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$50,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
POWER-ONE, INC.
CERTAIN LENDERS
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
December 10, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 AMENDMENTS AND RENEWALS. . . . . . . . . . . . . . . . . . . . 19
Section 1.3 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 2
REVOLVING CREDIT ADVANCES
Section 2.1 THE REVOLVING CREDIT ADVANCES. . . . . . . . . . . . . . . . . 19
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT . . . . . . . . . . . . . 20
Section 2.3 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.4 FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.5 PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.6 REDUCTION OF REVOLVING CREDIT COMMITMENT . . . . . . . . . . . 24
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER. . . . . . . 25
Section 2.8 PAYMENT OF PRINCIPAL OF REVOLVING CREDIT ADVANCES. . . . . . . 25
Section 2.9 REIMBURSEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.10 MANNER OF PAYMENT. . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.11 LIBOR LENDING OFFICES. . . . . . . . . . . . . . . . . . . . . 26
Section 2.12 SHARING OF PAYMENTS. . . . . . . . . . . . . . . . . . . . . . 27
Section 2.13 CALCULATION OF LIBOR RATE. . . . . . . . . . . . . . . . . . . 27
Section 2.14 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.15 LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO CLOSING, THE INITIAL REVOLVING
CREDIT ADVANCE AND THE INITIAL LETTERS OF CREDIT . . . . . . . 37
Section 3.2 CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT ADVANCES AND
LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . 39
Section 3.3 CONDITIONS PRECEDENT TO CONVERSIONS AND CONTINUATIONS. . . . . 40
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 40
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. . . . . . . . 47
ARTICLE 5
GENERAL COVENANTS
Section 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. . . . . . . . . 48
Section 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW . . . . . . . . . . . 48
Section 5.3 MAINTENANCE OF PROPERTIES. . . . . . . . . . . . . . . . . . . 48
Section 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS . . . . . . . . . . . 48
Section 5.5 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.6 PAYMENT OF TAXES AND CLAIMS. . . . . . . . . . . . . . . . . . 49
Section 5.7 VISITS AND INSPECTIONS . . . . . . . . . . . . . . . . . . . . 49
Section 5.8 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.9 INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.10 ENVIRONMENTAL LAW COMPLIANCE . . . . . . . . . . . . . . . . . 51
Section 5.11 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 6
INFORMATION COVENANTS
Section 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION . . . . . . . . 52
Section 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE
OF NO DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.3 COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . . . . . . 53
Section 6.4 COPIES OF OTHER REPORTS AND NOTICES. . . . . . . . . . . . . . 53
Section 6.5 NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS. . . . . . . . 54
Section 6.6 ERISA REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . 54
ARTICLE 7
NEGATIVE COVENANTS
Section 7.1 INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.2 LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.3 INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 7.4 LIQUIDATION, MERGER, NEW SUBSIDIARIES. . . . . . . . . . . . . 57
Section 7.5 SALES OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . 58
Section 7.6 ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 58
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Section 7.7 CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . . . . 58
Section 7.8 RESTRICTED PAYMENTS. . . . . . . . . . . . . . . . . . . . . . 59
Section 7.9 AFFILIATE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . 59
Section 7.10 COMPLIANCE WITH ERISA. . . . . . . . . . . . . . . . . . . . . 59
Section 7.11 MAXIMUM LEVERAGE RATIO . . . . . . . . . . . . . . . . . . . . 59
Section 7.12 MINIMUM FIXED CHARGE COVERAGE RATIO. . . . . . . . . . . . . . 59
Section 7.13 MINIMUM NET WORTH. . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.14 SALE AND LEASEBACK . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.15 SALE OR DISCOUNT OF RECEIVABLES. . . . . . . . . . . . . . . . 60
Section 7.16 BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.17 FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.18 BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 8
DEFAULT
Section 8.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . 60
Section 8.2 REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE 9
CHANGES IN CIRCUMSTANCES
Section 9.1 LIBOR BASIS DETERMINATION INADEQUATE . . . . . . . . . . . . . 64
Section 9.2 ILLEGALITY . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.3 INCREASED COSTS. . . . . . . . . . . . . . . . . . . . . . . . 65
Section 9.4 EFFECT ON BASE RATE ADVANCES . . . . . . . . . . . . . . . . . 67
Section 9.5 CAPITAL ADEQUACY . . . . . . . . . . . . . . . . . . . . . . . 67
Section 9.6 REPLACEMENT LENDER . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 10
AGREEMENT AMONG LENDERS
Section 10.1 AGREEMENT AMONG LENDERS. . . . . . . . . . . . . . . . . . . . 68
Section 10.2 LENDER CREDIT DECISION . . . . . . . . . . . . . . . . . . . . 70
Section 10.3 BENEFITS OF ARTICLE. . . . . . . . . . . . . . . . . . . . . . 71
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ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.2 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 11.3 WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 11.4 CALCULATION BY THE LENDERS CONCLUSIVE AND BINDING. . . . . . . 73
Section 11.5 SET-OFF. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 11.6 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 11.7 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.8 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.9 INTEREST AND CHARGES . . . . . . . . . . . . . . . . . . . . . 75
Section 11.10 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.11 AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . 76
Section 11.12 EXCEPTION TO COVENANTS . . . . . . . . . . . . . . . . . . . . 76
Section 11.13 NO LIABILITY OF ISSUING BANK . . . . . . . . . . . . . . . . . 76
Section 11.14 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . 77
Section 11.15 AMENDMENT, RESTATEMENT, EXTENSION, AND RENEWAL . . . . . . . . 77
Section 11.16 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 11.17 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 78
Section 11.18 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 78
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SCHEDULES AND EXHIBITS
Schedule 1: LIBOR Lending Offices
Schedule 2: Existing Liens
Schedule 3: Existing Litigation and Material Liabilities
Schedule 4: Subsidiaries
Schedule 5: Existing Investments
Schedule 6: Existing Indebtedness
Schedule 7: Qualification and Good Standing
Schedule 8: Existing Letters of Credit
Exhibit A: Revolving Credit Note
Exhibit B: Pledge Agreement
Exhibit C: Compliance Certificate
Exhibit D: Assignment Agreement
Exhibit E: Subsidiary Guaranty
Exhibit F: Subordination Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 10,
1997, among POWER-ONE, INC., a corporation organized and existing under the
laws of the State of Delaware (the "BORROWER"), the Lenders from time to time
party hereto, and NATIONSBANK OF TEXAS, N.A., a national banking association,
as administrative agent for the Lenders.
BACKGROUND
The Borrower has requested that the Lenders make a credit facility
available to the Borrower in the maximum principal amount of $50,000,000 to
(a) refinance existing debt of the Borrower outstanding pursuant to the terms
of that certain Credit Agreement, dated as of September 27, 1995, among the
Borrower, the lenders party thereto, and NationsBank of Texas, N.A., as
Administrative Lender, as amended, modified, supplemented and restated from
time to time (the "EXISTING CREDIT AGREEMENT"), (b) finance Acquisitions (as
hereinafter defined) permitted hereunder, and (c) finance the ongoing working
capital and general corporate requirements of the Borrower and its
Subsidiaries (as hereinafter defined). The Lenders have agreed to do so,
subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration hereby acknowledged, the
parties hereto agree that the Existing Credit Agreement shall be amended,
restated and superseded as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS. For purposes of this Agreement:
"ACQUISITION" shall mean any transaction pursuant to which the Borrower
or any of its Subsidiaries, (i) whether by means of a capital contribution or
purchase or other acquisition of stock or other securities or other equity
participation or interest, (A) acquires more than 50% of the equity interest
in any Person pursuant to a solicitation by the Borrower or such Subsidiary
of tenders of equity securities of such Person, or through one or more
negotiated block, market, private or other transactions not involving an
unfriendly tender offer, or a combination of any of the foregoing, or (B)
makes any corporation a Subsidiary of the Borrower or such Subsidiary, or
causes any corporation, other than a Subsidiary of the Borrower or such
Subsidiary, to be merged into the Borrower or such Subsidiary (or agrees to
be merged into any other corporation other than a wholly-owned Subsidiary
(excluding directors' qualifying shares) of the Borrower or such Subsidiary),
or (ii) in one transaction or a series of related transactions, purchases or
acquires any business or assets of any Person other than in the ordinary
course of business.
"ACQUISITION CONSIDERATION" means the consideration given by the
Borrower or any of its Subsidiaries for an Acquisition, including but not
limited to the fair market value of any cash, property, stock or services
given, and the amount of any Indebtedness in respect of debt for borrowed
money, Synthetic Leases and Capitalized Lease Obligations assumed or incurred
by the Borrower or any of its Subsidiaries in connection with such
Acquisition.
"ADMINISTRATIVE LENDER" means NationsBank of Texas, N.A., a national
banking association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to SECTION 10.1(b) hereof.
"ADVANCE" means any amount advanced by the Lenders to the Borrower
pursuant to ARTICLE 2 hereof on the occasion of any borrowing.
"AFFILIATE" means, as applied to any Person, any other Person that,
directly or indirectly, through one or more Persons, Controls or is
Controlled By or Under Common Control with, that Person.
"AGREEMENT" means this Credit Agreement, as amended, modified,
supplemented or restated from time to time.
"AGREEMENT DATE" means the date of this Agreement.
"APPLICABLE ENVIRONMENTAL LAWS" means applicable laws pertaining to
health or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986 (as amended from
time to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976,
as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal
Act amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984
(as amended from time to time, "RCRA").
"APPLICABLE LAW" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person and its properties,
including, without limiting the foregoing, all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in
question is a party, and (b) in respect of contracts relating to interest or
finance charges that are made or performed in the State of Texas, "APPLICABLE
LAW" shall mean the laws of the United States of America, including without
limitation 12 USC Sections 85 and 86, as amended from time to time, and any
other statute of the United States of America now or at any time hereafter
prescribing the maximum rates of interest on loans and extensions of credit,
and the laws of the State of Texas, including, without limitation, Article
5069-1.04, Title 79, Revised Civil Statutes of Texas, 1925, as amended ("ART.
1.04"), and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree that the provisions of Chapter
15, Title 79, Revised Civil Statutes of
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Texas, 1925, as amended, shall not apply to Advances, the Reimbursement
Obligations, this Agreement, the Notes or any other Loan Documents.
"APPLICABLE MARGIN" means the following per annum percentages,
applicable in the following situations:
Base Rate LIBOR
Applicability Basis Basis
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(a) INITIAL PRICING PERIOD 0.00 1.00
SUBSEQUENT PRICING PERIOD
(b) The Leverage Ratio is greater than 2.50 to 1 1.25 2.25
(c) The Leverage Ratio is less than or equal to
2.50 to 1 but greater than 1.75 to 1 0.75 1.75
(d) The Leverage Ratio is less than or equal to
1.75 to 1 but greater than 1.00 to 1 0.25 1.25
(e) The Leverage Ratio is less than or equal to
1.00 to 1 0.00 1.00
- 3 -
The Applicable Margin payable by the Borrower on the Advances outstanding
hereunder shall be subject to reduction or increase, as applicable and as set
forth in the table above, on a quarterly basis according to the performance
of the Borrower as tested by using the Leverage Ratio calculated as of the
end of each fiscal quarter during the Subsequent Pricing Period; PROVIDED,
that each adjustment in the LIBOR Rate shall be effective with respect to
LIBOR Advances (i) made following receipt by the Administrative Lender of the
financial statements required to be delivered pursuant to SECTION 6.1 or 6.2
hereof, as applicable, for each such fiscal quarter, and the corresponding
Compliance Certificate required pursuant to SECTION 6.3 hereof, on the date
of making of such LIBOR Advance and (ii) outstanding on the date of receipt
of such financial statements and Compliance Certificate referred to in clause
(i) immediately preceding, on the date which is 2 Business Days following the
date of receipt of such financial statements and Compliance Certificate. If
such financial statements and Compliance Certificate are not received by the
Administrative Lender by the date required, the Applicable Margin shall be
determined as if the Leverage Ratio is greater than 2.50 to 1 until such time
as such financial statements and Compliance Certificate are received.
"ART. 1.04" has the meaning specified in the definition of "APPLICABLE
LAW."
"ASSIGNEES" means any assignee of a Lender pursuant to an Assignment
Agreement and shall have the meaning ascribed thereto in SECTION 11.6 hereof.
"ASSIGNMENT AGREEMENT" has the meaning specified in SECTION 11.6 hereof.
"AUTHORIZED SIGNATORY" means such senior personnel of the Borrower as
may be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to
request Advances and Letters of Credit hereunder.
"BASE RATE ADVANCE" means any Advance bearing interest at the Base Rate
Basis.
"BASE RATE BASIS" means, for any day, a per annum interest rate equal to
the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on
such day plus (iii) the Applicable Margin or (b) the sum of (i) the Prime
Rate on such day plus (ii) the Applicable Margin. The Base Rate Basis shall
be adjusted automatically without notice to Borrower as of the opening of
business on the effective date of each change in the Prime Rate to account
for such change.
"BORROWER" means Power-One, Inc., a corporation organized and existing
under the laws of the State of Delaware, successor by merger with Power-One
LLC, a limited liability company.
"BUSINESS DAY" means a day on which banks are open (a) for the
transaction of business in Dallas, Texas and Los Angeles, California and, (b)
with respect to any LIBOR Advance, for the transaction of international
business (including dealings in U.S. Dollar deposits) in London, England.
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"CAPITAL EXPENDITURES" means, for any period, expenditures made by the
Borrower and its Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements during such
period and the aggregate amount of items leased or acquired under Capital
Leases at the cost of the item) computed in accordance with GAAP,
consistently applied.
"CAPITAL STOCK" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital
stock in any Person that is a corporation, each class of partnership interest
(including, without limitation, general, limited and preference units) in any
Person that is a partnership, and each member interest in any Person that is
a limited liability company.
"CAPITALIZED LEASE OBLIGATIONS" means that portion of any obligation of
the Borrower or any Subsidiary of the Borrower as lessee under a lease which
at the time would be required to be capitalized on a balance sheet of the
Borrower or such Subsidiary prepared in accordance with GAAP.
"CASH AND CASH EQUIVALENTS" means with respect to the Borrower and each
Subsidiary of the Borrower (i) cash (which after the occurrence of an Event
of Default shall exclude any cash proceeds of accounts), (ii) securities
issued or directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any
Lender or with any domestic commercial bank having capital and surplus in
excess of $500,000,000, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses
(ii) and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper issued
by any Lender or the parent corporation of any Lender, and commercial paper
rated A-1 or the equivalent thereof by Standard & Poor's Ratings Group, a
Division of ▇▇▇▇▇▇-▇▇▇▇, Inc., a New York corporation, or P-1 or the
equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., and in each case
maturing within six months after the date of acquisition, and (vi) a readily
redeemable "money market mutual fund" advised by a bank described in clause
(iii) hereof, or an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, that has and maintains an investment policy
limiting its investments primarily to instruments of the types described in
clauses (i) through (v) hereof and having on the date of such Investment
total assets of at least One Hundred Million Dollars ($100,000,000.00).
"CASH COLLATERALIZED LETTERS OF CREDIT" means Letters of Credit with
respect to which cash in the amount of such Letters of Credit has been
deposited in the L/C Cash Collateral Account as provided in SECTION
2.15(g)(i) hereof.
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"CHANGE OF CONTROL" means (a) any merger or consolidation of the
Borrower with or into any Person (other than a merger or consolidation in
which the Borrower is a surviving corporation) or any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of the
assets of the Borrower, on a consolidated basis, in one transaction or a
series of related transactions, (b) any "person" or "group" (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended, whether or not applicable) is or becomes the
"beneficial owner", directly or indirectly, of more than 50% of the total
voting power in the aggregate of all classes of capital stock of the Borrower
then outstanding normally entitled to vote in elections of directors, or (c)
during any period of 24 consecutive months after the Agreement Date,
individuals who at the beginning of such 24-month period constituted the
board of directors of the Borrower (together with any new directors whose
election by such board of directors or whose nomination for election by the
shareholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Borrower then in office.
"COBRA" has the meaning specified in SECTION 4.1(l) hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means any collateral hereafter granted by any Person to the
Administrative Lender for the benefit of the Lenders to secure the
Obligations.
"COLLATERAL DOCUMENT" means any document under which Collateral is
granted and any document related thereto.
"COMPLIANCE CERTIFICATE" means a certificate, signed by an Authorized
Signatory, in substantially the form of EXHIBIT C, appropriately completed.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" means possession,
directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of voting securities, by
contract or otherwise); provided, however, that in any event any Person which
beneficially owns, directly or indirectly, 10% or more (in number of votes)
of the securities having ordinary voting power for the election of directors
of a corporation shall be conclusively presumed to control such corporation.
"CONTROLLED GROUP" means as of the applicable date, as to any Person not
an individual, all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) which are under common
control with such Person and which, together with such Person, are treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code;
provided, however, that the Subsidiaries of the Borrower shall be deemed to
be members of the Borrower's Controlled Group.
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"DEBTOR RELIEF LAWS" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to
time in effect.
"DEFAULT" means an Event of Default and/or any of the events specified
in SECTION 8.1, regardless of whether there shall have occurred any passage
of time or giving of notice that would be necessary in order to constitute
such event an Event of Default.
"DEFAULT RATE" means a simple per annum interest rate equal to (a) with
respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or
(ii) the Prime Rate plus two percent or (b) with respect to LIBOR Advances,
the lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis plus two
percent.
"DEFERRED COMPENSATION" means the "Deferred Compensation" as defined in,
and payable pursuant to each executive of the Borrower pursuant to the terms
of, the Employment and Compensation Agreements, each dated September 27, 1995
between the Borrower and each such executive.
"DETERMINING LENDERS" means, on any date of determination, any
combination of the Lenders having at least 60% of the aggregate amount of the
Advances then outstanding; provided, however, that if there are no Advances
outstanding hereunder, "Determining Lenders" shall mean any combination of
Lenders whose Specified Percentages aggregate at least 60%.
"DIVIDEND" means, as to any Person, (a) any declaration or payment of
any dividend (other than a stock dividend) on, or the making of any
distribution on account of, any shares of Capital Stock of, or other similar
interest in, such Person and (b) any purchase, redemption, or other
acquisition or retirement for value of any shares of Capital Stock of, or
similar interest in, such Person.
"DOLLAR" or "$" means the lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower other than a
Foreign Subsidiary.
"EBIT" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a)
Pretax Net Income (excluding therefrom, to the extent included in determining
Pretax Net Income, any items of extraordinary gain, including net gains on
the sale of assets other than asset sales in the ordinary course of business,
and adding thereto, to the extent included in determining Pretax Net Income,
any items of extraordinary loss, including net losses on the sale of assets
other than asset sales in the ordinary course of business), plus (b) interest
expense.
"EBITA" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBIT
plus (b) amortization.
- 7 -
"EBITDA" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBIT
plus (b) depreciation and amortization.
"EQUITY" means shares of capital stock or partnership, profits, capital
or member interest, or options, warrants or any other right to subscribe for
or otherwise acquire capital stock or a partnership, profits, capital or
member interest, of the Borrower or any Subsidiary of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA EVENT" means, with respect to the Borrower and its Subsidiaries,
(a) a Reportable Event (other than a Reportable Event not subject to the
provision for 30-day notice to the PBGC under regulations issued under
Section 4043 of ERISA), (b) the withdrawal of any such Person or any member
of its Controlled Group from a Plan subject to Title IV of ERISA during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate under
Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a
Plan by the PBGC, (e) the failure to make required contributions which could
result in the imposition of a lien under Section 412 of the Code or Section
302 of ERISA, or (f) any other event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
the imposition of any liability under Title IV of ERISA other than PBGC
premiums due but not delinquent under Section 4007 of ERISA; PROVIDED,
HOWEVER, that ERISA Event shall not include the termination by Service Supply
of its employee stock option plan.
"EVENT OF DEFAULT" means any of the events specified in SECTION 8.1,
provided that any requirement for notice or lapse of time has been satisfied.
"EXISTING LETTERS OF CREDIT" means those Letters of Credit issued under
the Existing Credit Agreement and outstanding on the Agreement Date which are
set forth on SCHEDULE 8 hereto.
- 8 -
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Administrative Lender on such day on such transactions as
reasonably determined by Administrative Lender.
"FEE LETTER" has the meaning specified in SECTION 2.4(b) hereof.
"FISCAL YEAR" means each period of 52 or 53 weeks ending on the Sunday
closest to December 31 of each year.
"FIXED CHARGES" means, for any date of calculation, calculated for
Borrower and its Subsidiaries on a consolidated basis, the sum of, without
duplication, (a) scheduled principal payments in respect of Indebtedness,
plus (b) interest expense (including interest expense pursuant to Capitalized
Lease Obligations), plus (c) lease expense under Operating Leases.
"FIXED CHARGE COVERAGE RATIO" means the ratio of Pretax Cash Flow to
Fixed Charges, calculated for the four consecutive fiscal quarters
immediately preceding the date of calculation.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower which is not
organized under the laws of any state of the United States of America or the
District of Columbia.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants, or their
successors which are applicable in the circumstances as of the date in
question. The requirement that such principles be applied on a consistent
basis shall mean that the accounting principles applied in a current period
are comparable in all material respects to those applied in a preceding
period.
"GUARANTY" or "GUARANTEED", as applied to an obligation of another
Person, means (a) a guaranty, direct or indirect, in any manner, of any part
or all of such obligation, and (b) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any
way the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including, without
limiting the foregoing, any reimbursement obligations with respect to amounts
which may be drawn by beneficiaries of outstanding letters of credit;
provided, however, Guaranty does not mean (A) the endorsement of instruments
for collection or deposit in the ordinary course of business and (B)
customary indemnities given in connection with asset sales in the ordinary
course of business.
- 9 -
"HIGHEST LAWFUL RATE" means at the particular time in question the
maximum rate of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligations. If the maximum rate of interest
which, under Applicable Law, the Lenders are permitted to charge on the
Obligations shall change after the date hereof, the Highest Lawful Rate shall
be automatically increased or decreased, as the case may be, from time to
time as of the effective time of each change in the Highest Lawful Rate
without notice to the Borrower. For purposes of determining the Highest
Lawful Rate under the Applicable Law of the State of Texas, the applicable
rate ceiling shall be (a) the indicated rate ceiling described in and
computed in accordance with the provisions of Section (a)(1) of Art. 1.04, or
(b) if the parties subsequently contract as allowed by Applicable Law, the
quarterly ceiling or the annualized ceiling computed pursuant to Section (d)
of Art. 1.04; provided, however, that at any time the indicated rate ceiling,
the quarterly ceiling or the annualized ceiling shall be less than 18% per
annum or more than 24% per annum, the provisions of Sections (b)(1) and (2)
of said Art. 1.04 shall control for purposes of such determination, as
applicable.
"INDEBTEDNESS" means, with respect to any Person, (a) all items, except
accounts payable arising in the normal course of business, which in
accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person, (b) all
obligations secured by any Lien on any property or asset owned by such Person
(other than accounts payable arising in the ordinary course of business),
whether or not the obligation secured thereby shall have been assumed, (c) to
the extent not otherwise included, all Capitalized Lease Obligations of such
Person, all obligations in respect of letters of credit, bankers' acceptances
and similar instruments, and all obligations under Interest Hedge Agreements,
(d) any "withdrawal liability" of the Borrower or any Subsidiary of the
Borrower, as such term is defined under Part I of Subtitle E of Title IV of
ERISA, (e) all preferred Capital Stock issued by such Person and required by
the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, and (f) any Guaranty of such Person of any
obligation of another Person constituting obligations of a type set forth
above.
"INDEMNIFIED MATTERS" has the meaning specified in SECTION 5.9(a) hereof.
"INDEMNITEES" has the meaning specified in SECTION 5.9(a) hereof.
"INITIAL PRICING PERIOD" means that period from the Agreement Date to
and including the Rate Adjustment Date.
"INITIAL PUBLIC OFFERING" means an initial underwritten offering of
common Capital Stock of the Borrower for cash pursuant to an effective
registration statement under the Securities Act of 1933, as amended, as a
consequence of which common Capital Stock of the Borrower is listed on a
national securities exchange or quoted on the national market system of
NASDAQ.
- 10 -
"INTEREST HEDGE AGREEMENTS" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap, swap or
collar protection agreements, and forward rate currency or interest rate
options, as the same may be amended or modified and in effect from time to
time, and any and all cancellations, buy backs, reversals, terminations or
assignments of any of the foregoing.
"INTEREST PERIOD" means the period beginning on the day any LIBOR
Advance is made and ending one, two, three, six or, subject to availability
and agreement by each Lender, twelve months thereafter (as the Borrower shall
select).
"INVESTMENT" means any direct or indirect purchase or other acquisition
of, or beneficial interest in, capital stock or other securities of any other
Person, or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution to,
or investment in any other Person, including without limitation the purchase
of accounts receivable of any other Person that are not current assets or do
not arise in the ordinary course of business.
"ISSUING BANK" means NationsBank of Texas, N.A., a national banking
association, in its capacity as issuer of the Letters of Credit.
"LAW" means any statute, law, ordinance, regulation, rule, order, writ,
injunction, or decree of any Tribunal.
"LENDER" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of the
Revolving Credit Commitment or is owed any part of the Obligations (including
the Administrative Lender in its individual capacity), and each Assignee that
hereafter becomes a party hereto pursuant to SECTION 11.6 hereof, subject to
the limitations set forth therein.
"L/C RELATED DOCUMENTS" has the meaning specified in SECTION 2.15(e)
hereof.
"LETTER OF CREDIT" has the meaning specified in SECTION 2.15(a) hereof.
"LETTER OF CREDIT AGREEMENT" has the meaning specified in SECTION
2.15(b) hereof.
"LETTER OF CREDIT FACILITY" has the meaning specified in SECTION 2.15(a)
hereof.
- 11 -
"LEVERAGE RATIO" means, for any date of calculation, the ratio of Total
Debt as of the date of determination to EBITDA calculated for the four
consecutive fiscal quarters immediately preceding the date of calculation.
For purpose of calculation of the Leverage Ratio only, with respect to assets
not owned at all times during the four fiscal quarters immediately preceding
the date of calculation of EBITDA, there shall be (i) included in EBITDA the
EBITDA of any assets acquired during any such four fiscal quarters for the
twelve months preceding the date of calculation and (ii) excluded from EBITDA
the EBITDA of any assets disposed of during any of such fiscal quarters for
the twelve months preceding the date of calculation.
"LIBOR ADVANCE" means an Advance which the Borrower requests to be made
as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance
with the provisions of SECTION 2.2 hereof.
"LIBOR BASIS" means a simple per annum interest rate equal to the lesser
of (a) the Highest Lawful Rate, or (b) the sum of the LIBOR Rate plus the
Applicable Margin. The LIBOR Basis shall, with respect to LIBOR Advances
subject to reserve or deposit requirements, be subject to premiums for such
reserve or deposit requirements assessed by each Lender to the extent
incurred by such Lender, which are payable directly to each Lender. Once
determined, the LIBOR Basis shall remain unchanged during the applicable
Interest Period.
"LIBOR LENDING OFFICE" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on SCHEDULE 1 attached hereto, and
such other office of the Lender or any of its Affiliates hereafter designated
by notice to the Borrower and the Administrative Lender.
"LIBOR RATE" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th 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 RATE" shall mean, for any LIBOR
Advance for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th 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 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 1/100th of 1%).
"LIEN" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment or
other similar encumbrance of any kind in respect of such property, whether or
not ▇▇▇▇▇▇, vested or perfected.
- 12 -
"LITIGATION" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or investigations under or pursuant to any
environmental, occupational, safety and health, antitrust, unfair
competition, securities, Tax or other Law, or under or pursuant to any
contract, agreement or other instrument.
"LOAN DOCUMENTS" means this Agreement, the Notes, any Subsidiary
Guaranty, any Pledge Agreement, any Subordination Agreement, the Fee Letter,
any Interest Hedge Agreements entered into with any Lender or any Affiliate
of any Lender, and any other document or agreement executed or delivered from
time to time by the Borrower, any Subsidiary of the Borrower or any other
Person in connection herewith or as security for the Obligations.
"MATERIAL ADVERSE EFFECT" means any act or circumstance or event that
(a) causes a Default, (b) otherwise could reasonably be expected to be
material and adverse to the business, financial condition, results of
operations, or business prospects of the Borrower and its Subsidiaries taken
as a whole, or (c) in any manner whatsoever does or could reasonably be
expected to materially and adversely affect the validity or enforceability of
any Loan Documents.
"MATERIAL SUBSIDIARY" means each Subsidiary of the Borrower or of a
Subsidiary of the Borrower (a) the gross revenues of which for the then most
recently completed four fiscal quarters constituted (or, with respect to any
such Subsidiary acquired during such fiscal quarters, would have constituted
had the gross revenues of such Subsidiary been included for such period) 5%
or more of the consolidated gross revenues of the Borrower and its
Subsidiaries for such period or (b) the assets of which as of the end of any
fiscal quarter constituted 5% or more of the consolidated assets of the
Borrower and its Subsidiaries as of the end of such fiscal quarter.
"MATURITY DATE" means December 10, 2002, or the earlier date of
termination in whole of the Revolving Credit Commitment pursuant to SECTION
2.6 or 8.2 hereof.
"MAXIMUM AMOUNT" means the maximum amount of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations.
"MEMBER CONTRIBUTION" means any contribution of cash to the Borrower or
any Subsidiary of the Borrower made by any member of the Borrower or any of
its Affiliates which is used by the Borrower for Capital Expenditures or
Acquisitions or pursuant to SECTION 8.1(c) or 8.1(q) hereof.
"MULTIEMPLOYER PLAN" means, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which such Person or any member of its Controlled Group is making, or is
obligated to make contributions or has made, or been obligated to make,
contributions.
"NATIONSBANK" means NationsBank of Texas, N.A., a national banking
association, in its capacity as a Lender.
- 13 -
"NECESSARY AUTHORIZATION" means any right, franchise, license, permit,
consent, approval or authorization from, or any filing or registration with,
any Tribunal or any Person necessary or appropriate to enable the Borrower or
any Subsidiary of the Borrower to maintain and operate its business and
properties.
"NEGATIVE PLEDGE" means any agreement, contract or other arrangement
whereby the Borrower is prohibited from, or would otherwise be in default as
a result of, creating, assuming, incurring or suffering to exist, directly or
indirectly, any Lien on any of its assets.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer or
other disposition of any asset, Capital Stock or Indebtedness by or of any
Person, the amount of cash received by such Person in connection with such
transaction (including cash proceeds of any property received in
consideration of any such sale, lease, transfer or other disposition) after
deducting therefrom the aggregate, without duplication, of the following
amounts to the extent properly attributable to such transaction or to the
asset that is the subject thereof: (i) reasonable brokerage commissions,
legal fees, finder's fees, financial advisory fees, accounting fees,
underwriting fees, investment banking fees and other similar commissions and
fees, in each case, to the extent paid or payable by such Person; (ii)
filing, recording or registration fees or charges or similar fees or charges
paid by such Person; and (iii) without duplication, taxes paid or payable by
such Person or any shareholder, partner or member of such Person to
governmental taxing authorities as a result of such sale or other disposition.
"NET INCOME" means, net earnings (or deficit) after taxes of the
Borrower and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
"NET WORTH" means, for the Borrower and its Subsidiaries, on a
consolidated basis, determined in accordance with GAAP, total assets minus
total liabilities.
"NOTICE OF ISSUANCE" has the meaning specified in SECTION 2.15(b) hereof.
"OBLIGATIONS" means (a) all obligations of any nature (whether matured
or unmatured, fixed or contingent, including the Reimbursement Obligations)
of the Borrower, any Subsidiary of the Borrower or any other Obligor to any
Lender or any Affiliate of any Lender under the Loan Documents as they may be
amended from time to time, and (b) all obligations of the Borrower, any
Subsidiary of the Borrower or any other Obligor for losses, damages, expenses
or any other liabilities of any kind that any Lender may suffer by reason of
a breach by the Borrower, any Subsidiary of the Borrower or any other Obligor
of any obligation, covenant or undertaking with respect to any Loan Document
payable by the Borrower, any Subsidiary of the Borrower or any other Obligor
under any Loan Document.
"OBLIGOR" means the Borrower or any other Person liable for performance
of any of the Obligations or the property of which secures any of the
Obligations.
- 14 -
"OPERATING LEASE" means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP.
"PARTICIPANT" has the meaning specified in SECTION 11.6(c) hereof.
"PARTICIPATION" has the meaning specified in SECTION 11.6(c) hereof.
"PAYMENT DATE" means the last day of the Interest Period for any LIBOR
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PEI" means Power-Electronics, Inc., a corporation organized under the
laws of the Commonwealth of Puerto Rico.
"PERMITTED LIENS" means, as applied to any Person:
(a) Any Lien in favor of the Lenders to secure the Obligations
hereunder;
(b) (i) Liens on real estate for ad valorem taxes not yet delinquent,
(ii) Liens created by lease agreements to secure the payment of rental
amounts and other sums not yet due thereunder, (iii) Liens on leasehold
interests created by the lessor in favor of any mortgagee of the leased
premises, and (iv) Liens for taxes, assessments, governmental charges, levies
or claims that are not yet delinquent or that are being diligently contested
in good faith by appropriate proceedings in accordance with SECTION 5.6
hereof and for which adequate reserves shall have been set aside on such
Person's books, but only so long as no foreclosure, restraint, sale or
similar proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, landlords, mechanics, laborers and
materialmen and other similar Liens incurred in the ordinary course of
business for sums not yet due or being contested in good faith, if such
reserve or appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or similar legislation;
(e) Easements, right-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere in any
material respect with the ordinary conduct of the business of such Person;
- 15 -
(f) Liens created to secure the purchase price of assets acquired by
such Person or created to secure Indebtedness permitted by SECTION 7.1(c)
hereof, which is incurred solely for the purpose of financing the acquisition
of such assets and incurred at the time of acquisition, so long as each such
Lien shall at all times be confined solely to the asset or assets so acquired
(and proceeds thereof), and refinancings thereof so long as any such Lien
remains solely on the asset or assets acquired and the amount of Indebtedness
related thereto is not increased;
(g) Liens in respect of judgments or awards for which appeals or
proceedings for review are being prosecuted and in respect of which a stay of
execution upon any such appeal or proceeding for review shall have been
secured, provided that (i) such Person shall have established adequate
reserves for such judgments or awards, (ii) such judgments or awards shall be
fully insured (subject to customary deductibles) and the insurer shall not
have denied coverage, or (iii) such judgments or awards shall have been
bonded to the satisfaction of the Determining Lenders;
(h) Any Liens which are described on SCHEDULE 2 hereto, and Liens
resulting from the refinancing of the related Indebtedness, provided that the
Indebtedness secured thereby shall not be increased and the Liens shall not
cover additional assets of the Borrower;
(i) Leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
(j) Liens arising from filing Uniform Commercial Code financing
statements for precautionary purposes relating solely to true leases of
personal property permitted by this Agreement under which the Borrower or any
of its Subsidiaries is a lessee;
(k) Any zoning or similar law or right reserved to or vested in any
Tribunal to control or regulate the use of any real property;
(l) Any other title exception with respect to real property assets
disclosed by any preliminary title report, title commitment report or other
search of title provided to the Administrative Lender in accordance with this
Agreement unless disapproved by the Administrative Lender prior to the
Agreement Date; and
(m) Any Lien in favor of any Lender or any Affiliate of any Lender to
secure any obligations owed to such Lender in respect of any Interest Hedge
Agreement.
"PERSON" means an individual, corporation, partnership, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA (including a Multiemployer Plan) pursuant to which any employees of
the Borrower, its Subsidiaries or any member of their Controlled Group
participate.
- 16 -
"PLEDGE AGREEMENT" means any pledge agreement, substantially in the form
of EXHIBIT B hereto, as amended, modified, renewed, supplemented or restated
from time to time, executed by the Borrower with respect to 66% of the issued
and outstanding Capital Stock of each Foreign Subsidiary.
"PRETAX CASH FLOW" means, for any date of calculation, calculated for
the Borrower and its Subsidiaries on a consolidated basis, an amount equal to
the sum of (a) EBITA, plus (b) lease expense under Operating Leases.
"PRETAX NET INCOME" means net profit (or loss) before taxes of the
Borrower and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
"PRIME RATE" means, at any time, the prime interest rate announced or
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in United
States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by the Reference Lender as its
"prime rate;" it being understood that such rate may not be the lowest rate
of interest charged by the Reference Lender.
"PUM" shall mean Poder Uno de Mexico, S.A. de C.V., a corporation
organized under the laws of the United Mexican States.
"QUARTERLY DATE" means the last day of each March, June, September and
December, beginning December 31, 1997.
"RATE ADJUSTMENT DATE" means the date that the Lenders receive the
financial statements for the fiscal quarter ending September 30, 1997
required to be delivered pursuant to SECTION 6.1.
"REIMBURSEMENT OBLIGATIONS" means, in respect of any Letter of Credit as
at any date of determination, the sum of (a) the maximum aggregate amount
which is then available to be drawn under such Letter of Credit plus (b) the
aggregate amount of all drawings under such Letter of Credit not theretofore
reimbursed by the Borrower.
"RELEASE DATE" means the date on which the Notes have been paid, all
other Obligations due and owing have been paid and performed in full, and the
Revolving Credit Commitment has been terminated.
"REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of ERISA.
- 17 -
"RESTRICTED PAYMENTS" means, collectively, (i) Dividends, (ii) Deferred
Compensation, (iii) ▇▇▇▇▇▇▇▇ Fees, and (iv) any (A) payment or prepayment of
principal, premium or penalty on any Subordinated Debt of the Borrower or any
Subsidiary of the Borrower or any defeasance, redemption, purchase,
repurchase or other acquisition or retirement for value, in whole or in part,
of any Subordinated Debt (including, without limitation, the setting aside of
assets or the deposit of funds therefor) and (B) prepayment of interest on
any Subordinated Debt.
"REVOLVING COMMITMENT FEE" has the meaning specified in SECTION 2.4(a)
hereof.
"REVOLVING CREDIT ADVANCE" means an Advance made pursuant to SECTION
2.1(a) hereof.
"REVOLVING CREDIT COMMITMENT" means $50,000,000.00.
"REVOLVING CREDIT NOTE" means the Promissory Note of Borrower evidencing
Revolving Credit Advances hereunder, substantially in the form of EXHIBIT A
hereto, together with any extension, renewal, or amendment thereof, or
substitution therefor.
"RIGHTS" means rights, remedies, powers and privileges.
"SOLVENT" means, with respect to any Person, that the fair value of the
assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay
all liabilities of such Person as such liabilities mature and such Person
does not have unreasonably small capital with which to carry on its business.
In computing the amount of contingent or unliquidated liabilities at any
time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability
discounted to present value at rates believed to be reasonable by such Person.
"SPECIAL COUNSEL" means the law firm of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.C., or such other legal counsel as the Administrative Lender may select.
"SPECIFIED PERCENTAGE" means, as to any Lender, the percentage indicated
beside its name on the signature pages hereof, or if applicable, specified in
its most recent Assignment Agreement.
"▇▇▇▇▇▇▇▇ FEES" means any investment banking fees paid to ▇▇▇▇▇▇▇▇, Inc.
by the Borrower with respect to investment banking services rendered to the
Borrower by ▇▇▇▇▇▇▇▇, Inc.
- 18 -
"SUBORDINATED DEBT" means Indebtedness of the Borrower or any Subsidiary
of the Borrower having maturities and terms, and which is subordinated to
payment of the Obligations in a manner, approved in writing by the
Administrative Lender and the Determining Lenders, with only such changes or
amendments as are approved by the Administrative Lender and the Determining
Lenders.
"SUBORDINATION AGREEMENT" means any Subordination Agreement, executed by
one or more Subsidiaries of the Borrower, substantially in the form of
EXHIBIT F hereto, as amended, modified, renewed, supplemented or restated
from time to time.
"SUBSEQUENT PRICING PERIOD" means the period from the date which is the
first day following the end of the Initial Pricing Period to the Maturity
Date.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, trust or estate or other Person of which (or in which) more than 50%
of:
(a) the outstanding capital stock having voting power to elect a
majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency),
(b) the interest in the capital or profits of such partnership or
joint venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person
and one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"SUBSIDIARY GUARANTY" means any Subsidiary Guaranty, executed by one or
more Domestic Subsidiaries, substantially in the form of EXHIBIT E hereto, as
amended, modified, renewed, supplemented or restated from time to time.
"SYNTHETIC LEASES" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but which is classified as an Operating Lease pursuant to GAAP.
"TAXES" has the meaning specified in SECTION 2.14 hereof.
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"TOTAL DEBT" means, as of any date of determination, determined for the
Borrower and its Subsidiaries on a consolidated basis, (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or
other similar instruments, (iii) obligations to pay the deferred purchase
price of property or services other than trade payables incurred in the
ordinary course of business (excluding any Deferred Compensation), and (iv)
Capitalized Lease Obligations.
"TRIBUNAL" means any state, commonwealth, federal, foreign, territorial,
or other court or government body, subdivision, agency, department,
commission, board, bureau, or instrumentality of a governmental or other
regulatory body or authority.
"UCC" means the Uniform Commercial Code of Texas, as amended from time
to time, and the Uniform Commercial Code applicable in such other states as
any Collateral may be located.
"UNUSED PORTION" means an amount equal to the result of (i) the
Revolving Credit Commitment minus (ii) the sum of (A) the outstanding
Revolving Credit Advances plus (B) outstanding Reimbursement Obligations in
respect of the Letters of Credit less the amount of Cash Collateralized
Letters of Credit.
Section 1.2 AMENDMENTS AND RENEWALS. Each definition of an agreement
in this ARTICLE 1 shall include such agreement as amended to date, and as
amended or renewed from time to time in accordance with its terms, but only
(other than with respect to Power-One Acquisition Documents) with the prior
written consent of the Determining Lenders or all the Lenders as required
pursuant to SECTION 11.11 hereof.
Section 1.3 CONSTRUCTION. The terms defined in this ARTICLE 1
(except as otherwise expressly provided in this Agreement) for all purposes
shall have the meanings set forth in SECTION 1.1 hereof, and the singular
shall include the plural, and vice versa, unless otherwise specifically
required by the context. All accounting terms used in this Agreement which
are not otherwise defined herein shall be construed in accordance with GAAP
on a consolidated basis for the Borrower and its Subsidiaries, unless
otherwise expressly stated herein.
ARTICLE 2
REVOLVING CREDIT ADVANCES
Section 2.1 THE REVOLVING CREDIT ADVANCES.
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(a) Each Lender severally agrees, upon the terms and subject to the
conditions of this Agreement, to make Revolving Credit Advances to the
Borrower from time to time in an aggregate amount not to exceed its Specified
Percentage of the Revolving Credit Commitment less its Specified Percentage
of the remainder of (i) the aggregate amount of all Reimbursement Obligations
then outstanding (assuming compliance with all conditions to drawing) minus
(ii) the outstanding amount of Cash Collateralized Letters of Credit for the
purposes set forth in SECTION 5.9 hereof. Subject to SECTION 2.9 hereof,
Revolving Credit Advances may be repaid and then reborrowed. Notwithstanding
any provision in any Loan Document to the contrary, in no event shall the
principal amount of all outstanding Revolving Credit Advances exceed the
Revolving Credit Commitment minus the remainder of (i) the outstanding
Reimbursement Obligations minus (ii) the outstanding amount of Cash
Collateralized Letters of Credit.
(b) Any Revolving Credit Advance shall, at the option of the Borrower
as provided in SECTION 2.2 hereof (and, in the case of LIBOR Advances,
subject to the provisions of ARTICLE 9 hereof), be made as a Base Rate
Advance or a LIBOR Advance; provided that there shall not be outstanding to
any Lender, at any one time, more than five LIBOR Advances.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) In the case of Base Rate Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender prior to 11:00
a.m., Dallas, Texas time, on the date of any proposed Base Rate Advance
irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure
to confirm any telephonic notice in writing shall not invalidate any notice
so given), of its intention to borrow a Base Rate Advance hereunder. Such
notice of borrowing shall specify the requested funding date, which shall be
a Business Day, and the amount of the proposed aggregate Base Rate Advances
to be made by Lenders.
(b) In the case of LIBOR Advances, the Borrower, through an Authorized
Signatory, shall give the Administrative Lender at least three Business Days'
irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure
to confirm any telephonic notice in writing shall not invalidate any notice
so given), of its intention to borrow a LIBOR Advance hereunder. Notice
shall be given to the Administrative Lender prior to 11:00 a.m., Dallas,
Texas time, in order for such Business Day to count toward the minimum number
of Business Days required. LIBOR Advances shall in all cases be subject to
ARTICLE 9 hereof. For LIBOR Advances, the notice of borrowing shall specify
the requested funding date, which shall be a Business Day, the amount of the
proposed aggregate LIBOR Advances to be made by Lenders and the Interest
Period selected by the Borrower, provided that no such Interest Period shall
extend past the Maturity Date, or prohibit or impair the Borrower's ability
to comply with SECTION 2.8 hereof.
(c) Subject to SECTIONS 2.1 and 2.9 hereof, the Borrower shall have the
option (i) to convert at any time all or any part of the outstanding Base
Rate Advances to LIBOR Advances and all or any part of the outstanding LIBOR
Advances to Base Rate Advances or (ii) upon
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expiration of any Interest Period applicable to a LIBOR Advance, to continue
all or any portion of such LIBOR Advance equal to $500,000 and integral
multiples of $100,000 in excess of that amount as a LIBOR Advance and the
succeeding Interest Period(s) of such continued LIBOR Advance shall commence
on the last day of the Interest Period of the LIBOR Advance to be continued;
provided, however, (a) LIBOR Advances may only be converted into Base Rate
Advances on the expiration date of the Interest Period applicable thereto and
(b) notwithstanding anything in this Agreement to the contrary, no
outstanding Advance may be continued as, or converted into, a LIBOR Advance
when any Default or Event of Default has occurred and is continuing. At
least three Business Days prior to a proposed conversion/continuation date,
the Borrower, through an Authorized Signatory, shall give the Administrative
Lender irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure
to confirm any telephonic notice in writing shall not invalidate any notice
so given), stating (i) the proposed conversion/continuation date (which shall
be a Business Day), (ii) the amount of the Advance to be converted/continued,
(iii) in the case of a conversion to, or a continuation of, a LIBOR Advance,
the requested Interest Period, and (iv) in the case of a conversion of a Base
Rate Advance to a LIBOR Advance or continuation of a LIBOR Advance, stating
that no Default or Event of Default has occurred and is continuing. If the
Borrower shall fail to give any notice in accordance with this SECTION
2.2(c), the Borrower shall be deemed irrevocably to have requested that such
LIBOR Advance be converted to a Base Rate Advance in the same principal
amount. Notice shall be given to the Administrative Lender prior to 11:00
a.m., Dallas, Texas time, in order for such Business Day to count toward the
minimum number of Business Days required.
(d) The aggregate amount of Base Rate Advances to be made by the
Lenders on any day shall be in a principal amount which is at least $250,000
and which is an integral multiple of $100,000; provided, however, that such
amount may equal the unused amount of the Revolving Credit Commitment. The
aggregate amount of LIBOR Advances having the same Interest Period and to be
made by the Lenders on any day shall be in a principal amount which is at
least $500,000 and which is an integral multiple of $100,000.
(e) The Administrative Lender shall promptly notify the Lenders of each
notice received from the Borrower pursuant to this Section. Each Lender
shall, not later than noon, Dallas, Texas time, on the date of any Revolving
Credit Advance, deliver to the Administrative Lender, at its address set
forth herein, such Lender's Specified Percentage of such Revolving Credit
Advance in immediately available funds in accordance with the Administrative
Lender's instructions. Prior to 2:00 p.m., Dallas, Texas time, on the date
of any Revolving Credit Advance hereunder, the Administrative Lender shall,
subject to satisfaction of the conditions set forth in ARTICLE 3, disburse
the amounts made available to the Administrative Lender by the Lenders by (i)
transferring such amounts by wire transfer pursuant to the Borrower's
instructions, or (ii) in the absence of such instructions, crediting such
amounts to the account of the Borrower maintained with the Administrative
Lender. All Revolving Credit Advances shall be made by each Lender according
to its Specified Percentage.
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Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES.
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of the Base Rate Advances outstanding from time to time,
until such Base Rate Advances are due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) and repaid at a simple
interest rate per annum equal to the Base Rate Basis for the Base Rate
Advances as in effect from time to time, provided that interest on the Base
Rate Advances shall not exceed the Maximum Amount. If at any time the Base
Rate Basis would exceed the Highest Lawful Rate, interest payable on the
Base Rate Advances shall be limited to the Highest Lawful Rate, but the
Base Rate Basis shall not thereafter be reduced below the Highest Lawful
Rate until the total amount of interest accrued on the Base Rate Advances
equals the amount of interest that would have accrued if the Base Rate
Basis had been in effect at all times.
(ii) Interest on the Base Rate Advances shall be computed on the basis
of a year of 365 or 366 days, as appropriate, for the actual number of days
elapsed, and shall be payable in arrears on each Quarterly Date and on the
Maturity Date.
(b) ON LIBOR ADVANCES.
(i) The Borrower shall pay interest on the unpaid principal amount of
each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) and repaid, at a rate per annum equal to the LIBOR Basis for
such LIBOR Advance. The Administrative Lender, whose determination shall
be controlling in the absence of manifest error, shall determine the LIBOR
Basis on the second Business Day prior to the applicable funding date and
shall notify the Borrower and the Lenders of such LIBOR Basis.
(ii) Subject to SECTION 11.9 hereof, interest on each LIBOR Advance
shall be computed on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in arrears on the applicable Payment
Date and on the Maturity Date; provided, however, that if the Interest
Period for such LIBOR Advance exceeds three months, interest shall also be
due and payable in arrears on each three-month anniversary of the
commencement of such Interest Period during such Interest Period.
(c) INTEREST AFTER AN EVENT OF DEFAULT. (i) After an Event of Default
(other than an Event of Default specified in SECTION 8.1(f) or (g) hereof) and
during any continuance thereof, at the option of Determining Lenders and
provided that the Administrative Lender has given notice of the decision to
charge interest at the Default Rate, and (ii) after an Event of Default
specified in SECTION 8.1(f) or (g) hereof and during any continuance thereof,
automatically and without any action or notice by the Administrative Lender or
any Lender, the Obligations shall bear interest
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at a rate per annum equal to the Default Rate. Such interest shall be
payable on the earlier of demand or the Maturity Date, and shall accrue until
the earlier of (i) waiver or cure (to the satisfaction of the Determining
Lenders) of the applicable Event of Default, (ii) agreement by the Lenders to
rescind the charging of interest at the Default Rate, or (iii) payment in
full of the Obligations. The Lenders shall not be required to accelerate the
maturity of the Advances, to exercise any other rights or remedies under the
Loan Documents, or in case of an Event of Default specified in clause (ii)
hereof, to give notice to the Borrower of the decision to charge interest at
the Default Rate.
Section 2.4 FEES.
(a) REVOLVING COMMITMENT FEE. Subject to SECTION 11.9 hereof, the
Borrower agrees to pay to the Administrative Lender, for the ratable account
of the Lenders, a commitment fee on the daily average Unused Portion at the
following per annum percentages, applicable in the following situations:
Applicability Percentage
------------- ----------
(a) INITIAL PRICING PERIOD 0.250
(b) SUBSEQUENT PRICING PERIOD
(i) If the Leverage Ratio is greater
than 2.50 to 1 0.500
(ii) If the Leverage Ratio is greater
than 1.75 to 1 but is less than
or equal to 2.50 to 1 0.375
(iii) If the Leverage Ratio is less than
or equal to 1.75 to 1 0.250
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Such fee shall be (i) payable in arrears on each Quarterly Date and on the
Maturity Date, (ii) fully earned when due and, subject to SECTION 11.9
hereof, nonrefundable when paid and (iii) subject to SECTION 11.9 hereof,
computed on the basis of a year of 365 or 366 days, as appropriate, for the
actual number of days elapsed. The commitment fee shall be subject to
reduction or increase, as applicable and as set forth in the table above, on
a quarterly basis according to the performance of the Borrower as tested by
using the Leverage Ratio calculated as of the end of each fiscal quarter
during the Subsequent Pricing Period. Any such increase or decrease in the
commitment fee shall be effective two Business Days after the date of receipt
of the financial statements required to be delivered pursuant to SECTION 6.1
or 6.2 hereof, as applicable, for each such fiscal quarter, and the
Compliance Certificate required pursuant to SECTION 6.3 hereof. If such
financial statements and Compliance Certificate are not received by the date
required hereunder, the commitment fee shall be determined as if the Leverage
Ratio is greater than 2.50 to 1 until such time as such financial statements
and Compliance Certificate are received.
(b) OTHER FEES. Subject to SECTION 11.9 hereof, the Borrower agrees to
pay to the Administrative Lender, the fees on the dates and in the amounts
specified in the letter agreement (the "FEE LETTER"), dated as of October 21,
1997, between the Borrower and the Administrative Lender.
Section 2.5 PREPAYMENTS.
(a) VOLUNTARY LIBOR ADVANCE PREPAYMENTS. Upon three Business Days'
prior telephonic notice (to be promptly followed by written notice) by an
Authorized Signatory to the Administrative Lender, LIBOR Advances may be
voluntarily prepaid but only so long as the Borrower concurrently reimburses
the Lenders in accordance with SECTION 2.9 hereof. Any notice of prepayment
shall be irrevocable.
(b) MANDATORY PREPAYMENT. On or before the date of any reduction of
the Revolving Credit Commitment, the Borrower shall prepay applicable
outstanding Revolving Credit Advances and cash collateralize outstanding
Letters of Credit in an amount necessary to reduce the sum of outstanding
Revolving Credit Advances and Reimbursement Obligations less Cash
Collateralized Letters of Credit to an amount less than or equal to the
Revolving Credit Commitment as so reduced. To the extent required by the
preceding sentence, the Borrower shall first prepay all Base Rate Advances
and shall thereafter prepay LIBOR Advances. To the extent that any prepayment
requires that a LIBOR Advance be repaid on a date other than the last day of
its Interest Period, the Borrower shall reimburse each Lender in accordance
with SECTION 2.9 hereof. To the extent that outstanding Revolving Credit
Advances exceed the Revolving Credit Commitment after any reduction thereof,
the Borrower shall repay any such excess amount and all accrued interest
attributable to such excess Revolving Credit Advances on the date of such
reduction.
(c) PREPAYMENTS FROM SALES OF ASSETS. Concurrently with the receipt of
Net Cash
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Proceeds from the sale or disposition by the Borrower or any Subsidiary of
the Borrower of any assets (other than the sale or disposition of (i)
inventory in the ordinary course of business, (ii) obsolete or worn-out
equipment in the ordinary course of business, (iii) assets, the Net Cash
Proceeds of which are reinvested as provided in SECTION 7.5(c) hereof, and
(iv) assets or a series of related assets of a value (determined at the
greater or book or fair market value) in an aggregate amount during any
Fiscal Year not in excess of $1,000,000, the Borrower shall prepay Revolving
Credit Advances in a principal amount equal to the amount of such Net Cash
Proceeds. Any such prepayments shall be applied to permanently reduce the
Revolving Credit Commitment.
(d) PAYMENTS, GENERALLY. Any prepayment of any Revolving Credit
Advance shall be accompanied by interest accrued on the principal amount
being prepaid. Any voluntary partial payment of a Base Rate Advance shall be
in a principal amount which is at least $250,000 and which is an integral
multiple of $100,000. Any voluntary partial payment of a LIBOR Advance shall
be in a principal amount which is at least $500,000 and which is an integral
multiple of $100,000, and to the extent that any prepayment of a LIBOR
Advance is made on a date other than the last day of its Interest Period, the
Borrower shall reimburse each Lender in accordance with SECTION 2.9 hereof.
Section 2.6 REDUCTION OF REVOLVING CREDIT COMMITMENT.
(a) VOLUNTARY REDUCTION. The Borrower shall have the right, upon not
less than 5 Business Days' notice by an Authorized Signatory to the
Administrative Lender (if telephonic, to be confirmed by telex or in writing
on or before the date of reduction or termination), which shall promptly
notify the Lenders, to terminate or reduce the Revolving Credit Commitment,
in whole or in part. Each partial termination shall be in an aggregate
amount which is at least $1,000,000 and which is an integral multiple of
$100,000, and no voluntary reduction in the Revolving Credit Commitment shall
cause any LIBOR Advance to be repaid prior to the last day of its Interest
Period unless the Borrower shall reimburse each Lender in accordance with
SECTION 2.9 hereof.
(b) MANDATORY REDUCTION. The Revolving Credit Commitment shall be
automatically reduced to zero on the Maturity Date.
(c) GENERAL REQUIREMENTS. Upon a reduction of the Revolving Credit
Commitment pursuant to this Section, the Borrower shall immediately make a
repayment of the Revolving Credit Advances in accordance with SECTION 2.5(b)
hereof. The Borrower shall reimburse each Lender in connection with any such
payment in accordance with SECTION 2.9 hereof to the extent applicable. The
Borrower shall not have any right to rescind any termination or reduction.
Once reduced, the Revolving Credit Commitment may not be increased or
reinstated.
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER. Unless
the Administrative Lender shall have been notified by a Lender prior to the
date of any proposed Revolving Credit Advance (which notice shall be
effective upon receipt) that such Lender does
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not intend to make the proceeds of such Revolving Credit Advance available to
the Administrative Lender, the Administrative Lender may assume that such
Lender has made such proceeds available to the Administrative Lender on such
date, and the Administrative Lender 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 Lender by such Lender, the Administrative Lender shall be
entitled to recover such amount on demand from such Lender (or, if such
Lender fails to pay such amount forthwith upon such demand, from the
Borrower) together with interest thereon in respect of each day during the
period commencing on the date such amount was available to the Borrower and
ending on (but excluding) the date the Administrative Lender receives such
amount from the Lender, with interest thereon at a per annum rate equal to
the lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds Rate. No
Lender shall be liable for any other Lender's failure to fund a Revolving
Credit Advance hereunder.
Section 2.8 PAYMENT OF PRINCIPAL OF REVOLVING CREDIT ADVANCES. To
the extent not otherwise required to be paid earlier as provided herein, the
principal amount of the Revolving Credit Advances, all accrued interest and
fees thereon, and all other Obligations related thereto, shall be due and
payable in full on the Maturity Date.
Section 2.9 REIMBURSEMENT. Whenever any Lender shall sustain or
incur (other than through a default by that Lender) any losses or reasonable
out-of-pocket expenses in connection with (a) failure by the Borrower to
borrow any LIBOR Advance after having given notice of its intention to borrow
in accordance with SECTION 2.2 hereof (whether by reason of the Borrower's
election not to proceed or the non-fulfillment of any of the conditions set
forth in Article 3 hereof), (b) any prepayment for any reason of any LIBOR
Advance in whole or in part (including a prepayment pursuant to SECTION
9.3(b) hereof) on other than the last day of an Interest Period applicable to
such LIBOR Advance or (c) any prepayment of any of its LIBOR Advances that is
not made on any date specified in a notice of prepayment given by the
Borrower, the Borrower agrees to pay to any such Lender, within 30 days after
demand by such Lender, an amount sufficient to compensate such Lender for all
such losses and out-of-pocket expenses, subject to SECTION 11.9 hereof. Such
losses shall include, without limiting the generality of the foregoing,
reasonable expenses incurred by such Lender in connection with the
re-employment of funds prepaid, repaid, converted or not borrowed, converted
or paid, as the case may be. A certificate as to any amounts payable to any
Lender under this SECTION 2.9 submitted to the Borrower by such Lender shall
certify that such amounts were actually incurred by such Lender and shall
show in reasonable detail an accounting of the amount payable and the
calculations used to determine in good faith such amount and shall be
conclusive absent manifest or demonstrable error. Nothing in this SECTION
2.9 shall provide the Borrower or any Subsidiary of the Borrower the right to
inspect the records, files or books of any Lender.
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Section 2.10 MANNER OF PAYMENT.
(a) Each payment (including prepayments) by the Borrower of the
principal of or interest on the Revolving Credit Advances, fees, and any
other amount owed under this Agreement or any other Loan Document shall be
made not later than 12:00 noon (Dallas, Texas time) on the date specified for
payment under this Agreement to the Administrative Lender at the
Administrative Lender's office, in lawful money of the United States of
America constituting immediately available funds.
(b) If any payment under this Agreement or any other Loan Document
shall be specified to be made upon a day which is not a Business Day, it
shall be made on the next succeeding day which is a Business Day, unless,
with respect to a payment due in respect of a LIBOR Advance, such Business
Day falls in another calendar month, in which case payment shall be made on
the preceding Business Day. Any extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(c) The Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are
received by the Administrative Lender, the Administrative Lender shall apply
such amounts in the following order of priority: (i) to the payment of the
Administrative Lender's expenses incurred on behalf of the Lenders then due
and payable, if any; (ii) to the payment of all other fees then due and
payable; (iii) to the payment of interest then due and payable on the
Revolving Credit Advances; (iv) to the payment of all other amounts not
otherwise referred to in this clause (d) then due and payable under the Loan
Documents; and (v) to the payment of principal then due and payable on the
Revolving Credit Advances.
Section 2.11 LIBOR LENDING OFFICES. Each Lender's initial LIBOR
Lending Office is set forth opposite its name in SCHEDULE 1 attached hereto.
Each Lender shall have the right at any time and from time to time to
designate a different office of itself or of any Affiliate of such Lender as
such Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR
Advance to such LIBOR Lending Office. No such designation or transfer shall
result in any liability on the part of the Borrower for increased costs or
expenses resulting solely from such designation or transfer (except any such
transfer which is made by a Lender pursuant to SECTION 9.2 or 9.3 hereof, or
otherwise for the purpose of complying with Applicable Law). Increased costs
for expenses resulting from a change in law occurring subsequent to any such
designation or transfer shall be deemed not to result solely from such
designation or transfer.
Section 2.12 SHARING OF PAYMENTS. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of
set-off, or otherwise) on account of its Advances (other than pursuant to
SECTIONS 2.14, 2.15(d), 2.15(f)(ii), 9.3 or 9.5) in excess of its Specified
Percentage of all payments made by the Borrower with respect to Revolving
Credit
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Advances shall purchase from each other Lender such participation in the
Revolving Credit Advances made by such other Lender as shall be necessary to
cause such purchasing Lender to share the excess payment pro rata according
to Specified Percentages with each other Lender; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section, to the fullest extent permitted by law, may
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 2.13 CALCULATION OF LIBOR RATE. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
LIBOR Advance as it sees fit.
Section 2.14 TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with SECTION 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, EXCLUDING, in the
case of each Lender and the Administrative Lender, taxes imposed on, based
upon or measured by its overall net income, net worth or capital, and
franchise taxes, doing business taxes or minimum taxes imposed on it, (i) by
the jurisdiction under the laws of which such Lender or the Administrative
Lender (as the case may be) is organized and in which it has its applicable
lending office or any political subdivision thereof; (ii) by any other
jurisdiction, or any political subdivision thereof, other than those imposed
by reason of (A) an asserted relation of such jurisdiction to the
transactions contemplated by this Agreement, (B) the activities of the
Borrower in such jurisdiction, or (C) the activities in connection with the
transactions contemplated by this Agreement of a Lender or the Administrative
Lender; (iii) by reason of failure by the Lender or the Administrative Lender
to comply with the requirements of paragraph (e) of this SECTION 2.14; and
(iv) in the case of any Lender, any Taxes in the nature of transfer, stamp,
recording or documentary taxes resulting from a transfer (other than as a
result of foreclosure) by such Lender of all or any portion of its interest
in this Agreement, the Notes or any other Loan Documents (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Lender, (x) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this SECTION 2.14) such Lender or the Administrative Lender (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (y) the Borrower shall make such deductions and (z) the
Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
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(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges
and similar levies (other than Taxes described in clause (iv) of the first
sentence of SECTION 2.14(a)) that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as
"OTHER TAXES").
(c) The Borrower will indemnify each Lender and the Administrative
Lender for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this SECTION 2.14) paid by such Lender or the Administrative
Lender (as the case may be) and all liabilities (including penalties,
additions to tax, interest and reasonable expenses) arising therefrom or with
respect thereto whether or not such Taxes or Other Taxes were correctly or
legally asserted, other than penalties, additions to tax, interest and
expenses arising as a result of gross negligence or wilful misconduct on the
part of such Lender or the Administrative Lender, PROVIDED, HOWEVER, that the
Borrower shall have no obligation to indemnify such Lender or the
Administrative Lender unless and until such Lender or the Administrative
Lender shall have delivered to the Borrower a certificate certifying that
such Taxes or Other Taxes (and/or penalties, additions to tax, interest and
reasonable expenses) were actually incurred by such Lender or the
Administrative Lender and showing in reasonable detail an accounting of the
amount payable and the calculations used to determine in good faith such
amount, which certificate shall be conclusive absent manifest or demonstrable
error. Nothing in this SECTION 2.14 shall provide the Borrower or any
Subsidiary of the Borrower the right to inspect the records, files or books
of any Lender or the Administrative Lender. This indemnification shall be
made within 30 days from the date such Lender or the Administrative Lender
(as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Lender the original or a certified copy of
a receipt evidencing payment thereof. For purposes of this SECTION 2.14 the
terms "UNITED STATES" and "UNITED STATES PERSON" shall have the meanings set
forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of a
Lender which becomes a party hereto pursuant to SECTION 11.6 after the
Agreement Date, the date upon which such Lender becomes a party hereto)
deliver to the Borrower through the Administrative Lender, with a copy to
the Administrative Lender:
(A) if any lending office is located in the United States of America,
two (2) accurate and complete signed originals of Internal
Revenue Service Form 4224 or any successor thereto ("FORM 4224"),
(B) if any lending office is located outside the United States of
America, two (2) accurate and complete signed originals of
Internal Revenue Service
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Form 1001 or any successor thereto ("FORM 1001").
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the
account of such lending office or lending offices under this Agreement free
from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or lending
offices or selects an additional lending office it shall, at the same time
or reasonably promptly thereafter but only to the extent the forms
previously delivered by it hereunder are no longer effective, deliver to
the Borrower through the Administrative Lender, with a copy to the
Administrative Lender, in replacement for the forms previously delivered by
it hereunder:
(A) if such changed or additional lending office is located in the
United States of America, two (2) accurate and complete signed
originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of
Form 1001, in each case indicating that such Lender is on the
date of delivery thereof entitled to receive payments of
principal, interest and fees for the account of such changed or
additional lending office under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any
event (including the passing of time but excluding any event mentioned in
clause (ii) above) requiring a change in the most recent Form 4224 or
Form 1001 previously delivered by such Lender and if the delivery of the
same be lawful, deliver to the Borrower through the Administrative Lender
with a copy to the Administrative Lender, two (2) accurate and complete
original signed copies of Form 4224 or Form 1001 in replacement for the
forms previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to that
effect, deliver to the Borrower such other forms or similar documentation
as may be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for withholding
purposes; and
(v) it shall notify the Borrower within 30 days after any event
(including an amendment to, or a change in any applicable law or regulation
or in the written interpretation thereof by any regulatory authority or any
judicial authority, or by ruling applicable to such Lender of any
governmental authority charged with the interpretation or administration of
any law) shall occur that results in such Lender no longer being capable of
receiving payments without any deduction or withholding of United States
federal income tax.
- 31 -
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in this SECTION 2.14 shall survive the payment in full of principal and
interest hereunder.
(g) Each Lender (and the Administrative Lender with respect to payments
to the Administrative Lender for its own account) agrees that (i) it will
take all reasonable actions by all usual means to maintain all exemptions, if
any, available to it from United States withholding taxes (whether available
by treaty, existing administrative waiver or by virtue of the location of any
Lender's lending office), (ii) it will use reasonable best efforts
(consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its lending office, if the making of such a
change would avoid the need for, or reduce the amount of, any such additional
amounts which may thereafter accrue and would not, in the reasonable judgment
of such Lender, be materially disadvantageous to such Lender, and (iii)
otherwise cooperate with the Borrower to minimize amounts payable by the
Borrower under this SECTION 2.14; PROVIDED, HOWEVER, the Lenders and the
Administrative Lender shall not be obligated by reason of this SECTION
2.14(g) to contest the payment of any Taxes or Other Taxes or to disclose any
information regarding its tax affairs or tax computations or reorder its tax
or other affairs or tax or other planning. Subject to the foregoing, to the
extent the Borrower pays sums pursuant to this SECTION 2.14 and the Lender or
the Administrative Lender receives a refund of any or all of such sums, such
refund shall be applied to reduce any amounts then due and owing under this
Agreement or, to the extent that no amounts are due and owing under this
Agreement at the time such refunds are received, the party receiving such
refund shall promptly pay over all such refunded sums to the Borrower,
provided that no Default or Event of Default is in existence at such time.
(h) If the Borrower becomes obligated to pay additional amounts
described in this SECTION 2.14 to any Lender, the Borrower may designate a
financial institution reasonably acceptable to the Administrative Lender to
replace such Lender by purchasing for cash and receiving an assignment of
such Lender's pro rata share of the Revolving Credit Commitment and the
Rights of such Lender under the Loan Documents without recourse to or
warranty by, or expense to, such Lender, for a purchase price equal to the
outstanding amounts owed to such Lender (including such additional amounts
owing to such Lender pursuant to this SECTION 2.14). Upon execution of an
Assignment Agreement, such other financial institution shall be deemed to be
a "Lender" for all purposes of this Agreement as set forth in SECTION 11.6
hereof.
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Section 2.15 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT FACILITY. The Borrower may request the
Issuing Bank, on the terms and conditions hereinafter set forth, to issue,
and the Issuing Bank shall, if so requested, issue, letters of credit (the
"LETTERS OF CREDIT") for the account of the Borrower from time to time on any
Business Day from the date of the initial Advance until the Maturity Date in
an aggregate maximum amount (assuming compliance with all conditions to
drawing) not to exceed, at any time outstanding (less Cash Collateralized
Letters of Credit), the lesser of (i) $5,000,000 (the "LETTER OF CREDIT
FACILITY"), and (ii) the result of (1) the Revolving Credit Commitment MINUS
(2) the aggregate principal amount of Revolving Credit Advances then
outstanding. No Letter of Credit shall have an expiration date (including
all rights of renewal) later than the earlier of (i) the Maturity Date or
(ii) one year after the date of issuance thereof. Immediately upon the
issuance of each Letter of Credit (or on the Agreement Date, with respect to
Existing Letters of Credit), the Issuing Bank shall be deemed to have sold
and transferred to each Lender, and each Lender shall be deemed to have
purchased and received from the Issuing Bank, in each case irrevocably and
without any further action by any party, an undivided interest and
participation in such Letter of Credit, each drawing thereunder and the
obligations of the Borrower under this Agreement in respect thereof in an
amount equal to the product of (x) such Lender's Specified Percentage times
(y) the maximum amount available to be drawn under such Letter of Credit
(assuming compliance with all conditions to drawing). Within the limits of
the Letter of Credit Facility, and subject to the limits referred to above,
the Borrower may request the issuance of Letters of Credit under this SECTION
2.15(a), repay any Revolving Credit Advances resulting from drawings
thereunder pursuant to SECTION 2.15(c) and request the issuance of additional
Letters of Credit under this SECTION 2.15(a).
(b) REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 a.m. (Dallas time) on the third Business
Day prior to the date of the proposed issuance of such Letter of Credit, by
the Borrower to the Issuing Bank. Each Letter of Credit shall be issued upon
notice given in accordance with the terms of any separate agreement between
the Borrower and the Issuing Bank in form and substance reasonably
satisfactory to the Borrower and the Issuing Bank providing for the issuance
of Letters of Credit pursuant to this Agreement and containing terms and
conditions not inconsistent with this Agreement (a "LETTER OF CREDIT
AGREEMENT"), PROVIDED that if any such terms and conditions are inconsistent
with this Agreement, this Agreement shall control. Each such notice of
issuance of a Letter of Credit by the Borrower (a "NOTICE OF ISSUANCE") shall
be by telex, telecopier or cable, specifying therein, in the case of a Letter
of Credit, the requested (A) date of such issuance (which shall be a Business
Day), (B) maximum amount of such Letter of Credit, (C) expiration date of
such Letter of Credit, (D) name and address of the beneficiary of such Letter
of Credit, and (E) form of such Letter of Credit and specifying such other
information as shall be required pursuant to the relevant Letter of Credit
Agreement. If the requested terms of such Letter of Credit are acceptable to
the Issuing Bank in its reasonable discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in ARTICLE 3 hereof, make
such Letter of Credit available to the Borrower at its office referred to in
SECTION 11.1 or as otherwise agreed with the Borrower in connection with such
issuance.
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(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Revolving Credit Advance,
which shall bear interest at the Base Rate Basis, in the amount of such draft
(but without any requirement for compliance with the conditions set forth in
ARTICLE 3 hereof). In the event that a drawing under any Letter of Credit is
not reimbursed by the Borrower by 11:00 a.m. (Dallas time) on the first
Business Day after such drawing, the Issuing Bank shall promptly notify
Administrative Lender and each other Lender. Each such Lender shall, on the
first Business Day following such notification, make a Revolving Credit
Advance, which shall bear interest at the Base Rate Basis, and shall be used
to repay the applicable portion of the Issuing Bank's advance with respect to
such Letter of Credit, in an amount equal to the amount of its participation
in such drawing for application to reimburse the Issuing Bank (but without
any requirement for compliance with the applicable conditions set forth in
ARTICLE 3 hereof) and shall make available to the Administrative Lender for
the account of the Issuing Bank, by deposit at the Administrative Lender's
office, in same day funds, the amount of such Revolving Credit Advance. In
the event that any Lender fails to make available to the Administrative
Lender for the account of the Issuing Bank the amount of such Revolving
Credit Advance, the Issuing Bank shall be entitled to recover such amount on
demand from such Lender together with interest thereon at a rate per annum
equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal Funds
Rate.
(d) INCREASED COSTS. If (a) the applicability of any law, rule,
regulation or guideline adopted pursuant to or arising out of the July 1988
report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and
Capital Standards" or (b) any change in any Law or in the interpretation
thereof by any court or administrative or governmental authority charged with
the administration thereof shall either (i) impose, modify or deem applicable
any reserve, special deposit or similar requirement against letters of credit
or guarantees issued by, or assets held by, or deposits in or for the account
of, the Issuing Bank or any Lender or any corporation controlling the Issuing
Bank or any Lender or (ii) impose on the Issuing Bank or any Lender or any
corporation controlling the Issuing Bank or any Lender any other condition
regarding this Agreement or any Letter of Credit, and the result of any event
referred to in the preceding clause (i) or (ii) shall be to increase the cost
to the Issuing Bank or any corporation controlling the Issuing Bank of
issuing or maintaining any Letter of Credit or to any Lender or any
corporation controlling such Lender of purchasing any participation therein
or making any Revolving Credit Advance pursuant to SECTION 2.15(c), then,
within 30 days after demand by the Issuing Bank or such Lender, the Borrower
shall, subject to SECTION 11.9 hereof, pay to the Issuing Bank or such
Lender, from time to time as specified by the Issuing Bank or such Lender,
additional amounts that shall be sufficient to compensate the Issuing Bank or
such Lender or any corporation controlling such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Borrower by the Issuing Bank or such Lender, shall certify that such
increased costs were actually incurred by the Issuing Bank or such Lender and
shall show in reasonable detail an accounting of the amount payable and the
calculation used to determine in good faith such amount and shall be
conclusive absent manifest or demonstrable error. In determining such
- 34 -
amount, the Issuing Bank or such Lender may use any reasonable averaging or
attribution method. Nothing in this SECTION 2.15(d) shall provide the
Borrower or any Subsidiary of the Borrower the right to inspect the records,
files or books of the Issuing Bank or any Lender. If the Borrower becomes
obligated to pay additional amounts described in this SECTION 2.15(d) to any
Lender, the Borrower may designate a financial institution reasonably
acceptable to the Administrative Lender to replace such Lender by purchasing
for cash and receiving an assignment of such Lender's pro rata share of the
Revolving Credit Commitment and the Rights of such Lender under the Loan
Documents without recourse to or warranty by, or expenses to, such Lender,
for a purchase price equal to the outstanding amounts owing to such Lender
(including such additional amounts owing to such Lender pursuant to this
SECTION 2.15(d). Upon execution of an Assignment Agreement, such other
financial institution shall be deemed to be a "Lender" for all purposes of
this Agreement as set forth in SECTION 11.6 hereof. The obligations of the
Borrower under this SECTION 2.15(d) shall survive termination of this
Agreement. The Issuing Bank or any Lender claiming any additional
compensation under this SECTION 2.15(d) shall use reasonable efforts
(consistent with legal and regulatory restrictions) to reduce or eliminate
any such additional compensation which may thereafter accrue and which
efforts would not, in the reasonable judgment of the Issuing Bank or such
Lender, be otherwise disadvantageous.
(e) OBLIGATIONS ABSOLUTE. The obligations of the Borrower under this
Agreement with respect to any Letter of Credit, any Letter of Credit
Agreement and any other agreement or instrument relating to any Letter of
Credit or any Revolving Credit Advance pursuant to SECTION 2.15(c) shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement, any
other Loan Document, any Letter of Credit Agreement, any Letter of Credit
or any other agreement or instrument relating thereto (collectively, the
"L/C RELATED DOCUMENTS");
(ii) (A) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrower in respect
of the Letters of Credit or any Revolving Credit Advance pursuant to
SECTION 2.15(c) or (B) any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank, any
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C Related Documents or any
unrelated transaction;
(iv) any statement or any other document presented under a Letter of
Credit
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proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not comply with the terms
of the Letter of Credit, except for any payment made upon the Issuing
Bank's gross negligence or wilful misconduct;
(vi) any exchange, release or non-perfection of any Collateral, or any
release or amendment or waiver of or consent to departure from any
guarantee, for all or any of the Obligations of the Borrower in respect of
the Letters of Credit or any Revolving Credit Advance pursuant to
SECTION 2.15(c); or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available to,
or a discharge of, the Borrower or a guarantor, other than the Issuing's
Bank gross negligence or wilful misconduct.
(f) COMPENSATION FOR LETTERS OF CREDIT.
(i) CREDIT FEE. Subject to SECTION 11.9 hereof, the Borrower shall
pay to the Administrative Lender for the account of each Lender a fee
(which shall be payable quarterly in arrears on each Quarterly Date and on
the Maturity Date) on the average daily amount available for drawing under
all outstanding Letters of Credit at the following per annum percentages,
applicable in the following situations:
Applicability Percentage
------------- ----------
(a) INITIAL PRICING PERIOD 1.00
(b) SUBSEQUENT PRICING PERIOD
(1) If the Leverage Ratio is
greater than 2.50 to 1 2.25
(2) If the Leverage Ratio is
less than or equal to 2.50
to 1 but greater than 1.75
to 1 1.75
(3) If the Leverage Ratio is less
than or equal to 1.75 to 1 but
greater than 1.00 to 1 1.25
(4) If the Leverage Ratio is less
than or equal to 1.00 to 1 1.00
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The fee payable in respect of the Letters of Credit shall be subject to
reduction or increase, as applicable and as set forth in the table
above, on a quarterly basis according to the performance of the Borrower
as tested by using the Leverage Ratio calculated as of the end of each
fiscal quarter during the Subsequent Pricing Period. Any such increase
or reduction in such fee shall be effective within 2 Business Days of
the date of receipt by the Administrative Lender of the financial
statements required pursuant to SECTION 6.1 or 6.2 hereof, as
applicable, for each such fiscal quarter and the Compliance Certificate
required pursuant to SECTION 6.3 hereof. If such financial statements
and Compliance Certificate are not received by the date required, the
fee payable in respect of the Letters of Credit shall be determined as
if the Leverage Ratio is greater than 2.50 to 1 until such time as such
financial statements and Compliance Certificate are received. Subject
to SECTION 11.9 hereof, such fee shall be computed on the basis of a
360-day year for the actual number of days elapsed.
(ii) ISSUANCE FEE. Subject to SECTION 11.9 hereof, the Borrower
shall pay to the Administrative Lender for the account of the Issuing
Bank an issuance fee (which shall be payable on the date of issuance of
each Letter of Credit) in an amount equal to the greater of (a) $250 or
(b) the product of (x) 0.25% times (y) the face amount of the Letter of
Credit being issued.
(iii) ADMINISTRATIVE FEE. Subject to SECTION 11.9 hereof, the
Borrower shall pay, with respect to each amendment, renewal or transfer
of each Letter of Credit and each drawing made thereunder, reasonable
documentary and processing charges in accordance with the Issuing Bank's
standard schedule for such charges in effect at the time of such
amendment, renewal, transfer or drawing, as the case may be.
(g) L/C CASH COLLATERAL ACCOUNT.
(i) Upon the occurrence of an Event of Default and demand by the
Administrative Lender pursuant to SECTION 8.2(c) (but in the case of an
Event of Default specified in SECTION 8.1(f) or (g) hereof, without any
demand or taking of any other action by the Administrative Lender or any
other Lender), the Borrower will promptly pay to the Administrative
Lender in immediately available funds an amount equal to the maximum
amount then available to be drawn under the Letters of Credit then
outstanding. Any amounts so received by the Administrative Lender shall
be deposited by the Administrative Lender in a deposit account
maintained by the Issuing Bank (the "L/C CASH COLLATERAL ACCOUNT"). In
addition, as provided in SECTION 2.5(b) hereof, the Borrower will also
deposit in the L/C Cash Collateral Account immediately available funds
to cash collateralize Letters of Credit.
(ii) As security for the payment of all Reimbursement Obligations
and for any other Obligations, the Borrower hereby grants, conveys,
assigns, pledges, sets over and transfers to the Administrative Lender
(for the benefit of the Issuing Bank and Lenders), and creates in the
Administrative Lender's favor (for the benefit of the Issuing Bank and
- 37 -
Lenders) a Lien in, all money, instruments and securities at any time
held in or acquired in connection with the L/C Cash Collateral Account,
together with all proceeds thereof. The L/C Cash Collateral Account
shall be under the sole dominion and control of the Administrative
Lender and the Borrower shall have no right to withdraw or to cause the
Administrative Lender to withdraw any funds deposited in the L/C Cash
Collateral Account. At any time and from time to time, upon the
Administrative Lender's request, the Borrower promptly shall execute and
deliver any and all such further instruments and documents, including
UCC financing statements, as may be necessary, appropriate or desirable
in the Administrative Lender's judgment to obtain the full benefits
(including perfection and priority) of the security interest created or
intended to be created by this paragraph (ii) and of the rights and
powers herein granted. The Borrower shall not create or suffer to exist
any Lien on any amounts or investments held in the L/C Cash Collateral
Account other than the Lien granted under this paragraph (ii) and Liens
arising by operation of Law and not by contract which secure amounts not
yet due and payable.
(iii) The Administrative Lender shall (A) apply any funds in the L/C
Cash Collateral Account on account of Reimbursement Obligations when the
same become due and payable, (B) if at any time prior to the occurrence
of a Default or Event of Default, the amount in the L/C Cash Collateral
Account exceeds the amount of the Cash Collateralized Letters of Credit,
pay such excess to the Borrower, and (C) after the Maturity Date or if
at any time the amount in the L/C Cash Collateral Account exceeds the
amount of the Reimbursement Obligations, apply any proceeds remaining in
the L/C Cash Collateral Account FIRST to pay any unpaid Obligations then
outstanding hereunder and THEN to refund any remaining amount to the
Borrower.
(iv) The Borrower, no more than once in any calendar month, may
direct the Administrative Lender to invest the funds held in the L/C
Cash Collateral Account (so long as the aggregate amount of such funds
exceeds any relevant minimum investment requirement) in (A) Cash
Equivalents or direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof and (B) one or more other types of investments permitted by the
Determining Lenders, in each case with such maturities as the Borrower,
with the consent of the Determining Lenders, may specify, pending
application of such funds on account of Reimbursement Obligations or on
account of other Obligations, as the case may be. In the absence of any
such direction from the Borrower, the Administrative Lender shall invest
the funds held in the L/C Cash Collateral Account (so long as the
aggregate amount of such funds exceeds any relevant minimum investment
requirement) in one or more types of investments with the consent of the
Determining Lenders with such maturities as the Borrower, with the
consent of the Determining Lenders, may specify, pending application of
such funds on account of Reimbursement Obligations or on account of
other Obligations, as the case may be. All such investments shall be
made in the Administrative Lender's name for the account of the Lenders,
subject to the ownership interest therein of the Borrower. The Borrower
recognizes that any losses or taxes with respect to such investments
shall be borne solely by the Borrower, and the Borrower
- 38 -
agrees to hold the Administrative Lender and the Lenders harmless from
any and all such losses and taxes. Administrative Lender may liquidate
any investment held in the L/C Cash Collateral Account in order to apply
the proceeds of such investment on account of the Reimbursement
Obligations as provided in SECTION 2.15(g)(iii) hereof (or on account of
any other Obligation then due and payable, as the case may be) without
regard to whether such investment has matured and without liability for
any penalty or other fee incurred (with respect to which the Borrower
hereby agrees to reimburse the Administrative Lender) as a result of
such application.
(v) After the establishment of the L/C Cash Collateral Account
pursuant to SECTION 2.15(g)(i) hereof, the Borrower shall pay to the
Administrative Lender the fees customarily charged by the Issuing Bank
with respect to the maintenance of accounts similar to the L/C Cash
Collateral Account.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO CLOSING, THE INITIAL REVOLVING
CREDIT ADVANCE AND THE INITIAL LETTERS OF CREDIT. The obligation of each
Lender to make any Revolving Credit Advance and the obligation of the Issuing
Bank to issue Letters of Credit is subject to (i) receipt by the
Administrative Lender of the following items which are to be delivered, in
form and substance satisfactory to each Lender, with a copy (except for the
Notes) for each Lender, and (ii) satisfaction of the following conditions
which are to be satisfied:
(a) A loan certificate of the Borrower certifying as to the accuracy of
its representations and warranties in the Loan Documents, certifying that no
Default has occurred, and including a certificate of incumbency with respect
to each Authorized Signatory, and including (i) a copy of the Certificate of
Incorporation of the Borrower, certified to be true, complete and correct by
the Secretary of State of Delaware, (ii) a copy of its Bylaws, as in effect
on the Agreement Date, and (iii) a copy of a certificate of good standing and
a certificate of existence for its state of organization and each state in
which the nature of its business requires it to be qualified to do business
except where the failure to be in good standing would not have a Material
Adverse Effect;
(b) a duly executed Revolving Credit Note payable to the order of each
Lender and in an amount for each Lender equal to its Specified Percentage of
the Revolving Credit Commitment;
(c) UCC-11 searches in appropriate jurisdictions where Collateral is
located;
(d) opinions of counsel to the Borrower and each Subsidiary addressed
to the Lenders and in form and substance satisfactory to the Lenders, dated
the Agreement Date, and covering
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the matters set forth in SECTIONS 4.1(a), (b), (c), (h), (m), (n) and (p) and
such other matters incident to the transactions contemplated hereby as the
Administrative Lender or Special Counsel may reasonably request;
(e) reimbursement for the Administrative Lender for Special Counsel's
reasonable and customary fees (on an hourly basis) and expenses rendered
through the date hereof;
(f) evidence that all proceedings of the Borrower and its Subsidiaries
taken in connection with the transactions contemplated by this Agreement and
the other Loan Documents shall be reasonably satisfactory in form and
substance to the Lenders and Special Counsel; and the Lenders shall have
received copies of all documents or other evidence which the Administrative
Lender, Special Counsel or any Lender may reasonably request in connection
with such transactions;
(g) any fees or expenses required to be paid pursuant to the Fee Letter;
(h) duly executed and completed Pledge Agreements, dated as of the
Agreement Date granting a Lien, subject only to Permitted Liens, in all
Collateral covered thereby, together with related financing statements, stock
powers, stock certificates evidencing ownership of 66% of the issued and
outstanding Capital Stock of each Foreign Subsidiary;
(i) simultaneously with the making of the initial Advance, executed
UCC-3 Termination Statements to be filed in appropriate jurisdictions to
terminate all Liens against assets of the Borrower and its Subsidiaries other
than Permitted Liens;
(j) the Initial Public Offering shall have occurred on terms and
conditions acceptable to the Lenders, including but not limited to the
condition that the Borrower shall have received at least $50,000,000 in Net
Cash Proceeds thereof;
(k) there shall have occurred no material adverse change in the
business, assets or financial condition of the Borrower and its Subsidiaries,
taken as a whole, since the date of the financial statements referred to in
SECTION 4.1(j)(i) hereof;
(l) simultaneously with the making of the initial Advance, all
Indebtedness of the Borrower under the Existing Credit Agreement (other than
in respect of the Existing Letters of Credit) shall have been refinanced in
full pursuant to the terms hereof and all Liens granted with respect thereto
(other than with respect to the Capital Stock of each Foreign Subsidiary)
shall be terminated and released;
(m) duly executed Subordination Agreements executed by each Subsidiary
of the Borrower, dated as of the Agreement Date; and
(n) in form and substance reasonably satisfactory to the Lenders and
Special Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender
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may reasonably require in connection with the transactions contemplated
hereby, including without limitation, evidence of the status, organization or
authority of the Borrower or any Subsidiary of the Borrower, and the
enforceability of the Obligations.
Section 3.2 CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT ADVANCES AND
LETTERS OF CREDIT. The obligation of each Lender to make each Revolving
Credit Advance hereunder and the obligation of the Issuing Bank to issue each
Letter of Credit is subject to fulfillment of the following conditions
immediately prior to or contemporaneously with each such Revolving Credit
Advance or issuance:
(a) With respect to each Revolving Credit Advance and each issuance of
a Letter of Credit, all of the representations and warranties of the Borrower
under this Agreement, which, pursuant to SECTION 4.2 hereof, are made at and
as of the time of each such Revolving Credit Advance or issuance, shall be
true and correct at such time in all material respects, both before and after
giving effect to the application of the proceeds of the Revolving Credit
Advance, except as otherwise expressly provided in said SECTION 4.2 hereof;
(b) The incumbency of the Authorized Signatories shall be as stated in
the certificate of incumbency delivered in the Borrower's loan certificate
pursuant to SECTION 3.1(a) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Administrative Lender. The
Lenders may, without waiving this condition, consider it fulfilled and a
representation by the Borrower made to such effect if no written notice to
the contrary, dated on or before the date of such Revolving Credit Advance,
is received by the Administrative Lender from the Borrower prior to the
making of such Revolving Credit Advance;
(c) There shall not exist a Default or Event of Default hereunder, and,
with respect to each Revolving Credit Advance and Letter of Credit, the
Administrative Lender shall have received written or telephonic certification
thereof by an Authorized Signatory (which certification, if telephonic, shall
be followed promptly by written certification);
(d) The aggregate Revolving Advances and Letters of Credit, after
giving effect to such proposed Revolving Credit Advance or Letter of Credit,
shall not exceed the maximum principal amount then permitted to be
outstanding hereunder;
(e) No order, judgment, injunction or decree of any Tribunal shall
purport to enjoin or restrain any Lender or the Issuing Bank from making any
Revolving Credit Advance or issuing any Letter of Credit;
(f) There shall not be pending, or to the knowledge of the Borrower,
threatened any Litigation against or affecting the Borrower or any Subsidiary
of the Borrower or any property of the Borrower or any Subsidiary of the
Borrower that has not been disclosed in writing by the Borrower pursuant to
SECTION 4.1(h), 6.4(d) or 6.5(a) prior to the making of the last preceding
Revolving Credit Advance or the issuance of the last preceding Letter of
Credit (or in the case of the initial Revolving Credit Advances and Letters
of Credit, prior to the Agreement Date) and
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there shall have occurred no development not so disclosed in any such
Litigation that, in either event, would reasonably be expected to have a
Material Adverse Effect; and
(g) There shall have occurred no material adverse change in the
business, financial condition, results of operations or business prospects of
the Borrower and its Subsidiaries, taken as a whole, since June 30, 1997.
Section 3.3 CONDITIONS PRECEDENT TO CONVERSIONS AND CONTINUATIONS.
The obligation of the Lenders to convert any existing Base Rate Advance into
a LIBOR Advance or to continue any existing LIBOR Advance is subject to the
condition precedent that on the date of such conversion or continuation no
Default or Event of Default shall have occurred and be continuing or would
result from the making of such conversion or continuation. The acceptance of
the benefits of each such conversion and continuation shall constitute a
representation and warranty by the Borrower to each of the Lenders that no
Default or Event of Default shall have occurred and be continuing or would
result from the making of such conversion or continuation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to each Lender as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. The respective jurisdiction of
organization or incorporation and percentage ownership by the Borrower of the
Subsidiaries listed on SCHEDULE 4 are true and correct as of the Agreement
Date. SCHEDULE 4 is a complete and accurate listing as of the Agreement Date,
showing with respect to each Subsidiary of the Borrower (a) its mailing
address, which is its principal place of business, (b) the classes of its
Capital Stock and the number of amount of its Capital Stock authorized and
outstanding, (c) each record and beneficial owner of its outstanding Capital
Stock, and (d) all outstanding options, rights, rights of conversion,
redemption, purchase or repurchase, rights of first refusal and similar
rights relating to the Capital Stock. All of the outstanding Capital Stock
of the Borrower and each Subsidiary of the Borrower is validly issued, fully
paid and non-assessable. Each of the Borrower and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of its state, county or province of organization. Each of the Borrower
and its Subsidiaries has the legal power and authority to own its properties
and to carry on its business as now being and hereafter proposed to be
conducted. Each of the Borrower and its Subsidiaries is authorized to do
business, duly qualified and in good standing as set forth in SCHEDULE 7 and
no qualification or authorization is necessary in any other jurisdictions in
which the character of its properties or the nature of its business requires
such qualification or authorization except where the failure to be so
qualified or authorized would not have a Material Adverse Effect.
(b) AUTHORIZATION. The Borrower has legal power and has taken all
necessary legal
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action to authorize it to borrow and request Letters of Credit hereunder.
Each of the Borrower and its Subsidiaries has legal power and has taken all
necessary legal action to execute, deliver and perform the Loan Documents to
which it is party in accordance with the terms thereof, and to consummate the
transactions contemplated thereby. Each Loan Document has been duly executed
and delivered by the Borrower or the Subsidiary of the Borrower executing it.
Each of the Loan Documents to which the Borrower or any of its Subsidiaries
is a party is a legal, valid and binding obligation of the Borrower or such
Subsidiary, as applicable, enforceable in accordance with its terms, subject,
to enforcement of remedies, to the following qualifications: (i) equitable
principles generally, and (ii) Debtor Relief Laws (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower or any
Subsidiary of the Borrower).
(c) COMPLIANCE WITH OTHER LOAN DOCUMENTS AND CONTEMPLATED TRANSACTIONS.
The execution, delivery and performance by the Borrower and its Subsidiaries
of the Loan Documents to which they are respectively a party, and the
consummation of the transactions contemplated thereby, do not and will not
(i) require any consent or approval necessary on or prior to the Agreement
Date not already obtained, except to the extent that the failure to obtain
any such consent or approval could not reasonably be expected to have a
Material Adverse Effect, (ii) violate any Applicable Law, except to the
extent that any such violation could not reasonably be expected to have a
Material Adverse Effect, (iii) conflict with, result in a breach of, or
constitute a default under the certificate of incorporation or by-laws of the
Borrower or any Subsidiary of the Borrower, (iv) conflict with, result in a
breach of, or constitute a default under any Necessary Authorization,
indenture, agreement or other instrument, to which the Borrower or any
Subsidiary of the Borrower is a party or by which they or their respective
properties may be bound, the result of which could reasonably be expected to
have a Material Adverse Effect, or (v) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Subsidiary of the Borrower, except
Permitted Liens.
(d) BUSINESS. The Borrower and its Subsidiaries are engaged primarily
in the business of designing, manufacturing and marketing direct current
power supplies and activities directly related thereto.
(e) LICENSES, ETC. All Necessary Authorizations have been duly
obtained, and are in full force and effect without any known conflict with
the rights of others and free from any unduly burdensome restrictions, unless
the failure to obtain or have in effect such Necessary Authorizations would
not result in a Material Adverse Effect. The Borrower and its Subsidiaries
are and will continue to be in compliance in all material respects with all
provisions thereof. No circumstance exists which could reasonably be
expected to impair the utility of the Necessary Authorization or the right to
renew such Necessary Authorization the effect of which would have a Material
Adverse Effect. No Necessary Authorization is the subject of any pending or,
to the best of the Borrower's knowledge, threatened challenge, suspension,
cancellation or revocation, the effect of which could reasonably be expected
to have a Material Adverse Effect.
(f) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries are in
compliance in all
- 43 -
respects with all Applicable Laws, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
(g) TITLE TO PROPERTIES. The Borrower and its Subsidiaries have good
and indefeasible title to, or a valid leasehold interest in, all of their
material assets. None of their assets are subject to any Liens, except
Permitted Liens. No financing statement or other Lien filing (except relating
to Permitted Liens) is on file in any state or jurisdiction that names the
Borrower or any of its Subsidiaries as debtor or covers (or purports to
cover) any assets of the Borrower or any of its Subsidiaries. The Borrower
and its Subsidiaries have not signed any such financing statement or filing,
nor any security agreement authorizing any Person to file any such financing
statement or filing (except relating to Permitted Liens).
(h) LITIGATION. Except as reflected on SCHEDULE 3 hereto, as of the
Agreement Date there is no Litigation pending against, or, to the Borrower's
current actual knowledge, threatened against the Borrower, or in any other
manner relating directly and adversely to the Borrower or any of its
Subsidiaries, or any of their respective properties, in any court or before
any arbitrator of any kind or before or by any governmental body in which the
amount claimed (in excess of applicable insurance) exceeds $500,000.
(i) TAXES. All federal, state and other tax returns of the Borrower
and its Subsidiaries required by law to be filed have been duly filed or
extensions have been timely filed, and all federal, state and other Taxes
upon the Borrower, its Subsidiaries or any of their properties, income,
profits and assets, which are due and payable, have been paid, unless the
same are being diligently contested in accordance with SECTION 5.6 hereof.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of their Taxes or their obligations in respect of the
Tax Distributions are, in the judgment of the Borrower, adequate.
(j) FINANCIAL STATEMENTS; MATERIAL LIABILITIES.
(i) Borrower has heretofore delivered to Lenders (a) the audited
combined balance sheets of the Borrower and its Subsidiaries as at
December 31, 1996, and the related statements of earnings and changes in
investment and statement of cash flows for the twelve-month period then
ended, and (b) unaudited combined balance sheets of the Borrower and its
Subsidiaries as at June 30, 1997, and the related statements of earnings
and changes in investment and statement of cash flows for the six-month
period then ended. Such financial statements were prepared in conformity
with GAAP (except for the absence of footnotes) and fairly present, in all
material respects, the financial position of the Borrower and its
Subsidiaries as at the date thereof and the combined results of operations
and cash flows for the period covered thereby.
(ii) The projected financial statements of the Borrower and its
Subsidiaries delivered to the Lenders prior to or on the Agreement Date
were prepared in good faith and management of the Borrower believes them to
be based on reasonable assumptions and to fairly present in all material
respects the projected financial condition of the
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Borrower and its Subsidiaries and the projected results of operations as
of the dates and for the periods shown for the Borrower and its
Subsidiaries, it being recognized by the Lenders that such projections
as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may
differ from the projected results.
(iii) The financial statements of the Borrower and its Subsidiaries
delivered to the Lenders pursuant to SECTION 6.1 and 6.2 hereof fairly
present in all material respects their respective financial condition
and their respective results of operations as of the dates and for the
periods shown, all in accordance with GAAP, subject to normal year-end
adjustments. The latest of such financial statements reflects all
material liabilities, direct and contingent, of the Borrower and each
Subsidiary of the Borrower that are required to be disclosed in
accordance with GAAP. As of the date of the latest of such financial
statements, there were no Guaranties, liabilities for Taxes, forward or
long-term commitments or unrealized or anticipated losses from any
unfavorable commitments that are substantial in amount that are required
to be reflected but that are not reflected on such financial statements.
(k) NO ADVERSE CHANGE. Since the date of the last financial statements
delivered to the Lenders pursuant to SECTION 6.1 or 6.2 hereof, no event or
circumstance has occurred or arisen which is reasonably likely to have a
Material Adverse Effect.
(l) ERISA. None of the Borrower or its Controlled Group maintains or
contributes to any Plan subject to Title IV of ERISA other than those
disclosed to the Administrative Lender in writing. Each such Plan (other
than any Multiemployer Plan) is in compliance in all material respects with
the applicable provisions of ERISA, the Code, and any other applicable Law,
except to the extent that failure to so comply would not reasonably be
expected to have a Material Adverse Effect. With respect to each Plan (other
than any Multiemployer Plan) of the Borrower and each member of its
Controlled Group, all reports required under ERISA or any other Applicable
Law to be filed with any governmental authority, the failure of which to file
could reasonably result in liability of the Borrower or any member of its
Controlled Group in excess of $500,000, have been duly filed. All such
reports are true and correct in all material respects as of the date given.
No Plan of the Borrower or any member of its Controlled Group has been
terminated under Section 4041(c) of ERISA nor has any accumulated funding
deficiency (as defined in Section 412(a) of the Code) been incurred (without
regard to any waiver granted under Section 412 of the Code), nor has any
funding waiver from the Internal Revenue Service been received or requested
the result of which could reasonably be expected to have Material Adverse
Effect. None of the Borrower or any member of its Controlled Group has
failed to make any contribution or pay any amount due or owing as required
under the terms of any such Plan, or by Section 412 of the Code or Section
302 of ERISA by the due date under Section 412 of the Code and Section 302 of
ERISA, the result of which could reasonably be expected to have a Material
Adverse Effect. There has been no ERISA Event or any event requiring
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to
any Plan or its related trust of the Borrower or any member of its Controlled
Group since the effective date of ERISA. The
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present value of the benefit liabilities, as defined in Title IV of ERISA, of
each Plan subject to Title IV of ERISA (other than a Multiemployer Plan) of
the Borrower and each member of its Controlled Group does not exceed by more
than $500,000 the present value of the assets of each such Plan as of the
most recent valuation date using each such Plan's actuarial assumptions at
such date. There are no pending, or to the best of the Borrower's knowledge
threatened, claims, lawsuits or actions (other than routine claims for
benefits in the ordinary course) asserted or instituted against, and neither
the Borrower nor any member of its Controlled Group has knowledge of any
threatened litigation or claims against, the assets of any Plan or its
related trust or against any fiduciary of a Plan with respect to the
operation of such Plan, the result of which could reasonably be expected to
have a Material Adverse Effect. None of the Borrower or, to the best of the
Borrower's knowledge, any member of its Controlled Group has engaged in any
prohibited transactions, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, in connection with any Plan the result of which
could reasonably be expected to have Material Adverse Effect. None of the
Borrower or any member of its Controlled Group has withdrawn from any
Multiemployer Plan, nor has incurred or reasonably expects to incur (A) any
liability under Title IV of ERISA (other than premiums due under Section 4007
of ERISA to the PBGC), (B) any withdrawal liability (and no event has
occurred which with the giving of notice under Section 4219 of ERISA would
result in such liability) under Section 4201 of ERISA as a result of a
complete or partial withdrawal (within the meaning of Section 4203 or 4205 of
ERISA) from a Multiemployer Plan, or (C) any liability under Section 4062 of
ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA.
None of the Borrower, any member of its Controlled Group, or any organization
to which the Borrower or any member of its Controlled Group is a successor or
parent corporation within the meaning of ERISA Section 4069(b), has engaged
in a transaction within the meaning of ERISA Section 4069, the result of
which could reasonably be expected to have a Material Adverse Effect. None
of the Borrower or any member of its Controlled Group maintains or has
established any Plan, which is a welfare benefit plan within the meaning of
Section 3(1) of ERISA and which provides for continuing benefits or coverage
for any participant or any beneficiary of any participant after such
participant's termination of employment, except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
the result of which could reasonably be expected to have a Material Adverse
Effect. Each of Borrower and its Controlled Group which maintains a Plan
which is a welfare benefit plan within the meaning of Section 3(1) of ERISA
has complied in all material respects with any applicable notice and
continuation requirements of COBRA and the regulations thereunder. None of
the Borrower or any member of its Controlled Group maintains, has
established, or has ever participated in a multiemployer welfare benefit
arrangement within the meaning of Section 3(40)(A) of ERISA.
(m) COMPLIANCE WITH REGULATIONS G, T, U AND X. The Borrower is not
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, and no part of the proceeds of the Advances or
Letters of Credit will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock. No more than 25% of the assets of the Borrower and its Subsidiaries
are margin stock. None of the Borrower and
- 46 -
its Subsidiaries nor any agent acting on their behalf, have taken or will
knowingly take any action which would cause this Agreement or any other Loan
Documents to violate any regulation of the Board of Governors of the Federal
Reserve System or to violate the Securities Exchange Act of 1934, in each
case as in effect now or as the same may hereafter be in effect.
(n) GOVERNMENTAL REGULATION. The Borrower and its Subsidiaries are not
required to obtain any Necessary Authorization on or prior to the Agreement
Date that has not already been obtained from, or effect any material filing
or registration that has not already been effected with, any Tribunal in
connection with the execution and delivery of this Agreement or any other
Loan Document, or the performance thereof, in accordance with their
respective terms, including any borrowings hereunder.
(o) ABSENCE OF DEFAULT. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions of their
certificates of incorporation and by-laws, and no event has occurred or
failed to occur, which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, or which with the passage of time or
giving of notice or both would constitute, (i) an Event of Default or (ii) a
default by the Borrower or any of its Subsidiaries under any material
indenture, agreement or other instrument, or any judgment, decree or order to
which the Borrower or any of its Subsidiaries or by which they or any of
their respective properties is bound, except to the extent that such default
could not reasonably be expected to have a Material Adverse Effect.
(p) GOVERNMENTAL REGULATION. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or
the Investment Company Act of 1940, or any other Law, domestic or foreign,
limiting its ability to incur Indebtedness for money borrowed or to create
Liens on any of its properties or assets to secure such Indebtedness.
Neither the entering into or performance by the Borrower of this Agreement
nor the issuance of the Notes violates any provision of such act or requires
any consent, approval, or authorization of, or registration with, the
Securities and Exchange Commission or any other governmental or public body
of authority pursuant to any provisions of such act.
(q) ENVIRONMENTAL MATTERS. Neither the Borrower nor any Subsidiary has
any current actual knowledge that any substance deemed hazardous by any
Applicable Environmental Law, has been installed (i) on any real property fee
title to which is now owned by the Borrower or any of its Subsidiaries or
(ii) by Borrower or any of its Subsidiaries on any real property leased by
the Borrower or any of its Subsidiaries, in either case in a manner which
does not comply with Applicable Environmental Laws, except to the extent that
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect. The Borrower and its Subsidiaries are not in violation of or
subject to any existing, pending or, to the best of the Borrower's knowledge,
threatened investigation or inquiry by any Tribunal or to any material
remedial obligations under any Applicable Environmental Laws, the effect of
which could reasonably be expected to have a Material Adverse Effect. The
Borrower and its Subsidiaries have not obtained and are not required to
obtain any permits, licenses or similar authorizations other than
- 47 -
certificates of occupancy and building permits and other authorizations that
have been obtained to construct, occupy, operate or use any buildings,
improvements, fixtures, and equipment forming a part of any real property
owned or leased by the Borrower or any Subsidiary of the Borrower by reason
of any Applicable Environmental Laws, except to the extent that the failure
to so obtain could not reasonably be expected to have a Material Adverse
Effect. The Borrower and its Subsidiaries undertook, at the time of
acquisition of fee title to any real property, reasonable inquiry into the
previous ownership and uses of such real property consistent with good
commercial or customary practice. The Borrower and its Subsidiaries have
taken reasonable steps to determine, and the Borrower and its Subsidiaries
have no current actual knowledge, that any hazardous substances or solid
wastes have been disposed of or otherwise released (i) on or to the real
property fee title to which is owned by the Borrower or any of its
Subsidiaries or (ii) by Borrower or any of its Subsidiaries on or to any real
property leased by Borrower or any of its Subsidiaries, all within the
meaning of the Applicable Environmental Laws, the effect of which could
reasonably be expected to have a Material Adverse Effect.
(r) CERTAIN FEES. No broker's, finder's or other fee or commission
will be payable by the Borrower (other than to the Lenders hereunder) with
respect to the making of the Revolving Credit Commitment or the Revolving
Credit Advances hereunder. The Borrower agrees to indemnify and hold
harmless the Administrative Lender and each Lender from and against any
claims, demand, liability, proceedings, costs or expenses asserted with
respect to or arising in connection with any such fees or commissions.
(s) NECESSARY AUTHORIZATIONS. No event has occurred which permits (or
with the passage of time would permit) the revocation or termination of any
Necessary Authorization, or which could reasonably be expected to result in
the imposition of any restriction thereon of such a nature that could
reasonably be expected to be classified as a Material Adverse Effect.
(t) PATENTS, ETC. The Borrower and its Subsidiaries have collectively
obtained or applied for all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions,
that are necessary for the operation of their business as presently conducted
and as proposed to be conducted, except to the extent that the failure to so
obtain or apply could not reasonably be expected to have a Material Adverse
Effect. Nothing has come to the current actual knowledge of the Borrower or
any of its Subsidiaries to the effect that (i) any process, method, part or
other material presently contemplated to be employed by the Borrower or any
Subsidiary of the Borrower may infringe any patent, trademark, service ▇▇▇▇,
trade name, copyright, license or other right owned by any other Person, or
(ii) there is pending or overtly threatened any claim or litigation against
or affecting the Borrower or any Subsidiary of the Borrower contesting its
right to sell or use any such process, method, part or other material, which
could reasonably be expected to be classified as a Material Adverse Effect.
(u) DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement which has been furnished to any Lender by or on
behalf of the Borrower or any Subsidiary of the Borrower in connection
herewith contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statement contained
herein
- 48 -
and therein not misleading at the time it was furnished, unless such
statements were corrected in writing and delivered to the Lenders prior to
the Agreement Date. The representation and warranty made in the immediately
preceding sentence shall be qualified to the best of the Borrower's knowledge
to the extent the information referred to therein was prepared or furnished
to the Borrower by another Person on their behalf. As of the Agreement Date,
there is no fact known to the Borrower and not known to the public generally
that could reasonably be expected to have a Material Adverse Effect, which
has not been set forth in this Agreement or in the documents, certificates
and statements furnished to the Lenders by or on behalf of the Borrower prior
to the date hereof in connection with the transaction contemplated hereby.
(v) SOLVENCY. The Borrower is, and Borrower and its Subsidiaries on a
consolidated basis are, Solvent.
(w) LABOR RELATIONS. Neither the Borrower nor any Subsidiary is a
party to a collective bargaining agreement or similar agreement, and the
Borrower and each Subsidiary is in compliance in all material respects with
all Laws respecting employment and employment practices, terms and conditions
of employment, wages and hours and other laws related to the employment of
its employees, and there are no arrears in the payment of wages, withholding
or social security taxes, unemployment insurance premiums or other similar
obligations of the Borrower or any Subsidiary or for which the Borrower or
any Subsidiary may be responsible other than in the ordinary course of
business. There is no strike, work stoppage or labor dispute with any union
or group of employees pending or overtly threatened involving Borrower or any
Subsidiary that would have a Material Adverse Effect.
(x) CONSOLIDATED BUSINESS ENTITY. The Borrower and its Subsidiaries
are operated as a part of one consolidated business entity and are directly
dependent upon each other for and in connection with their respective
business activities.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at
and as of the date of each Revolving Credit Advance and the date of issuance
of each Letter of Credit, and each shall be true and correct in all material
respects when made, except to the extent (a) previously fulfilled in
accordance with the terms hereof, (b) previously waived in writing by the
Determining Lenders with respect to any particular factual circumstance or
permitted by the terms of this Agreement or (c) such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects on and as of such date. All such representations and
warranties shall survive, and not be waived by, the execution hereof by any
Lender, any investigation or inquiry by any Lender, or by the making of any
Revolving Credit Advance or the issuance of any Letter of Credit under this
Agreement.
- 49 -
ARTICLE 5
GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Revolving Credit Commitment is outstanding (whether or not the conditions to
borrowing have been or can be fulfilled):
Section 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. The
Borrower shall, and shall cause each Subsidiary of the Borrower to:
(a) except as otherwise permitted pursuant to SECTION 7.4 hereof,
preserve and maintain, or timely obtain and thereafter preserve and maintain,
its existence, rights, franchises, licenses, authorizations, consents,
privileges and all other Necessary Authorizations from any Tribunal, the loss
of which could reasonably be expected to have a Material Adverse Effect; and
(b) except as otherwise permitted pursuant to SECTION 7.4 hereof,
qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, unless the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
Section 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW. The Borrower
and its Subsidiaries shall (a) engage primarily in the businesses set forth
in SECTION 4.1(d) hereof, and (b) comply in all respects with the
requirements of all applicable Law, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
Section 5.3 MAINTENANCE OF PROPERTIES. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, maintain or cause to be maintained
all its properties (whether owned or held under lease) in reasonably good
repair, working order and condition, taken as a whole, and from time to time
make or cause to be made all appropriate (in the reasonable judgment of the
Borrower) repairs, renewals, replacements, additions, betterments and
improvements thereto, except where the failure to so maintain, repair, renew,
replace or improve could not reasonably be expected to have a Material
Adverse Effect.
Section 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower
shall, and shall cause each Subsidiary of the Borrower to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made
and all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. The Borrower and each of its
Subsidiaries shall maintain a fiscal year ending on the last day of December.
Section 5.5 INSURANCE. The Borrower shall, and shall cause each
Subsidiary of the Borrower to, maintain insurance from responsible companies
in such amounts and against such risks as shall be customary and usual in the
industry for companies of similar size and capability,
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but in no event less than the amount and types insured as of the Agreement
Date to the extent available at reasonable cost. Each insurance policy shall
(i) provide for at least 30 days' prior notice to the Administrative Lender
of any proposed termination or cancellation of such policy, whether on
account of default or otherwise and (ii) otherwise contain the requirements
for insurance set forth in the Security Agreements.
Section 5.6 PAYMENT OF TAXES AND CLAIMS. The Borrower shall, and
shall cause each Subsidiary of the Borrower to, pay and discharge all
material Taxes upon it or its income or properties prior to the date on which
penalties attach thereto, and all lawful material claims for labor, materials
and supplies which, if unpaid, might become a Lien upon any of its
properties; except that no such Tax or claim need be paid which is being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on the appropriate books, but
only so long as no Lien (other than a Permitted Lien) shall attach with
respect thereto and no foreclosure, distraint, sale or similar proceedings
shall have been commenced. The Borrower shall, and shall cause each
Subsidiary of the Borrower to, timely file all information returns (or
extensions of such filing deadlines) required by federal, state or local tax
authorities.
Section 5.7 VISITS AND INSPECTIONS. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, promptly permit representatives of
the Administrative Lender or any Lender from time to time after notice by the
Administrative Lender or any Lender no later than the previous Business Day
to (a) visit and inspect the properties of the Borrower and its Subsidiaries
as often as the Administrative Lender or any Lender shall reasonably deem
advisable, (b) audit, inspect and make extracts from and copies of the
Borrower's and each such Subsidiary's books and records, and (c) discuss with
the Borrower's and each such Subsidiary's directors, officers, employees and
auditors its business, assets, liabilities, financial positions, results of
operations and business prospects. The Borrower shall pay the reasonable
expenses related to inspections and audits performed by the Administrative
Lender. Prior to the occurrence of an Event of Default, all such visits and
inspections shall be conducted during normal business hours. Following the
occurrence and during the continuance of an Event of Default, such visits and
inspections shall be conducted at any time requested by the Administrative
Lender or any Lender without any requirement for advance notice.
Section 5.8 USE OF PROCEEDS. The Borrower shall use the proceeds of
Revolving Credit Advances and Letters of Credit for refinancing of certain
Indebtedness of the Borrower (including in respect of the Existing Credit
Agreement), for Acquisitions permitted hereunder and for working capital and
other general corporate purposes.
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SECTION 5.9 INDEMNITY.
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(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES,
AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS
(INCLUDING, WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH THE
SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET FORTH
HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, CLAIMS, REASONABLE COSTS, REASONABLE EXPENSES AND
REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH
INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY
THERETO), IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES
(WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL,
STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE,
OR ON CONTRACT, TORT OR OTHERWISE, ARISING FROM OR CONNECTED WITH THE PAST,
PRESENT OR FUTURE OPERATIONS OF THE BORROWER OR ITS PREDECESSORS IN INTEREST,
OR THE PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE
BORROWER), IN ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT
OR TRANSACTION RELATING OR ATTENDANT THERETO, THE MANAGEMENT OF THE ADVANCES,
INCLUDING IN CONNECTION WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY
ORDINARY OR MERE NEGLIGENCE OF ADMINISTRATIVE LENDER OR ANY LENDER (OTHER
THAN THOSE MATTERS RAISED EXCLUSIVELY BY A PARTICIPANT AGAINST THE
ADMINISTRATIVE LENDER OR ANY LENDER AND NOT THE BORROWER), OR THE USE OR
INTENDED USE OF THE PROCEEDS OF THE ADVANCES HEREUNDER, OR IN CONNECTION WITH
ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING (I)
ANY CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR
WILFUL MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A
COURT OF COMPETENT JURISDICTION, AND (II) MATTERS RAISED BY ONE LENDER
AGAINST ANOTHER LENDER OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR
ITS MANAGEMENT (COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE EXTENT THAT ANY
INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH INDEMNITEES SHALL
USE THE SAME LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS REASONABLE DISCRETION
DETERMINES THAT CONFLICTS EXIST OR MAY ARISE IN CONNECTION WITH SUCH
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REPRESENTATION.
(b) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL
REASONABLE EXPENSES (INCLUDING THE REASONABLE COST OF ANY INVESTIGATION AND
PREPARATION) INCURRED IN CONNECTION WITH ANY INDEMNIFIED MATTER. THE
REIMBURSEMENT, INDEMNITY AND CONTRIBUTION OBLIGATIONS UNDER THIS SECTION
SHALL BE IN ADDITION TO ANY LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE,
SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS
AND PERSONAL REPRESENTATIVES OF THE BORROWER, THE ADMINISTRATIVE LENDER, THE
LENDERS AND ALL OTHER INDEMNITEES. THIS SECTION SHALL SURVIVE ANY TERMINATION
OF THIS AGREEMENT AND PAYMENT OF THE OBLIGATIONS.
Section 5.10 ENVIRONMENTAL LAW COMPLIANCE. The use which the Borrower
or any Subsidiary of the Borrower intends to make of any real property which
is owned or leased by it will not result in the disposal or other release of
any hazardous substance or solid waste on or to such real property which is
in violation of Applicable Environmental Laws, the effect of which could
reasonably be expected to have a Material Adverse Effect. As used herein,
the terms "hazardous substance" and "release" as used in this Section shall
have the meanings specified in CERCLA (as defined in the definition of
Applicable Environmental Laws), and the terms "solid waste" and "disposal"
shall have the meanings specified in RCRA (as defined in the definition of
Applicable Environmental Laws); provided, however, that if CERCLA or RCRA is
amended so as to broaden or lessen the meaning of any term defined thereby,
such broader or lesser meaning shall apply subsequent to the effective date
of such amendment; and provided further, to the extent that any other law
applicable to the Borrower, any Subsidiary or any of their properties
establishes a meaning for "hazardous substance," "release," "solid waste," or
"disposal" which is broader or lesser than that specified in either CERCLA or
RCRA, such broader or lesser meaning shall apply. The Borrower agrees to
indemnify and hold the Administrative Lender and each Lender harmless from
and against, and to reimburse them with respect to, any and all claims,
demands, causes of action, loss, damage, liabilities, reasonable costs and
reasonable expenses (including reasonable attorneys' fees and courts costs)
of any kind or character, known or unknown, fixed or contingent, asserted
against or incurred by any of them at any time and from time to time by
reason of or arising out of (a) the failure of the Borrower or any Subsidiary
to perform any of their obligations hereunder regarding asbestos or
Applicable Environmental Laws, (b) any violation on or before the Release
Date of any Applicable Environmental Law in effect on or before the Release
Date, and (c) any act, omission, event or circumstance existing or occurring
on or prior to the Release Date (including without limitation the presence on
such real property or release from such real property of hazardous substances
or solid wastes disposed of or otherwise released on or prior to the Release
Date), resulting from or in connection with the ownership of the real
property, regardless of whether the act, omission, event or circumstance
constituted a violation of any Applicable Environmental Law at the time of
its existence or
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occurrence; provided that, the Borrower shall not be under any obligation to
indemnify the Administrative Lender or any Lender to the extent that any such
liability arises as the result of the negligence or wilful misconduct of such
Person, as finally judicially determined by a court of competent
jurisdiction. The provisions of this paragraph shall survive the Release
Date and shall continue thereafter in full force and effect.
Section 5.11 FURTHER ASSURANCES. At any time or from time to time
upon reasonable request by the Administrative Lender, the Borrower or any
Subsidiary of the Borrower shall execute and deliver such further documents
and do such other acts and things as the Administrative Lender may reasonably
request in order to effect fully the purposes of this Agreement and the other
Loan Documents and to provide for payment of the Obligations in accordance
with the terms of this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, the Borrower agrees to update and
deliver to the Administrative Lender SCHEDULES 3 AND 4 hereto at the time of
delivery of the financial statements set forth in SECTIONS 6.1 and 6.2 hereof
if the information provided therein is not complete and correct.
ARTICLE 6
INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Revolving Credit Commitment is outstanding (whether or not the conditions to
borrowing have been or can be fulfilled), the Borrower shall furnish or cause
to be furnished to each Lender:
Section 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. Within
45 days after the end of each fiscal quarter, the consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at the
end of such fiscal quarter and the related consolidated and consolidating
statements of income for such fiscal quarter and for the elapsed portion of
the year ended with the last day of such fiscal quarter, and consolidated and
consolidating statements of cash flow for the elapsed portion of the year
ended with the last day of such fiscal quarter, all of which shall be
certified by the president or chief financial officer or other officer of the
Borrower acceptable to the Administrative Lender, to be, in his or her
opinion acting solely in his or her capacity as an officer of the Borrower,
present fairly in all material respects, in accordance with GAAP (except for
the absence of footnotes), the financial position and results of operations
of the Borrower and its Subsidiaries as at the end of and for such fiscal
quarter, and for the elapsed portion of the year ended with the last day of
such fiscal quarter, subject only to normal year-end adjustments.
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Section 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE
OF NO DEFAULT.
(a) Within 90 days after the end of each fiscal year, a copy of (i) the
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries, as of the end of the current and prior fiscal years and (ii)
the consolidated and consolidating statements of earnings and consolidated
statements of changes in shareholders' equity, and statements of cash flow as
of and through the end of such fiscal year, all of which are prepared in
accordance with GAAP, and certified by independent certified public
accountants reasonably acceptable to the Lenders (provided, however, any big
six public accounting firm shall be acceptable to the Lenders), whose opinion
shall be in scope and substance in accordance with generally accepted
auditing standards and shall be unqualified as to scope of audit and going
concern.
(b) Simultaneously with the delivery of the statements required by this
SECTION 6.2, a letter from the Borrower's public accountants certifying that
no Default was detected during the examination of the Borrower and its
Subsidiaries.
(c) As soon as available, but in any event within 90 days following the
end of each fiscal year, a copy of the annual consolidated operating budget
of the Borrower and its Subsidiaries for the succeeding fiscal year.
Section 6.3 COMPLIANCE CERTIFICATE. At the time financial statements
are furnished pursuant to SECTIONS 6.1 and 6.2 hereof, the Compliance
Certificate, completed as provided therein.
Section 6.4 COPIES OF OTHER REPORTS AND NOTICES.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to the Borrower or any Subsidiary of the
Borrower by accountants in connection with any annual, interim or special
audit, including without limitation any report prepared in connection with
the annual audit referred to in SECTION 6.2 hereof, and, if requested by the
Administrative Lender, any other comment letter submitted to management in
connection with any such audit, (ii) each financial statement, report, notice
or proxy statement sent by the Borrower to stockholders generally, (iii) each
regular, periodic or other report and any registration statement (other than
statements on Form S-8) or prospectus (or material written communication in
respect of any thereof) filed by the Borrower or any Subsidiary of the
Borrower with any securities exchange, with the Securities and Exchange
Commission or any successor agency, and (iv) all press releases concerning
material financial aspects of the Borrower or any Subsidiary of the Borrower;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s)
or other evidence of indebtedness or other security of the Borrower or any
Subsidiary of the Borrower in excess of $250,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform,
claimed default or event of default thereunder, (ii) any occurrence or
non-occurrence of any event which constitutes or which with the passage of
time or giving of notice or both could constitute a material breach by the
Borrower or any Subsidiary of the
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Borrower under any material agreement or instrument other than this Agreement
to which the Borrower or any Subsidiary of the Borrower is a party or by
which any of their properties may be bound, or (iii) any event, circumstance
or condition which could reasonably be expected to be classified as a
Material Adverse Effect, a written notice specifying the details thereof (or
the nature of any claimed default or event of default) and what action is
being taken or is proposed to be taken with respect thereto;
(c) Promptly upon becoming aware that any party to any Capitalized
Lease Obligations or Operating Lease, in each case, in excess of $250,000,
has given notice or taken any action with respect to a breach, failure to
perform, claimed default or event of default thereunder, a written notice
specifying the details thereof (or the nature of any claimed default or event
of default) and what action is being taken or is proposed to be taken with
respect thereto;
(d) Promptly upon receipt thereof, information with respect to and
copies of any notices received from any Tribunal relating to any order,
ruling, law, information or policy that relates to a breach of or
noncompliance with any Law, or could reasonably be expected to result in the
payment of money by the Borrower or any Subsidiary of the Borrower in an
amount of $250,000 or more in the aggregate, or otherwise have a Material
Adverse Effect, or result in the loss or suspension of any Necessary
Authorization where such loss could reasonably be expected to have a Material
Adverse Effect; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results
of operations or business prospects of the Borrower and its Subsidiaries, as
the Administrative Lender or any Lender may reasonably request.
Section 6.5 NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS. Prompt
notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all Litigation and investigations by or before
any Tribunal, and all actions and proceedings in any court or before any
arbitrator involving claims for damages (including punitive damages) in
excess of $250,000 (after deducting the amount with respect to the Borrower
or any Subsidiary of the Borrower is insured), against or in any other way
relating directly to the Borrower, any Subsidiary of the Borrower, or any of
their respective properties or businesses; and
(b) Promptly upon the happening of any condition or event of which the
Borrower has current actual knowledge which constitutes a Default, a written
notice specifying the nature and period of existence thereof and what action
is being taken or is proposed to be taken with respect thereto.
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Section 6.6 ERISA REPORTING REQUIREMENTS.
(a) Promptly and in any event (i) within 30 days after the Borrower or
any member of its Controlled Group has current actual knowledge that any
ERISA Event described in clause (a) of the definition of ERISA Event or any
event described in Section 4063(a) of ERISA with respect to any Plan of the
Borrower or any member of its Controlled Group has occurred, and (ii) within
10 days after the Borrower or any member of its Controlled Group has current
actual knowledge that any other ERISA Event with respect to any Plan of the
Borrower or any member of its Controlled Group has occurred or a request for
a minimum funding waiver under Section 412 of the Code with respect to any
Plan of the Borrower or any member of its Controlled Group, a written notice
describing such event and describing what action is being taken or is
proposed to be taken with respect thereto, together with a copy of any notice
of event that is given to the PBGC;
(b) Promptly and in any event within three Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its
Controlled Group of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof
by the Borrower or any member of its Controlled Group with the United States
Department of Labor or the Internal Revenue Service, copies of each annual
report (including Schedule B thereto, if applicable) with respect to each
Plan subject to Title IV of ERISA of which Borrower or any member of its
Controlled Group is the "plan sponsor";
(d) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group
setting forth details as to the events giving rise to such potential
withdrawal liability and the action which the Borrower or such member of its
Controlled Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the
benefits of any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any
Plan to which the Borrower or any member of its Controlled Group was not
previously contributing which would in either case result in a material
liability to the Borrower;
(f) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows that the Borrower or any such member of
its Controlled Group has filed or intends to file a notice of intent to
terminate any Plan under a distress termination within the meaning of Section
4041(c) of ERISA and a copy of such notice; and
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(g) Within three Business Days after receipt of written notice of
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, if adversely determined could not have a Material Adverse Effect.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or the
Revolving Credit Commitment is outstanding (whether or not the conditions to
borrowing have been or can be fulfilled):
Section 7.1 INDEBTEDNESS. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, create, assume, incur or otherwise
become or remain obligated in respect of, or permit to be outstanding, or
suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Accounts payable and accrued liabilities incurred in the ordinary
course of business; PROVIDED, HOWEVER, all obligations of the Borrower to any
of its Subsidiaries in respect of accounts payable and accrued liabilities
shall be subject to a Subordination Agreement;
(c) Indebtedness, including in respect of Capitalized Lease
Obligations, incurred to purchase, or to finance the purchase of, assets
which constitute property, plant and equipment in an aggregate principal
amount not in excess of $500,000 outstanding at any time;
(d) Interest hedging obligations under Interest Hedge Agreements
entered into with any Lender or any Affiliate of any Lender;
(e) Indebtedness existing on the Agreement Date which is described on
SCHEDULE 6 hereto, including renewals (but no increases) thereof;
(f) Indebtedness in respect of endorsement of negotiable instruments in
the ordinary course of business; and
(g) Other Indebtedness not to exceed $5,000,000 in aggregate principal
amount outstanding at any time.
Section 7.2 LIENS. The Borrower shall not, and shall not permit any
Subsidiary of Borrower to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets, whether now owned or
hereafter acquired, except Permitted Liens. The
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Borrower shall not, and shall not permit any Subsidiary to, agree with any
other Person that it shall not create, assume, incur, permit or suffer to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its assets.
Section 7.3 INVESTMENTS. The Borrower shall not, and shall not
permit any Subsidiary of Borrower to, make any Investment, except that the
Borrower and any Subsidiary of the Borrower may purchase or otherwise acquire
and own:
(a) Cash and Cash Equivalents;
(b) Accounts receivable that arise in the ordinary course of business
and are payable on standard terms;
(c) Investments in existence on the Agreement Date which are described
on SCHEDULE 5 hereto;
(d) Investments which are Acquisitions permitted pursuant to SECTION
7.6 hereof;
(e) Investments in the form of Interest Hedge Agreements permitted by
SECTION 7.1(d) hereof;
(f) Investments (excluding accounts receivable from Foreign
Subsidiaries created in the ordinary course of business) in, and expenditures
in respect of Acquisitions of, Foreign Subsidiaries by the Borrower in an
aggregate amount not to exceed (calculated immediately prior to the date of
each such Investment or Acquisition) 50% of Net Worth at any time
outstanding; and
(g) Other Investments not to exceed $500,000 in aggregate amount
outstanding at any time.
Section 7.4 LIQUIDATION, MERGER, NEW SUBSIDIARIES. The Borrower
shall not, and shall not permit any Subsidiary of Borrower to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, except that a Subsidiary of the Borrower
may liquidate or dissolve into the Borrower or a Subsidiary of the Borrower;
(b) enter into any merger or consolidation unless (i) with respect to a
merger or consolidation involving the Borrower, the Borrower shall be the
surviving corporation, or if the merger or consolidation involves a
Subsidiary of the Borrower and not the Borrower, such Subsidiary shall be the
surviving corporation, (ii) such transaction shall not be utilized to
circumvent compliance with any term or provision herein and (iii) no Default
or Event of Default shall then be in existence or occur as a result of such
transaction; or
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(c) create or acquire any Subsidiary except as permitted pursuant to
SECTION 7.6 hereof.
Section 7.5 SALES OF ASSETS. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, sell, lease, transfer or otherwise
dispose of, any of its assets except (a) inventory in the ordinary course of
business, (b) obsolete or worn-out assets, (c) asset sales in which the Net
Cash Proceeds from the disposition thereof are reinvested, within 90 days
before or after such disposition, in productive tangible assets of a similar
nature of the Borrower and its Subsidiaries, (d) asset sales the Net Cash
Proceeds of which are applied in accordance with SECTION 2.5(d) hereof and
(e) any asset or series of related assets of a value (determined at the
greater of book or fair market value) during any Fiscal Year in an aggregate
amount not in excess of $1,000,000.
Section 7.6 ACQUISITIONS. The Borrower shall not, and shall permit
any Subsidiary of Borrower to, make any Acquisitions; provided, however, if
immediately prior to and after giving effect to the proposed Acquisition
there shall not exist a Default or Event of Default, the Borrower or any
Subsidiary of the Borrower may make Acquisitions so long as (a) Lenders shall
have received written notice at least 30 Business Days prior to the date of
such Acquisition, (b) if the Acquisition Consideration for such Acquisition
exceeds $20,000,000, the Administrative Lender shall have received at least
20 Business Days prior to the date of such Acquisition a Compliance
Certificate setting forth the covenant calculations both immediately prior to
and after giving effect to the proposed Acquisition, (c) the assets, property
or business acquired shall be in the business described in SECTION 4.1(d)
hereof, (d) if such Acquisition results in a Domestic Subsidiary, (A) such
Subsidiary shall execute a Subsidiary Guaranty and (B) the Lenders receive
such board resolutions, officer's certificates and opinions of counsel as the
Administrative Lender shall reasonably request in connection with the
Subsidiary Guaranty, and (e) if such Acquisition results in a Foreign
Subsidiary, (A) 66% of such Subsidiary's Capital Stock shall be pledged to
secure the Obligations pursuant to a Pledge Agreement and (B) the Lenders
receive such board resolutions, officer's certificates and opinions of
counsel as the Administrative Lender shall reasonably request in connection
with clause (A) immediately preceding. Notwithstanding anything in this
SECTION 7.6 or any other provision of this Agreement to the contrary, the
Acquisition Consideration for any single Acquisition shall not exceed
$40,000,000, and (b) the aggregate amount of expenditures in respect of
Acquisitions of, and Investments in, Foreign Subsidiaries by the Borrower
shall not exceed (calculated immediately prior to the date of each such
Investment or Acquisition) 50% of Net Worth at any time outstanding.
Section 7.7 CAPITAL EXPENDITURES. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, make or commit to make any
Capital Expenditures (a) during any Fiscal Year in excess of $5,000,000 in
aggregate amount (the "Maximum Amount") PROVIDED, HOWEVER, that the Maximum
Amount for each fiscal year shall be increased by an amount equal to the
excess, if any, of the Maximum Amount for the previous fiscal year (before
making any adjustments in accordance with this proviso) over the actual
aggregate Capital Expenditures for such previous fiscal year and (b) in
excess of $7,500,000 in aggregate amount in respect of the building owned by
PUM at Avenida Rio Mayo Calle ▇▇▇▇▇▇▇▇▇▇▇ Col. La Mesa, San ▇▇▇▇ Rio
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Colorado, Sonora, Mexico.
Section 7.8 RESTRICTED PAYMENTS. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, directly or indirectly declare,
pay or make any Restricted Payments except (i) any Subsidiary may declare and
pay Dividends to the Borrower, and (ii) the Borrower shall be permitted to
pay ▇▇▇▇▇▇▇▇ Fees; provided, further, however, the Borrower shall not pay or
make any Restricted Payments permitted by this SECTION 7.8 unless there shall
exist no Default or Event of Default prior to or after giving effect to any
such proposed Restricted Payment.
Section 7.9 AFFILIATE TRANSACTIONS. The Borrower shall not, and
shall not permit any Subsidiary of the Borrower to, at any time engage in any
transaction with an Affiliate on terms materially less advantageous to the
Borrower or such Subsidiary than would be the case if such transaction had
been effected with a non-Affiliate (other than compensation and advances to
employees in the ordinary course of business). The Borrower shall not, and
shall not permit any Subsidiary of Borrower to, in any event incur or suffer
to exist any Indebtedness or Guaranty in favor of any Affiliate, unless such
Affiliate shall subordinate the payment and performance thereof to the
Obligations on terms, conditions and documentation satisfactory to the
Determining Lenders.
Section 7.10 COMPLIANCE WITH ERISA. The Borrower shall not, and shall
not permit any Subsidiary to, directly or indirectly, or permit any member of
its Controlled Group to directly or indirectly, (a) terminate any Plan so as
to result in any material (in the opinion of the Determining Lenders)
liability to the Borrower or any member of its Controlled Group taken as a
whole, (b) permit to exist any ERISA Event, or any other event or condition
which could reasonably be expected to have a Material Adverse Effect, (c)
make a complete or partial withdrawal (within the meaning of Section 4201 of
ERISA) from any Multiemployer Plan so as to result in any material (in the
opinion of the Determining Lenders) liability to the Borrower or any member
of its Controlled Group taken as a whole, (d) enter into any new Plan or
modify any existing Plan so as to increase its obligations thereunder which
could reasonably be expected to have a Material Adverse Effect, or (e) permit
the present value of all benefit liabilities, as defined in Title IV of
ERISA, under each Plan (other than a Multiemployer Plan) of the Borrower or
any member of its Controlled Group (using the actuarial assumptions utilized
by each such Plan) to exceed the fair market value of Plan assets allocable
to such benefits by more than $100,000, all determined as of the most recent
valuation date for each such Plan.
Section 7.11 MAXIMUM LEVERAGE RATIO. The Borrower shall not permit
the Leverage Ratio to be greater than 3.00 to 1 at the end of any fiscal
quarter.
Section 7.12 MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrower shall
not permit the Fixed Charge Coverage Ratio to be less than (a) 1.50 to 1 at
the end of any fiscal quarter through the last fiscal quarter of Fiscal Year
1998 and (b) 1.75 to 1 at the end of any fiscal quarter thereafter.
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Section 7.13 MINIMUM NET WORTH. The Borrower shall not permit the Net
Worth at any time to be less than the sum of (a) $82,000,000, plus (b) 50% of
cumulative Net Income for the period from September 30, 1997 to the date of
calculation (but excluding from the calculation of such cumulative Net Income
the effect, if any, of any fiscal quarter, or a portion of a fiscal quarter
not yet ended, for which the Net Income was a negative number) plus (c) an
amount equal to the net worth of any Person that, on or after the Agreement
Date, becomes a Subsidiary of the Borrower or any of its Subsidiaries or is
merged into or consolidated with the Borrower or any of its Subsidiaries or
substantially all of the assets of which are acquired by the Borrower or any
of its Subsidiaries to the extent that the purchase price therefore is paid
in Capital Stock of the Borrower or any of its Subsidiaries, plus (d) an
amount equal to 85% of any increase in Net Worth pursuant to offerings of
Capital Stock of the Borrower or any of its Subsidiaries or pursuant to the
conversion or exchange of any convertible subordinated debt or redeemable
preferred stock into Capital Stock of the Borrower or any of its Subsidiaries.
Section 7.14 SALE AND LEASEBACK. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, enter into any arrangement
whereby it sells or transfers any of its assets, and thereafter rents or
leases such assets.
Section 7.15 SALE OR DISCOUNT OF RECEIVABLES. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, directly or
indirectly, sell, with or without recourse, for discount or otherwise, any
notes or accounts receivable.
Section 7.16 BUSINESS. Neither the Borrower nor any Subsidiary of the
Borrower shall conduct any business other than the business described in
SECTION 4.1(d) hereof.
Section 7.17 FISCAL YEAR. Neither the Borrower nor any Subsidiary of
the Borrower shall change its fiscal year.
Section 7.18 BUSINESS. Notwithstanding anything herein to the
contrary, neither PUM nor PEI or any other Foreign Subsidiary shall (i)
transact any business other than the manufacturing and assembling of direct
current power supplies for the benefit of the Borrower or (ii) sell any goods
to any Person other than the Borrower or a Domestic Subsidiary of the
Borrower; provided, however, notwithstanding anything in this SECTION 7.19 to
the contrary, Foreign Subsidiaries may sell goods to Persons other than the
Borrower or a Domestic Subsidiary of the Borrower so long as the aggregate
amount of such sales during any fiscal year does not exceed 5% of the
consolidated gross revenues of the Borrower and its Subsidiaries for the
immediately preceding fiscal year.
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ARTICLE 8
DEFAULT
Section 8.1 EVENTS OF DEFAULT. Each of the following shall
constitute an Event of Default, whatever the reason for such event, and
whether voluntary, involuntary, or effected by operation of law or pursuant
to any judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under any Loan Document shall
prove to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall fail to pay any (i) principal under any Note
when due or (ii) interest under any Note or any fees payable hereunder or any
other costs, fees, expenses or other amounts payable hereunder or under any
other Loan Document within 3 days after the date due;
(c) The Borrower or any Subsidiary of the Borrower shall default in the
performance or observance of any agreement or covenant contained in SECTION
5.1 or ARTICLE 7 hereof and, if such default is capable of being cured by the
payment of cash, such default is not cured within three Business Days after
discovery thereof by the Borrower by the making of a Member Contribution;
(d) The Borrower or any Subsidiary of the Borrower shall default in the
performance or observance of any other agreement or covenant contained in
this Agreement not specifically referred to elsewhere in this SECTION 8.1,
and such default shall not be cured within a period of 30 days after the
earlier of notice from the Administrative Lender thereof or actual notice
thereof by the Borrower or such Subsidiary;
(e) There shall occur any default or breach in the performance or
observance of any agreement or covenant in any of the Loan Documents (other
than this Agreement) and such default shall not be cured within a period of
30 days after the earlier of notice from the Administrative Lender thereof or
actual notice thereof by the Borrower or a Subsidiary of the Borrower;
(f) There shall be entered a decree or order by a court having
competent jurisdiction constituting an order for relief in respect of the
Borrower or any Material Subsidiary, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable
Federal, state or foreign bankruptcy law or other similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official of the Borrower or any Material Subsidiary, or of any substantial
part of their respective properties, or ordering the winding-up or
liquidation of the affairs of the Borrower or any Material Subsidiary, and
any such decree or order shall continue unstayed and in effect for a period
of 45 consecutive days;
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(g) The Borrower or any Material Subsidiary shall file a petition,
answer or consent seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable Federal, state
or foreign bankruptcy law or other similar law, or the Borrower or any
Material Subsidiary shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or
taking of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Borrower or any Material
Subsidiary or of substantially all of its properties, or the Borrower or any
Material Subsidiary shall make a general assignment for the benefit of
creditors, or take any action in furtherance of any such action;
(h) A final judgment or judgments shall be entered by any court against
the Borrower or any Subsidiary of the Borrower for the payment of money which
exceeds $250,000 in the aggregate, or a warrant of attachment or execution or
similar process shall be issued or levied against property of the Borrower or
any Subsidiary of the Borrower which, together with all other such property
of the Borrower and its Subsidiaries subject to other such process, exceeds
in value $250,000 in the aggregate, and if such judgment or award is not
insured or, within 30 days after the entry, issue or levy thereof, such
judgment, warrant or process shall not have been paid or discharged or stayed
pending appeal, or if, after the expiration of any such stay, such judgment,
warrant or process shall not have been paid or discharged;
(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other
party-in-interest or disqualified person shall engage in transactions which
in the aggregate would reasonably result in a direct or indirect liability to
the Borrower or any member of its Controlled Group under Section 409 or 502
of ERISA or Section 4975 of the Code; (ii) the Borrower or any member of its
Controlled Group shall incur any accumulated funding deficiency, as defined
in Section 412 of the Code, or request a funding waiver from the Internal
Revenue Service for contributions; (iii) the Borrower or any member of its
Controlled Group shall incur any withdrawal liability as a result of a
complete or partial withdrawal within the meaning of Section 4203 or 4205 of
ERISA, or any other liability with respect to a Plan, unless the amount of
such liability has been funded within the Plan or pursuant to one or more
insurance contracts; (iv) the Borrower or any member of its Controlled Group
shall fail to make a required contribution by the due date under Section 412
of the Code or Section 302 of ERISA which would result in the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA; (v) the Borrower,
any member of its Controlled Group or any Plan sponsor shall notify the PBGC
of an intent to terminate, or the PBGC shall institute proceedings to
terminate, or the PBGC shall institute proceedings to terminate, any Plan
subject to Title IV of ERISA; (vi) a Reportable Event shall occur with
respect to a Plan subject to Title IV of ERISA, and within 15 days after the
reporting of such Reportable Event to the Administrative Lender, the
Administrative Lender shall have notified the Borrower in writing that the
Determining Lenders have made a determination that, on the basis of such
Reportable Event, there are reasonable grounds for the termination of such
Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer such Plan and as a result thereof
an Event of Default shall have occurred hereunder; (vii) a trustee shall be
appointed by a court of competent jurisdiction to administer any Plan or the
assets thereof;
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(viii) the benefits of any Plan shall be increased, or the Borrower or any
member of its Controlled Group shall begin to maintain, or begin to
contribute to, any Plan, without the prior written consent of the Determining
Lenders; or (ix) any ERISA Event with respect to a Plan subject to Title IV
of ERISA shall have occurred, and 30 days thereafter (A) such ERISA Event,
other than such event described in clause (f) of the definition of ERISA
Event herein, (if correctable) shall not have been corrected and (B) the then
present value of such Plan's benefit liabilities, as defined in Title IV of
ERISA, shall exceed the then current value of assets accumulated in such
Plan; PROVIDED, HOWEVER, that the events listed in subsections (i) - (ix)
above shall constitute Events of Default only if the maximum aggregate
liability which the Borrower or any member of its Controlled Group has a
reasonable likelihood of incurring under the applicable provisions of ERISA
resulting from an event or events exceeds $250,000;
(j) All or any material portion of the Collateral or the Loan Documents
shall be the subject of any proceeding instituted by any Person other than a
Lender (except in connection with any Lender's exercise of any remedies under
the Loan Documents);
(k) The Borrower or any Subsidiary of the Borrower shall default in the
payment of any Indebtedness or any lease obligations in an aggregate amount
of $500,000 or more beyond any grace period provided with respect thereto, or
shall default in the performance of any agreement or instrument under which
such Indebtedness is created or evidenced beyond any applicable grace period,
if the effect of such default is to permit or cause the holder of such
Indebtedness (or a trustee on behalf of any such holder) to (i) cause such
Indebtedness to become due prior to its date of maturity or (ii) require the
Borrower or any Subsidiary of the Borrower to purchase or redeem such
Indebtedness;
(l) Any lease where the Borrower or any Subsidiary of the Borrower is
the lessee shall terminate or cease to be effective, and termination or
cessation thereof, together with all other leases, if any, which have been
terminated or cease to be effective, could reasonably be expected to have a
Material Adverse Effect; provided, however, that termination or cessation of
a lease shall not constitute an Event of Default if another lease reasonably
satisfactory to the Determining Lenders is contemporaneously substituted
therefor;
(m) Any material provision of any Loan Document shall for any reason
cease to be valid and binding on or enforceable against any party to it
(other than the Administrative Lender or any Lender) in all material
respects, or any such party (other than the Administrative Lender or any
Lender) shall so assert in writing;
(n) The Borrower shall fail to own (i) 99% of the Capital Stock of PUM
or (ii) 100% of the Capital Stock of PEI;
(o) Except as a result of the Administrative Lender's gross negligence
or wilful misconduct, the Administrative Lender shall fail to have a valid
and perfected first priority Lien in 66% of the Capital Stock of PUM and PEI;
or
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(p) A Change of Control shall occur.
Section 8.2 REMEDIES. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in SECTION
8.1(f) or (g) hereof, the Administrative Lender shall, upon the direction of
the Determining Lenders, terminate the Revolving Credit Commitment and/or
declare the principal of and interest on the Advances and all Obligations and
other amounts owed under the Loan Documents to be forthwith due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
(b) Upon the occurrence of an Event of Default specified in SECTION
8.1(f) or (g) hereof, such principal, interest and other amounts shall
thereupon and concurrently therewith become due and payable and the Revolving
Credit Commitment shall forthwith terminate, all without any action by the
Administrative Lender, any Lender or any holders of the Notes and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the
Administrative Lender may demand upon the Borrower to, and forthwith upon
such demand (but in the case of an Event of Default specified in SECTION
8.1(f) or (g) hereof, without any demand or taking of any other action by the
Administrative Lender or any other Lender), the Borrower shall, pay to the
Administrative Lender in same day funds at the office of the Administrative
Lender for deposit in the L/C Cash Collateral Account, an amount equal to the
maximum amount available to be drawn under the Letters of Credit then
outstanding.
(d) The Administrative Lender and the Lenders may exercise all of the
Rights granted to them under the Loan Documents or under Applicable Law.
(e) The Rights of the Administrative Lender and the Lenders hereunder
shall be cumulative, and not exclusive.
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ARTICLE 9
CHANGES IN CIRCUMSTANCES
Section 9.1 LIBOR BASIS DETERMINATION INADEQUATE. If with respect to
any proposed LIBOR Advance for any Interest Period, (i) any Lender determines
that deposits in dollars (in the applicable amount) are not being offered to
that Lender in the relevant market for such Interest Period or (ii) the
Determining Lenders determine that the LIBOR Rate for such proposed LIBOR
Advance does not adequately cover the cost to such Lender of making and
maintaining such proposed LIBOR Advance for such Interest Period, such Lender
or Determining Lenders, as the case may be, shall forthwith give notice
thereof to the Borrower, whereupon until such Lender or Determining Lenders,
as the case may be, notify the Borrower that the circumstances giving rise to
such situation no longer exist, the obligation of such Lender to make LIBOR
Advances shall be suspended; PROVIDED, HOWEVER, such Lender or the
Determining Lenders, as the case may be, shall promptly notify the Borrower
if the circumstances giving rise to such situation no longer exist.
Section 9.2 ILLEGALITY. If any change in applicable law, rule or
regulation, or adoption thereof, or any change in any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency, shall make it unlawful or impossible for
such Lender (or its LIBOR Lending Office) to make, maintain or fund its LIBOR
Advances, such Lender shall so notify the Borrower and the Administrative
Lender. Before giving any notice to the Borrower pursuant to this Section,
the notifying Lender shall designate a different LIBOR Lending Office or
other lending office if such designation will avoid the need for giving such
notice and will not, in the sole judgment of the Lender, be materially
disadvantageous to the Lender. Upon receipt of such notice, notwithstanding
anything contained in ARTICLE 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each LIBOR Advance owing to the
notifying Lender, together with accrued interest thereon and any
reimbursement required under SECTION 2.9 hereof, on either (a) the last day
of the Interest Period applicable to such Advance, if the Lender may lawfully
continue to maintain and fund such Advance to such day, or (b) immediately,
if the Lender may not lawfully continue to fund and maintain such Advance to
such day or if the Borrower so elects. Concurrently with repaying each
affected LIBOR Advance owing to such Lender if the Borrower does not
terminate this Agreement, notwithstanding anything contained in ARTICLE 2
hereof, the Borrower shall, without any requirement to satisfy the conditions
precedent set forth in SECTION 3.1, 3.2 or 3.3, borrow a Base Rate Advance
from such Lender, and such Lender shall make such Base Rate Advance, in an
amount such that the outstanding principal amount of the Revolving Credit
Advances owing to such Lender shall equal the outstanding principal amount of
the Revolving Credit Advances owing immediately prior to such repayment.
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Section 9.3 INCREASED COSTS.
(a) If (a) the applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards" or
(b) any change in or adoption of any law, rule or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof or compliance by any Lender (or its LIBOR Lending
Office) with any request or directive (whether or not having the force of
law) of any such authority, central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any
Tax (net of any tax benefit engendered thereby) with respect to its
LIBOR Advances or its obligation to make such Advances, or shall change
the basis of taxation of payments to a Lender (or to its LIBOR Lending
Office) of the principal of or interest on its LIBOR Advances or in
respect of any other amounts due under this Agreement, as the case may
be, or its obligation to make such Advances (except for changes in the
rate of tax on the overall net income, net worth or capital of the
Lender and franchise taxes, doing business taxes or minimum taxes
imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, a Lender's LIBOR Lending Office or shall impose on the
Lender (or its LIBOR Lending Office) or on the London interbank market
any other condition affecting its LIBOR Advances or its obligation to
make such Advances (but excluding any reserves or deposits that are
included in the calculation of LIBOR Basis);
and the result of any of the foregoing is to increase the cost to a Lender
(or its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or
to reduce the amount of any sum received or receivable by a Lender (or its
LIBOR Lending Office) with respect thereto, by an amount deemed by a Lender
to be material, then, within 30 days after demand by a Lender, the Borrower
agrees to pay to such Lender such additional amount as will compensate such
Lender for such increased costs or reduced amounts, subject to SECTION 11.9
hereof. The affected Lender will as soon as practicable notify the Borrower
of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender to compensation pursuant to this Section and
will designate a different LIBOR Lending Office or other lending office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of the affected Lender
made in good faith, be disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth the additional amounts to be paid to it hereunder
shall certify that such amounts or costs were actually incurred by such
Lender and shall show in reasonable detail an accounting of
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the amount payable and the calculations used to determine in good faith such
amount and shall be conclusive absent manifest or demonstrable error. In
determining such amount, a Lender may use any reasonable averaging and
attribution methods. Nothing in this SECTION 9.3 shall provide the Borrower
or any Subsidiary of the Borrower the right to inspect the records, files or
books of any Lender. If a Lender demands compensation under this Section,
the Borrower may at any time, upon at least five Business Days' prior notice
to the Lender, after reimbursement to the Lender by the Borrower in
accordance with this Section of all costs incurred, prepay in full the then
outstanding LIBOR Advances of the Lender, together with accrued interest
thereon to the date of prepayment, along with any reimbursement required
under SECTION 2.9 hereof. Concurrently with prepaying such LIBOR Advances,
the Borrower shall borrow a Base Rate Advance from the Lender, and the Lender
shall make such Base Rate Advance, in an amount such that the outstanding
principal amount of the Revolving Credit Advances owing to such Lender shall
equal the outstanding principal amount of the Revolving Credit Advances owing
immediately prior to such prepayment.
Section 9.4 EFFECT ON BASE RATE ADVANCES. If notice has been given
pursuant to SECTION 9.1, 9.2 or 9.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower
that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Lender as LIBOR Advances shall
be made instead as Base Rate Advances.
Section 9.5 CAPITAL ADEQUACY. If (a) the applicability of any law,
rule, regulation or guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and
Capital Standards", (b) the introduction of or any change in or in the
interpretation of any law, rule or regulation or (c) compliance by a Lender
with any law, rule or regulation or any guideline or request from any central
bank or other governmental authority (whether or not having the force of law)
adopted or promulgated after the Agreement Date affects or would affect the
amount of capital required or expected to be maintained by a Lender or any
corporation controlling such Lender, and such Lender determines that the
amount of such capital is increased by or based upon the existence of such
Lender's commitment or Advances hereunder and other commitments or advances
of such Lender of this type, then, within 30 days after demand by such
Lender, subject to SECTION 11.9, the Borrower shall immediately pay to such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender with respect to such circumstances, to
the extent that such Lender reasonably determines in good faith such increase
in capital to be allocable to the existence of such Lender's share of the
Revolving Credit Commitment hereunder. A certificate as to any additional
amounts payable to any Lender under this SECTION 9.5 submitted to the
Borrower by such Lender shall certify that such amounts were actually
incurred by such Lender or corporation controlling such Lender and shall show
in reasonable detail an accounting of the amount payable and the calculations
used to determine in good faith such amount and shall be conclusive absent
manifest or demonstrable error. In determining such amount, such Lender or a
corporation controlling such Lender may use any reasonable averaging and
attribution methods.
Notwithstanding the foregoing, nothing in this SECTION 9.5 shall provide the
Borrower or any Subsidiary of the Borrower the right to inspect the records,
files or books of any Lender or any corporation controlling such Lender.
Section 9.6 REPLACEMENT LENDER. If the Borrower becomes obligated to
pay additional amounts to any Lender described in SECTION 9.3 or 9.5, the
Borrower may designate a financial institution reasonably acceptable to the
Administrative Lender to replace such Lender by purchasing for cash and
receiving an assignment of such Lender's pro rata share of such Lender's
share of the Revolving Credit Commitment and the Rights of such Lender under
the Loan Documents without recourse to or warranty by, or expense to, such
Lender, for a purchase price equal to the outstanding amounts owing to such
Lender (including such additional amounts owing to such Lender pursuant to
SECTION 9.3 or 9.5). Upon execution of an Assignment Agreement, such other
financial institution shall be deemed to be a "Lender" for all purposes of
this Agreement as set forth in SECTION 11.6 hereof.
ARTICLE 10
AGREEMENT AMONG LENDERS
Section 10.1 AGREEMENT AMONG LENDERS. The Lenders agree among
themselves that:
(a) ADMINISTRATIVE LENDER. Each Lender hereby appoints the
Administrative Lender as its nominee in its name and on its behalf, to
receive all documents and items to be furnished hereunder; to act as nominee
for and on behalf of all Lenders under the Loan Documents; to, except as
otherwise expressly set forth herein, take such action as may be requested by
the Determining Lenders, provided that, (i) unless and until the
Administrative Lender shall have received such requests, the Administrative
Lender may take such administrative action, or refrain from taking such
administrative action, as it may deem advisable and in the best interests of
the Lenders, and (ii) the Administrative Lender shall not be required to take
any action that exposes the Administrative Lender to personal liability or
that is contrary to any Loan Document or Applicable Law; to arrange the means
whereby the proceeds of the Revolving Credit Advances of the Lenders are to
be made available to the Borrower; to distribute promptly to each Lender
information, requests and documents received from the Borrower, and each
payment (in like funds received) with respect to any of such Lender's
Revolving Credit Advances, fee or other amount; and to deliver to the
Borrower requests, demands, approvals and consents received from the Lenders.
Administrative Lender agrees to promptly distribute to each Lender, at such
Lender's address set forth below information, requests, documents and
payments received from the Borrower. The Administrative Lender shall have no
fiduciary relationship in respect of any Lender by reason of this Agreement
or any other Loan Document. The Administrative Lender shall have no duties
or responsibilities except those expressly set forth in this Agreement. The
duties of the Administrative Lender under the Loan Documents are merely
mechanical and administrative in nature.
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(b) REPLACEMENT OF ADMINISTRATIVE LENDER. Should the Administrative
Lender or any successor Administrative Lender ever cease to be a Lender
hereunder, or should the Administrative Lender or any successor
Administrative Lender ever resign as Administrative Lender, or should the
Administrative Lender or any successor Administrative Lender ever be removed
with cause or without cause by the action of all Lenders (other than the
Administrative Lender), then the Lender appointed by the other Lenders (with
the consent of the Borrower, which consent shall not be unreasonably
withheld) shall forthwith become the Administrative Lender, and the Borrower
and the Lenders shall execute such documents as any Lender may reasonably
request to reflect such change at no cost to the Borrower. Any resignation
or removal of the Administrative Lender or any successor Administrative
Lender shall become effective upon the appointment by the Lenders of a
successor Administrative Lender; provided, however, if no successor
Administrative Lender shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Administrative Lender's
giving of notice of resignation or the Lenders' removal of the retiring
Administrative Lender, then the retiring Administrative Lender may, on behalf
of the Lenders, appoint a successor Administrative Lender, which shall be a
commercial bank organized under the Laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as the Administrative
Lender hereunder by a successor Administrative Lender, such successor
Administrative Lender shall thereupon succeed to and become vested with all
the rights and duties of the retiring Administrative Lender, and the retiring
Administrative Lender shall be discharged from its duties and obligations
under the Loan Documents, provided that if the retiring or removed
Administrative Lender is unable to appoint a successor Administrative Lender,
the Administrative Lender shall, after the expiration of a 60 day period from
the date of notice, be relieved of all obligations as Administrative Lender
hereunder. Notwithstanding any Administrative Lender's resignation or
removal hereunder, the provisions of this Article shall continue to inure to
its benefit as to any actions taken or omitted to be taken by it while it was
the Administrative Lender under this Agreement.
(c) EXPENSES. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any expenses paid by the Administrative Lender
directly and solely in connection with any of the Loan Documents if
Administrative Lender does not receive reimbursement therefor from other
sources within 60 days after the date incurred. Any amount so paid by the
Lenders to the Administrative Lender shall be returned by the Administrative
Lender pro rata to each paying Lender to the extent later paid by the
Borrower or any other Person on the Borrower's behalf to the Administrative
Lender.
(d) DELEGATION OF DUTIES. The Administrative Lender may execute any of
its duties hereunder by or through officers, directors, employees, attorneys
or agents, and shall be entitled to (and shall be protected in relying upon)
advice of counsel concerning all matters pertaining to its duties hereunder.
(e) RELIANCE BY ADMINISTRATIVE LENDER. The Administrative Lender and
its officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in
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relying on any writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telex or teletype message, statement, order, or
other document or conversation reasonably believed by it or them in good
faith to be genuine and correct and to have been signed or made by the proper
Person and, with respect to legal matters, upon opinions of counsel selected
the Administrative Lender. The Administrative Lender may, in its reasonable
judgment, deem and treat the payee of any Note as the owner thereof for all
purposes hereof.
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY. Neither the
Administrative Lender nor any of its officers, directors, employees,
attorneys or agents shall be liable for any action taken or omitted to be
taken by it or them hereunder in good faith and believed by it or them to be
within the discretion or power conferred to it or them by the Loan Documents
or be responsible for the consequences of any error of judgment, except for
its or their own gross negligence or wilful misconduct. Except as aforesaid,
the Administrative Lender shall be under no duty to enforce any rights with
respect to any of the Revolving Credit Advances, or any security therefor.
The Administrative Lender shall not be compelled to do any act hereunder or
to take any action towards the execution or enforcement of the powers hereby
created or to prosecute or defend any suit in respect hereof, unless
indemnified to its satisfaction against loss, cost, liability and expense.
The Administrative Lender shall not be responsible in any manner to any
Lender for the effectiveness, enforceability, genuineness, validity or due
execution of any of the Loan Documents, or for any representation, warranty,
document, certificate, report or statement made herein or furnished in
connection with any Loan Documents, or be under any obligation to any Lender
to ascertain or to inquire as to the performance or observation of any of the
terms, covenants or conditions of any Loan Documents on the part of the
Borrower. TO THE EXTENT NOT REIMBURSED BY THE BORROWER, EACH LENDER HEREBY
SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE ADMINISTRATIVE LENDER, PRO RATA
ACCORDING TO ITS SPECIFIED PERCENTAGE, FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES AND/OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THE ADMINISTRATIVE
LENDER IN ANY WAY WITH RESPECT TO ANY LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED BY THE ADMINISTRATIVE LENDER UNDER THE LOAN DOCUMENTS (INCLUDING ANY
NEGLIGENT ACTION OF THE ADMINISTRATIVE LENDER), EXCEPT TO THE EXTENT THE SAME
ARE FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION TO RESULT FROM
GROSS NEGLIGENCE OR WILFUL MISCONDUCT BY THE ADMINISTRATIVE LENDER. THE
INDEMNITY PROVIDED IN THIS SECTION 10.1(f) SHALL SURVIVE TERMINATION OF THIS
AGREEMENT.
(g) LIABILITY AMONG LENDERS. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Documents) to any other Lender, except for acts
or omissions in bad faith.
(h) RIGHTS AS LENDER. With respect to its commitment hereunder, the
Advances made
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by it and the Notes issued to it, the Administrative Lender shall have the
same rights as a Lender and may exercise the same as though it were not the
Administrative Lender, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Lender in its
individual capacity. The Administrative Lender or any Lender may accept
deposits from, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower and any of its Affiliates, and any
Person who may do business with or own securities of the Borrower or any of
its Affiliates, all as if the Administrative Lender were not the
Administrative Lender hereunder and without any duty to account therefor to
the Lenders.
Section 10.2 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Lender or any
other Lender and based upon the financial statements referred to in SECTIONS
4.1(j), 6.1, and 6.2 hereof, and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Lender or any
other Lender and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement and the other Loan Documents. Each
Lender also acknowledges that its decision to fund the initial Revolving
Credit Advance shall constitute evidence to the Administrative Lender that
such Lender has deemed all of the conditions set forth in SECTION 3.1 to have
been satisfied.
Section 10.3 BENEFITS OF ARTICLE. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders and, with
respect to SECTION 10.1(b), the Borrower; consequently, no such other Person
shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of the Administrative Lender or any Lender to comply
with such provisions.
ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES.
(a) All notices and other communications under this Agreement shall be
in writing (except in those cases where giving notice by telephone is
expressly permitted) and shall be deemed to have been given on the date
personally delivered or sent by telecopy (answerback received), or three days
after deposit in the mail, designated as certified mail, return receipt
requested, postage-prepaid, or one day after being entrusted to a reputable
commercial overnight delivery service, or one day after being delivered to
the telegraph office or sent out by telex addressed to the party to which
such notice is directed at its address determined as provided in this
Section. All notices and other communications under this Agreement shall be
given to the parties hereto at the following addresses:
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(i) If to the Borrower, at:
Power-One, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Vice President
(iii) If to a Lender, at its address shown below its name on the
signature pages hereof, or if applicable, set forth in its
Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other
parties.
Section 11.2 EXPENSES. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative Lender
in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Documents, the transactions contemplated
hereunder and thereunder, and the making of Advances hereunder, including
without limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and reasonable attorneys'
fees of the Administrative Lender in connection with the administration of
the transactions contemplated in this Agreement and the other Loan Documents
and the preparation, negotiation, execution and delivery of any waiver,
amendment or consent by the Administrative Lender relating to this Agreement
or the other Loan Documents; and
(c) all costs, out-of-pocket expenses and reasonable attorneys' fees of
the Administrative Lender and each Lender incurred for enforcement,
collection, restructuring, refinancing and "work-out", or otherwise incurred
in obtaining performance under the Loan Documents, which in each case shall
include without limitation fees and expenses of consultants, counsel for the
Administrative Lender and any Lender, and administrative fees for the
Administrative Lender.
Section 11.3 WAIVERS. The rights and remedies of the Lenders under
this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Administrative Lender or any
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Lender in exercising any right shall operate as a waiver of such right. The
Lenders expressly reserve the right to require strict compliance with the
terms of this Agreement in connection with any funding of a request for a
Revolving Credit Advance. In the event that any Lender decides to fund a
Revolving Credit Advance at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision by such Lender
shall not be deemed to constitute an undertaking by the Lender to fund any
further requests for Revolving Credit Advances or preclude the Lenders from
exercising any rights available under the Loan Documents or at law or equity.
Any waiver or indulgence granted by the Lenders shall not constitute a
modification of this Agreement, except to the extent expressly provided in
such waiver or indulgence, or constitute a course of dealing by the Lenders
at variance with the terms of the Agreement such as to require further notice
by the Lenders of the Lenders' intent to require strict adherence to the
terms of the Agreement in the future. Any such actions shall not in any way
affect the ability of the Administrative Lender or the Lenders, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Administrative Lender or any of
the Lenders are a party thereto, relating to the Borrower.
Section 11.4 CALCULATION BY THE LENDERS CONCLUSIVE AND BINDING. Any
mathematical calculation required or expressly permitted to be made by the
Administrative Lender or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be controlling.
Section 11.5 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, each Lender and any subsequent
holder of any Note, and any assignee of any Note is hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or
any other Person, any such notice being hereby expressly waived, to set-off,
appropriate and apply any deposits (general or special (except trust and
escrow accounts), time or demand, including without limitation Indebtedness
evidenced by certificates of deposit, in each case whether matured or
unmatured) and any other Indebtedness at any time held or owing by such
Lender or holder to or for the credit or the account of the Borrower, against
and on account of the Obligations and other liabilities of the Borrower to
such Lender or holder, irrespective of whether or not (a) the Lender or
holder shall have made any demand hereunder, or (b) the Lender or holder
shall have declared the principal of and interest on the Revolving Credit
Advances and other amounts due hereunder to be due and payable as permitted
by SECTION 8.2. Any sums obtained by any Lender or by any assignee or
subsequent holder of any Note shall be subject to pro rata treatment of all
Obligations and other liabilities hereunder.
Section 11.6 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of the Lenders.
(b) No Lender shall be entitled to assign its interest in this
Agreement, its Notes or its Advances, except as hereinafter set forth.
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(c) Without the consent of the Borrower, any Lender may at any time
sell participations in all or any part of its Advances and Reimbursement
Obligations (collectively, "PARTICIPATIONS") to any banks or other financial
institutions ("PARTICIPANTS") provided that such Participation shall not
confer on any Person (other than the parties hereto) any right to vote on,
approve or sign amendments or waivers, or any other independent benefit or
any legal or equitable right, remedy or other claim under this Agreement or
any other Loan Documents, other than the right to vote on, approve, or sign
amendments or waivers or consents with respect to items that would result in
(i) any increase in the commitment of any Participant; or (ii)(A) the
extension of the date of maturity of, or (B) the extension of the due date
for any payment of principal, interest or fees respecting, or (C) the
reduction of the amount of any installment of principal or interest on or the
change or reduction of any mandatory reduction required hereunder, or (D) a
reduction of the rate of interest on, the Revolving Credit Advances, the
Letters of Credit, or the Reimbursement Obligations; or (iii) the release of
security for the Obligations, including without limitation any guarantee; or
(iv) the reduction of any fees payable hereunder. Notwithstanding the
foregoing, the Borrower agrees that the Participants shall be entitled to the
benefits of ARTICLE 9 hereof as though they were Lenders and the Lenders may
provide copies of all financial information received from the Borrower to
such Participants.
(d) Each Lender may assign to one or more financial institutions
organized under the laws of the United States, or any state thereof, or under
the laws of any other country that is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business (each, an "ASSIGNEE")
its rights and obligations under this Agreement and the other Loan Documents;
PROVIDED, HOWEVER, that (i) each such assignment shall be subject to the
prior written consent of the Administrative Lender and Borrower, which
consent shall not be unreasonably withheld (PROVIDED, HOWEVER,
notwithstanding anything herein to the contrary, no consent of the Borrower
is required for any assignment during any time that an Event of Default has
occurred and is continuing), (ii) no such assignment shall be in an amount of
the Revolving Credit Commitment less than $5,000,000, (iii) the applicable
Lender, Administrative Lender and applicable Assignee shall execute and
deliver to the Administrative Lender an Assignment and Acceptance Agreement
(an "ASSIGNMENT AGREEMENT") in substantially the form of EXHIBIT D hereto,
together with the Revolving Credit Notes subject to such assignment and (iv)
the Assignee executing the Assignment, shall deliver to the Administrative
Lender a processing fee of $2,500. Upon such execution, delivery and
acceptance from and after the effective date specified in each Assignment,
which effective date shall be at least three Business Days after the
execution thereof, (A) the Assignee thereunder shall be party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment, have the rights and obligations of a Lender
hereunder and (B) the applicable Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment,
relinquish such rights and be released from such obligations under this
Agreement.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may
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assign and pledge all or any portion of its Revolving Credit Advances and
Revolving Credit Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A of F.R.S. Board and any Operating Circular issued by
such Federal Reserve Bank; provided, however, that no such assignment under
this clause (e) shall release the assignor Lender from its obligations
hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender
and an Assignee, and any Revolving Credit Note or Revolving Credit Notes
subject to such assignment, the Borrower shall, within five Business Days
after its receipt of such Assignment Agreement, at no expense to the
Borrower, execute and deliver to the Administrative Lender in exchange for
the surrendered Notes new Notes to the order of such Assignee in an amount
equal to the portion of the Revolving Credit Advances and Revolving Credit
Commitment assigned to it pursuant to such Assignment Agreement and new
Revolving Credit Notes to the order of the assignor Lender in an amount equal
to the portion of the Revolving Credit Advances and Revolving Credit
Commitment retained by it hereunder. Such new Revolving Credit Notes shall
be in an aggregate principal amount equal to the aggregate principal amount
of such surrendered Revolving Credit Notes, shall be dated the effective date
of such Assignment Agreement and shall otherwise be in substantially the form
of EXHIBIT A hereto.
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this SECTION 11.6,
disclose to the assignee or Participant or proposed assignee or participant,
any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower, provided such Person agrees to handle such
information in accordance with the standards set forth in SECTION 11.14
hereof.
(h) Except as specifically set forth in this SECTION 11.6, nothing in
this Agreement or any other Loan Documents, expressed or implied, is intended
to or shall confer on any Person other than the respective parties hereto and
thereto and their successors and assignees permitted hereunder and thereunder
any benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(i) Notwithstanding anything in this SECTION 11.6 to the contrary, no
Assignee or Participant shall be entitled to receive any greater payment
under SECTION 2.15 or SECTION 9.3 than such assigning or participating Lender
would have been entitled to receive with respect to the interest assigned or
participated to such Assignee or Participant.
Section 11.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 SEVERABILITY. Any provision of this Agreement which is
for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability without invalidating the
remaining provisions hereof in such jurisdiction or affecting the validity or
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enforceability of such provision in any other jurisdiction.
Section 11.9 INTEREST AND CHARGES. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of
any applicable jurisdiction relating to usury. Regardless of any provision
in any Loan Documents, no Lender shall ever be entitled to receive, collect
or apply, as interest on the Obligations, any amount in excess of the Maximum
Amount. If any Lender or participant ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest
shall be deemed a partial repayment of principal and treated hereunder as
such; and if principal is paid in full, any remaining excess shall be paid to
the Borrower. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Maximum Amount, the Borrower and
the Lenders shall, to the maximum extent permitted under Applicable Law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (b) exclude voluntary prepayments and the effect thereof,
and (c) amortize, prorate, allocate and spread in equal parts, the total
amount of interest throughout the entire contemplated term of the Obligations
so that the interest rate is uniform throughout the entire term of the
Obligations; provided, however, that if the Obligations are paid and
performed in full prior to the end of the full contemplated term thereof, and
if the interest received for the actual period of existence thereof exceeds
the Maximum Amount, the Lenders shall refund to the Borrower the amount of
such excess or credit the amount of such excess against the total principal
amount of the Obligations owing, and, in such event, the Lenders shall not be
subject to any penalties provided by any laws for contracting for, charging
or receiving interest in excess of the Maximum Amount. This Section shall
control every other provision of all agreements pertaining to the
transactions contemplated by or contained in the Loan Documents.
Section 11.10 HEADINGS. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation
of any provision hereof.
Section 11.11 AMENDMENT AND WAIVER. The provisions of this Agreement
may not be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such
amendment, modification or waiver shall be made (a) without the consent of
all Lenders, if it would (i) increase the Specified Percentage, the Revolving
Credit Commitment, or commitment of any Lender, or (ii) extend or postpone
the date of maturity of, extend the due date for any payment of principal or
interest on, reduce the amount of any installment of principal or interest
on, or reduce the rate of interest on, any Advance, the Reimbursement
Obligations or other amount owing under any Loan Documents, or (iii) release
any security for or guaranty of the Obligations (except pursuant to this
Agreement), or (iv) reduce the fees payable hereunder, or (v) revise this
SECTION 11.11, or (vi) waive the date for payment of any principal, interest
or fees hereunder, or (vii) amend the definition of Determining Lenders; (b)
without the consent of the Administrative Lender, if it would alter the
rights, duties or obligations of the Administrative Lender; or (c) without
the consent of the Issuing Bank, if it would alter the rights, duties or
obligations of the Issuing Bank. Neither this Agreement nor any term hereof
may be amended orally, nor may any provision hereof be waived orally but only
by an instrument in writing signed by the Administrative Lender and, in the
case
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of an amendment, by the Borrower.
Section 11.12 EXCEPTION TO COVENANTS. Neither the Borrower nor any
Subsidiary of the Borrower shall be deemed to be permitted to take any action
or fail to take any action which is permitted as an exception to any of the
covenants contained herein or which is within the permissible limits of any
of the covenants contained herein if such action or omission would result in
the breach of any other covenant contained herein.
Section 11.13 NO LIABILITY OF ISSUING BANK. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter
of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any Lender nor any of their respective officers or directors
shall be liable or responsible for: (a) the use that may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of
Credit, except for any payment made upon the Issuing Bank's gross negligence
or wilful misconduct; or (d) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit, EXCEPT that the Borrower
shall have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that a court of competent jurisdiction
determines were caused by (i) the Issuing Bank's wilful misconduct or gross
negligence or (ii) the Issuing Bank's wilful failure to make lawful payment
under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter
of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 11.14 CONFIDENTIALITY. Each Lender and the Administrative
Lender agrees (on behalf of itself and each of its Affiliates, directors,
officers, employees and representatives) to use reasonable precautions to
keep confidential, in accordance with customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to it by the Borrower
pursuant to this Agreement which is identified by the Borrower as being
confidential at the time the same is delivered to the Lenders or the
Administrative Lender, provided that nothing herein shall limit the
disclosure of any such information (a) to the extent required by statute,
rule, regulation or judicial process, (b) to counsel for any Lender or the
Administrative Lender, (c) to bank examiners, auditors or accountants of any
Lender, (d) to the Administrative Lender or any other Lender, (e) in
connection with any Litigation to which any one or more of Lenders is a
party, (f) to the extent necessary in connection with the enforcement of any
Rights under this Agreement or any other Loan Document, provided, further,
that, unless specifically prohibited by Applicable Law or court order, each
Lender shall, prior to disclosure thereof, notify Borrower of any request for
disclosure of any such non-public information (i) by any Tribunal or
representative thereof (other
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than any such request in connection with an examination of such Lender's
financial condition by such governmental agency) or (ii) pursuant to legal
process, or (f) to any Assignee or Participant (or prospective Assignee or
Participant) so long as such Assignee or Participant (or prospective Assignee
or Participant) agrees to handle such information in accordance with the
provisions of this SECTION 11.14.
Section 11.15 AMENDMENT, RESTATEMENT, EXTENSION, AND RENEWAL. This
Agreement is a renewal, extension, amendment and restatement of the Existing
Credit Agreement, and is not a novation of the "Obligations" (as defined in
the Existing Credit Agreement) thereunder. All terms and provisions of this
Agreement supersede in their entirety the Existing Credit Agreement. All
Liens covering the Collateral (as defined in the Existing Credit Agreement)
are hereby terminated and released, except with respect to the Liens against
the Capital Stock of PUM and PEI pledged pursuant to the Existing Credit
Agreement (the "STOCK LIENS"), which Stock Liens shall remain valid, binding
and enforceable Liens against the Borrower.
SECTION 11.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE
5069-15.10(B), TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED,
IT IS AGREED THAT THE PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL
STATUTES OF TEXAS, 1925, AS AMENDED, SHALL NOT APPLY TO THE ADVANCES, THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. THE LOAN DOCUMENTS ARE PERFORMABLE
IN DALLAS, DALLAS COUNTY, TEXAS, AND BORROWER AND EACH SURETY, GUARANTOR,
ENDORSER AND ANY OTHER PARTY EVER LIABLE FOR PAYMENT OF ANY MONEY PAYABLE
WITH RESPECT TO THE LOAN DOCUMENTS, JOINTLY AND SEVERALLY WAIVE THE RIGHT TO
BE SUED ELSEWHERE. THE BORROWER, THE ADMINISTRATIVE LENDER AND EACH LENDER
EACH AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,
TEXAS SHALL HAVE EXCLUSIVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND HEREBY SUBMITS WITH RESPECT
TO ITSELF AND ITS PROPERTY TO THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT
FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. THE PARTIES HERETO
IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS THAT
ANY OF THE PARTIES MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN DALLAS, TEXAS.
SECTION 11.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE LENDER AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY,
IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE
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MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY
ADVANCES HEREUNDER.
SECTION 11.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
BORROWER: POWER-ONE, INC.
By:
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Name:
------------------------------
Title:
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ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Vice President
LENDERS: NATIONSBANK OF TEXAS, N.A.,
as a Lender and Issuing Bank
Specified Percentage:
30%
By:
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Vice President
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Vice President
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UNION BANK OF CALIFORNIA, N.A.
Specified Percentage:
30%
By:
-----------------------------------
Name:
------------------------------
Title:
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Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇
Vice President
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CITY NATIONAL BANK
Specified Percentage:
20%
By:
-----------------------------------
Name:
------------------------------
Title:
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
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SUMITOMO BANK OF CALIFORNIA
Specified Percentage:
20%
By:
-----------------------------------
Name:
------------------------------
Title:
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Attn: ▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE 1
LIBOR LENDING OFFICES
NATIONSBANK OF TEXAS, N.A.
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
UNION BANK OF CALIFORNIA, N.A.
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CITY NATIONAL BANK
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SUMITOMO BANK OF CALIFORNIA
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SCHEDULE 2
EXISTING LIENS
PROPERTY SUBJECT AMOUNT OF
TO LIEN LIENHOLDER DEBT SECURED LIENHOLDER
---------------- ---------- ------------ ----------
SCHEDULE 3
EXISTING LITIGATION
AND MATERIAL LIABILITIES
SCHEDULE 4
SUBSIDIARIES
State of
Incorporation Percentage
Name or Organization of Ownership Owner
---- --------------- ------------ -----
SCHEDULE 5
EXISTING INVESTMENTS
SCHEDULE 6
EXISTING INDEBTEDNESS
SCHEDULE 7
AUTHORIZATION, QUALIFICATION AND GOOD STANDING
SCHEDULE 8
EXISTING LETTERS OF CREDIT
EXHIBIT A
REVOLVING CREDIT NOTE
Dallas, Texas $ December 1, 1997
POWER-ONE, INC., a Delaware corporation (the "Borrower"), for value
received, promises to pay to the order of _______________________ ("Lender"),
at the principal office of NationsBank of Texas, N.A., in lawful money of the
United States of America, the principal sum of _____________________________
___________________________________ ($______________), or such lesser sum as
shall be due and payable from time to time hereunder, as hereinafter
provided. All terms used but not defined herein shall have the meanings set
forth in the Credit Agreement described below.
Principal of and interest on the unpaid principal balance of Revolving
Credit Advances under this Revolving Credit Note (the "Note") from time to
time outstanding shall be due and payable as set forth in the Credit
Agreement.
This Note is issued pursuant to and evidences Revolving Credit Advances
under an Amended and Restated Credit Agreement, dated as of December 1, 1997,
among the Borrower, NationsBank of Texas, N.A., as Administrative Lender, and
the lenders parties thereto (as amended, restated, supplemented, renewed,
extended or otherwise modified from time to time, "Credit Agreement"), to
which reference is made for a statement of the rights and obligations of the
Lender and the duties and obligations of the Borrower in relation thereto;
but neither this reference to the Credit Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the
Borrower to pay the principal sum of and interest on this Note when due.
Except as provided in the Credit Agreement, the Borrower and all
endorsers, sureties and guarantors of this Note hereby severally waive
demand, presentment for payment, protest, notice of protest, notice of
acceleration, notice of intention to accelerate the maturity of this Note,
and all other notices of any kind, diligence in collecting, the bringing of
any suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS; PROVIDED,
HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(b), TITLE 79, REVISED CIVIL
STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT THE PROVISIONS OF
CHAPTER 15, TITLE 79,
REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, SHALL NOT APPLY TO THE
ADVANCES, THIS NOTE AND THE OTHER LOAN DOCUMENTS. THE BORROWER AGREES THAT
THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS SHALL HAVE
EXCLUSIVE JURISDICTION OVER THE PROCEEDINGS IN CONNECTION WITH THIS NOTE AND
THE OTHER LOAN DOCUMENTS.
THIS NOTE, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
POWER-ONE, INC.
By:
Name:
Title:
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated _______________, _____
Reference is made to the Amended and Restated Credit Agreement dated as
of December 1, 1997 (the "Credit Agreement") among POWER-ONE, INC., a
Delaware corporation ("Borrower"), NationsBank of Texas, N.A. as
Administrative Lender ("Administrative Lender"), and the lenders parties
thereto (as amended, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meaning.
_________________________________ ("Assignor") and _________________________
("Assignee") agree as follows:
Assignor hereby sells and assigns to Assignee, and Assignee hereby
purchases and assumes from Assignor, a ______% interest in and to all of
Assignor's rights and obligations under the Credit Agreement as of the
Effective Date (as defined below), with respect to such percentage interest
in Assignor's Revolving Credit Commitment as in effect on the Effective Date,
the principal amount of Revolving Credit Advances owing to Assignor on the
Effective Date, and the Revolving Credit Note held by Assignor, and
Assignor's participation in any Letters of Credit and Reimbursement
Obligations outstanding on the Effective Date, subject to the terms and
conditions of this Assignment and Acceptance.
Assignor (a) represents and warrants that (i) as of the date hereof its
Revolving Credit Commitment (without giving effect to assignments thereof
which have not yet become effective) is $__________ and, as of the date
hereof, the outstanding principal amount of the Revolving Credit Advances
owing to it (without giving effect to assignments thereof which have not yet
become effective) is $_________, (ii) it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim; (b) makes no representation or warranty and
assumes no responsibility with respect to (i) any statements, warranties, or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto or (ii) the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant
thereto; and (c) attaches the Revolving Credit Note referred to in Paragraph
1 above to exchange such Revolving Credit Note for new Revolving Credit Notes
as follows: a Revolving Credit Note dated ____________, 199___, in the
principal amount of $_________ payable to the order of Assignee, and a
Revolving Credit Note dated _____________, 199___, in the principal amount of
$_________ payable to the order of Assignor.
Assignee (a) confirms that it has received a copy of the Credit
Agreement and
the other Loan Documents, together with copies of the financial statements
referred to in Sections 4.1(j), 6.1 and 6.2 of the Credit Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance;
(b) agrees that it will, independently and without reliance upon the
Administrative Lender, Assignor, 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 decisions in taking or not taking action under the
Credit Agreement and the other Loan Documents; (c) appoints and authorizes
the Administrative Lender to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement, the other Loan Documents,
and this Assignment and Acceptance as are delegated to the Administrative
Lender by the terms thereof and hereof, together with such powers as are
reasonably incidental thereto and hereto; (d) agrees that it will perform in
accordance with its terms all of the obligations which by the terms of the
Credit Agreement, the other Loan Documents, and this Assignment and
Acceptance are required to be performed by it as a Lender; and (e) specifies
the addresses set forth in Schedule I attached hereto as its address for the
receipt of notices and as its initial LIBOR Lender Office, respectively[;
and (f) attaches the forms prescribed by the IRS certifying as to Assignee's
status for purposes of determining exception from United States withholding
taxes with respect to all payments to be made to Assignee under the Credit
Agreement, the other Loan Documents, and this Assignment and Acceptance or
such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty].
The effective date for this Assignment and Acceptance shall be ________
_____________, ______ (the "Effective Date").
Upon such acceptance as of the Effective Date and upon the remittance of
a $2,500 processing fee to the Administrative Lender, (a) Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and
(b) Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
Upon such acceptance from and after the Effective Date, whenever the
Administrative Lender shall receive a payment, or whenever the Administrative
Lender shall make an application of funds, in respect of any aggregate
outstanding principal amount of the Revolving Credit Advances or in respect
of any aggregate amount of interest accrued on the Revolving Credit Advances,
or in respect of the commitment fee (other than a payment or an application
of funds in respect of any amount due and owing to any Lender or the
Administrative Lender under Sections 2.4(b), 2.9, 2.15(d), 2.15(f)(ii), 5.9,
9.3, 9.5, or 11.2 of the Credit Agreement), the Administrative Lender shall
pay over to each of the Lenders an amount equal to (i) such Lender's Pro Rata
Share (as defined below) of such aggregate amount of principal, (ii) such
Lender's Pro Rata Share of such aggregate amount of interest, and (iii) such
Lender's Pro Rata Share of such aggregate amount of the commitment fee.
The "Pro Rata Share" of any aggregate amount means, with respect to such
Lender, the amount equal to the product obtained by multiplying (i) such
aggregate amount and (ii) a fraction, the numerator of which is such Lender's
portion of the Revolving Credit Commitment, or after the Revolving Credit
Advances have been made, the principal amount of the Advances owing to such
Lender and the denominator of which is the sum of the Revolving Credit
Commitment, or after the Advances have been made, the aggregate principal
amount of the Revolving Credit Advances owing to all of the Lenders.
In the event that, after the Administrative Lender has paid to any
Lender its Pro Rata Share of any such payment received by the Administrative
Lender or any such application made by the Administrative Lender, such
payment or application is rescinded or must otherwise be returned or must be
paid over by the Administrative Lender for any reason, such Lender shall,
upon notice by the Administrative Lender, forthwith pay back to the
Administrative Lender such Lender's Pro Rata Share of the amount so rescinded
or so returned or paid over.
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of
America. Without excluding any other jurisdiction, Assignee agrees that the
courts of Texas will have jurisdiction over proceedings in connection
herewith.
Assignee's Specified Percentage shall be _____%.
This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
Accepted this ___ day of ____________, _____
NATIONSBANK OF TEXAS, N.A.,
as Administrative Lender
By:
Name:
Title:
POWER-ONE, INC.
By:
Name:
Title:
Schedule I
ASSIGNEE'S ADDRESS
1. ADDRESS FOR THE ADVANCES AND RECEIPT OF NOTICES
2. INITIAL LIBOR LENDING OFFICE