a) LEVERAGE RATIO. The Leverage Ratio, as of the last day of
each fiscal quarter of the Borrower and its Subsidiaries occurring
during the periods indicated below, shall be less than or equal to the
following:
Period Ratio
------ -----
Closing Date through and including
the second fiscal quarter of fiscal year 2000 5.25 to 1.0
Third fiscal quarter of fiscal year 2000
through and including the fourth fiscal quarter
of fiscal year 2000 5.00 to 1.0
First fiscal quarter of fiscal year 2001 4.75 to 1.0
Second fiscal quarter of fiscal year 2001 4.50 to 1.0
Third fiscal quarter of fiscal year 2001 4.25 to 1.0
Fourth fiscal quarter of fiscal year 2001
through and including the third fiscal
quarter of fiscal year 2002 4.00 to 1.0
Fourth fiscal quarter of fiscal year 2002
and thereafter 3.75 to 1.0
(b) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio,
as of the last day of each fiscal quarter of the Borrower and
its Subsidiaries occurring during the periods indicated below,
shall be less than or equal to the following:
Period Ratio
------ -----
Closing Date through and including
the second fiscal quarter of fiscal year 2000 4.25 to 1.0
Third fiscal quarter of fiscal year 2000 through
and including the fourth fiscal quarter of
fiscal year 2000 4.00 to 1.0
First fiscal quarter of fiscal year 2001 3.75 to 1.0
Second fiscal quarter of fiscal year 2001 3.50 to 1.0
Third fiscal quarter of fiscal year 2001 3.25 to 1.0
Fourth fiscal quarter of fiscal year 2001
through and including the third fiscal
quarter of fiscal year 2002 3.00 to 1.0
Fourth fiscal quarter of fiscal year 2002
and thereafter 2.75 to 1.0
(c) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Borrower and
its Subsidiaries occurring during the periods indicated below, shall
be greater than or equal to the following:
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Period Ratio
------ -----
Closing Date through and including
the second fiscal quarter of fiscal year 2000 1.05 to 1.0
Third fiscal quarter of fiscal year 2000 through
and including the first fiscal quarter of
fiscal year 2001 1.10 to 1.0
Second fiscal quarter of fiscal
year 2001 and thereafter 1.15 to 1.0
(d) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Borrower and its
Subsidiaries occurring during the periods indicated below, shall be
greater than or equal to the following:
Period Ratio
------ -----
Closing Date through and including
the second fiscal quarter of fiscal year 2000 2.00 to 1.0
Third fiscal quarter of fiscal year 2000
through and including the fourth fiscal
quarter of fiscal year 2000 2.15 to 1.0
First fiscal quarter of fiscal year 2001 2.25 to 1.0
Second fiscal quarter of fiscal year 2001 2.35 to 1.0
Third fiscal quarter of fiscal year 2001 through
and including the fourth fiscal quarter of fiscal
year 2001 2.50 to 1.0
First fiscal quarter of fiscal year 2002
and thereafter 3.00 to 1.0
(e) CONSOLIDATED EBITDA. Consolidated EBITDA with respect to
the Borrower and its Subsidiaries, as of the last day of each fiscal
quarter of the Borrower occurring during the period indicated below,
shall be greater than or equal to the following:
Period Amount
------ ------
Closing Date through and including
the first fiscal quarter of fiscal year 2000 $26,000,000
Second fiscal quarter of fiscal year 2000 $27,500,000
Third fiscal quarter of fiscal year 2000 $28,500,000
Fourth fiscal quarter of fiscal year 2000 $29,500,000
First fiscal quarter of fiscal year 2001 $30,000,000
Second fiscal quarter of fiscal year 2001 $31,000,000
Third fiscal quarter of fiscal year 2001 $32,000,000
Fourth fiscal quarter of fiscal year 2001 $33,000,000
First fiscal quarter of fiscal year 2002
through and including the second fiscal quarter
of fiscal year 2002 $35,000,000
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Third fiscal quarter of fiscal year 2002
through and including the fourth fiscal quarter
of fiscal year 2002 $37,000,000
First fiscal quarter of fiscal year 2003
through and including the second fiscal quarter
of fiscal year 2003 $39,000,000
Third fiscal quarter of fiscal year 2003 and thereafter $41,000,000
(f) CONSOLIDATED CAPITAL EXPENDITURES. Consolidated Capital
Expenditures (which shall not include the conversion of operating
leases to Capital Leases or other Indebtedness as permitted by Section
6.17) as of the end of any fiscal year of the Borrower shall be less
than or equal to the amount set forth below during the periods set
forth below:
Period Amount
------ ------
Fiscal Year 1999 $8,800,000
Fiscal Year 2000 $8,500,000
Fiscal Year 2001 $7,500,000
Fiscal Year 2002 $7,500,000
Fiscal Year 2003 $7,500,000
Fiscal Year 2004 $7,500,000
Fiscal Year 2005 $7,500,000
SECTION 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.
The Credit Parties will cause each of their Domestic Subsidiaries,
whether newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party.
SECTION 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 PLEDGED ASSETS.
Each Credit Party will, and will cause each of its Subsidiaries to, be
subject at all times to a first priority, perfected Lien with respect to all of
such Subsidiary's Collateral (subject in each case to Permitted Liens) in favor
of the Administrative Agent pursuant to the terms and conditions of the Security
Documents or such other security documents as the Administrative Agent shall
reasonably request. Each Credit Party shall, and shall cause each of its
Subsidiaries
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to, adhere to the covenants regarding the location of personal property as
set forth in the Security Documents.
SECTION 5.13 YEAR 2000 COMPLIANCE.
The Credit Parties will promptly notify the Administrative Agent in
the event any Credit Party discovers or determines that any computer
application (including those of its suppliers, vendors and customers) that is
material to its or any of its Subsidiaries' business and operations will not
be Year 2000 Compliant, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.14 INTEREST RATE PROTECTION.
The Borrower shall, within 90 days of the Funding Date, enter into
interest rate protection agreements protecting against fluctuations in
interest rates as to which the material terms are satisfactory to the
Administrative Agent, which agreements shall provide for coverage in an
amount not less than $50,000,000 and for a duration of not less than three
years.
SECTION 5.15 SENIOR DEBT RATING.
The Borrower shall have obtained, within 30 days of the Funding
Date, a senior debt rating of at least "B" from S&P and "B2" from ▇▇▇▇▇'▇.
SECTION 5.16 FURTHER ASSURANCES.
As soon as practicable, but in any event within (a) 45 days of the
Closing Date, the Borrower shall have delivered surveys for each of the
Mortgaged Properties satisfactory to the Administrative Agent in its sole
discretion, (b) 15 days of the Closing Date, the Administrative Agent shall
have received information in connection with field audits of the assets of
the Credit Parties the results of which shall be satisfactory to the
Administrative Agent in its sole discretion, (c) 45 days of the Closing Date,
the Administrative Agent shall have received a landlord waiver with respect
to the leased property of the Borrower located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ on terms satisfactory to the Administrative Agent in
its sole discretion, (d) within 5 days of the Closing Date, the Borrower
shall have delivered evidence satisfactory to the Administrative Agent in its
sole discretion that the Indebtedness of the Borrower owing to Great Northern
Insured Annuity Corporation in the initial principal amount of $1,295,000 has
been paid in full and all liens existing in connection therewith have been
terminated and (e) within 15 days of the Closing Date, the Borrower shall
have delivered evidence satisfactory to the Administrative Agent in its sole
discretion that is has obtained flood insurance with respect to the real
property located on ▇▇▇▇▇▇ Way in Santa Ana, California naming the
Administrative Agent as sole loss payee on behalf of the Lenders.
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ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing
Date, and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all
other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full that:
SECTION 6.1 INDEBTEDNESS.
The Borrower will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement
and the other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries
existing as of the Closing Date as referenced in the financial
statements referenced in Section 3.1 (and set out more specifically in
SCHEDULE 6.1(b)) hereto and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension;
(c) Indebtedness of the Borrower and its Subsidiaries
incurred after the Closing Date consisting of Capital Leases or
Indebtedness incurred to provide all or a portion of the purchase price
or cost of construction of an asset provided that (i) such Indebtedness
when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and (iii) the
total amount of all such Indebtedness shall not exceed $500,000 at any
time outstanding; provided, however that notwithstanding the foregoing,
the operating leases set forth on SCHEDULE 6.17 hereto may be converted
into Capital Leases or purchased at such time as the Borrower may
elect.
(d) Unsecured intercompany Indebtedness among the
Borrower and its Subsidiaries, PROVIDED that any such Indebtedness
shall be fully subordinated to the Credit Party Obligations hereunder
on terms reasonably satisfactory to the Administrative Agent;
(e) Indebtedness and obligations owing under Hedging
Agreements relating to the Loans hereunder and other Hedging Agreements
entered into in order to manage existing or anticipated interest rate,
exchange rate or commodity price risks and not for speculative
purposes;
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(f) Indebtedness and obligations of Credit Parties owing
under documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of
credit except for the Letters of Credit hereunder) generally in an
aggregate amount not to exceed $250,000 in the aggregate;
(g) Indebtedness in respect of Guaranty Obligations
(other than Guaranty Obligations permitted pursuant to Section 6.1(a))
in an aggregate amount not to exceed $500,000 at any time outstanding;
(h) Indebtedness and obligations owing under the
Subordinated Notes; and
(i) other Indebtedness of the Borrower and its
Subsidiaries which does not exceed $500,000 in the aggregate at any
time outstanding.
SECTION 6.2 LIENS.
The Borrower will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to
any of its property or assets of any kind (whether real or personal, tangible
or intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
SECTION 6.3 GUARANTY OBLIGATIONS.
The Borrower will not, nor will it permit any Subsidiary to, enter
into or otherwise become or be liable in respect of any Guaranty Obligations
(excluding specifically therefrom endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) other than (i)
those in favor of the Lenders in connection herewith, (ii) those in favor of
the holders of the TCW/Crescent Mezzanine Notes, and (iii) Guaranty
Obligations by the Borrower or its Subsidiaries of Indebtedness permitted
under Section 6.1(b) and Section 6.1(g) (except, as regards Indebtedness
under Section 6.1(b) thereof, only if and to the extent such Indebtedness was
guaranteed on the Closing Date).
SECTION 6.4 NATURE OF BUSINESS.
The Borrower will not, nor will it permit any Subsidiary to, alter
the character of its business in any material respect from that conducted as
of the Closing Date.
SECTION 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell,
transfer, lease or otherwise dispose of its property or assets or agree
to do so at a future time except the following, without duplication,
shall be expressly permitted:
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(i) Specified Sales;
(ii) the sale, transfer, lease or other
disposition of property or assets (A) to an unrelated party
not in the ordinary course of business (other than Specified
Sales), where and to the extent that they are the result of a
Recovery Event or (B) the sale, lease, transfer or other
disposition of machinery, parts and equipment no longer used
or useful in the conduct of the business of the Borrower or
any of its Subsidiaries, as appropriate, in its reasonable
discretion, so long as the net proceeds therefrom are used to
repair or replace damaged property or to purchase or otherwise
acquire new assets or property, PROVIDED that such purchase or
acquisition is committed to within 180 days of receipt of the
net proceeds and such purchase or acquisition is consummated
within 270 days of receipt of such proceeds;
(iii) the sale, lease or transfer of property or
assets (at fair value) between the Borrower and any Guarantor;
(iv) the sale, lease or transfer of property or
assets not to exceed $500,000 in the aggregate in any fiscal
year;
(v) the sale, lease or transfer of certain real
property owned by Power Circuits, Inc. as described on
SCHEDULE 3.19(a);
PROVIDED, that in the case of a sale, lease or transfer pursuant to
Section 6.5(a)(ii)(A) and Section 6.5(a)(iv), at least 75% of the
consideration received therefor by the Borrower or any such Subsidiary
is in the form of cash or Cash Equivalents and in the case of a sale
pursuant to Section 6.5(a)(v), 100% of the consideration received
therefor by the Borrower or any Subsidiary is in the form of cash or
Cash Equivalents; PROVIDED, FURTHER, that with respect to sales of
assets permitted hereunder only, the Administrative Agent shall be
entitled, without the consent of the Required Lenders, to release its
Liens relating to the particular assets sold; or
(b) (i) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets
of any Person (other than purchases or other acquisitions of inventory,
leases, materials, property and equipment in the ordinary course of
business, except as otherwise limited or prohibited herein) provided
that so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower may (A) acquire
all or a majority of the Capital Stock or other ownership interest in
any Person (in a similar or related line of business and which has
earnings before interest, taxes, depreciation and amortization for the
prior four fiscal quarters in an amount greater than $0) or all or a
substantial portion of the assets, property and/or operations of a
Person (in a similar or related line of business and which had earnings
before interest, taxes, depreciation and amortization for the prior
four fiscal quarters in an amount greater than $0) in an aggregate
amount not to exceed $1,000,000
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for any individual acquisition of $2,500,000 in the aggregate in any
fiscal year; provided, however that after giving effect to any such
acquisition otherwise permitted hereunder, there shall be not less than
$3,000,000 of availability under Section 2.1 and (B) to the extent
permitted under Section 5.9(f), purchase that certain real property
located at ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ in
an aggregate amount not to exceed $3,500,000 or (ii) enter into any
transaction of merger or consolidation, except for (A) investments or
acquisitions permitted pursuant to Section 6.6, and (B) the merger or
consolidation of a Credit Party with and into another Credit Party,
PROVIDED that if the Borrower is a party thereto, the Borrower will be
the surviving corporation.
SECTION 6.6 ADVANCES, INVESTMENTS AND LOANS.
The Borrower will not, nor will it permit any Subsidiary to, lend
money or extend credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make
any capital contribution to, any Person except for Permitted Investments.
SECTION 6.7 TRANSACTIONS WITH AFFILIATES.
Except for those transactions contemplated by the agreements set
forth on SCHEDULE 6.7 and except as permitted in subsection (iv) of the
definition of Permitted Investments, the Borrower will not, nor will it
permit any Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than on fair and reasonable
terms and conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
SECTION 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for Domestic Subsidiaries which are
joined as Additional Credit Parties in accordance with the terms hereof. The
Borrower will not sell, transfer, pledge or otherwise dispose of any Capital
Stock or other equity interests in any of its Subsidiaries, nor will it
permit any of its Subsidiaries to issue, sell, transfer, pledge or otherwise
dispose of any of their Capital Stock or other equity interests, except in a
transaction permitted by Section 6.5.
SECTION 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
The Borrower will not, nor will it permit any of its Subsidiaries
to, change its fiscal year or to change any fiscal quarter end as set forth
on SCHEDULE 6.9(e). The Borrower will not, nor will it permit any Subsidiary
to, amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational document) or bylaws (or other similar
document) without the prior written consent of the Required Lenders. The
Borrower will not, nor will it permit any of its Subsidiaries to, without the
prior written consent of the Administrative Agent, amend, modify, cancel or
terminate or fail to renew or extend or permit
80
the amendment, modification, cancellation or termination of any of the
Material Contracts, except in the event that such amendments, modifications,
cancellations or terminations could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.10 LIMITATION ON RESTRICTED ACTIONS.
The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (a) pay dividends or make any other distributions to any Credit
Party on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, (b) pay any Indebtedness or
other obligation owed to any Credit Party, (c) make loans or advances to any
Credit Party, (d) sell, lease or transfer any of its properties or assets to
any Credit Party, or (e) act as a Guarantor and pledge its assets pursuant to
the Credit Documents or any renewals, refinancings, exchanges, refundings or
extension thereof, except (in respect of any of the matters referred to in
clauses (a)-(d) above) for such encumbrances or restrictions existing under
or by reason of (i) this Agreement and the other Credit Documents, (ii)
applicable law; (iii) any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c), PROVIDED that any such restriction
contained therein relates only to the asset or assets constructed or acquired
in connection therewith or (iv) any Permitted Lien or any document or
instrument governing any Permitted Lien, PROVIDED that any such restriction
contained therein relates only to the asset or assets subject to such
Permitted Lien.
SECTION 6.11 RESTRICTED PAYMENTS.
The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay
any Restricted Payment, except (a) to make dividends payable solely in the
same class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party (directly or indirectly through
Subsidiaries), (c) as permitted by Section 6.16,(d) to make regularly
scheduled payments of interest on the TCW/Crescent Notes to the extent
permitted by and subject to the subordination provisions applicable thereto,
and (e) provided that no Default or Event of Default has occurred and is
continuing at such time or would be directly or indirectly caused as a result
thereof, the Borrower may (i) pay cash distributions in respect of interest
owing on the Subordinated Notes (other than the TCW/Crescent Notes) in an
aggregate amount not to exceed $400,000 annually and (ii) repurchase stock
and options of management in an aggregate amount not to exceed $2,000,000
during the term of this Agreement.
SECTION 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Borrower will not, nor will it permit any Subsidiary to, after
the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Indebtedness if such amendment or
modification would add or change any terms in a manner adverse to the issuer
of such Indebtedness, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled
or increase the interest rate applicable thereto or change any subordination
provision thereof.
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SECTION 6.13 SALE LEASEBACKS.
The Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an operating lease or a
Capital Lease, of any property (whether real, personal or mixed), whether now
owned or hereafter acquired in excess of $1,000,000 in the aggregate on an
annual basis, (a) which the Borrower or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not the Borrower
or any Subsidiary or (b) which the Borrower or any Subsidiary intends to use
for substantially the same purpose as any other property which has been sold
or is to be sold or transferred by the Borrower or any Subsidiary to another
Person which is not the Borrower or any Subsidiary in connection with such
lease.
SECTION 6.14 NO FURTHER NEGATIVE PLEDGES.
The Borrower will not, nor will it permit any Subsidiary to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other
obligation, except (a) pursuant to this Agreement and the other Credit
Documents, (b) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c), PROVIDED that any such restriction
contained therein relates only to the asset or assets constructed or acquired
in connection therewith and (c) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien, PROVIDED that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
SECTION 6.15 PARENT HOLDING COMPANY.
The Parent shall not engage in any operations, business or activity
other than holding not less than 51% of the capital stock of the Borrower.
SECTION 6.16 OTHER PAYMENTS.
The Borrower will not, nor will it permit any Subsidiary to, make
payments in respect of management fees or the Retention Bonus Plan; provided,
however, that so long as no Default or Event of Default shall have occurred
or be continuing or would result therefrom, the Borrower may (i) pay
management fees to the Sponsors or any of their Affiliates in an aggregate
annual amount not to exceed $600,000 and (ii) pay amounts owing in respect of
the Retention Bonus Plan in an aggregate annual amount not to exceed
$1,200,000; notwithstanding the foregoing, if the Borrower shall have been
prohibited from making payments owing in respect of the Retention Bonus Plan
as a result of the foregoing provisions, then, so long as no Default or Event
of Default shall have occurred or be continuing or would result therefrom,
the Borrower may pay any amounts past due at such time.
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SECTION 6.17 OPERATING LEASES.
The Borrower will not, nor will it permit any Subsidiary to incur or
permit to exist any obligations in respect of operating leases which require
rental payments in excess of $2,500,000 in the aggregate for all such Persons
during any fiscal year; provided, however that the amount set forth above
shall be permanently reduced on a dollar for dollar basis upon the conversion
of each operating lease set forth on SCHEDULE 6.17 to a Capital Lease or
other Indebtedness otherwise permitted under Section 6. 1.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) The Borrower shall fail to pay any principal on any
Note when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Note or any fee or other
amount payable hereunder when due in accordance with the terms thereof
or hereof and such failure shall continue unremedied for three (3)
Business Days (or any Guarantor shall fail to pay on the Guaranty in
respect of any of the foregoing or in respect of any other Guaranty
Obligations thereunder); or
(b) Any representation or warranty made or deemed made
herein, in the Security Documents or in any of the other Credit
Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made
or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply
with or observe any term, covenant or agreement applicable to it
contained in Section 5.7(a), Section 5.9 or Article VI hereof; or (ii)
any Credit Party shall fail to comply with any other covenant,
contained in this Credit Agreement or the other Credit Documents or any
other agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in
favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a) or 7.1(c)(i) above), and in the event
such breach or failure to comply is capable of cure, is not cured
within thirty (30) days of its occurrence; or
83
(d) The Borrower or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness
(other than the Notes) in a principal amount outstanding of at least
$500,000 in the aggregate for the Borrower and any of its Subsidiaries
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness was created;
or (ii) default in the observance or performance of any other agreement
or condition relating to any Indebtedness in a principal amount
outstanding of at least $500,000 in the aggregate for the Borrower and
its Subsidiaries or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or
(e) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or the Borrower or any Subsidiary shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any Subsidiary any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the
Borrower or any Subsidiary any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any Subsidiary shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by
insurance) of $500,000 or more and all such judgments or decrees shall
not have been paid and satisfied, vacated, discharged, stayed or bonded
pending appeal within 10 days from the entry thereof; or
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(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
(other than a Permitted Lien) shall arise on the assets of the Borrower
or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower, any of its Subsidiaries or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, any Multiemployer Plan or (vi) any
other similar event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could have a Material Adverse Effect; or
(h) There shall occur a Change of Control; or
(i) The Guaranty or any provision thereof shall cease to
be in full force and effect or any Guarantor or any Person acting by or
on behalf of any Guarantor shall deny or disaffirm any Guarantor's
obligations under the Guaranty;
(j) Any other Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Lenders
the security interests, liens, rights, powers and privileges purported
to be created thereby (except as such documents may be terminated or no
longer in force and effect in accordance with the terms thereof, other
than those indemnities and provisions which by their terms shall
survive); or
(k) Any default shall occur under any of the Subordinated
Notes.
SECTION 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
and (b) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) the Administrative Agent may, or upon the
written request of the
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Required Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes to be due and payable
forthwith and direct the Borrower to pay to the Administrative Agent cash
collateral as security for the LOC Obligations for subsequent drawings under
then outstanding Letters of Credit an amount equal to the maximum amount of
which may be drawn under Letters of Credit then outstanding, whereupon the
same shall immediately become due and payable.
ARTICLE VIII
THE AGENT
SECTION 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes First Union National
Bank, as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
SECTION 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. Without limiting the foregoing, the Administrative Agent may appoint
one of its affiliates as its agent to perform the functions of the
Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.
SECTION 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to
any of
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the Lenders for any recitals, statements, representations or warranties made
by the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or for any
failure of the Borrower to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by the Borrower
of any of the agreements contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of the Borrower.
SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or conversation
believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless (a) a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee to be bound hereby as fully and to the
same extent as if such assignee were an original Lender party hereto, in each
case in form satisfactory to the Administrative Agent. The Administrative
Agent shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under any of the Credit
Documents in accordance with a request of the Required Lenders or all of the
Lenders, as may be required under this Agreement, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes.
SECTION 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; PROVIDED, HOWEVER, that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem
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advisable in the best interests of the Lenders except to the extent that this
Credit Agreement expressly requires that such action be taken, or not taken,
only with the consent or upon the authorization of the Required Lenders, or all
of the Lenders, as the case may be.
SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representation or warranty to it
and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit analysis, appraisals and decisions in taking or not
taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except
for notices, reports and other documents expressly required to be furnished
to the Lenders by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness
of the Borrower which may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates.
SECTION 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its
capacity hereunder (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Notes) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of any Credit Document or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing;
PROVIDED, HOWEVER, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the Agent's gross negligence or willful misconduct, as
determined by a court of competent jurisdiction. The
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agreements in this Section 8.7 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.
SECTION 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as though it
were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the
Notes, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by
the Borrower, whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term "Administrative
Agent" shall mean such successor agent effective upon such appointment and
approval, and the former Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the
part of such former Administrative Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring Agent's resignation
as Administrative Agent, the provisions of this Section 8.9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of
this Section nor may be released except as specifically provided herein or in
the Security Documents or in accordance with the provisions of this Section
9.1. The Required Lenders may, or, with the written consent of the Required
Lenders, the Administrative Agent may, from time to time, (a) enter into with
the Borrower written amendments, supplements or modifications hereto and to
the other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights
of the Lenders or of the Borrower hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders may specify in such
instrument, any of the
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requirements of this Agreement or the other Credit Documents or any Default
or Event of Default and its consequences; PROVIDED, HOWEVER, that no such
waiver and no such amendment, waiver, supplement, modification or release
shall:
(i) reduce the amount or extend the scheduled
date of maturity of any Loan or Note or any installment
thereon, or reduce the stated rate of any interest or fee
payable hereunder (other than interest at the increased
post-default rate) or extend the scheduled date of any payment
thereof or increase the amount or extend the expiration date
of any Lender's Commitment, in each case without the written
consent of each Lender directly affected thereby, or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, without the written consent of
all the Lenders, or
(iii) amend, modify or waive any provision of
Article VIII without the written consent of the then
Administrative Agent, or
(iv) release any of the Guarantors from their
obligations under the Guaranty, except in accordance with the
terms thereof, without the written consent of all of the
Lenders, or
(v) release all or substantially all of the
Collateral, without the written consent of all of the Lenders,
or
(vi) without the consent of Lenders holding in
the aggregate more than 50% of the outstanding Tranche A Term
Loans and 50% of the outstanding Tranche B Term Loans, extend
the time for or the amount or the manner of application of
proceeds of any mandatory prepayment required by Section
2.8(b)(ii), (iii), (iv) or (v) hereof, or
(vii) without the consent of Lenders holding in
the aggregate more than 50% of the outstanding Tranche B Term
Loans, amend any provision that changes the allocation of any
payments between the term loan facilities, or
(viii) amend, modify or waive any provision of the
Credit Documents requiring consent, approval or request of the
Required Lenders or all Lenders, without the written consent
of all of the Required Lenders or Lenders as appropriate and,
PROVIDED, FURTHER, that no amendment, waiver or consent
affecting the rights or duties of the Administrative Agent or
the Issuing Lender under any Credit Document shall in any
event be effective, unless in writing and signed by the
Administrative Agent and/or the Issuing Lender, as applicable,
in addition to the Lenders required hereinabove to take such
action.
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Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or waiver
of the provisions of Article VIII (other than the provisions of Section 8.9);
PROVIDED, HOWEVER, that the Administrative Agent will provide written notice
to the Borrower of any such amendment, modification or waiver. In addition,
the Borrower and the Lenders hereby authorize the Administrative Agent to
modify this Credit Agreement by unilaterally amending or supplementing
SCHEDULE 2.1(a) from time to time in the manner requested by the Borrower,
the Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; PROVIDED, HOWEVER, that the
Administrative Agent shall promptly deliver a copy of any such modification
to the Borrower and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
SECTION 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when confirmation of transmittal via telecopy (or other facsimile
device) to the number set out herein has been received by the sender, (c) the
day following the day on which the same has been delivered prepaid to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case, addressed as follows in the case of the
Borrower, the other Credit Parties and the Administrative Agent, and as set
forth on SCHEDULE 9.2 in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto and any future
holders of the Notes:
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The Borrower
and the other Pacific Circuits, Inc.
Credit Parties: ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (425) 883-7575 ext. 272
With a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative First Union National Bank
Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof;
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nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation, negotiation, printing and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent or (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the Notes and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other documents and the use, or proposed
use, of proceeds of the Loans (all of the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that the Borrower shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, as determined by a
court of competent jurisdiction. The agreements in this Section 9.5 shall
survive repayment of the Loans, Notes and all other amounts payable hereunder.
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SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement or the other Credit
Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender, or any other interest of
such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend
the scheduled maturity of any Loan or Note or any installment thereon
in which such Participant is participating, or reduce the stated rate
or extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of
the Participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
consent of any participant if the Participant's participation is not
increased as a result thereof), (ii) release any of the Guarantors from
their obligations under the Guaranty, (iii) release all or
substantially all of the collateral, or (iv) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under
this Agreement. In the case of any such participation, the Participant
shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation, PROVIDED that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17,
2.18 and 9.5 with respect to its participation in the Commitments and
the Loans outstanding from time to time; PROVIDED, that no Participant
shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
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(c) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time, sell or assign to any Lender or any affiliate thereof and
with the consent of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Borrower (in each case,
which consent shall not be unreasonably withheld), to one or more
additional banks or financial institutions ("PURCHASING LENDERS"), all
or any part of its rights and obligations under this Agreement and the
Notes in minimum amounts of $3,000,000 with respect to its Revolving
Commitment, its Revolving Loans, its Tranche A Term Loans or its
Tranche B Term Loans (or, if less, the entire amount of such Lender's
obligations), pursuant to a Commitment Transfer Supplement, executed by
such Purchasing Lender and such transferor Lender (and, in the case of
a Purchasing Lender that is not then a Lender or an affiliate thereof,
the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower), and delivered to the
Administrative Agent for its acceptance and recording in the Register;
PROVIDED, HOWEVER, that any sale or assignment to an existing Lender
shall not require the consent of the Administrative Agent or the
Borrower nor shall any such sale or assignment be subject to the
minimum assignment amounts specified herein. Upon such execution,
delivery, acceptance and recording, from and after the Transfer
Effective Date specified in such Commitment Transfer Supplement, (x)
the Purchasing Lender thereunder shall be a party hereto and, to the
extent provided in such Commitment Transfer Supplement, have the rights
and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the transferor Lender thereunder shall, to the extent
provided in such Commitment Transfer Supplement, be released from its
obligations under this Agreement (and, in the case of a Commitment
Transfer Supplement covering all or the remaining portion of a
transferor Lender's rights and obligations under this Agreement, such
transferor Lender shall cease to be a party hereto). Such Commitment
Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of
such Purchasing Lender and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender of all
or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Notes. On or prior to the Transfer
Effective Date specified in such Commitment Transfer Supplement, the
Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement
new Notes to the order of such Purchasing Lender in an amount equal to
the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender
in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the
form of the Notes replaced thereby. The Notes surrendered by the
transferor Lender shall be returned by the Administrative Agent to the
Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its
address referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders
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and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register as the owner of the Loan recorded therein
for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of
a registration and processing fee of $3,500.00 for each Purchasing
Lender listed in such Commitment Transfer Supplement and the Notes
subject to such Commitment Transfer Supplement, the Administrative
Agent shall (i) accept such Commitment Transfer Supplement, (ii)
record the information contained therein in the Register and (iii)
give prompt notice of such acceptance and recordation to the Lenders
and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming
a party to this Agreement, in each case subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in Section 7701
(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Lender shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a 2.18 Certificate) described in Section 2.19.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any
Note) to any Federal Reserve Bank in accordance with applicable laws.
SECTION 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "BENEFITED
LENDER") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e),
or otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in
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respect of such other Lender's Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's
Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to
cause such benefited Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another
Lender's Loans may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully
as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to
the Borrower, any such notice being expressly waived by the Borrower
to the extent permitted by applicable law, upon the occurrence of any
Event of Default, to setoff and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final),
in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrower, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and
liabilities of the Borrower to such Lender hereunder and claims of
every nature and description of such Lender against the Borrower, in
any currency, whether arising hereunder, under the Notes or under any
documents contemplated by or referred to herein or therein, as such
Lender may elect, whether or not such Lender has made any demand for
payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be
exercised by such Lender against the Borrower or against any trustee
in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of
the Borrower, or against anyone else claiming through or against the
Borrower or any such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, to the extent permitted by law,
notwithstanding the fact that such right of set-off shall not have
been exercised by such Lender prior to the occurrence of any Event of
Default. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by
such Lender; PROVIDED, HOWEVER, that the failure to give such notice
shall not affect the validity of such set-off and application.
SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings
herein are intended for convenience only and shall be ignored in construing
this Agreement.
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SECTION 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
SECTION 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which
all of the parties have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent
pursuant to SECTION 9.2 or, in the case of the Lenders, shall have given to
the Administrative Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed to it.
SECTION 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
SECTION 9.12 INTEGRATION.
This Agreement and the Notes represent the agreement of the
Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrower or
any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the Notes.
SECTION 9.13 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of North
Carolina.
SECTION 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrower and/or any
other Credit Party with respect to this Agreement, any Note or any of the
other Credit Documents may be brought in any state or federal court of
competent jurisdiction in the State of North Carolina, and, by execution and
delivery of this Agreement, each of the Borrower and the other Credit Parties
accepts, for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any final judgment
98
rendered thereby in connection with this Agreement from which no appeal has
been taken or is available. Each of the Borrower and the other Credit Parties
irrevocably agrees that all service of process in any such proceedings in any
such court may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid,
to it at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto,
such service being hereby acknowledged by the each of the Borrower and the
other Credit Parties to be effective and binding service in every respect.
Each of the Borrower, the other Credit Parties, the Administrative Agent and
the Lenders irrevocably waives any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have to the bringing of any such
action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall
limit the right of any Lender to bring proceedings against the Borrower or
the other Credit Parties in the court of any other jurisdiction.
SECTION 9.15 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the
Borrower (other than to its employees, affiliates, auditors or counsel or to
another Lender) any information with respect to the Borrower and its
Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein
and which is designated by the Borrower to the Lenders in writing as
confidential or as to which it is otherwise reasonably clear such information
is not public, except that any Lender may disclose any such information (a)
as has become generally available to the public other than by a breach of
this Section 9.16, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or
to the Federal Reserve Board or the Federal Deposit Insurance Corporation or
the OCC or the NAIC or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena or any law, order, regulation or ruling
applicable to such Lender, (d) to any prospective Participant or assignee in
connection with any contemplated transfer pursuant to Section 9.6, PROVIDED
that such prospective transferee shall have been made aware of this Section
9.16 and shall have agreed to be bound by its provisions as if it were a
party to this Agreement or (e) with the consent of the Borrower (which
consent shall not be unreasonably withheld) to GOLD SHEETS and other similar
bank trade publications; such information to consist of deal terms and other
information regarding the credit facilities evidenced by this Credit
Agreement customarily found in such publications.
SECTION 9.16 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
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(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other
Credit Party arising out of or in connection with this Agreement and
the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower and the other Credit Parties, on the other
hand, in connection herewith is solely that of debtor and creditor;
and
(c) no joint venture exists among the Lenders or among the
Borrower or the other Credit Parties and the Lenders.
SECTION 9.17 WAIVER AGREEMENT.
Each of the Lenders has reviewed that certain waiver agreement
attached as SCHEDULE 9.17 hereto and by its signature below agrees to be
bound to the terms contained therein and authorizes the Administrative Agent
to execute such waiver agreement on its behalf.
SECTION 9.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
ARTICLE X
GUARANTY
SECTION 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be
received by the Guarantors from the Extensions of Credit hereunder, each of
the Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: the Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise,
of any and all Credit Party Obligations to the Administrative Agent and the
Lenders. If any or all of the Credit Party Obligations of the Borrower to the
Administrative Agent and the Lenders becomes due and payable hereunder, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent and the Lenders, on order, or demand, together with any
and all reasonable expenses which may be incurred by the Administrative Agent
or the Lenders in collecting any of the Credit Party Obligations.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a
Guarantor shall be adjudicated to be invalid
100
or unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of each such Guarantor hereunder shall be limited to the
maximum amount that is permissible under applicable law (whether federal or
state and including, without limitation, the Bankruptcy Code).
SECTION 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence of any of the events specified in Section 7.1 (e), and
unconditionally promises to pay such Credit Party Obligations to the
Administrative Agent for the account of the Lenders, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to
the extent that the Borrower or a Guarantor shall make a payment or a transfer
of an interest in any property to the Administrative Agent or any Lender, which
payment or transfer or any part thereof is subsequently invalidated, declared to
be fraudulent or preferential, or otherwise is avoided, and/or required to be
repaid to the Borrower or a Guarantor, the estate of the Borrower or a
Guarantor, a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had
not been made.
SECTION 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
SECTION 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
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SECTION 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this Agreement,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any guarantor or any other party for the payment of this
Guaranty or the indebtedness and exchange, enforce waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.
SECTION 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
SECTION 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as
shall be required by applicable statute and cannot be waived) to
require the Administrative Agent or any Lender to (i) proceed against
the Borrower, any other guarantor or any other party, (ii) proceed
against or exhaust any security held from the Borrower, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent's or any Lender's power whatsoever. Each of the
Guarantors waives any defense based on or arising out of any defense of
the Borrower, any other guarantor or any other party other than payment
in full of the indebtedness, including without limitation any defense
based on or arising out of the disability of the Borrower, any other
guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full
of the indebtedness. Without limiting the generality of the provisions
of this Article X, each of the Guarantors hereby specifically waives
the benefits of N.C. Gen. Stat. Section 26-7 through 26-9, inclusive.
The Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender
by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy the Administrative Agent and any Lender may have against the
Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to
the extent the indebtedness has been paid. Each of the Guarantors
waives any defense arising out of any such election by the
Administrative
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Agent and each of the Lenders, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other
right or remedy of the Guarantors against the Borrower or any other
party or any security.
(b) Each of the Guarantors waives all presentments,
demands for performance, protests and notices, including without
limitation notices of nonperformance, notice of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional indebtedness.
Each Guarantor assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the
indebtedness and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or
risks.
(c) Each of the Guarantors hereby agrees it will not
exercise any rights of subrogation which it may at any time otherwise
have as a result of this Guaranty (whether contractual, under Section
509 of the U.S. Bankruptcy Code, or otherwise) to the claims of the
Lenders against the Borrower or any other guarantor of the indebtedness
of the Borrower owing to the Lenders (collectively, the "OTHER
PARTIES") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such
time as the Loans hereunder shall have been paid and the Commitments
have been terminated. Each of the Guarantors hereby further agrees not
to exercise any right to enforce any other remedy which the
Administrative Agent and the Lenders now have or may hereafter have
against any Other Party, any endorser or any other guarantor of all or
any part of the indebtedness of the Borrower and any benefit of, and
any right to participate in, any security or collateral given to or for
the benefit of the Lenders to secure payment of the indebtedness of the
Borrower until such time as the Loans hereunder shall have been paid
and the Commitments have been terminated.
SECTION 10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
SECTION 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the
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Commitments relating thereto, confirm to the Borrower, the Guarantors or any
other Person that the such indebtedness and obligations have been paid and the
Commitments relating thereto terminated, subject to the provisions of Section
10.2.
SECTION 10.10 CALIFORNIA WAIVERS.
Without limiting the generality of the foregoing, each Guarantor waives
all rights and defenses that such Guarantor may have because the Credit Party
obligations are secured by real property. This means, among other things: (1)
the administrative agent or the lenders may collect from such Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Borrower or any other Credit Party; (2) if the administrative agent or the
lenders foreclose on any real property collateral pledged by the Borrower or any
other Credit Party: (A) the amount of the obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; (B) the administrative agent or
the lenders may collect from such Guarantor even if the administrative agent or
the Lenders, by foreclosing on the real property collateral, have destroyed
any right such Guarantor may have to collect from the Borrower or any other
Credit Party. This is an unconditional and irrevocable waiver of any rights and
defenses such Guarantor may have because the Credit Party obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure (the "CCP").
In addition, each Guarantor waives all rights and defenses arising out
of an election of remedies by the Administrative Agent or the Lenders, even
though that election of remedies, such as a nonjudicial foreclosure with respect
to security for a guaranteed obligation, has destroyed such Guarantor's rights
by the operation of Section 580d of the CPC or otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Charlotte, North Carolina by its proper and duly
authorized officers as of the day and year first above written.
BORROWER: PACIFIC CIRCUITS, INC.,
a Washington corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
GUARANTORS: CIRCUIT HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: President
POWER CIRCUITS, INC.,
a California corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Title: President
AGENT AND LENDERS: FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Senior Vice President
DRESDNER BANK, AG, NEW YORK AND GRAND CAYMAN
BRANCHES,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Assistant Treasurer
SUNTRUST BANK, ATLANTA,
as a Lender
By: /s/ [ILLEGIBLE]
----------------------------------
Title: Vice President
By: /s/ [ILLEGIBLE]
----------------------------------
Title: Managing Director
