EXHIBIT 10.27
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THREE-YEAR LOAN AGREEMENT
DATED AS OF NOVEMBER 29, 2002
AMONG
JABIL CIRCUIT, INC.
CERTAIN BORROWING SUBSIDIARIES,
THE BANKS FROM TIME TO TIME PARTY HERETO
SUNTRUST BANK, AS CO-SYNDICATION AGENT
THE ROYAL BANK OF SCOTLAND, AS CO-SYNDICATION AGENT
AND
BANK ONE, NA
AS ADMINISTRATIVE AGENT
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BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER
AND
SOLE BOOKRUNNER
TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS.......................................................................1
1.1 Certain Definitions...............................................................1
1.2 Other Definitions; Rules of Construction.........................................18
ARTICLE II. THE COMMITMENTS AND THE ADVANCES.................................................19
2.1 Commitments of the Banks.........................................................19
2.2 Termination and Reduction of Commitments.........................................20
2.3 Fees.............................................................................21
2.4 Disbursement of Advances.........................................................23
2.5 Conditions for First Disbursement................................................25
2.6 Further Conditions for Disbursement..............................................26
2.7 Subsequent Elections as to Borrowings............................................27
2.8 Limitation of Requests and Elections.............................................28
2.9 Minimum Amounts; Limitation on Number of Borrowings..............................28
2.10 Security and Collateral..........................................................29
2.11 Increase of Aggregate Commitment Subsequent to Capital
Markets Issuance.................................................................29
ARTICLE III. PAYMENTS AND PREPAYMENTS.........................................................29
3.1 Principal Payments...............................................................29
3.2 Interest Payments................................................................31
3.3 Letter of Credit Reimbursement Payments..........................................32
3.4 Payment Method...................................................................34
3.5 No Setoff or Deduction...........................................................35
3.6 Payment on Non-Business Day; Payment Computations................................37
3.7 Additional Costs.................................................................37
3.8 Illegality and Impossibility.....................................................38
3.9 Indemnification..................................................................39
3.10 Right of Banks to Fund Through Other Offices.....................................39
3.11 Replacement of Bank..............................................................40
ARTICLE IV. REPRESENTATIONS AND WARRANTIES...................................................40
4.1 Corporate Existence and Power....................................................40
4.2 Corporate Authority..............................................................40
4.3 Binding Effect...................................................................41
4.4 Subsidiaries.....................................................................41
4.5 Litigation.......................................................................41
4.6 Financial Condition..............................................................41
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4.7 Use of Loans.....................................................................42
4.8 Consents, Etc....................................................................42
4.9 Taxes............................................................................42
4.10 Title to Properties..............................................................42
4.11 ERISA............................................................................42
4.12 Disclosure.......................................................................43
4.13 Environmental and Safety Matters.................................................43
4.14 No Material Adverse Change.......................................................44
4.15 No Default.......................................................................44
4.16 No Burdensome Restrictions.......................................................44
ARTICLE V. COVENANTS........................................................................44
5.1 Affirmative Covenants............................................................44
(a) Preservation of Corporate Existence, Etc................................44
(b) Compliance with Laws, Etc...............................................45
(c) Maintenance of Properties; Insurance....................................45
(d) Reporting Requirements..................................................45
(e) Accounting; Access to Records, Books, Etc...............................47
(f) Stamp Taxes.............................................................47
(g) Additional Security and Collateral......................................47
(h) Further Assurances......................................................48
5.2 Negative Covenants...............................................................48
(a) Fixed Charge Coverage Ratio.............................................48
(b) Net Worth...............................................................49
(c) Total Indebtedness to EBITDA............................................49
(d) Indebtedness............................................................49
(e) Liens...................................................................50
(f) Merger; Acquisitions; Etc...............................................53
(g) Disposition of Assets; Dissolution of Subsidiaries; Etc.................53
(h) Nature of Business......................................................54
(i) Investments, Loans and Advances.........................................54
(j) Transactions with Affiliates............................................55
(k) Sale and Leaseback Transactions.........................................55
(m) Inconsistent Agreements.................................................56
(n) Accounting Changes......................................................56
(o) Additional Covenants....................................................57
(p) Foreign Subsidiaries....................................................57
(q) Dividends and Other Restricted Payments.................................57
ARTICLE VI. DEFAULT..........................................................................58
6.1 Events of Default................................................................58
6.2 Remedies.........................................................................60
6.3 Distribution of Proceeds of Collateral...........................................61
6.4 Letter of Credit Liabilities.....................................................63
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ARTICLE VII. THE AGENT AND THE BANKS..........................................................63
7.1 Appointment and Authorization....................................................63
7.2 Agent and Affiliates.............................................................63
7.3 Scope of Agent's Duties..........................................................63
7.4 Reliance by Agent................................................................64
7.5 Default..........................................................................64
7.6 Liability of Agent...............................................................64
7.7 Nonreliance on Agent and Other Banks.............................................64
7.8 Indemnification..................................................................65
7.9 Resignation of Agent.............................................................65
7.10 Sharing of Payments..............................................................66
ARTICLE VIII. GUARANTY.........................................................................67
8.1 Guarantee of Obligations.........................................................67
8.2 Waivers and Other Agreements.....................................................68
8.3 Nature of Guaranty...............................................................68
8.4 Obligations Absolute.............................................................68
8.5 No Investigation by Banks or Agent...............................................69
8.6 Indemnity........................................................................69
8.7 Subordination, Subrogation, Etc..................................................69
8.8 Waiver...........................................................................70
8.9 Joint and Several Obligations; Contribution Rights...............................70
ARTICLE IX. MISCELLANEOUS....................................................................71
9.1 Amendments, Etc..................................................................71
9.2 Notices..........................................................................72
9.3 No Waiver By Conduct; Remedies Cumulative........................................73
9.4 Reliance on and Survival of Various Provisions...................................73
9.5 Expenses.........................................................................73
9.6 Successors and Assigns; Additional Banks.........................................76
9.7 Counterparts.....................................................................79
9.8 Governing Law; Consent to Jurisdiction...........................................79
9.9 Table of Contents and Headings...................................................80
9.10 Construction of Certain Provisions...............................................80
9.11 Integration and Severability.....................................................80
9.12 Independence of Covenants........................................................80
9.13 Interest Rate Limitation.........................................................80
9.14 Joint and Several Obligations; Contribution Rights; Savings
Clause...........................................................................81
9.15 Waivers, Etc.....................................................................83
9.16 Waiver of Jury Trial.............................................................83
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EXHIBITS
Exhibit A New Borrowing Subsidiary Designation
Exhibit B Intercreditor Agreement
Exhibit C Revolving Credit Note
Exhibit D Swing Line Note
Exhibit E Request for Advance
Exhibits F-1, F-2, and F-3 Opinions of Counsel
Exhibit G Request for Conversion
Exhibit H Assignment and Acceptance
Exhibit I Charge of General Partnership Interest
SCHEDULES
Schedule 1.1 Borrowing Subsidiaries
Schedule 2.4 Existing Letters of Credit
Schedule 4.4 Subsidiaries
Schedule 4.5 Litigation
Schedule 4.13 Environmental and Safety Matters
Schedule 5.2(d) and (e) Indebtedness and Liens
Schedule 5.2(i) Investments, Loans and Advances
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THIS THREE-YEAR LOAN AGREEMENT, dated as of November 29, 2002 (as
amended or modified from time to time, this "Agreement"), is entered into by and
among JABIL CIRCUIT, INC., a Delaware corporation (the "Company"), each of the
Subsidiaries of the Company designated in Section 1.1 as a Borrowing Subsidiary
(individually, a "Borrowing Subsidiary" and collectively, the "Borrowing
Subsidiaries") (the Company and the Borrowing Subsidiaries, may each be referred
to as a "Borrower" and, collectively, as the "Borrowers"), the Banks party
hereto from time to time, including, without limitation, unless the context
otherwise requires, the Issuing Bank (collectively, the "Banks" and
individually, a "Bank") and BANK ONE, NA (MAIN OFFICE CHICAGO), a national
banking association, as administrative agent for the Banks (in such capacity,
the "Agent").
INTRODUCTION
The Borrowers wish to obtain a three-year revolving credit facility for
use in connection with funding general corporate purposes and the Banks and the
Agent are willing to extend such a credit facility to the Borrowers on the terms
and conditions set forth in this Agreement.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Advance" shall mean any Loan and any Letter of Credit
Advance.
"Affiliate" when used with respect to any person shall mean
any other person which, directly or indirectly, controls or is controlled by or
is under common control with such person. For purposes of this definition
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or otherwise.
"Aggregate Commitment" shall mean the aggregate of the
Commitments of all of the Banks, as reduced or modified from time to time
pursuant to the terms hereof, which Aggregate Commitment shall initially be
$295,000,000 as of the Effective Date.
"Applicable Administrative Office" shall be the principal
office of the Agent in Chicago, Illinois.
"Applicable Rate" shall mean with respect to any Eurocurrency
Rate Loan, facility fee, usage fee, S/L/C fee, C/L/C fee, or Bank Guarantee fee,
as the case may be,
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the then applicable percentage set forth in the table below; provided, that
Rating Level V shall apply subsequent to the occurrence of an Event of Default.
APPLICABLE RATE
Rating Eurocurrency Rate Facility Fee Usage Fee
Level Loan/
S/L/C
C/L/C
Bank Guarantee Fee
-------- ------------------ ------------ ---------
Rating 0.65% 0.225% 0.125%
Level I
-------- ------------------ ------------ ---------
Rating 0.875% 0.25% 0.125%
Level II
-------- ------------------ ------------ ---------
Rating 1.10% 0.275% 0.125%
Level III
-------- ------------------ ------------ ---------
Rating 1.325% 0.30% 0.125%
Level IV
-------- ------------------ ------------ ---------
Rating 1.35% 0.40% 0.25%
Level V
"Applicable Rate Rating" shall mean, on any date of
determination, the Company's general corporate rating, or at such time as the
Company has outstanding senior unsecured long-term Indebtedness, the rating of
such senior unsecured long-term Indebtedness (without giving effect to any
third-party credit enhancement) on such date by each of S&P and ▇▇▇▇▇'▇;
provided, however, that if such corporate rating or such Indebtedness, as
applicable, is split-rated by one rating (i.e., BBB+ by S&P and Baa2 by
▇▇▇▇▇'▇), the higher rating (i.e., BBB+) shall apply; provided, further, that if
such corporate rating or such Indebtedness, as applicable, is split-rated by
more than one rating (i.e., BBB+ by S&P and Ba1 by ▇▇▇▇▇'▇), the rating one
level below the higher of the two ratings (i.e., BBB, which is one level below
BBB+) would apply.
"Applicable Senior Debt Securities" shall mean each series of
Senior Debt Securities designated pursuant to Section 3.1 of the Senior
Indenture as secured pursuant to Article 16 of the Senior Indenture, ranking
pari passu with the Bank Obligations, including with respect to the collateral
pledged to secure the Bank Obligations.
"Bank Guarantee" shall mean each guarantee and any other
similar instrument having an analogous effect, issued by the Issuing Bank
hereunder for the
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benefit of a Borrower or one of its Affiliates for the purpose of guaranteeing
obligations of such Borrower or one of its Affiliates.
"Bank Obligations" shall mean all indebtedness, obligations
and liabilities, whether now owing or hereafter arising, direct, indirect,
contingent or otherwise, of the Borrowers or the Guarantors to the Agent or any
Bank, including the Issuing Bank, pursuant to the Loan Documents.
"Bank One" shall mean Bank One, NA (Main Office Chicago), a
national banking association, in its individual capacity, and its successors.
"Borrowing" shall mean the aggregation of Advances made to any
Borrower, or continuations and conversions of such Advances, made pursuant to
Article II on a single date and for a single Interest Period. A Borrowing may be
referred to for purposes of this Agreement by reference to the type of Loan
comprising the relating Borrowing, e.g., a "Floating Rate Borrowing" if such
Loans are Floating Rate Loans or a "Eurocurrency Rate Borrowing" if such Loans
are Eurocurrency Rate Loans.
"Borrowing Subsidiary" shall mean each of the Subsidiaries of
the Company set forth on Schedule 1.1 on the Effective Date together with any
other Subsidiary of the Company upon request by the Company to the Agent for
designation of such Subsidiary as a "Borrowing Subsidiary" hereunder, so long as
(a) all of the Banks approve, in their reasonable discretion, the designation of
such Subsidiary as a "Borrowing Subsidiary", (b) each of the Guarantors
guarantees the obligations of such new Borrowing Subsidiary pursuant to the
terms of the Guaranty, (c) such new Borrowing Subsidiary delivers Notes executed
in favor of each Bank, all documents and items referred to in Section 2.5, and
Security Documents granting a security interest in certain assets pursuant to
Section 2.10, all in form and substance satisfactory to the Banks, and (d) the
Company and such new Borrowing Subsidiary execute an agreement substantially in
the form of Exhibit A hereto.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which (a) the Agent is not open to the public for carrying on
substantially all of its banking functions or banks located in Chicago are
authorized or required to close, and (b) if such reference relates to any
Eurocurrency Rate Loan, banks are not generally open to the public for carrying
on substantially all of their banking functions in London, England.
"Capital Expenditures" shall mean, for any period, the
additions to property, plant and equipment and other capital expenditures of the
Company and its Subsidiaries for such period as the same are (or should be) set
forth, in accordance with Generally Accepted Accounting Principles, in
consolidated financial statements of the Company and its Subsidiaries for such
period.
"Capital Lease" of any person shall mean any lease which, in
accordance with Generally Accepted Accounting Principles, is capitalized on the
books of such person.
"Capital Markets Issuance" shall mean, with respect to any
Person:
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(a) the issuance or sale by such Person of any Capital
Stock of such Person; provided, however, that issuances of Capital Stock to
employees, directors and consultants of such Person as compensation and
issuances of Capital Stock under or in connection with employee stock purchase
plans shall not constitute "Capital Markets Issuances"; and
(b) the issuance or sale by such Person of any
Indebtedness described in clauses (i), (ii), and (ix) of the definition thereof;
provided, however, that issuances or sales of Indebtedness that are permitted
under Section 5.2, other than Sections 5.2(d)(v) and 5.2(d)(vii), shall not
constitute Capital Markets Issuances, and this clause (b) shall not permit the
incurrence by any Borrower or any Subsidiary thereof of any Indebtedness if such
incurrence is not otherwise permitted by this Agreement.
"Capital Stock" shall mean (i) in the case of any corporation,
all capital stock (whether common, preferred or any other type) and any
securities exchangeable for or convertible into capital stock and any warrants,
rights or other options to purchase or otherwise acquire capital stock or such
securities or any other form of equity securities, (ii) in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, (iii) in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distribution of assets of, the issuing Person.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations thereunder.
"Collateral Agent" shall mean Bank One together with any
successor or permitted assign.
"Collateral Trust Agreements" shall mean a collateral sharing
or trust agreement by and among the Agent, the Banks, the Short-Term Lenders,
and the holders of the Applicable Senior Debt Securities and any security
agreements, pledge agreements or other collateral documents delivered in
connection therewith, as each may be amended, restated, supplemented or
otherwise modified from time to time.
"C/L/C" shall mean any commercial letter of credit issued by
the Issuing Bank hereunder.
"Commitment" shall mean, with respect to each Bank, the
commitment of each such Bank to make Loans and to participate in Letter of
Credit Advances made through the Issuing Bank pursuant to Section 2.1(a) and
(b), in amounts not exceeding in aggregate principal amount outstanding at any
time the respective commitment amount for each such Bank set forth next to the
name of each such Bank in the signature pages hereof or in its Assignment and
Acceptance hereto (if applicable), as such amounts may be modified in accordance
with assignments permitted under Section 9.6 or reduced from time to time
pursuant to Section 2.2.
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"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for the Company
and its consolidated Subsidiaries of the amounts signified by such term for all
such persons determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
"Contingent Liabilities" of any person shall mean, as of any
date, all obligations of such person or of others for which such person is
contingently liable, as obligor, guarantor, surety or in any other capacity, or
in respect of which obligations such person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business),
including without limitation all reimbursement obligations of such person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such person to advance funds to, or to purchase assets, property
or services from, any other person in order to maintain the financial condition
of such other person.
"Contractual Obligation" shall mean, as to any person, any
material provision of any security issued by such person or of any agreement,
instrument or other undertaking to which such person is a party or by which it
or any of its property is bound.
"Default" shall mean any of the events or conditions described
in Section 6.1 which might become an Event of Default with notice or lapse of
time or both.
"Defaulting Bank" means any Bank that fails to make available
to the Agent such Bank's Loans required to be made hereunder or shall not have
made a payment required to be made to the Agent hereunder. Once a Bank becomes a
Defaulting Bank, such Bank shall continue as a Defaulting Bank until such time
as such Defaulting Bank makes available to the Agent, the amount of such
Defaulting Bank's Loans and all other amounts required to be paid to the Agent
pursuant to this Agreement.
"Dollars" and "$" shall mean the lawful money of the United
States of America.
"Domestic Borrower" shall mean any Borrower incorporated or
formed in any State of the United States of America or any political subdivision
of any such State.
"Domestic Subsidiary" shall mean any Subsidiary of any
Borrower incorporated or formed in any State of the United States or any
political subdivision of any such State.
"EBIT" shall mean, with respect to any person, for any period,
the sum of (a) Net Income or loss plus (b) all amounts deducted in determining
such Net Income or loss on account of (i) all consolidated interest expense and
(ii) taxes based on or measured by income, all as determined in accordance with
Generally Accepted Accounting Principles.
"EBITDA" shall mean, with respect to any person, for any
period, EBIT for such period plus, to the extent deducted in determining such
EBIT, depreciation and
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positive amortization expense, plus (or minus) up to $85,000,000 in the
aggregate at any time of extraordinary non-cash or nonrecurring non-cash charges
and losses (or gains), plus Permitted OEM Cash Charges, and minus Permitted OEM
Cash Payments, all as determined in accordance with Generally Accepted
Accounting Principles; provided, however, that in connection with Permitted OEM
Cash Payments, if any Permitted OEM Cash Payment is recognized or otherwise
included in a calculation of EBITDA for a calculation period, such Permitted OEM
Cash Payment shall not be included in subsequent calculation periods,
notwithstanding the fact that Generally Accepted Accounting Principles may
require the amortization of such Permitted OEM Cash Payment for accounting
purposes over multiple calculation periods. For example, if the Company receives
a $25,000,000 Permitted OEM Cash Payment on February 1, 2003, the entire amount
of such Permitted OEM Cash Payment shall be included in the EBITDA calculation
for the quarter ending February 28, 2003. If, however, the Company is required
under Generally Accepted Accounting Principles to amortize such $25,000,000 over
four quarters, such that $6,250,000 will appear in the Company's financial
statements or balance sheet with respect to such Permitted OEM Cash Payment for
each of such four quarters, the Company shall not be required to reflect
$6,250,000 in its EBITDA calculations for the quarters ending May 31, 2003,
August 31, 2003, and November 30, 2003. Such amounts were already captured in
the February 2003 EBITDA calculation.
"Effective Date" shall mean November 29, 2002.
"Environmental Laws" at any date shall mean all provisions of
law, statute, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards which are applicable to any Borrower or
any Subsidiary and promulgated by the government of the United States of America
or any foreign government or by any state, province, municipality or other
political subdivision thereof or therein or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning the protection of, or regulating the discharge of substances into,
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean, with respect to any person, any
trade or business (whether or not incorporated) which, together with such person
or any Subsidiary of such person, would be treated as a single employer under
Section 414 of the Code.
"Eurocurrency Rate" applicable to any Eurocurrency Interest
Period means, the per annum rate that is equal to the sum of:
(a) the Applicable Rate for Eurocurrency Rate Loans, plus
(b) the rate per annum obtained by dividing (i) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
Dollars appearing on
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Reuters Screen FRBD as of 11:00 a.m. (London time) two Eurocurrency Business
Days prior to the first day of such Eurocurrency Interest Period, and having a
maturity equal to such Eurocurrency Interest Period, provided that, (i) if
Reuters Screen FRBD is not available to the Agent for any reason, the applicable
Eurocurrency Rate for the relevant Eurocurrency Interest Period shall instead be
the applicable British Bankers' Association Interest Settlement Rate for
deposits in Dollars as reported by any other generally recognized financial
information service as of 11:00 a.m. (London time) two Eurocurrency Business
Days prior to the first day of such Eurocurrency Interest Period, and having a
maturity equal to such Eurocurrency Interest Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available, the applicable
Eurocurrency Rate for the relevant Interest Period shall instead be the rate
determined by the Agent to be the rate at which Bank One offers to place
deposits in Dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Eurocurrency Business Days prior to
the first day of such Eurocurrency Interest Period, in the approximate amount of
Bank One's relevant Eurocurrency Rate Loan and having a maturity equal to such
Eurocurrency Interest Period, by (ii) an amount equal to one minus the stated
maximum rate (expressed as a decimal) of all reserve requirements including,
without limitation, any marginal, emergency, supplemental, special or other
reserves, that is specified on the first day of such Eurocurrency Interest
Period by the Board of Governors of the Federal Reserve System (or any successor
agency thereto) or the relevant fiscal or monetary authority for determining the
maximum reserve requirement with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such System; all as conclusively determined by
the Agent, absent manifest error, such sum to be rounded up, if necessary, to
the nearest whole multiple of one one-hundredth of one percent (1/100 of 1%);
which Eurocurrency Rate shall change simultaneously with any change in the
Applicable Rate.
"Eurocurrency Business Day" shall mean, with respect to any
Eurocurrency Rate Loan, a day which is both a Business Day and a day on which
dealings in deposits in Dollars are carried out in the London interbank market.
"Eurocurrency Interest Period" shall mean, with respect to any
Eurocurrency Rate Loan, the period commencing on the day such Eurocurrency Rate
Loan is made, converted to or continued as a Eurocurrency Rate Loan and ending
on the date one, two, three or six months thereafter, as any Borrower may elect
under Section 2.4 or 2.7, and each subsequent period commencing on the last day
of the immediately preceding Eurocurrency Interest Period and ending on the date
one, two, three or six months thereafter, as a Borrower may elect under Section
2.4 or 2.7, provided, however, that (a) any Eurocurrency Interest Period which
commences on the last Eurocurrency Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Eurocurrency Business Day of
the appropriate subsequent calendar month, (b) each Eurocurrency Interest Period
which would otherwise end on a day which is not a Eurocurrency Business Day
shall end on the next succeeding Eurocurrency Business Day or, if such next
succeeding Eurocurrency Business Day falls in the next succeeding calendar
month, on the next preceding Eurocurrency Business Day, and (c) no
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Eurocurrency Interest Period shall be permitted which would end after the
Termination Date.
"Eurocurrency Rate Loan" shall mean any Loan which bears
interest at the Eurocurrency Rate.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
"Federal Funds Rate" shall mean, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal Funds
transactions, with members of the Federal Reserve System arranged by Federal
Funds brokers, as published for such day by the Federal Reserve Bank of New
York, or if such rate is not so published for such day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal Funds brokers of recognized standing selected by it.
"Fixed Charge Coverage Ratio" of any person shall mean, as of
any date, the ratio of (a) Consolidated EBITDA as calculated for the four most
recently ended consecutive fiscal quarters of the Company plus all payments
relating to operating leases of such person during such period to (b) all
consolidated interest expense during such period for such person, plus all
payments relating to operating leases of such person during such period.
"Floating Rate" shall mean, as of any date, the per annum rate
equal to the greater of (i) the Prime Rate in effect from time to time, or (ii)
the sum of the Federal Funds Rate in effect from time to time plus one-half of
one percent (1/2 of 1%) per annum; which Floating Rate shall change
simultaneously with any change in such Prime Rate or Federal Funds Rate, as the
case may be.
"Floating Rate Loan" shall mean any Loan which bears interest
at the Floating Rate.
"Foreign Affiliate Contingent Liabilities" shall mean, on any
date of determination, the aggregate Contingent Liabilities of the Company and
its Affiliates which arise in respect of amounts owing by their Foreign
Subsidiaries in connection with value added taxes, rents, goods or services
being provided by such Foreign Subsidiaries to governmental entities, or other
similar items which under Generally Accepted Accounting Principles constitute
operating expenses.
"Foreign Borrower" shall mean any Borrower incorporated or
formed in any jurisdiction other than any State of the United States of America
or any political subdivision of any such State.
"Foreign Subsidiary" shall mean any Subsidiary incorporated or
formed in any jurisdiction other than any State of the United States of America
or any political subdivision of any such State.
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"Generally Accepted Accounting Principles" shall mean
Generally Accepted Accounting Principles as in effect in the United States of
America from time to time and applied on a basis consistent with that reflected
in the financial statements referred to in Section 4.6.
"Guarantor" shall mean each Domestic Borrower, certain
Domestic Subsidiaries and each person otherwise entering into a Guaranty from
time to time.
"Guaranty" shall mean the guaranty entered into by each
Guarantor for the benefit of the Agent and the Banks pursuant to and in
accordance with Section 2.10 and Article VIII of this Agreement and any other
guaranties entered into by a Guarantor pursuant to Section 5.1(g), as amended or
modified from time to time.
"Hazardous Materials" shall mean any material or substance:
(1) which is or becomes defined as a hazardous substance, pollutant, or
contaminant, pursuant to the Comprehensive Environmental Response Compensation
and Liability Act (42 USC ss.9601 et. seq.) as amended and regulations
promulgated under it; (2) containing gasoline, oil, diesel fuel or other
petroleum products; (3) which is or becomes defined as hazardous waste pursuant
to the Resource Conservation and Recovery Act (42 USC ss.6901 et. seq.) as
amended and regulations promulgated under it; (4) containing polychlorinated
biphenyls (PCBs); (5) containing asbestos; (6) which is radioactive; (7) the
presence of which requires investigation or remediation under any Environmental
Law; (8) which is or becomes defined or identified as a hazardous waste,
hazardous substance, hazardous or toxic chemical, pollutant, contaminant, or
biologically Hazardous Material under any Environmental Law.
"Indebtedness" of any person shall mean (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, except for (a) trade accounts payable arising in the
ordinary course of business, (b) obligations arising under supply or consignment
agreements, in each case with respect to clauses (a) and (b) that are not more
than 90 days past due or as are reasonably being contested, and (c) the Marconi
Deferred Purchase Price Obligations, (iv) obligations as lessee under leases
which have been in accordance with Generally Accepted Accounting Principles,
recorded as Capital Leases, (v) obligations to purchase property or services if
payment is required regardless of whether such property is delivered or services
are performed (generally called "take or pay" contracts), (vi) obligations in
respect of currency or interest rate swaps or comparable transactions valued at
the maximum termination payment payable by the obligor, (vii) all obligations of
others similar in character to those described in clauses (i) through (iv) of
this definition for which such person is contingently liable, as guarantor,
surety, accommodation party, partner or in any other capacity, including,
without limitation, Contingent Liabilities, (viii) liabilities in respect of
actual unfunded vested benefits under plans covered by Title IV of ERISA, (ix)
the aggregate principal amount of the financing provided to the Company and its
Subsidiaries under any agreement entered into as part of a Permitted Receivables
Transaction, and (x) any liability under any so-called "synthetic lease" or "tax
ownership operating lease" transaction.
9
"Intercreditor Agreement" shall mean the Intercreditor
Agreement, dated as of May 30, 1996, among the "Banks" (as defined therein), the
Agent, the Collateral Agent and the Note Purchasers, as such agreement is
attached hereto as Exhibit B, and as such agreement may be amended, restated,
supplemented or otherwise modified from time to time, including, without
limitation, the amendment thereto dated as of November 29, 2002.
"Interest Payment Date" shall mean (a) with respect to any
Eurocurrency Rate Loan, the last day of each Interest Period with respect to
such Eurocurrency Rate Loan and, in the case of any Interest Period exceeding
three months, those days that occur during such Interest Period at intervals of
three months after the first day of such Interest Period, and (b) in all other
cases, the last Business Day of each August, November, February and May
occurring after the date hereof, commencing with the first such Business Day
occurring after the date of this Agreement.
"Interest Period" shall mean any Eurocurrency Interest Period.
"Issuing Bank" shall mean Bank One, together with its
successors and assigns, and any other Bank hereafter designated as an "Issuing
Bank" upon the prior written agreement of the Company, the Agent and such Bank.
"Letter of Credit" shall mean a Bank Guarantee, S/L/C or C/L/C
having a stated expiry date or a date by which any draft drawn thereunder must
be presented not later than twelve months after the date of issuance (provided
that any Letter of Credit with a one-year tenor may provide for the renewal
thereof for additional one-year periods). Such Bank Guarantee, S/L/C or C/L/C
shall be issued by the Issuing Bank on behalf of the Banks for the account of
any Borrower under an application and related documentation acceptable to the
Issuing Bank. Such application and documentation shall require, among other
things, immediate reimbursement by such Borrower to the Issuing Bank in respect
of all drafts or other demands for payment honored thereunder and all reasonable
and customary expenses paid or incurred by the Issuing Bank relative thereto.
Notwithstanding anything to the contrary set forth in this definition, no Letter
of Credit may expire later than, and no draw may occur under a Letter of Credit
later than, the fifth Business Day before the Termination Date.
"Letter of Credit Advance" shall mean any issuance of a Letter
of Credit under Section 2.4 made pursuant to Section 2.1 in which each Bank
acquires a pro rata participation (based on such Bank's Commitment) pursuant to
Section 2.4(d).
"Letter of Credit Documents" shall have the meaning set forth
in Section 3.3(b).
"Lien" shall mean any pledge, assignment, deed of trust,
hypothecation, mortgage, security interest, conditional sale or title retaining
contract, or any other type of lien, charge, encumbrance or other similar claim
or right.
"Loan" shall mean any Revolving Credit Loan or any Swing Line
Loan, as the context may require.
10
"Loan Documents" shall mean this Agreement, the Notes, the
Letter of Credit Documents, the Security Documents and any other agreement,
instrument or document executed at any time in connection with this Agreement.
"Majority Banks" shall mean Banks holding not less than
fifty-one percent (51%) of the Commitments (or fifty-one percent (51%) of the
outstanding Advances if the Commitments have been terminated).
"Marconi Deferred Purchase Price Obligations" shall mean up to
$35,000,000 owing by the Company to Marconi plc in connection with the Company's
acquisition of certain property from Marconi plc.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, assets, operations or financial condition of the Company
and its Subsidiaries, taken as a whole, (b) the ability of any Borrower to
perform its obligations under any Loan Document, or (c) the validity or
enforceability of any Loan Document or the rights or remedies of the Agent or
the Banks under any Loan Document.
"Multiemployer Plan" shall mean any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Cash Proceeds" shall mean, in connection with:
(i) any Capital Markets Issuance after the Effective Date
other than a Permitted Receivables Transaction as described in clause (ix) of
the definition of "Indebtedness", the cash proceeds received from such issuance,
net of investment banking fees, reasonable and documented attorneys' fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and other costs and expenses actually incurred in connection therewith; and
(ii) any Capital Markets Issuance after the Effective Date
constituting a Permitted Receivables Transaction as described in clause (ix) of
the definition of "Indebtedness":
(A) if such Capital Markets Issuance is in addition to
those Capital Markets Issuances constituting Permitted
Receivables Transactions as described in clause (ix) of the
definition of "Indebtedness" that were in existence prior to
the Effective Date, the cash proceeds received from such new
issuance, net of investment banking fees, reasonable and
documented attorneys' fees, accountants' fees, underwriting
discounts and commissions and other customary fees and other
costs and expenses actually incurred in connection therewith;
and
(B) if such Capital Markets Issuance is a substitute or
replacement for a Capital Markets Issuance constituting a
Permitted Receivables Transaction as described in clause (ix)
of the definition of "Indebtedness" that was in existence
prior to the Effective Date, the excess of the cash proceeds
resulting from such new Capital Markets Issuance over the cash
proceeds
11
which resulted from the existing Permitted Receivables
Transaction subject to such substitution or replacement, net
of investment banking fees, reasonable and documented
attorneys' fees, accountants' fees, underwriting discounts and
commissions and other customary fees and other costs and
expenses actually incurred in connection therewith.
"Net Income" of any person shall mean, for any period, the net
income (after deduction for income and other taxes of such person determined by
reference to income or profits of such person) of such person for such period,
all as determined in accordance with Generally Accepted Accounting Principles.
"Net Worth" of any person shall mean, as of any date, the
amount of any capital stock, paid in capital and similar equity accounts plus
(or minus in the case of a deficit) the capital surplus and retained earnings of
such person and the amount of any foreign currency translation adjustment or
other income shown as a capital account of such person, all as determined under
Generally Accepted Accounting Principles.
"Notes" shall mean the Revolving Credit Notes and the Swing
Line Notes; "Note" shall mean any Revolving Credit Note or any Swing Line Note.
"Note Purchase Agreement" shall mean the Note Purchase
Agreement between the Company and the Note Purchasers dated as of May 30, 1996,
as amended or modified from time to time.
"Note Purchasers" shall mean Connecticut General Life
Insurance Company, Life Insurance Company of North America and Metropolitan Life
Insurance Company, together with their successors and permitted assigns.
"Notional Pooling Accounts" shall mean those deposit accounts
of the Borrowers and their Subsidiaries operated and maintained outside of the
United States of America by ABN AMRO Bank N.V. or its successor in connection
with cross-border, cross-currency cash pooling by the Borrowers and their
Subsidiaries.
"Overdue Rate" shall mean (a) in respect of principal of
Floating Rate Loans, a rate per annum that is equal to the sum of two percent
(2%) per annum plus the Floating Rate, (b) in respect of principal of
Eurocurrency Rate Loans or Swing Line Loans, a rate per annum that is equal to
the sum of two percent (2%) per annum plus the per annum rate in effect thereon
until the end of the then current Interest Period for such Loan and, thereafter,
a rate per annum that is equal to the sum of two percent (2%) per annum plus the
Floating Rate, and (c) in respect of other amounts payable by any Borrower
hereunder (other than interest), a per annum rate that is equal to the sum of
two percent (2%) per annum plus the Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" shall mean Liens permitted by Section 5.2(e)
hereof.
12
"Permitted OEM Cash Charges" shall mean, with respect to the
Company or any Affiliate thereof, cash charges of the Company or an Affiliate
thereof arising in connection with a Permitted OEM Divestiture Purchase for
which the Company or such Affiliate, pursuant to the agreements evidencing such
Permitted OEM Divestiture Purchase (as such agreements may be amended or
supplemented), shall be reimbursed by the original equipment manufacturer acting
as seller under such Permitted OEM Divestiture Purchase; provided, however, that
such cash charges shall not constitute Permitted OEM Cash Charges if the Company
or its Affiliate, as applicable, shall not be required to be reimbursed for such
cash charges pursuant to the terms of the agreements (as amended or
supplemented) evidencing such Permitted OEM Divestiture Purchase; provided,
further, that no charge shall constitute a Permitted OEM Cash Charge if the
reimbursement provisions set forth in the aforementioned agreements (as amended
or modified) are not in form and substance acceptable to the Agent.
"Permitted OEM Cash Payments" shall mean, with respect to the
Company or any Affiliate thereof, cash payments made by an original equipment
manufacturer to the Company or an Affiliate thereof in connection with a
Permitted OEM Divestiture Purchase where such payments are made as a result of,
and correspond with the amount of, Permitted OEM Cash Charges.
"Permitted OEM Divestiture Purchase" shall mean, whether
through the acquisition of Capital Stock or through the acquisition of assets,
the acquisition by the Company or any of its Subsidiaries, in one or a series of
transactions, of all or any substantial portion of a division, line of business
or separate facility of an original equipment manufacturer; provided, however,
that, in order for such acquisition to constitute a "Permitted OEM Divestiture
Purchase" (i) both before and after such acquisition, the Company shall be in
compliance with all financial covenants hereunder, (ii) the assets or Persons
holding such assets being acquired relate to a line of business substantially
similar to a line of business then engaged in by the Company or its
Subsidiaries, (iii) such acquisition is on terms and conditions no less
favorable to the purchaser than shall then be customary for acquisitions in the
electronics or high technology industries, and (iv) the Agent, in the reasonable
exercise of its discretion, shall have approved the terms and conditions of any
such acquisition; provided, further, that acquisitions satisfying the foregoing
requirements shall be subject to Section 5.2(r) instead of Sections 5.2(f) and
5.2(i). The Philips Acquisition shall constitute a Permitted OEM Divestiture
Purchase.
"Permitted Receivables Transactions" shall mean, collectively,
(i) if an SPC is created in connection therewith, the creation of the SPC to
purchase accounts receivable generated by and owed to the Company or any
Subsidiary, (ii) the entry by one or more Receivables Sellers into one or more
receivables purchase agreements with Purchasers, pursuant to which each
Purchaser will, from time to time, purchase from such Receivables Sellers
undivided interests in the receivables described in clause (i), and (iii) the
entry by such Receivables Sellers into such ancillary agreements, documents and
instruments as are necessary or advisable in connection with such receivables
purchase agreements, provided that (x) the outstanding principal amount of the
financing provided by all Purchasers pursuant to all such receivables purchase
agreements shall not exceed
13
$500,000,000 in the aggregate at any time and (y) the primary structural terms
of each such receivables purchase agreement, including without limitation, the
amount of any recourse to the Company or any of its Subsidiaries for
uncollectible receivables, shall be reasonably satisfactory to the Agent in each
case.
"Person" or "person" shall include an individual, a
corporation, a limited liability company, an association, a partnership, a trust
or estate, a joint stock company, an unincorporated organization, a joint
venture, a trade or business (whether or not incorporated), a government
(foreign or domestic) and any agency or political subdivision thereof, or any
other entity.
"Philips Acquisition" shall mean the acquisition by the
Company or its Subsidiaries, on or prior to February 15, 2003, of all of the
Capital Stock of certain corporate entities formed to acquire substantially all
of the assets of Philips PCMS.
"Philips PCMS" shall mean the business group of the Consumer
Electronics Division of Koninklijke Philips Electronics N.V. and certain of its
Subsidiaries titled "Contract Manufacturing Services".
"Plan" shall mean, with respect to any person, any pension
plan (other than a Multiemployer Plan) subject to Title IV of ERISA or to the
minimum funding standards of Section 412 of the Code which has been established
or maintained by such person, any Subsidiary of such person or any ERISA
Affiliate, or by any other person if such person, any Subsidiary of such person
or any ERISA Affiliate could have liability with respect to such pension plan.
"Prime Rate" shall mean the per annum rate announced by Bank
One or its parent from time to time as its "prime rate" (it being acknowledged
that such announced rate may not necessarily be the lowest rate charged by Bank
One or its parent to any of its customers) which Prime Rate shall change
simultaneously with any change in such announced rate.
"Private Placement Debt" shall mean the Indebtedness evidenced
by the Senior Notes.
"Private Placement Documents" shall mean the Note Purchase
Agreement, the Senior Notes, together with any and all other documents,
instruments and certificates executed and delivered pursuant thereto, as amended
or modified from time to time and any other documents executed in exchange or
replacement therefor.
"Prohibited Transaction" shall mean any non-exempt transaction
involving any Plan which is proscribed by Section 406 of ERISA or Section 4975
of the Code.
"Purchaser" shall mean a purchaser of accounts receivable from
one or more Receivables Sellers pursuant to a Permitted Receivables Transaction.
14
"Rating Level I" shall mean an Applicable Rate Rating of BBB+
or higher by S&P or Baa1 or higher by ▇▇▇▇▇'▇.
"Rating Level II" shall mean an Applicable Rate Rating of BBB
or higher by S&P or Baa2 or higher by ▇▇▇▇▇'▇ and Rating Level I does not apply.
"Rating Level III" shall mean an Applicable Rate Rating of
BBB- or higher by S&P and Baa3 or higher by ▇▇▇▇▇'▇ and neither Rating Level I
nor Rating Level II applies.
"Rating Level IV" shall mean an Applicable Rate Rating of (x)
BB+ or higher by S&P and Baa3 or higher by ▇▇▇▇▇'▇ or (y) BBB- or higher by S&P
and Ba1 or higher by ▇▇▇▇▇'▇, and none of Rating Level I, Rating Level II, or
Rating Level III apply.
"Rating Level V" shall mean an Applicable Rate Rating of BB+
or lower by S&P and Ba1 or lower by ▇▇▇▇▇'▇ and none of Rating Level I, Rating
Level II, Rating Level III, or Rating Level IV apply.
"Receivables Seller" shall mean any one of any SPC, the
Company, or a Subsidiary which is the seller of receivables in a Permitted
Receivables Transaction, and "Receivables Sellers" means all of such entities
collectively.
"Reportable Event" shall mean a reportable event as described
in Section 4043(b) of ERISA including those events as to which the thirty (30)
day notice period is waived under Part 2615 of the regulations promulgated by
the PBGC under ERISA.
"Requirement of Law" shall mean as to any person, the
certificate of incorporation and by-laws or other organizational or governing
documents of such person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such person or any of its property or to
which such person or any of its property is subject.
"Revolving Credit Advance" shall mean any Revolving Credit
Loan and any Letter of Credit Advance.
"Revolving Credit Note" shall mean any promissory note of any
Borrower evidencing the Revolving Credit Advances in substantially the form
annexed hereto as Exhibit C, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor.
"Revolving Credit Loan" shall mean any Borrowing under Section
2.4 evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a).
"Security Documents" shall mean, collectively, the Guaranties,
the Intercreditor Agreement, the Collateral Trust Agreements, the security
agreement described in Section 2.10 that relates to the pledge of the Company's
general partnership interest in Jabil Circuit Cayman L.P., which, together with
certain collateral documents
15
delivered pursuant thereto, is attached hereto as Exhibit I and all other
related agreements and documents, including financing statements and similar
documents delivered pursuant to this Agreement or otherwise entered into by any
person to secure the Advances.
"Senior Debt Securities" shall mean senior debt securities
from time to time issued under the Senior Indenture.
"Senior Indenture" shall mean the senior indenture to be
entered into between the Company and The Bank of New York, as trustee,
substantially in the form filed as an exhibit to the Company's registration
statement on Form S-3 (File No. 333-91719), and any amendment or supplement
thereto.
"Senior Notes" shall mean the 6.89% Senior Notes due May 30,
2004 issued pursuant to the Note Purchase Agreement.
"Senior Trustee" shall mean the trustee at any time acting as
such under the Senior Indenture.
"Short-Term Credit Agreement" shall mean that certain 364-Day
Loan Agreement, dated as of November 29, 2002, by and among the Company, the
"Borrowing Subsidiaries" from time to time party thereto, the "Banks" from time
to time party thereto, and Bank One, NA, as "Administrative Agent," as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Short-Term Lenders" shall mean the "Administrative Agent" and
the "Banks" from time to time party to the Short-Term Credit Agreement.
"Significant Foreign Subsidiary" shall mean (i) Jabil Circuit
Cayman L.P., a Cayman Islands exempted limited partnership, (ii) any other
direct Foreign Subsidiary of the Company not incorporated or formed in Mexico
which holds shares of other Foreign Subsidiaries of the Company, and (iii) any
one or more direct Foreign Subsidiaries of the Company incorporated or formed in
Mexico (for purposes of this definition, "Mexican Subsidiaries"), which, if
considered in the aggregate as a single Subsidiary would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Exchange Act if
5% were substituted for 10% wherever it occurs in such Rule, provided that no
Mexican Subsidiary which is not by itself a Significant Foreign Subsidiary shall
be included in any Significant Foreign Subsidiary if all Mexican Subsidiaries
which are not by themselves Significant Foreign Subsidiaries would not
constitute a Significant Foreign Subsidiary.
"Significant Subsidiary" shall mean (i) each Significant
Foreign Subsidiary, and (ii) any one or more Domestic Subsidiaries which, if
considered in the aggregate as a single Subsidiary would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Exchange Act if
3% were substituted for 10% wherever it occurs in such Rule, provided that no
Domestic Subsidiary which is not by itself a Significant Subsidiary shall be
included in any Significant Subsidiary if all Domestic Subsidiaries which are
not by themselves Significant Subsidiaries or Guarantors would not constitute a
Significant Subsidiary and provided further that with respect to Jabil
16
Circuit of Michigan, Inc., its limited partnership interest in Jabil Circuit
Cayman L.P. and its investments in Affiliates of the Company organized in Mexico
in an amount not to exceed 5% of the equity of such Affiliates shall be
disregarded when determining whether it constitutes a Significant Subsidiary.
"S/L/C" shall mean any standby letter of credit issued by the
Issuing Bank hereunder.
"SPC" shall mean any special purpose corporation or other
legal entity created in connection with a Permitted Receivables Transaction and
which performs the function of purchasing receivables from the Company and/or
one or more Subsidiaries and selling them to a Purchaser.
"Subordinated Debt" of any person shall mean, as of any date,
that Indebtedness of such person for borrowed money which is expressly
subordinate and junior in right and priority of payment to the Advances and
other Indebtedness of such person to the Banks in manner and by agreement
satisfactory in form and substance to the Majority Banks.
"Subordinated Indenture" shall mean the Indenture (for
subordinated debt securities), dated as of April 24, 2001, entered into between
the Company and The Bank of New York, as trustee, and any amendment or
supplement thereto.
"Subsidiary" of any person shall mean any other person
(whether now existing or hereafter organized or acquired) in which (other than
directors' qualifying shares required by law) at least a majority of the
securities or other ownership interests of each class having ordinary voting
power or analogous right (other than securities or other ownership interests
which have such power or right only by reason of the happening of a
contingency), at the time as of which any determination is being made, are
owned, beneficially and of record, by such person or by one or more of the other
Subsidiaries of such person or by any combination thereof. Unless otherwise
specified, reference to "Subsidiary" shall mean a Subsidiary of the Company.
"Swing Line Bank" shall mean Bank One, together with its
successors and assigns, and any other Bank hereafter designated as a "Swing Line
Bank" upon the prior written agreement of the Company, the Agent and such Bank.
"Swing Line Facility" shall have the meaning specified in
Section 2.1(b).
"Swing Line Interest Period" shall mean, with respect to any
Swing Line Loan, the period commencing on the day such Swing Line Loan is made
and ending on the date agreed upon between the Borrower requesting such Loan and
the Swing Line Bank at the time such Swing Line Loan is made, provided no Swing
Line Interest Period which would end after the Termination Date shall be
permitted.
"Swing Line Loan" shall mean any borrowing under Section 2.4
evidenced by a Swing Line Note and made pursuant to Section 2.1(b).
17
"Swing Line Note" means any promissory note of any Borrower
payable to the order of the Swing Line Bank, in substantially the form annexed
hereto as Exhibit D, as amended or modified from time to time and together with
any promissory note or notes issued in exchange or replacement therefor.
"Swing Line Rate" shall mean, with respect to any Swing Line
Rate Loan, the rate per annum agreed upon between the Borrower requesting such
Loan and the Swing Line Bank at the time such Swing Line Rate Loan is made.
"Termination Date" shall mean the earlier to occur of (a)
November 29, 2005 and (b) the date on which the Commitments shall be terminated
pursuant to Section 2.2 or 6.2.
"Total Indebtedness" of any person shall mean, as of any date,
all Indebtedness of such person for borrowed money, including without
limitation, all obligations under any Capital Lease and Subordinated Debt.
"Unfunded Benefit Liabilities" shall mean, with respect to any
Plan as of any date, the amount of the unfunded benefit liabilities determined
in accordance with Section 4001(a)(18) of ERISA.
"Wholly-Owned Subsidiary" for any Person means (i) any
Subsidiary all of the outstanding voting securities of which shall at the time
be owned or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business organization
100% of the ownership interests having ordinary voting power of which shall at
the time be so owned or controlled.
1.2 Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Banks", "Company", "Borrower", "Borrowers", "Borrowing
Subsidiary", "Borrowing Subsidiaries", and "this Agreement" shall have the
respective meanings ascribed thereto in the introductory paragraphs of this
Agreement. Such terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and shall be
construed accordingly. All computations required hereunder and all financial
terms used herein shall be made or construed in accordance with Generally
Accepted Accounting Principles unless such principles are inconsistent with the
express requirements of this Agreement provided that, if the Company notifies
the Agent that the Company wishes to amend any covenant in Article V to
eliminate the effect of any change in Generally Accepted Accounting Principles
in the operation of such covenant (or if the Agent notifies the Company that the
Majority Banks wish to amend Article V for such purpose), then the Borrowers'
compliance with such covenant shall be determined on the basis of Generally
Accepted Accounting Principles in effect immediately before the relevant change
in Generally Accepted Accounting Principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Borrowers and the Majority Banks. Use of the terms "herein", "hereof", and
"hereunder" shall be deemed references to this Agreement in its entirety
18
and not to the Section or clause in which such term appears. References to
"Sections" and "subsections" shall be to Sections and subsections, respectively,
of this Agreement unless otherwise specifically provided.
ARTICLE II.
THE COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Banks.
(a) Revolving Credit Advances. Each Bank agrees, for
itself only, subject to the terms and conditions of this Agreement, to make
Revolving Credit Loans to the Borrowers pursuant to Section 2.4 and to
participate in Letter of Credit Advances to the Borrowers pursuant to Section
2.4, from time to time from and including the Effective Date to but excluding
the Termination Date, not to exceed in aggregate principal amount at any time
outstanding the amount determined pursuant to Section 2.1(c). On the date of
each Advance, the aggregate principal amount of all Advances, including the
Advances to be made or requested on such date, shall not exceed the Aggregate
Commitment.
(b) Swing Line Loan. (i) Any Borrower may request the
Swing Line Bank to make, and the Swing Line Bank may, in its sole discretion
provided that the requirements of Section 2.6 are complied with by the Borrowers
at the time of such request, make, Swing Line Loans to any Borrower from time to
time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate principal amount not to exceed at any date the
lesser of (A) $25,000,000 (the "Swing Line Facility") and (B) the aggregate of
the unused portions of the Commitments of the Banks as of such date. Each Bank's
Commitment shall be deemed utilized by an amount equal to such Bank's pro rata
share (based on such Bank's Commitment) of each Swing Line Loan for purposes of
determining the amount of Revolving Credit Advances required to be made by such
Bank, but no Bank's Commitment shall be deemed utilized for purposes of
determining commitment fees under Section 2.3(a)(i). Swing Line Loans shall bear
interest at the Floating Rate or at the Swing Line Rate, as elected by the
Borrower requesting such Loan pursuant to Section 2.4. Within the limits of the
Swing Line Facility, so long as the Swing Line Bank, in its sole discretion,
elects to make Swing Line Loans, the Borrowers may borrow and reborrow under
this Section 2.1(b)(i).
(ii) The Swing Line Bank may at any time in its
sole and absolute discretion require that any Swing Line Loan be refunded by a
Revolving Credit Loan which is a Floating Rate Loan, and upon written notice
thereof by the Swing Line Bank to the Agent, the Banks and the Borrower for any
such Swing Line Loan, such Borrower shall be deemed to have requested a
Revolving Credit Loan for the account of such Borrower for any such Swing Line
Loan bearing interest at the Floating Rate, as the Floating Rate may change from
time to time, in an amount equal to the amount of any such Swing Line Loan, and
such Revolving Credit Loan shall be made to refund such Swing Line Loan. Each
Bank shall be absolutely and unconditionally obligated (except as set forth in
Section 2.1(b)(i)) to fund its pro rata share (based on such Bank's Commitment)
of such Revolving Credit Loan or, if applicable, purchase a participating
interest in the Swing Line Loans pursuant to Section 2.1(b)(iii) and such
obligation shall
19
not be affected by any circumstance, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such Bank or any
Borrower or any of their respective Subsidiaries may have against the Agent, any
Borrower or any of their respective Subsidiaries or anyone else for any reason
whatsoever; (B) the occurrence or continuance of a Default or an Event of
Default, subject to Section 2.1(b)(iii); (C) any adverse change in the condition
(financial or otherwise) of any Borrower or any of its Subsidiaries; (D) any
breach of this Agreement by any Borrower or any of their respective Subsidiaries
or any other Bank; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing (including any Borrower's failure
to satisfy any conditions contained in Article II or any other provision of this
Agreement).
(iii) If, for any reason (including without
limitation as a result of the occurrence of an Event of Default with respect to
any Borrower pursuant to Section 6.1(i)), Revolving Credit Loans may not be made
by the Banks as described in Section 2.1(b)(ii), then (A) each Borrower agrees
that each Swing Line Loan not paid pursuant to Section 2.1(b)(ii) shall bear
interest, payable on demand by the Agent, at the Overdue Rate then applicable to
Floating Rate Loans, and (B) effective on the date each such Revolving Credit
Loan would otherwise have been made, each Bank severally agrees that it shall
unconditionally and irrevocably, without regard to the occurrence of any Default
or Event of Default, in lieu of deemed disbursement of loans, to the extent of
such Bank's Commitment, purchase a participating interest in the Swing Line
Loans by paying its participation percentage thereof. Each Bank will immediately
transfer to the Agent, in same day funds, the amount of its participation. Each
Bank shall share on a pro rata basis (calculated by reference to its Commitment)
in any interest which accrues thereon and in all repayments thereof. If and to
the extent that any Bank shall not have so made the amount of such participating
interest available to the Agent, such Bank and the Borrower of such Swing Line
Loan severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Agent until the date such amount is paid to the Agent, at (x) in the case of any
Borrower, at the interest rate specified above and (y) in the case of such Bank,
the Federal Funds Rate.
(c) Limitation on Amount of Advances. Notwithstanding
anything in this Agreement to the contrary, (i) the aggregate principal amount
of the Revolving Credit Advances made by any Bank at any time outstanding shall
not exceed the amount of its respective Commitment as of the date any such
Advance is made, and (ii) the aggregate principal amount of Revolving Credit
Advances and Swing Line Loans outstanding to the Borrowers shall not exceed the
Aggregate Commitment; provided, however, that the aggregate principal amount of
Letter of Credit Advances outstanding at any time shall not exceed $40,000,000.
2.2 Termination and Reduction of Commitments.
(a) (i) The Company shall have the right to
terminate or reduce the Aggregate Commitment at any time and from time to time
at its option, provided that (A) the Company shall give five days' prior written
notice of such termination or
20
reduction to the Agent (with sufficient executed copies for each Bank)
specifying the amount and effective date thereof, (B) each partial reduction of
the Aggregate Commitment shall be in a minimum amount of $5,000,000 and in
integral multiples of $5,000,000 and shall reduce the Commitments of all of the
Banks proportionately in accordance with the respective Commitments of such
Banks, (C) no such termination or reduction shall be permitted with respect to
any portion of the Aggregate Commitment as to which a request for a Borrowing
pursuant to Section 2.4 is then pending and (D) the Aggregate Commitment may not
be terminated if any Advances are then outstanding and may not be reduced below
the aggregate principal amount of Advances then outstanding.
(ii) The Commitments or any portion thereof terminated or reduced
pursuant to this Section 2.2(a), whether optional or mandatory, may not be
reinstated. The Borrowers shall immediately prepay the Loans to the extent they
exceed the reduced Aggregate Commitment pursuant hereto, and any reduction
hereunder shall reduce the Commitment amount of each Bank proportionately in
accordance with the respective Commitments of such Banks. In addition to the
foregoing, the Aggregate Commitment may be increased or decreased, as
applicable, pursuant to Section 2.11 and Section 3.1(d).
(b) For purposes of this Agreement, a Letter of Credit
Advance (i) shall be deemed outstanding in an amount equal to the sum of the
maximum amount available to be drawn under the related Letter of Credit on or
after the date of determination and on or before the stated expiry date thereof
plus the amount of any draws under such Letter of Credit that have not been
reimbursed by a Revolving Credit Loan as provided in Section 3.3 and (ii) shall
be deemed outstanding at all times on and before such stated expiry date or such
earlier date on which all amounts available to be drawn under such Letter of
Credit have been fully drawn, and thereafter until all related reimbursement
obligations have been paid by a Revolving Credit Loan or otherwise. Upon each
payment made by the Agent in respect of any draft or other demand for payment
under any Letter of Credit, the amount of any Letter of Credit Advance
outstanding immediately prior to such payment shall be automatically reduced by
the amount of each Revolving Credit Loan deemed advanced in respect of the
related reimbursement obligation of the Borrower, as more fully provided for in
Section 3.3.
2.3 Fees.
(a) (i) The Company agrees to pay to the Banks a
facility fee on the daily average amount of the Aggregate Commitment (without
regard to usage), for the period from the Effective Date to but excluding the
Termination Date, at a rate equal to the Applicable Rate for facility fees.
(ii) During any calendar quarter during the
period from the Effective Date to but excluding the Termination Date, when the
aggregate daily average amount of outstanding Advances exceeds 33-1/3% of the
Aggregate Commitment at any time during such quarter, the Company agrees to pay
to the Banks a usage fee on the daily average amount of outstanding Advances
during such quarter at a rate equal to the Applicable Rate for usage fees.
21
(iii) Accrued facility and usage fees shall be
payable quarterly in arrears on the last Business Day of each August, November,
February and May, commencing on the first such Business Day occurring after the
date of this Agreement, and on the Termination Date. For the purpose of
calculating the fees under this Section 2.3(a) only, the aggregate amount of
outstanding Bank Guarantees, C/L/Cs and S/L/Cs shall constitute usage of the
Aggregate Commitment. For the purpose of calculating the fees under this Section
2.3(a), Swing Line Loans shall count as usage of the Aggregate Commitment.
(b) The Borrowers agree to pay:
(i) with respect to any S/L/C, (A) a fee to
Agent for the benefit of the Banks computed at the Applicable Rate on the
maximum amount available to be drawn from time to time under such S/L/C payable
quarterly in arrears on the last Business Day of each August, November, February
and May for the period from and including the date of issuance of such S/L/C to
and including the stated expiry date of such S/L/C, and (B) an additional fee to
the Issuing Bank for its own account, which fee shall be paid annually in
advance at the time such S/L/C is issued or amended, and which fee shall equal
one-eighth of one percent (1/8 of 1%) of such maximum amount for each such
period,
(ii) with respect to any C/L/C, (A) a fee to the
Agent for the benefit of the Banks computed at a rate equal to .50 times the
Applicable Rate on the maximum amount available to be drawn from time to time
under such C/L/C payable quarterly in arrears on the last Business Day of each
August, November, February and May for the period from and including the date of
issuance of such C/L/C to and including the stated expiry date of such C/L/C,
and (b) an additional fee to the Issuing Bank for its own account, which fee
shall be paid annually in advance at the time such C/L/C is issued or amended,
and which fee shall equal one-eighth of one percent (1/8 of 1%) of such maximum
amount for each such period, and
(iii) with respect to any Bank Guarantee, (A) a
fee to Agent for the benefit of the Banks computed at the Applicable Rate on the
maximum amount available to be drawn from time to time under such Bank Guarantee
payable quarterly in arrears on the last Business Day of each August, November,
February and May for the period from and including the date of issuance of such
Bank Guarantee to and including the stated expiry date of such Bank Guarantee,
and (B) an additional fee to the Issuing Bank for its own account, which fee
shall be paid annually in advance at the time such Bank Guarantee is issued or
amended, and which fee shall equal one-eighth of one percent (1/8 of 1%) of such
maximum amount for each such period
(iv) The aforementioned fees are nonrefundable
once they accrue and/or they have been paid and the Borrowers shall not be
entitled to any rebate of any portion of any such accrued or previously paid fee
if the applicable Letter of Credit does not remain outstanding through its
stated expiry date or for any other reason. With respect to any Letter of
Credit, the S/L/C fee, C/L/C fee or Bank Guarantee fee payable in respect
thereof shall cease to accrue upon the earlier to occur of the expiry date
therefor
22
or such date as such Letter of Credit no longer remains outstanding. The
Borrowers further agree to pay to the Issuing Bank, on demand, such other
customary and reasonable administrative fees, charges and expenses of the
Issuing Bank in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to
the application and related documentation under which such Letter of Credit is
issued in accordance with a schedule of fees provided by the Issuing Bank to the
Company.
(c) The Company agrees to pay to the Agent and Banc One
Capital Markets, Inc. (the "Arranger") an arrangement fee and an agency fee for
their services as Agent and Arranger, respectively, under this Agreement in such
amounts as may from time to time be agreed upon by the Company, the Agent and
the Arranger.
2.4 Disbursement of Advances.
(a) Except with respect to Swing Line Loans, a Borrower
shall give the Agent notice of its request for each Advance in substantially the
form of Exhibit E hereto at the principal office of the Agent and at the
Applicable Administrative Office with respect to such Advance not later than
11:00 a.m. local time of the Applicable Administrative Office (i) three
Eurocurrency Business Days prior to the date such Advance is requested to be
made if such Borrowing is to be made as a Eurocurrency Rate Borrowing, and (ii)
three Business Days prior to the date any Letter of Credit Advance is requested
to be made and (iii) on the date such Advance is requested to be made if such
Advance is to be made as a Floating Rate Borrowing. The Agent shall promptly
notify each Bank of such notice. Such notice shall specify whether a
Eurocurrency Rate Loan, Floating Rate Loan or a Letter of Credit Advance is
requested and, in the case of each requested Eurocurrency Rate Loan, the
Interest Period to be initially applicable to such Loan. With respect to Swing
Line Loans, a Borrower shall give the Swing Line Bank notice of its request for
each Swing Line Loan in substantially the form of Exhibit E hereto at the
Applicable Administrative Office with respect to such Advance not later than
1:00 p.m. local time of the Applicable Administrative Office on the same
Business Day any Swing Line Loan is requested to be made which notice shall
specify whether such Borrower elects the Swing Line Rate or the Floating Rate
with respect to such Swing Line Loan. The Agent, on the same day any such notice
is given, shall provide notice of such requested Loan, other than any Swing Line
Loan, to each Bank (which notice shall be provided by 1:00 p.m. local time of
the Applicable Administrative Office with respect to Floating Rate Loans).
Subject to the terms and conditions of this Agreement, the proceeds of each such
requested Loan shall be made available to the Borrower requesting such Loan by
depositing the proceeds thereof, in immediately available, freely transferable
cleared funds, in an account maintained and designated by such Borrower. Subject
to the terms and conditions of this Agreement, the Issuing Bank shall, on the
date any Letter of Credit Advance is requested to be made, issue the related
Letter of Credit on behalf of the Banks for the account of the Borrower
requesting such Letter of Credit. Notwithstanding anything herein to the
contrary, the Issuing Bank may decline to issue any requested Letter of Credit
on the basis that the beneficiary, the purpose of issuance or the terms or the
conditions of drawing are unacceptable to it in its reasonable discretion. As of
the Effective Date, subject to the satisfaction of the
23
conditions precedent set forth in Sections 2.5 and 2.6, those letters of credit,
bank guarantees, and similar obligations set forth on Schedule 2.4, which
letters of credit, bank guarantees and similar obligations were issued for the
account of the Company prior to the Effective Date, shall be deemed to be
Letters of Credit issued under this Agreement. The Issuing Bank shall be deemed
to be the issuer thereof and shall enjoy all rights, benefits and indemnities
afforded the Issuing Bank hereunder with respect to such letters of credit, bank
guarantees and similar obligations.
(b) Each Bank, on the date any Loan is requested to be
made, shall make its pro rata share of such Loan available in immediately
available funds for disbursement to the Borrower requesting such Loan pursuant
to the terms and conditions of this Agreement at the principal office of the
Agent. Unless the Agent shall have received prior notice from any Bank that such
Bank will not make available to the Agent such Bank's pro rata portion of such
Loan, the Agent may assume that such Bank has made such portion available to the
Agent on the date such Loan is requested to be made in accordance with this
Section 2.4. If, after receiving notice of a Loan from the Agent in accordance
with this Section 2.4, and to the extent such Bank shall not have so made such
pro rata portion available to the Agent, the Agent may (but shall not be
obligated to) make such amount available to such Borrower, and such Bank agrees
to pay to the Agent forthwith on demand such amount together with interest
thereon, for each day from the date such amount is made available to such
Borrower by the Agent until the date such amount is repaid to the Agent, at a
rate per annum equal to the Federal Funds Rate then in effect. If such Bank
shall pay such amount to the Agent together with interest, such amount so paid
shall constitute a Loan by such Bank as part of the related Borrowing for
purposes of this Agreement and interest shall accrue from the date of the
related Borrowing. The failure of any Bank to make its pro rata portion of any
such Borrowing available to the Agent shall not relieve any other Bank of its
obligation to make available its pro rata portion of such Loan on the date such
Loan is requested to be made, but no Bank shall be responsible for failure of
any other Bank to make such pro rata portion available to the Agent on the date
of any such Loan.
(c) All Revolving Credit Loans made under this Section
2.4 shall be evidenced by the Revolving Credit Notes and all Swing Line Loans
made under this Section 2.4 shall be evidenced by the Swing Line Notes, and all
such Loans shall be due and payable and bear interest as provided in Article
III. Each Bank is hereby authorized by the Borrowers to record on its books and
records, the date, amount and type of each Loan and the duration of the related
Interest Period (if applicable), the amount of each payment or prepayment of
principal thereon, and the other information provided for in such books and
records, which books and records shall constitute prima facie evidence of the
information so recorded, provided, however, that failure of any Bank to record,
or any error in recording, any such information shall not relieve the Borrowers
of their obligation to repay the outstanding principal amount of the Loans, all
accrued interest thereon and other amounts payable with respect thereto in
accordance with the terms of the Notes and this Agreement. Subject to the terms
and conditions of this Agreement, each Borrower may borrow Revolving Credit
Loans under this Section 2.4, prepay Revolving Credit Loans pursuant to Section
3.1 and reborrow Revolving Credit Loans.
24
(d) Nothing in this Agreement shall be construed to
require or authorize any Bank to issue any Letter of Credit, it being recognized
that the Issuing Bank has the sole obligation under this Agreement to issue
Letters of Credit on behalf of the Banks, and the Commitment of each Bank with
respect to Letter of Credit Advances is expressly conditioned upon the Issuing
Bank's performance of such obligations. Upon such issuance by the Issuing Bank,
each Bank shall automatically acquire a pro rata participation interest in such
Letter of Credit Advance based on the amount of its respective Commitment. Upon
the Issuing Bank making any payment in respect of a Letter of Credit honored by
the Issuing Bank, the Issuing Bank shall be reimbursed for such payment in
accordance with Section 3.3 hereof.
2.5 Conditions for First Disbursement. The obligation of each Bank
to make its first Advance hereunder is subject to receipt by each Bank and the
Agent of the following documents and completion of the following matters, in
form and substance reasonably satisfactory to the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of each Borrower's and each Guarantor's
jurisdiction of organization listing all charter documents of such Borrower or
such Guarantor, on file in that office and certifying as to the good standing
and corporate existence of such Borrower or such Guarantor, together with copies
of such charter documents of such Borrower or such Guarantor, certified as of a
recent date by such authority or official and certified as true and correct as
of the Effective Date by a duly authorized officer of such Borrower or such
Guarantor;
(b) By-Laws and Corporate Authorizations. Copies of the
by-laws of each Borrower and each Guarantor together with all authorizing
resolutions and evidence of other corporate action taken by such Borrower or
such Guarantor to authorize the execution, delivery and performance by such
Borrower or such Guarantor of the Loan Documents to which it is a party and the
consummation by such Borrower or such Guarantor of the transactions contemplated
hereby, certified as true and correct as of the Effective Date by a duly
authorized officer of such Borrower or such Guarantor;
(c) Incumbency Certificate. Certificates of incumbency of
each Borrower and each Guarantor containing, and attesting to the genuineness
of, the signatures of those officers authorized to act on behalf of such
Borrower or such Guarantor in connection with the Loan Documents and the
consummation by such Borrower or such Guarantor of the transactions contemplated
hereby, certified as true and correct as of the Effective Date by a duly
authorized officer of such Borrower or such Guarantor;
(d) Notes. The Notes, duly executed on behalf of each
Borrower, for each Bank;
(e) Security Documents. The Security Documents duly
executed on behalf of each Borrower and each Guarantor granting to the Banks and
the Agent and any
25
other parties specified therein the collateral and security intended to be
provided pursuant to Section 2.10 duly executed on behalf of each party thereto;
(f) Legal Opinions. The favorable written opinion of
▇▇▇▇▇▇ ▇▇▇▇▇, General Counsel of the Company, Holland & Knight, LLP, and ▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Co. in substantially the forms of Exhibits F-1, F-2, and F-3
respectively, attached hereto;
(g) Consents, Approvals, Etc. Copies of all governmental
and nongovernmental consents, approvals, authorizations, declarations,
registrations or filings, if any, required on the part of each Borrower and each
Guarantor in connection with the execution, delivery and performance of the Loan
Documents or the transactions contemplated hereby or as a condition to the
legality, validity or enforceability of this Agreement and the Notes, certified
as true and correct and in full force and effect as of the Effective Date by a
duly authorized officer of such Borrower or such Guarantor, or, if none are
required, a certificate of such officer to that effect;
(h) Short-Term Credit Agreement. A fully executed copy of
the Short-Term Credit Agreement;
(i) Note Purchase Agreement. A copy of the amendment,
dated as of the date hereof, to the Note Purchase Agreement, which amendment
shall include a consent to the Borrowers' entry into this Agreement and the
Short-Term Credit Agreement and a consent to the Indebtedness evidenced by and
the parties to this Agreement and the Short-Term Credit Agreement being subject
to and benefiting from each of the Intercreditor Agreement and the Charge of
General Partnership Interest attached hereto as Exhibit I;
(j) Intercreditor Agreement. A fully executed and
effective copy of the Intercreditor Agreement, including, without limitation,
the amendment thereto dated as of November 29, 2002;
(k) Termination of Existing Jabil Loan Agreement.
Evidence satisfactory to the Banks of the termination of the Amended and
Restated Loan Agreement, dated as of April 7, 2000, as amended, by and among the
Company, certain financial institutions, and Bank One, NA (Main Office Chicago),
as Administrative Agent.
(l) Fees. The Agent shall have received in immediately
available funds all fees owing by the Borrowers in connection with the
transaction evidenced by this Agreement, including all fees owing to the Banks.
2.6 Further Conditions for Disbursement. The obligation of each
Bank to make any Advance (including its first Advance), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in
Article IV hereof and in any other Loan Document shall be true and correct in
all material respects on and as of the date such Advance is made, continued or
converted (both before and after such
26
Advance is made, continued or converted) as if such representations and
warranties were made on and as of such date;
(b) No Event of Default and no Default shall exist or
shall have occurred and be continuing on the date such Advance is made,
continued or converted (whether before or after such Advance is made, continued
or converted);
(c) In the case of any Letter of Credit Advance, the
Borrower requesting such Letter of Credit Advance shall have delivered to the
Agent an application for the related Letter of Credit and other related
documentation requested by and acceptable to the Agent appropriately completed
and duly executed on behalf of such Borrower; and
(d) In the case of a Letter of Credit Advance consisting
of a Bank Guarantee, the Issuing Bank shall have approved the terms and
conditions of such Bank Guarantee in its sole discretion.
Each Borrower shall be deemed to have made a representation and
warranty to the Banks at the time of the requesting of, the making of, and the
continuation or conversion under Section 2.7 of, each Advance to the effects set
forth in clauses (a) and (b) of this Section 2.6. For purposes of this Section
2.6, the representations and warranties contained in Section 4.6 hereof shall be
deemed made with respect to the most recent financial statements delivered
pursuant to Section 5.1(d)(ii) and (iii), and the representations and warranties
contained in Section 4.4 hereof with respect to identifying the Company's
Subsidiaries on Schedule 4.4 shall be deemed made as of the last date on which
deliveries with respect to the identification of such Subsidiaries were made
under Section 5.1(h).
2.7 Subsequent Elections as to Borrowings. A Borrower may elect
(a) to continue a Eurocurrency Rate Borrowing, or a portion thereof, as a
Eurocurrency Rate Borrowing, or (b) may elect to convert a Eurocurrency Rate
Borrowing, or a portion thereof, to a Floating Rate Borrowing or (c) elect to
convert a Floating Rate Borrowing, or a portion thereof, to a Eurocurrency Rate
Borrowing, in each case by giving notice thereof to the Agent in substantially
the form of Exhibit G hereto at the principal office of the Agent and at the
Applicable Administrative Office with respect to such Loan not later than 11:00
a.m. local time of the Applicable Administrative Office (i) three Eurocurrency
Business Days prior to the date any such continuation of or conversion to a
Eurocurrency Rate Borrowing is to be effective, (ii) the date such continuation
or conversion is to be effective in all other cases, provided that an
outstanding Eurocurrency Rate Borrowing may only be converted on the last day of
the then current Interest Period with respect to such Borrowing, and provided,
further, if a continuation of a Borrowing as, or a conversion of a Borrowing to,
a Eurocurrency Rate Borrowing is requested, such notice shall also specify the
Interest Period to be applicable thereto upon such continuation or conversion.
The Agent, on the day any such notice is given, shall promptly provide notice of
such election to the Banks. If a Borrower shall not timely deliver such a notice
with respect to any outstanding Eurocurrency Rate Borrowing, the Borrower shall
be deemed to have elected to convert such Eurocurrency Rate Borrowing to a
Floating Rate
27
Borrowing on the last day of the then current Interest Period with respect to
such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any
other provision of this Agreement to the contrary, if, upon receiving a request
for a Eurocurrency Rate Borrowing pursuant to Section 2.4, or a request for a
continuation of a Eurocurrency Rate Borrowing as a Eurocurrency Rate Borrowing,
or a request for a conversion of a Floating Rate Borrowing to a Eurocurrency
Rate Borrowing pursuant to Section 2.7, (a) in the case of any Eurocurrency Rate
Borrowing, deposits for periods comparable to the Interest Period elected by the
Borrower are not available to any Bank in the relevant interbank or secondary
market and such Bank has provided to the Agent and the Borrowers a certificate
prepared in good faith to that effect, or (b) any Bank reasonably determines
that the Eurocurrency Rate will not adequately and fairly reflect the cost to
such Bank of making, funding or maintaining the related Eurocurrency Rate Loan
and such Bank has provided to the Agent and the Borrowers a certificate prepared
in good faith to that effect, or (c) by reason of national or international
financial, political or economic conditions or by reason of any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect, or the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank with any directive of such authority (whether or not
having the force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for any Bank (i) to make or fund the
relevant Eurocurrency Rate Borrowing or (ii) to continue such Eurocurrency Rate
Borrowing as a Eurocurrency Rate Borrowing or (iii) to convert a Loan to such a
Eurocurrency Rate Loan, and such Bank has provided to the Agent and the
Borrowers a certificate prepared in good faith to that effect, then the
Borrowers shall not be entitled, so long as such circumstances continue, to
request a Eurocurrency Rate Borrowing of the affected type pursuant to Section
2.4 or a continuation of or conversion to a Eurocurrency Rate Borrowing pursuant
to Section 2.7. In the event that such circumstances no longer exist, the Banks
shall again honor requests, subject to this Agreement, for Eurocurrency Rate
Borrowings of the affected type pursuant to Section 2.4, and requests for
continuations of and conversions to Eurocurrency Rate Borrowings of the affected
type pursuant to Section 2.7. Any Bank to which this Section 2.8 may apply from
time to time may be removed from the transactions evidenced by the Loan
Documents in accordance with Section 3.11.
2.9 Minimum Amounts; Limitation on Number of Borrowings. Except
for (a) Borrowings and conversions thereof which exhaust the entire remaining
amount of the Commitments, (b) conversions or payments required pursuant to
Section 3.1(c) or Section 3.7, (c) Revolving Credit Loans requested as a result
of the refusal of the Agent to make a Swing Line Loan, in which case the minimum
amount of the Loan shall be $100,000, and (d) Revolving Credit Loans disbursed
to satisfy reimbursement obligations under Letters of Credit pursuant to Section
3.3(a), each Revolving Credit Loan and each continuation or conversion pursuant
to Section 2.7 shall be in a minimum amount of, with respect to Floating Rate
Loans, $5,000,000 and in integral multiples of $500,000 and, with respect to
Eurocurrency Rate Loans, $10,000,000 and in integral multiples of $1,000,000.
28
2.10 Security and Collateral. To secure the payment when due of the
Notes and all other obligations of the Borrowers under this Agreement to the
Banks and the Agent, each Borrower has or has caused to be executed and
delivered, or shall or shall cause to be executed and delivered, to the Agent
Security Documents granting the following:
(a) Pledges of all of the Capital Stock of certain
Domestic Subsidiaries, 100% of the general partnership interest in Jabil Circuit
Cayman L.P., and 65% of all Capital Stock of certain Foreign Subsidiaries, as
further described in Section 5.1(g); and
(b) Guaranties of all Domestic Borrowers and certain
Domestic Subsidiaries, as further described in Section 5.1(g).
Each of the Banks hereby authorizes the Agent to take actions under the
Intercreditor Agreement for itself and for and on behalf of the Banks and to
serve on its behalf as Collateral Agent under the Intercreditor Agreement. Each
of the Banks further authorizes the Agent to act on its behalf under the
Security Documents attached hereto as Exhibit I, as such Security Documents may
be amended or modified from time to time, in connection with the Charge of
General Partnership Interest in Jabil Circuit Cayman L.P.
2.11 Increase of Aggregate Commitment Subsequent to Capital Markets
Issuance. If, as a result of Capital Markets Issuances, the Aggregate Commitment
is reduced to $250,000,000 pursuant to Section 3.1(d), the Borrowers may from
time to time request that the Aggregate Commitment be increased to an amount
which does not exceed $350,000,000; provided, however, that an increase in the
Aggregate Commitment hereunder may only be made at a time when no Event of
Default or Default shall have occurred and be continuing or would result
therefrom; provided, further, that no increase in the Aggregate Commitment
hereunder shall occur if such increase would result in the Aggregate Commitment
plus the "Aggregate Commitment" under the Short-Term Credit Agreement exceeding
$600,000,000. In the event of a requested increase in the Aggregate Commitment,
each of the Banks shall be given the opportunity to participate in the increased
Aggregate Commitment (x) initially ratably in the proportion that its Commitment
bears to the Aggregate Commitment and (y) to the extent that the requested
increase in the Aggregate Commitment is not fulfilled pursuant to the preceding
clause, in such additional amounts as any Bank, including any new Bank, and the
Borrowers agree. No Bank shall have any obligation to increase its Commitment
pursuant to a request by the Borrowers hereunder. Increases in the Aggregate
Commitment under this Section 2.11 shall occur if the only prior reductions in
the Aggregate Commitment resulted from Capital Markets Issuances. Voluntary
reductions of the Aggregate Commitment under Section 2.2 shall not be impacted
by the terms of this Section 2.11 and the aggregate amount by which the
Aggregate Commitment was reduced pursuant to Section 2.2 shall not be reinstated
as a result of any increase under this Section 2.11.
ARTICLE III.
PAYMENTS AND PREPAYMENTS
3.1 Principal Payments.
29
(a) Unless earlier payment is required under this
Agreement, the Borrowers shall pay to the Banks on the Termination Date the
entire outstanding principal amount of the Loans.
(b) The Borrowers may at any time and from time to time
prepay all or a portion of the Loans without premium or penalty, provided that
(i) a Borrower may not prepay any portion of any Loan as to which an election
for continuation of or conversion to a Eurocurrency Rate Loan is pending
pursuant to Section 2.7, and (ii) unless earlier payment is required under this
Agreement or unless Borrower pays all amounts required pursuant to Section 3.9,
any Eurocurrency Rate Loan may only be prepaid on the last day of the then
current Interest Period with respect to such Loan and (iii) such prepayment
shall only be permitted if a Borrower shall have given not less than one
Business Days' notice thereof of such prepayment with respect to prepayment of
Floating Rate Loans which shall be in a minimum aggregate amount of $2,000,000
and in integral multiples of $100,000, not less than three Eurocurrency Business
Days' notice thereof with respect to prepayment of Eurocurrency Rate Loans which
shall be in a minimum aggregate amount of $5,000,000 and in integral multiples
of $500,000, such notice specifying the Loan or portion thereof to be so prepaid
and shall have paid to the Banks, together with such prepayment of principal,
all accrued interest to the date of payment on such Loan or portion thereof so
prepaid and all amounts owing to the Banks under Section 3.9 in connection with
such prepayment. Upon the giving of such notice, the aggregate principal amount
of such Loan or portion thereof so specified in such notice, together with such
accrued interest and other amounts, shall become due and payable on the
specified date.
(c) If at any time (i) the aggregate outstanding
principal amount of the Revolving Credit Advances and Swing Line Loans shall
exceed the Aggregate Commitments or (ii) the aggregate outstanding principal
amount of the Revolving Credit Advances to any Borrower shall exceed the
sublimit specified for such Borrower on Schedule 1.1, the Borrowers, in the case
of clause (i) above, or the relevant Borrower, in the case of clause (ii) above,
shall forthwith pay to the Banks, without demand, an amount not less than the
amount of such excess for application to the outstanding principal amount of the
Loans, provided that if any such prepayment would be in excess of the
outstanding amount of the Loans, the Borrowers or the relevant Borrower, as the
case may be, shall deliver cash collateral to the Agent to secure the
outstanding Letters of Credit in the amount of such excess which is greater than
the outstanding Loans and the Company hereby grants to the Agent, for the
benefit of the Issuing Bank and the Banks, a first priority lien and security
interest in such collateral, and all such cash collateral shall be under the
sole and exclusive control of the Agent.
(d) Upon the consummation of any Capital Markets Issuance
by any Borrower or any Subsidiary thereof, within three (3) Business Days after
such Borrower's or such Subsidiary's receipt of any Net Cash Proceeds from such
Capital Markets Issuance, the Borrowers shall make a mandatory prepayment of the
Bank Obligations outstanding under this Agreement, subject to the following
provisions governing the application of payments, in an amount equal to fifty
percent (50%) of such Net Cash Proceeds; provided, however, that if the
remaining fifty percent (50%) of such
30
Net Cash Proceeds are not simultaneously applied to reduce amounts outstanding
under the Short-Term Credit Agreement, then the amount of the mandatory
prepayment under this Section 3.1(d) shall equal 100% of such Net Cash Proceeds.
Each mandatory prepayment required by this Section 3.1(d) shall be referred to
herein as a "Designated Prepayment." Designated Prepayments shall be applied to
repay Revolving Credit Loans and shall reduce the Aggregate Commitment;
provided, however, that notwithstanding the aggregate amount of such Designated
Prepayments, the Aggregate Commitment shall not be reduced below $250,000,000.
Following the payment in full of the Revolving Credit Loans, the amount of each
Designated Prepayment shall be applied as cash collateral for obligations owing
in connection with Letters of Credit. With respect to the reduction of the
Revolving Credit Loans on any date, Designated Prepayments shall first be
applied to Floating Rate Loans and to any Eurocurrency Rate Loans maturing on
such date and then to subsequently maturing Eurocurrency Rate Loans in order of
maturity. No payment under Section 3.9 shall be required in connection with a
repayment of Bank Obligations under this Section 3.1(d).
(e) If, pursuant to Section 2.7, a Loan, or portion
thereof, is continued, such Loan or portion thereof shall be repaid on the last
day of the related Interest Period and the Agent shall readvance to the
requesting Borrower the same amount as has been so repaid. For purposes of
effecting the repayment required by this Section 3.1(e), the Agent shall apply
the proceeds of such readvance toward the repayment of such Loan or portion
thereof on the last day of the related Interest Period. On the date of each such
continuation, if the aggregate principal amount of all Advances, including the
Advances being continued, exceeds the Aggregate Commitment, the Borrowers shall
prepay the Advances, in such order as determined by the Borrowers, in an amount
such that the outstanding principal amount of all Advances does not exceed the
Aggregate Commitment as of such date, together with all amounts owing to the
Banks under Section 3.9 in connection therewith, if any.
3.2 Interest Payments. The Borrowers shall pay interest to the
Banks on the unpaid principal amount of each Loan, for the period commencing on
the date such Loan is made until such Loan is paid in full, on each Interest
Payment Date and at maturity (whether at stated maturity, by acceleration or
otherwise), and thereafter on demand, at the following rates per annum:
(a) With respect to Revolving Credit Loans:
(i) During such periods that such Loan is a
Floating Rate Loan, the Floating Rate.
(ii) During such periods that such Loan is an
Eurocurrency Rate Loan, the Eurocurrency Rate applicable to such Loan for each
related Eurocurrency Interest Period.
(b) With respect to Swing Line Loans, the Swing Line Rate
or Floating Rate applicable to such Loan.
31
Notwithstanding the foregoing paragraphs (a) through (b), the Borrowers
shall pay interest on demand at the Overdue Rate on the outstanding principal
amount of any Loan and any other amount payable by the Borrowers hereunder
(other than interest) on and after an Event of Default.
3.3 Letter of Credit Reimbursement Payments.
(a) (i) Each Borrower agrees to pay to the Agent
for the benefit of the Banks, on the day on which the Issuing Bank shall honor a
draft or other demand for payment presented or made under any Letter of Credit,
an amount equal to the amount paid by the Issuing Bank in respect of such draft
or other demand under such Letter of Credit and all expenses paid or incurred by
the Issuing Bank relative thereto. Unless a Borrower shall have made such
payment to the Agent on such day, upon each such payment by the Issuing Bank,
subject to Section 3.3(a)(ii), the Issuing Bank shall be deemed to have
disbursed to such Borrower, and such Borrower shall be deemed to have elected to
satisfy its reimbursement obligation by requesting a Revolving Credit Loan
bearing interest at the Floating Rate for the account of the Banks in an amount
equal to the amount so paid by the Issuing Bank in respect of such draft or
other demand under such Letter of Credit. Such Revolving Credit Loans shall,
subject to Section 3.3(a)(ii), be disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Loan set forth in Article II
hereof and, to the extent of the Revolving Credit Loan so disbursed, the
reimbursement obligation of the Borrower under this Section 3.3 shall be deemed
satisfied; provided, however, that nothing in this Section 3.3 shall be deemed
to constitute a waiver of any Default or Event of Default caused by the failure
to the conditions for disbursement or otherwise.
(ii) If, for any reason (including without
limitation as a result of the occurrence of an Event of Default with respect to
any Borrower pursuant to Section 6.1(i)), Floating Rate Loans may not be made by
the Banks as described in Section 3.3(a)(i), then (A) each Borrower agrees that
each reimbursement amount not paid pursuant to the first sentence of Section
3.3(a)(i) shall bear interest, payable on demand by the Agent, at the interest
rate then applicable to Floating Rate Loans, and (B) effective on the date each
such Floating Rate Loan would otherwise have been made, each Bank severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement of
loans, to the extent of such Bank's Commitment, purchase a participating
interest in each reimbursement amount. Each Bank will immediately transfer to
the Agent, in same day funds, the amount of its participation. Each Bank shall
share on a pro rata basis (calculated by reference to its Commitment) in any
interest which accrues thereon and in all repayments thereof. If and to the
extent that any Bank shall not have so made the amount of such participating
interest available to the Agent, such Bank and the Borrower severally agree to
pay to the Agent forthwith on demand such amount together with interest thereon,
for each day from the date of demand by the Agent until the date such amount is
paid to the Agent, at (x) in the case of any Borrower, the interest rate then
applicable to Floating Rate Loans and (y) in the case of such Bank, the Federal
Funds Rate. The failure of any Bank to make its pro rata portion of any such
amount paid by the Issuing Bank available to the Agent shall not relieve any
other Bank of its obligation
32
to make available its pro rata portion of such amount, but no Bank shall be
responsible for failure of any other Bank to make such pro rata portion
available to the Agent.
(b) The reimbursement obligation of each Borrower under
this Section 3.3 shall be absolute, unconditional and irrevocable and shall
remain in full force and effect until all obligations of the Borrowers to the
Banks hereunder shall have been satisfied, and such obligations of the Borrowers
shall not be affected, modified or impaired upon the happening of any event,
including without limitation, any of the following, whether or not with notice
to, or the consent of, any Borrower:
(i) Any lack of validity or enforceability of
any Letter of Credit or any documentation relating to any Letter of Credit or to
any transaction related in any way to such Letter of Credit (the "Letter of
Credit Documents");
(ii) Any amendment, modification, waiver,
consent, or any substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to any of the Letter of Credit
Documents;
(iii) The existence of any claim, setoff, defense
or other right which any Borrower may have at any time against any beneficiary
or any transferee of any Letter of Credit (or any persons or entities for whom
any such beneficiary or any such transferee may be acting), the Agent, the
Issuing Bank or any Bank or any other person or entity, whether in connection
with any of the Letter of Credit Documents, the transactions contemplated herein
or therein or any unrelated transactions;
(iv) Any draft or other statement or document
presented under any Letter of Credit 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 to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the
part of the Agent, the Issuing Bank or any Bank or any party to any of the
Letter of Credit Documents to enforce, assert or exercise any right, power or
remedy conferred upon the Agent, the Issuing Bank, any Bank or any such party
under this Agreement or any of the Letter of Credit Documents, or any other acts
or omissions on the part of the Agent, the Issuing Bank, any Bank or any such
party;
(vii) Any other event or circumstance that would,
in the absence of this clause, result in the release or discharge by operation
of law or otherwise of any Borrower from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of
any obligation or any defense of any kind or nature which any Borrower has or
may have against the
33
beneficiary of any Letter of Credit shall be available hereunder to such
Borrower against the Agent, the Issuing Bank or any Bank. Nothing in this
Section 3.3 shall limit the liability, if any, of the Agent or the Issuing Bank
to any Borrower pursuant to Section 9.5.
3.4 Payment Method.
(a) All payments to be made by the Borrower hereunder
shall be made to the Agent for the account of the Banks in Dollars in same-day
funds, not later than 12:00 p.m. local time in the place specified for payment
on the date on which such payment is due. Payments received after 12:00 p.m. at
the place for payment shall be deemed to be payments made prior to 12:00 p.m. at
the place for payment on the next succeeding Business Day. Each Borrower hereby
authorizes the Agent to charge its account with the Agent in order to cause
timely payment of amounts due hereunder to be made (subject to sufficient funds
being available in such account for that purpose).
(b) At the time of making each such payment, a Borrower
shall, subject to the other terms and conditions of this Agreement, specify to
the Agent that Borrowing or other obligation of the Borrowers hereunder to which
such payment is to be applied. In the event that a Borrower fails to so specify
the relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion to obligations of the Borrowers to the Banks arising under this
Agreement.
(c) On the day such payments are deemed received, the
Agent shall promptly remit to the Banks their pro rata shares of such payments
in immediately available funds either to their respective addresses in the
United States specified for notices pursuant to Section 9.2 or by wire transfer
to their respective deposit accounts identified to the Agent in writing. Such
pro rata shares shall be determined with respect to each such Bank, (i) in the
case of payments of principal and interest on any Borrowing, by the ratio which
the outstanding principal balance of its Loan included in such Borrowing bears
to the outstanding principal balance of the Loans of all of the Banks included
in such Borrowing and (ii) in the case of fees paid pursuant to Section 2.3 and
other amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(d) and amounts payable to any Bank under Section 2.4 or 3.6) by the
ratio which the Commitment of such Bank bears to the Aggregate Commitment.
(d) This Agreement arises in the context of an
international transaction, and the specification of payment in a specific
currency at a specific place pursuant to this Agreement is of the essence. Such
specified currency shall be the currency of account and payment under this
Agreement. The obligations of the Borrowers hereunder shall not be discharged by
an amount paid in any other currency or at another place, whether pursuant to a
judgment or otherwise, to the extent that the amount so paid, on prompt
conversion into the applicable currency and transfer to the Banks under normal
banking procedure, does not yield the amount of such currency due under this
Agreement. In the event that any payment, whether pursuant to a judgment or
otherwise, upon conversion and transfer, does not result in payment of the
amount of
34
such currency due under this Agreement, the Banks shall have an independent
cause of action against the Borrowers for the currency deficit.
(e) If for purposes of obtaining judgment in any court it
becomes necessary to convert any currency due hereunder into any other currency,
the Borrowers will pay such additional amount, if any, as may be necessary to
ensure that the amount paid in respect of such judgment is the amount in such
other currency which, when converted at the Agent's spot rate of exchange
prevailing on the date of payment, would yield the same amount of the currency
due hereunder. Any amount due from the Borrowers under this Section 3.4(e) will
be due as a separate debt and shall not be affected by judgment being obtained
for any other sum due under or in respect of this Agreement.
3.5 No Setoff or Deduction.
(a) All such payments shall be made free and clear of any
present or future taxes or withholdings and without any set-off or counter claim
or any restriction or condition or deduction whatsoever. The Borrowers shall
indemnify the Agent and each Bank against any taxes or charges (other than on
net overall income) which may be claimed from it in respect of the Advances or
any of them or any sum payable by the Borrowers or any of them hereunder and
against any costs, charges and expenses or liabilities in respect of such claim
and such indemnity shall survive the termination of the Commitments.
(b) If at any time any Borrower is required by law or by
any directive or order of any court of competent jurisdiction to make any
deduction or withholding of whatsoever nature from any payment due under this
Agreement or any of the Loan Documents, such Borrower will ensure that the same
does not exceed the minimum liability therefor and will (a) pay to any Bank on
request such additional amount as such Bank certifies will result in the net
amount received by it after all deductions being equal to the full amount which
would have been receivable had there been no deduction or withholding and (b)
pay forthwith to the relevant authorities the full amount of the deduction or
withholding and deliver to the Agent such an official receipt, certificate or
other proof evidencing the amount paid in respect of such deduction or
withholding. Any additional amount paid under this sub-clause shall not be
treated as interest but as agreed compensation.
(c) If any payment by any Borrower is made to or for the
account of any Bank after deduction for or on account of tax, and additional
payments are made by the Borrower then, if any Bank shall receive or be granted
a credit against or remission for such tax, such Bank shall, to the extent that
it can do so without prejudice to the retention of the amount of such credit or
remission, reimburse to such Borrower such amount as such Bank shall, in its
sole and absolute discretion, have concluded to be attributable to the relevant
tax or deduction or withholding. Nothing herein contained shall interfere with
the right of any Bank to arrange its affairs in whatever manner it thinks fit
and, in particular, the Banks shall not be under any obligation to claim relief
from its corporation profits or similar tax liability in respect of such tax in
priority to any
35
other claims, reliefs, credits or deductions available to it nor oblige any Bank
to disclose any information relating to its tax affairs. Such reimbursement
shall be made as soon as reasonably practical upon such Bank certifying that the
amount of such credit or remission has been received by it.
(d) Each Bank that is not incorporated under the laws of
the United States of America or a state thereof (each a "Non-U.S. Bank") agrees
that it will, not less than ten Business Days after the date of this Agreement,
(i) deliver to each of the Company and the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in
either case that such Bank is entitled to receive payments under this Agreement
from the Company and any other Borrower that is not a Non-U.S. Borrower without
deduction or withholding of any United States federal income taxes, or (ii)
deliver to each of the Company and the Agent a United States Internal Revenue
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Bank further
undertakes to deliver to each of the Company and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by the
Company or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form or amendment
with respect to it and such Bank advises the Company and the Agent that it is
not capable of receiving payments from the Company and any other Borrower that
is not a Non-U.S. Borrower without any deduction or withholding of United States
federal income tax.
(e) For any period during which a Non-U.S. Bank has
failed to provide the Company with an appropriate form pursuant to subsection
(d) above (unless such failure is due to a change in treaty, law or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Bank shall not be
entitled to indemnification under this Section 3.5 with respect to taxes imposed
by the United States; provided that, should a Non-U.S. Bank which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject to
taxes because of its failure to deliver a form required under subsection (d),
above, the Company shall take such steps as such Non-U.S. Bank shall reasonably
request to assist such Non-U.S. Bank to recover such taxes.
(f) Any Bank that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Company (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly
36
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate.
(g) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because such
Bank failed to notify the Agent of a change in circumstances which rendered its
exemption from withholding ineffective), such Bank shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Banks under
this Section 3.5(g) shall survive the payment of the Bank Obligations and
termination of this Agreement.
3.6 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period.
3.7 Additional Costs.
(a) In the event that any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether
or not presently applicable to any Bank or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or the Agent
with any directive of any such authority (whether or not having the force of
law), shall (i) affect the basis of taxation of payments to any Bank or the
Agent of any amounts payable by any Borrower under this Agreement (other than
taxes imposed on the overall net income of the Bank or the Agent, by the
jurisdiction, or by any political subdivision or taxing authority of any such
jurisdiction, in which any Bank or the Agent, as the case may be, has its
principal office), or (ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by any Bank or the Agent, as the case may be,
or (iii) shall impose any other condition with respect to this Agreement, the
Commitments, the Notes or the Advances, and the result of any of the foregoing
is to increase the cost to any Bank or the Agent, as the case may be, of making,
funding or maintaining any Loan or to reduce the amount of any sum receivable by
any Bank or the Agent, thereon, then the Borrowers shall pay to such Bank or the
Agent, as the case may be, from time to time, upon request by such Bank (with a
copy of such request to be provided to the Agent) or the Agent, additional
amounts sufficient to
37
compensate such Bank or the Agent, as the case may be, for such increased cost
or reduced sum receivable to the extent, in the case of any Eurocurrency Rate
Loan, such Bank or the Agent, as the case may be, is not compensated therefor in
the computation of the interest rate applicable to such Eurocurrency Rate Loan.
Each Bank or the Agent, as the case may be, seeking compensation hereunder shall
deliver to the Borrowers a statement setting forth (i) such increased cost or
reduced sum receivable as such Bank or the Agent, as the case may be, has
calculated in good faith, (ii) a description of the event giving rise thereto,
and (iii) a calculation in reasonable detail of the amounts requested. Such
statement as to the amount of such increased cost or reduced sum receivable,
prepared in good faith and in reasonable detail by such Bank or the Agent, as
the case may be, and submitted by such Bank or the Agent, as the case may be, to
the Borrowers, shall be conclusive and binding for all purposes absent manifest
error. Any Bank to which this Section 3.7(a) may apply from time to time may be
removed from the transactions evidenced by the Loan Documents in accordance with
Section 3.11.
(b) In the event that any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect and whether
or not presently applicable to any Bank or the Agent, but applicable to banks or
financial institutions generally, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank or the Agent with any
directive of any such authority (whether or not having the force of law),
including any risk-based capital guidelines, affects the amount of capital
required or expected to be maintained by such Bank or the Agent (or any
corporation controlling such Bank or the Agent) and such Bank or the Agent, as
the case may be, determines that the amount of such capital is increased by or
based upon the existence of such Bank's or the Agent's obligations hereunder and
such increase has the effect of reducing the rate of return on such Bank's or
the Agent's (or such controlling corporation's) capital as a consequence of such
obligations hereunder to a level below that which such Bank or the Agent (or
such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank or the Agent to be material, then the Borrowers shall
pay to such Bank or the Agent, as the case may be, from time to time, upon
request by such Bank (with a copy of such request to be provided to the Agent)
or the Agent, additional amounts sufficient to compensate such Bank or the Agent
(or such controlling corporation) for any reduced rate of return which such Bank
or the Agent reasonably determines to be allocable to the existence of such
Bank's or the Agent's obligations hereunder. Each Bank or the Agent, as the case
may be, seeking compensation hereunder shall deliver to the Borrowers a
statement setting forth (i) such increased cost or reduced sum receivable as
such Bank or the Agent, as the case may be, has calculated in good faith, (ii) a
description of the event giving rise thereto, and (iii) a calculation in
reasonable detail of the amounts requested. Such statement as to the amount of
such compensation, prepared in good faith and in reasonable detail by such Bank
or the Agent, as the case may be, and submitted by such Bank or the Agent to the
Borrowers, shall be conclusive and binding for all purposes absent manifest
error. Any Bank to which this Section 3.7(b) may apply from time to time may be
removed from the transactions evidenced by the Loan Documents in accordance with
Section 3.11.
38
3.8 Illegality and Impossibility. In the event that any applicable
law, treaty, rule or regulation (whether domestic or foreign) now or hereafter
in effect and whether or not presently applicable to any Bank, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank
with any directive of such authority (whether or not having the force of law),
including without limitation exchange controls, shall make it unlawful or
impossible for any Bank to maintain any Eurocurrency Rate Loan under this
Agreement or shall make it impracticable, unlawful or impossible for, or shall
in any way limit or impair the ability of, any Borrower to make or any Bank to
receive any payment under this Agreement at the place specified for payment
hereunder, or to transfer any amount paid or so converted to the address of its
principal office specified in Section 9.2, the Borrowers shall upon receipt of
notice thereof from such Bank, repay in full the then outstanding principal
amount of each Loan so affected, together with all accrued interest thereon to
the date of payment and all amounts owing to such Bank under Section 3.9, (a) on
the last day of the then current Interest Period applicable to such Loan if such
Bank may lawfully continue to maintain such Loan to such day, or (b) immediately
if such Bank may not continue to maintain such Loan to such day. Any Bank to
which this Section 3.8 may apply from time to time may be removed from the
transactions evidenced by the Loan Documents in accordance with Section 3.11.
3.9 Indemnification. If any Borrower makes any payment of
principal with respect to any Loan on any other date than the last day of an
Interest Period applicable thereto (whether pursuant to Section 3.8 or Section
6.2 or otherwise), or if any Borrower fails to borrow or convert any Loan after
notice has been given to the Banks in accordance with Section 2.4 or Section
2.7, the Borrowers shall reimburse each Bank on demand for any resulting net
loss or expense incurred by each such Bank after giving credit for any earnings
or other quantifiable financial benefit to such Bank from such Bank's investment
or other amounts prepaid or not reborrowed, including without limitation any
loss incurred in obtaining, liquidating or employing deposits from third
parties, whether or not such Bank shall have funded or committed to fund such
Loan. A statement as to the amount of such loss or expense, prepared in good
faith and in reasonable detail by such Bank and submitted by such Bank to the
Borrowers, shall be conclusive and binding for all purposes absent manifest
error, provided that before delivery of such statement, each Bank shall use
reasonable efforts in accordance with its normal practices and procedures to
reduce amounts payable under this Section. Calculation of all amounts payable to
such Bank under this Section 3.9 shall be made as though such Bank shall have
actually funded or committed to fund the relevant Loan through the purchase of
an underlying deposit in an amount equal to the amount of such Loan and having a
maturity comparable to the related Interest Period; provided, however, that such
Bank may fund any Loan in any manner it sees fit and the foregoing assumption
shall be utilized only for the purpose of calculation of amounts payable under
this Section 3.9.
3.10 Right of Banks to Fund Through Other Offices. Each Bank may
perform its Commitment to fund its pro rata share of any Eurocurrency Rate Loan
or, with respect to the Swing Line Bank, any Swing Line Loan to the Borrowers by
causing an affiliate of such Bank to provide such funds in accordance with the
terms of this Agreement. For all
39
purposes of this Agreement, any amounts so advanced shall be deemed to have been
advanced by such Bank, and the obligation of the Borrowers to repay such amounts
shall be as provided in this Agreement.
3.11 Replacement of Bank. If the Borrowers are required pursuant to
Section 2.8, 3.7 or 3.8 to make any additional payment to any Bank or if any
Bank's obligation to make Eurocurrency Rate Loans, or to convert Floating Rate
Borrowings into Eurocurrency Rate Borrowings, shall be suspended (any such Bank,
an "Affected Bank"), the Borrowers may elect, if such amounts continue to be
charged or such suspension is still effective, to terminate or replace the
Commitment of such Affected Bank; provided, however, that no Default or Event of
Default shall have occurred and be continuing at the time of such termination or
replacement; provided, further, that, concurrently with such termination or
replacement, (i) if the Affected Bank is being replaced, another financial
institution reasonably acceptable to the Borrower and the Agent shall agree, as
of such date, to purchase for cash the outstanding portion of the Bank
Obligations of the Affected Bank pursuant to an Assignment and Acceptance
substantially in the form attached hereto as Exhibit H and to become a Bank for
all purposes under this Agreement and to assume all obligations of the Affected
Bank to be terminated as of such date and to comply with the requirements of
this Agreement with respect to assignments, and (ii) the Borrowers shall pay to
such Affected Bank in immediately available funds on the day of such replacement
(A) all interest, fees and other amounts then accrued and unpaid to such
Affected Bank by the Borrowers hereunder to and including the date of
termination, including, without limitation, payments due to such Affected Bank
under Sections 2.8, 3.7, and 3.8, and (B) an amount, if any, equal to the
payment which would have been due to such Bank on the day of such replacement
under this Agreement had the Loans of such Affected Bank been prepaid on such
date rather than sold to the replacement Bank, in each case to the extent not
paid by the replacement Bank, and (iii) if the Affected Bank is being
terminated, the Borrower shall pay to such Affected Bank all Bank Obligations
due and payable to such Affected Bank (including the amounts described in the
immediately preceding clauses (i) and (ii)).
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Each Borrower and each Guarantor represents and warrants to the Agent
and the Banks that:
4.1 Corporate Existence and Power. Each Borrower and each
Guarantor is a Person duly organized, validly existing and in good standing
under the laws of the state or other political subdivision of its jurisdiction
of incorporation or organization, as the case may be, and is duly qualified to
do business, and is in good standing, in all additional jurisdictions where such
qualification is necessary under applicable law, except where the failure to be
so qualified would not have a material adverse effect on the business and
financial condition of the Company and its Subsidiaries taken as a whole. Each
Borrower and each Guarantor have all requisite corporate power to own or lease
the properties used in its business and to carry on its business as now being
conducted and as
40
proposed to be conducted, and to execute and deliver the Loan Documents to which
it is a party and to engage in the transactions contemplated by the Loan
Documents.
4.2 Corporate Authority. The execution, delivery and performance
by each Borrower and each Guarantor of the Loan Documents to which it is a party
have been duly authorized by all necessary corporate action and are not in
contravention of any material law, rule or regulation, or any judgment, decree,
writ, injunction, order or award of any arbitrator, court or governmental
authority, or of the terms of such Borrower's or such Guarantor's charter or
by-laws, or of any material contract or undertaking to which such Borrower or
such Guarantor is a party or by which such Borrower or such Guarantor or any of
their property is bound and do not result in the imposition of any Lien except
for Permitted Liens.
4.3 Binding Effect. The Loan Documents when executed and delivered
hereunder will be legal, valid and binding obligations of each Borrower and each
Guarantor party thereto enforceable against each Borrower and each Guarantor
party thereto in accordance with their respective terms; except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights and except that
the remedy of specific performance and injunctive and other forms of equitable
relief are subject to equitable defenses and to the discretion of the court
before which any proceedings may be brought.
4.4 Subsidiaries. Schedule 4.4 hereto (as supplemented from time
to time pursuant to Section 5.1(h)) correctly sets forth the corporate name,
jurisdiction of organization and ownership of each Subsidiary of each Borrower.
Each Subsidiary and each corporation or other entity becoming a Subsidiary of
any Borrower after the date hereof is and will be a corporation or other entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is and will be duly qualified to do business in
each additional jurisdiction where such qualification is or may be necessary
under applicable law, except where the failure to be so qualified would not have
a Material Adverse Effect.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there
is no action, suit or proceeding pending or, to the best of each Borrower's and
each Guarantor's knowledge, threatened against or affecting any Borrower or any
of their respective Subsidiaries before or by any court, governmental authority
or arbitrator, which if adversely decided would result, either individually or
collectively, in any Material Adverse Effect.
4.6 Financial Condition. The consolidated balance sheet of the
Company and its Subsidiaries and the related consolidated statements of income,
shareholders equity and cash flows of the Company and its Subsidiaries for the
fiscal year ended August 31, 2002, as reported on by KPMG LLP, independent
certified public accountants (copies of which have been furnished to the Banks),
fairly present, and the financial statements of the Company and its Subsidiaries
delivered pursuant to Section 5.1(d) will fairly present the consolidated
financial position of the Company and its Subsidiaries as at the respective
dates thereof, and the consolidated results of operations of the Company and
41
its Subsidiaries for the respective periods indicated, all in accordance with
Generally Accepted Accounting Principles consistently applied (subject, in the
case of said interim statements, to normal year-end adjustments). There has been
no material adverse change in the financial condition of the Company and its
Subsidiaries taken as a whole since May 31, 2002. There is no material
Contingent Liability of the Company that is not reflected in such financial
statements or in the notes thereto.
4.7 Use of Loans. Each Borrower will use the proceeds of the Loans
for its general corporate purposes, including repayment of certain existing
Indebtedness. No Borrower nor any of their respective Subsidiaries extends or
maintains, in the ordinary course of business, credit for the purpose, whether
immediate, incidental, or ultimate, of buying or carrying margin stock (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan will be used for the purpose,
whether immediate, incidental, or ultimate, of buying or carrying margin stock
or maintaining or extending credit to others for such purpose. After applying
the proceeds of each Loan, margin stock will not constitute more than 25% of the
value of the assets (either of any Borrower alone or of the Borrowers and their
respective Subsidiaries on a consolidated basis) that are subject to any
provisions of this Agreement that may cause the Loans to be deemed secured,
directly or indirectly, by margin stock.
4.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the
Borrowers or the Guarantors pursuant to Section 2.5(g), if any, each of which is
in full force and effect, no consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental person, including without limitation any creditor, lessor or
stockholder of any Borrower or any Guarantor, is required on the part of any
Borrower or any Guarantor in connection with the execution, delivery and
performance of the Loan Documents or the transactions contemplated hereby or as
a condition to the legality, validity or enforceability of the Loan Documents.
4.9 Taxes. Each Borrower and each of their respective Subsidiaries
has filed all material tax returns (federal, state and local applicable in the
United States or any foreign jurisdiction) required to be filed and have paid
all taxes shown thereon to be due, including interest and penalties, or have
established adequate financial reserves on their respective books and records
for payment thereof except where the failure to file such returns, pay such
taxes or establish such reserves would not have a Material Adverse Effect.
4.10 Title to Properties. Except as otherwise disclosed in the
latest balance sheet delivered pursuant to this Agreement, a Borrower or one or
more of its Subsidiaries have good and marketable fee simple title to all of the
material real property to the best of such Borrower's knowledge absent manifest
error, and a valid and indefeasible ownership interest in all of the other
properties and assets reflected in said balance sheet or subsequently acquired
by a Borrower or any such Subsidiary material to the business or financial
condition of the Borrowers and their respective Subsidiaries, taken as a
42
whole, except for title defects that do not have a Material Adverse Effect. All
of such properties and assets are free and clear of any Lien, except for
Permitted Liens.
4.11 ERISA. The Borrowers, their respective Subsidiaries, their
ERISA Affiliates and their respective Plans are in substantial compliance in all
material respects with those provisions of ERISA and of the Code which are
applicable with respect to any Plan. No Prohibited Transaction and no Reportable
Event has occurred with respect to any such Plan which would cause an Event of
Default. No Borrower, any of their respective Subsidiaries nor any of their
ERISA Affiliates is an employer with respect to any Multiemployer Plan. The
Borrowers, their respective Subsidiaries and their ERISA Affiliates have met the
minimum funding requirements under ERISA and the Code with respect to each of
their respective Plans, if any, and have not incurred any liability to the PBGC,
other than premiums which are not yet due and payable. The execution, delivery
and performance of the Loan Documents does not constitute a Prohibited
Transaction. There is no material unfunded benefit liability, determined in
accordance with Section 4001(a)(18) of ERISA, with respect to any Plan of any
Borrower, their respective Subsidiaries or their ERISA Affiliates.
4.12 Disclosure. No report or other information furnished in
writing or on behalf of any Borrower or any Guarantor to any Bank or the Agent
in connection with the negotiation or administration of this Agreement contains
any material misstatement of fact or omits to state any material fact or any
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which they were made. Neither this Agreement, the Notes,
the Security Documents nor any other document, certificate, or report or
statement or other information furnished to any Bank or the Agent by or on
behalf of any Borrower or any Guarantor in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact in order to make the statements contained herein and
therein not misleading in light of the circumstances in which they were made.
There is no fact known to any Borrower or any Guarantor which has or which in
the future may have (so far as any Borrower or any Guarantor reasonably can now
foresee based on information currently available to such Borrower or any
Guarantor) a Material Adverse Effect, which has not been set forth in this
Agreement or in the other documents, certificates, statements, reports and other
information furnished in writing to the Banks by or on behalf of any Borrower in
connection with the transactions contemplated hereby.
4.13 Environmental and Safety Matters. The Borrowers and each of
their respective Subsidiaries is in substantial compliance with all
Environmental Laws in jurisdictions in which such Borrower or any such
Subsidiary owns or operates, or has owned or operated, a facility or site, or
arranges or has arranged for disposal or treatment of hazardous substances,
solid waste, or other wastes, accepts or has accepted for transport any
hazardous substances, solid wastes or other wastes or holds or has held any
interest in real property or otherwise, except where the failure to comply would
not have a Material Adverse Effect. No demand, claim, notice, action,
administrative proceeding, investigation or inquiry whether brought by any
governmental authority, private person or entity or otherwise, arising under,
relating to or in connection with any Environmental Laws is pending or, to the
best of its knowledge, threatened against any Borrower or any
43
of their respective Subsidiaries, any real property in which any Borrower or any
such Subsidiary holds or has held an interest or any past or present operation
of any Borrower or any such Subsidiary. Neither any Borrower nor any of their
respective Subsidiaries (a) is the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic substances, radioactive materials, hazardous wastes or related materials
into the environment, (b) has received any notice of any toxic substances,
radioactive materials, hazardous waste or related materials in, or upon any of
its properties in violation of any Environmental Laws, (c) knows of any basis
for any such investigation, notice or violation, or (d) owns or operates, or has
owned or operated, property which appears on the United States National Priority
List or any other governmental listing which identifies sites for remedial
clean-up or investigatory actions, except as disclosed on Schedule 4.13 hereto,
and as to such matters disclosed on such Schedule, none will have a Material
Adverse Effect. No release, threatened release or disposal of hazardous waste,
solid waste or other wastes is occurring or has occurred on, under or to any
real property in which any Borrower or any of their respective Subsidiaries
holds any interest or performs any of its operations, in material violation of
any Environmental Law.
4.14 No Material Adverse Change. Neither any Borrower nor any of
its Subsidiaries has received any notice, citation or communication of the
nature referred to in Section 5.1(d)(i), except in respect of such matters as
have been or are being remediated in all material respects or are being
contested or remediated in good faith, and, in the case of any such matter being
so contested or remediated, and as of the date of this Agreement, adequate
provision for all material costs of any remediation is reflected in the
financial statements referred to in Section 4.6 of this Agreement, and in
respect of any such notice, citation or communication received after the date of
this Agreement, will be reflected in the subsequent financial statements
furnished to the Agent and the Banks pursuant to Sections 5.1(d)(ii),
5.1(d)(iii) and 5.1(d)(iv).
4.15 No Default. Neither any Borrower nor any Subsidiary is in
default or has received any written notice of default under or with respect to
any of its Contractual Obligations in any respect which would have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.16 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation applicable to any Borrower or any Subsidiary would have a
Material Adverse Effect.
ARTICLE V.
COVENANTS
5.1 Affirmative Covenants. Each Borrower covenants and agrees
that, until the Termination Date and thereafter until irrevocable payment in
full of the principal of and accrued interest on the Notes and all other Bank
Obligations and the performance of all other obligations of the Borrowers under
this Agreement, unless the Majority Banks shall otherwise consent in writing, it
shall, and shall cause each of its Subsidiaries to:
44
(a) Preservation of Corporate Existence, Etc. Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except to the extent permitted by Section 5.2(f) and
except for the dissolution of Subsidiaries that are not Significant
Subsidiaries, and its qualification as a foreign corporation in good standing in
each jurisdiction in which such qualification is necessary under applicable law,
except for such jurisdictions where the failure to so qualify would not have a
Material Adverse Effect.
(b) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and orders of any
governmental authority, whether federal, state, local or foreign (including
without limitation ERISA, the Code and Environmental Laws), in effect from time
to time, except where the failure to comply would not have a Material Adverse
Effect; and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, revenues or
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
would give rise to Liens upon such properties or any portion thereof, except to
the extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of any such
Borrower or Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain,
preserve and protect all property that is material to the conduct of the
business of any Borrower or any of their respective Subsidiaries and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times in
accordance with customary and prudent business practices for similar businesses;
and, maintain in full force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such terms and covering
such risks, as is usually carried by companies engaged in similar businesses and
owning similar properties similarly situated and maintain in full force and
effect public liability insurance, insurance against claims for personal injury
or death or property damage occurring in connection with any of its activities
or any properties owned, occupied or controlled by it, in such amount as it
shall reasonably deem necessary.
(d) Reporting Requirements. Furnish to the Banks and the
Agent the following:
(i) Promptly and in any event within seven
calendar days after becoming aware of the occurrence of (A) any Event of Default
or Default, or (B) the commencement of any material litigation against, by or
affecting any Borrower or any of their respective Subsidiaries or (C) entering
into any material contract or undertaking that is not entered into in the
ordinary course of business and which has resulted in or which is likely, in the
reasonable judgment of the Company, to result in a Material Adverse Effect, or
(D) any material development in the business or affairs of any Borrower or any
of their respective Subsidiaries which has resulted in or which is likely, in
the reasonable
45
judgment of such Borrower, to result in a Material Adverse Effect, a statement
of the chief financial officer of such Borrower setting forth details of each
such Default or Event of Default or such litigation, material contract or
undertaking or development and the action which such Borrower or such
Subsidiary, as the case may be, has taken and proposes to take with respect
thereto;
(ii) As soon as available and in any event within
45 days after the end of each of the first three fiscal quarters of each fiscal
year of the Company, the consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarter, and the related consolidated
statements of income and cash flow for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
date or period of the preceding fiscal year, all in reasonable detail and duly
certified (subject to normal year-end adjustments) by the treasurer of the
Company as having been prepared in accordance with Generally Accepted Accounting
Principles, together with a certificate of the treasurer of the Company stating
(A) that no Event of Default or Default has occurred and is continuing or, if an
Event of Default or Default has occurred and is continuing, a statement setting
forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, and (B) that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Section 5.2(a), (b), (c) and (d) hereof is in conformity
with the terms of this Agreement;
(iii) As soon as available and in any event within
90 days after the end of each fiscal year of the Company, a copy of the
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income, shareholders
equity and cash flows of the Company and its Subsidiaries for such fiscal year,
with a customary audit report of KPMG LLP, or other independent certified public
accountants selected by the Company and acceptable to the Majority Banks,
without qualifications unacceptable to the Majority Banks, together with (A)
either (I) a written statement of the accountants that in making the examination
necessary for their report or opinion they obtained no knowledge of the
occurrence of any Default or Event of Default under this Agreement or (II) if
they know of any Default or Event of Default, their written disclosure of its
nature and status, provided that, the accountants shall not be liable directly
or indirectly to anyone for any failure to obtain knowledge of any Default or
Event of Default under this Agreement, and (B) a certificate of the treasurer of
the Company stating (I) that no Event of Default or Default has occurred and is
continuing or, if an Event of Default or Default has occurred and is continuing,
a statement setting forth the details thereof and the action which the Company
has taken and proposes to take with respect thereto, and (II) that a computation
(which computation shall accompany such certificate and shall be in reasonable
detail) showing compliance with Section 5.2(a), (b), (c) and (d) hereof is in
conformity with the terms of this Agreement;
(iv) Promptly after the sending or filing
thereof, copies of all reports, proxy statements and financial statements which
any Borrower sends to or files
46
with any of their respective security holders or any securities exchange or the
Securities and Exchange Commission or any successor agency thereof;
(v) Promptly and in any event within 10 calendar
days after receiving or becoming aware thereof (A) a copy of any notice of
intent to terminate any Plan of any Borrower, their respective Subsidiaries or
any ERISA Affiliate filed with the PBGC, (B) a statement of the chief financial
officer or any other officer of such Borrower setting forth the details of the
occurrence of any Reportable Event with respect to any such Plan, (C) a copy of
any notice that any Borrower, any of their respective Subsidiaries or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any such Plan or to appoint a trustee to administer any such Plan, or
(D) a copy of any notice of failure to make a required installment or other
payment within the meaning of Section 412(n) of the Code or Section 302(f) of
ERISA with respect to any such Plan; and
(vi) Promptly, such other information respecting
the business, properties, operations or condition, financial or otherwise, of
any Borrower or any of their respective Subsidiaries as any Bank or the Agent
may from time to time reasonably request.
(e) Accounting; Access to Records, Books, Etc. Maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with Generally Accepted Accounting Principles and to comply with the
requirements of this Agreement and, at any reasonable time during normal
business hours and from time to time, (i) permit any Bank or the Agent or any
agents or representatives thereof to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Borrowers and their respective Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrowers and their respective Subsidiaries with
their respective officers, employees and independent auditors, provided that
representatives of the Company selected by the Company are present during any
such visit or discussion, and by this provision the Company does hereby
authorize such persons to discuss such affairs, finances and accounts with any
Bank or the Agent subject to the above terms and conditions and (ii) permit the
Agent and any of its agents or representative to conduct a comprehensive field
audit of its books, records, property and assets, which audits shall be
performed once per year (unless an Event of Default has occurred in which case
audits may be performed more frequently) and which audits shall be at the
expense of the Borrowers. In connection with any activities of the Agent or any
Bank pursuant to this Section 5.1(e), prior to any Default or Event of Default
hereunder, the Agent and each of the Banks: (i) shall endeavor to give the
Company three Business Days notice of any audit or visit, which visit shall be
during normal business hours, and (ii) shall follow the Company's standard
security procedures.
(f) Stamp Taxes. The Borrowers will pay all stamp taxes
and similar taxes, if any, including interest and penalties, if any, payable in
respect of the Notes. The efficacy of this subsection shall survive the payment
in full of the Notes.
47
(g) Additional Security and Collateral. (i) Cause each
Domestic Subsidiary which is also a Significant Subsidiary of the Company and is
not owned by a Foreign Subsidiary from time to time to execute and deliver to
the Banks and the Agent, within 30 days after such person becomes a Significant
Subsidiary, a Guaranty, together with other related documents described in
Section 2.5, and the Company shall pledge (or shall cause a Subsidiary to
pledge) 100% of the Capital Stock of each such person becoming such a
Significant Subsidiary within 30 days after such person becomes a Significant
Subsidiary to the Collateral Agent for the equal and ratable benefit of the
Banks, the Note Purchasers, the Short-Term Lenders and the Senior Trustee on
behalf of holders from time to time of Applicable Senior Debt Securities
pursuant to the Intercreditor Agreement and the Collateral Trust Agreements, as
applicable; (ii) on or prior to the Effective Date, pledge or affirm the
existing pledge of, as applicable, 100% of the general partnership interest in
Jabil Circuit Cayman L.P. and 65% of the Capital Stock of each Significant
Foreign Subsidiary (other than Jabil Circuit Cayman, L.P.) to the Collateral
Agent for the equal and ratable benefit of the Banks, the Note Purchasers, the
Short-Term Lenders and the Senior Trustee on behalf of holders from time to time
of Applicable Senior Debt Securities pursuant to the Intercreditor Agreement and
the Collateral Trust Agreements, as applicable, and (iii) promptly pledge 65% of
the Capital Stock of each Foreign Subsidiary formed or acquired after the
Effective Date as a direct Subsidiary of the Company (if such Foreign Subsidiary
remains a direct Subsidiary of the Company for more than 120 days after the
Effective Date or the date of acquisition or formation thereof, whichever is
later) to the Collateral Agent for the equal and ratable benefit of the Banks,
the Note Purchasers, the Short-Term Lenders and the Senior Trustee on behalf of
holders from time to time of Applicable Senior Debt Securities pursuant to the
Intercreditor Agreement and the Collateral Trust Agreements, as applicable. Each
Borrower shall notify the Banks and the Agent of any person's becoming a
Subsidiary in accordance with the requirements of Section 5.1(h).
Notwithstanding anything in this Agreement to the contrary, no SPC shall be
required to become a Guarantor hereunder or execute a Guaranty.
(h) Further Assurances. Will execute and deliver within
30 days after request therefor by the Majority Banks or the Agent, all further
instruments and documents and take all further action that may be necessary, in
order to give effect to, and to aid in the exercise and enforcement of the
rights and remedies of the Banks and the Agent under, this Agreement and the
Notes. In addition, the Company shall promptly deliver to the Agent supplements
to Schedule 4.4 identifying those Persons that have become Subsidiaries since
the last date on which Schedule 4.4 was updated, with any such delivery to occur
either upon the request of the Agent or any Bank or at such time as the assets
owned, held, or otherwise controlled by such Subsidiar(y)/(ies) equals
US$25,000,000 in the aggregate.
5.2 Negative Covenants. Until the Termination Date and thereafter
until irrevocable payment in full of the principal of and accrued interest on
the Notes and all other Bank Obligations and the performance of all other
obligations of each Borrower under this Agreement, each Borrower agrees that,
unless the Majority Banks shall otherwise consent in writing it shall not (and
shall not permit any of its Subsidiaries to):
48
(a) Fixed Charge Coverage Ratio. Permit or suffer the
Consolidated Fixed Charge Coverage Ratio of the Company and its Subsidiaries to
be less than at 3.0 to 1.0. For purposes of this Section 5.2(a), the
Consolidated Fixed Charge Coverage Ratio shall be calculated on the last day of
each of the Company's fiscal quarters for the then most-recently ended four
consecutive fiscal quarters.
(b) Net Worth. Permit or suffer Consolidated Net Worth of
the Company and its Subsidiaries at any time to be less than the sum of (i)
$1,205,600,000 plus (ii) 75% of the Net Cash Proceeds of Capital Stock of the
Company offered or otherwise sold after the Effective Date, plus (iii) an
aggregate amount equal to 60% of Consolidated Net Income (but, in each case,
only if a positive number) for each completed fiscal quarter of the Company
commencing with the fiscal quarter ending November 30, 2002.
(c) Total Indebtedness to EBITDA. Permit or suffer the
ratio of Total Indebtedness of the Company and its Subsidiaries on a
Consolidated basis to EBITDA of the Company and its Subsidiaries on a
Consolidated basis to exceed 2.5 to 1.0. For purposes of this Section 5.2(c),
(i) the ratio of Total Indebtedness to EBITDA shall be calculated on the last
day of each of the Company's fiscal quarters for the then most-recently ended
four consecutive fiscal quarters, (ii) Indebtedness arising in connection with
Notional Pooling Accounts permitted under Section 5.2(d)(x) shall not be
included in any calculation of Total Indebtedness under this Section 5.2(c), and
(iii) Total Indebtedness, on any date of calculation, shall only include that
portion of Foreign Affiliate Contingent Liabilities in excess of US$50,000,000.
(d) Indebtedness. Create, incur, assume or in any manner
become liable in respect of, or suffer to exist, any Indebtedness other than:
(i) The Advances;
(ii) The Indebtedness described in Schedule
5.2(d) hereto and extensions and renewals thereof, having the same terms as
those existing on the date of this Agreement, but no increase in the principal
amount thereof shall be permitted;
(iii) Indebtedness of any Subsidiary of a Borrower
owing to a Borrower or to any other Subsidiary of a Borrower;
(iv) Interest rate or currency swaps, rate caps
or other similar transactions with any Bank or Short-Term Lender (valued in an
amount equal to the highest termination payment, if any, that would be payable
by such person upon termination for any reason on the date of determination) not
exceeding the aggregate amount of the Commitments and the "Commitments" under
the Short-Term Credit Agreement;
(v) The Private Placement Debt in an aggregate
principal amount not exceeding $16,667,000, and Indebtedness under the Senior
Indenture and/or the Subordinated Indenture, provided that the terms and
conditions of the Applicable Senior Debt Securities have been approved by the
Agent in its sole discretion, together
49
with guaranties of such Indebtedness by Domestic Subsidiaries which are also
Significant Subsidiaries;
(vi) Indebtedness secured by Liens described in
Section 5.2(e)(x);
(vii) Indebtedness incurred as part of a Permitted
Receivables Transaction;
(viii) Indebtedness incurred under the Short-Term
Credit Agreement;
(ix) Indebtedness, in an aggregate amount not to
exceed $100,000,000, in connection with any so-called "synthetic lease" or "tax
ownership operating lease" transaction;
(x) Indebtedness which in the aggregate does not
exceed US $30,000,000 and which arises solely in connection with the
administration and operation of the Notional Pooling Accounts, including,
without limitation, any Indebtedness resulting under an overdraft facility
offered by ABN AMRO Bank N.V. in connection with the operation and
administration of the Notional Pooling Accounts or any Contingent Liability
incurred by the Company in connection with its guaranty of amounts owing by any
other Borrower or Affiliate thereof in connection with the operation and
administration of the Notional Pooling Accounts;
(xi) Indebtedness, which in the aggregate shall
at no time exceed $125,000,000, arising under or evidenced by standby letters of
credit, guarantees or similar instruments having an analogous effect issued by a
financial institution on behalf or for the benefit of a Borrower or a Subsidiary
thereof pursuant to which such financial institution guarantees obligations
owing by such Borrower or Subsidiary; provided, however, that Letters of Credit
issued or extended under this Agreement shall not reduce availability under this
clause (xi);
(xii) Indebtedness in an aggregate amount not to
exceed $10,000,000 arising in connection with Capital Leases;
(xiii) Indebtedness in an aggregate amount not to
exceed US$100,000,000 owing by Subsidiaries of the Company that are not
organized under the laws of the United States of America or any political
subdivision thereof to non-Affiliates of the Company;
(xiv) Purchase money Indebtedness incurred by any
Borrower or Subsidiary thereof to finance the acquisition of assets used in its
business if (a) at the time of such incurrence, no Default or Event of Default
has occurred or would result from such incurrence, (b) such Indebtedness does
not exceed the lower of the fair market value or the cost of the applicable
asset on the date acquired; and (c) such outstanding Indebtedness in the
aggregate does not exceed $5,000,000 at any time; and
50
(xv) Additional unsecured Indebtedness in an
aggregate amount not exceeding $25,000,000 at any time.
(e) Liens. Create, incur or suffer to exist any Lien on
any of the assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter acquired, of any Borrower
or any of its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes
being contested in good faith by appropriate proceedings and as to which
adequate financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of business which are not material
in the aggregate and which constitute (A) pledges or deposits under worker's
compensation laws, unemployment insurance laws or similar legislation, (B) good
faith deposits in connection with bids, tenders, contracts or leases to which a
Borrower or any of its Subsidiaries is a party for a purpose other than
borrowing money or obtaining credit, including rent security deposits, and (C)
Liens imposed by law, such as those of carriers, warehousemen and mechanics, if
payment of the obligation secured thereby is not yet due;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property,
provided that all of the foregoing, in the aggregate, do not at any time
materially detract from the value of said properties or materially impair their
use in the operation of the businesses of a Borrower or any of its Subsidiaries;
(iv) Liens existing on the date hereof upon the
same terms as the date hereof and extensions and renewals thereof, but no
increase in the principal amount secured thereby shall be permitted, with each
existing Lien described in Schedule 5.2(e) hereto;
(v) Liens granted by any Subsidiary in favor of
a Borrower or any other Subsidiary which are subordinated to the Liens of the
Agent and the Banks under the Security Documents on terms and pursuant to
agreements satisfactory to the Banks;
(vi) The interest or title of a lessor or a
lessee, as applicable, under any lease otherwise permitted under this Agreement,
including, without limitation, "synthetic leases" or "tax ownership operating
leases" permitted under Section 5.2(d)(ix), with respect to the property subject
to such lease;
(vii) Liens in favor of the Collateral Agent for
the equal and ratable benefit of the Banks, the Note Purchasers, the Short Term
Lenders, and the Senior Trustee on behalf of the holders from time to time of
Applicable Senior Debt Securities;
51
(viii) Liens on accounts receivable (together with
related collections and proceeds thereof, collateral insurance therefor,
guaranties thereof, lockbox or other collection accounts related thereto and all
records related thereto) of the Company or any Subsidiary which are transferred
to a Receivables Seller and/or to a Purchaser as part of a Permitted Receivables
Transaction (subject to the limitation on the amount of financing which may be
provided in all such transactions as set forth in the definition of the term
"Permitted Receivables Transaction" herein);
(ix) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of business which are not material
in the aggregate and which constitute pledges or deposits to secure public or
statutory obligations of a Borrower or any of its Subsidiaries, or surety,
customs or appeal bonds to which a Borrower or any of its Subsidiaries is a
party;
(x) Liens created to secure payment of a portion
of the purchase price of, or existing at the time of acquisition of, any
tangible fixed asset or real property acquired by a Borrower or any of its
Subsidiaries if the outstanding principal amount of the Indebtedness secured by
any such Lien does not at any time exceed 100% of the purchase price paid by
such Borrower or Subsidiary for such fixed asset or real property, and the
aggregate principal amount of Indebtedness secured by such Liens does not exceed
$10,000,000 at any time, provided that any such Lien does not encumber any other
asset at any time owned by such Borrower or Subsidiary;
(xi) Liens arising in favor of ABN AMRO Bank
N.V., its successor, or its designee, in connection with the administration and
operation of the Notional Pooling Accounts; provided, however, that such Liens
shall not extend beyond the Notional Pooling Accounts and the amounts on deposit
therein; provided, further, that, unless otherwise required under those laws
governing the Notional Pooling Accounts, including, without limitation, the
administration and operation thereof, such Liens shall only secure the
Indebtedness described in Section 5.2(d)(x);
(xii) Liens arising in connection with Capital
Leases permitted under Section 5.2(d)(xii);
(xiii) Liens securing the Indebtedness in an
aggregate amount not to exceed US$15,000,000 incurred by Subsidiaries organized
under the laws of a jurisdiction other than the United States of America or a
political subdivision thereof and permitted under Section 5.2(d)(xiii);
provided, however, that the value of those assets securing the permitted
Indebtedness shall not exceed the aggregate principal amount of the permitted
Indebtedness plus accrued and unpaid interest on the permitted Indebtedness;
(xiv) Liens in favor of suppliers or consignors
upon the property of such suppliers or consignors;
(xv) Liens securing purchase money Indebtedness
permitted under Section 5.2(d)(xiv); provided, that such Liens shall not apply
to or otherwise be
52
permitted with respect to any property of the Borrowers or any Subsidiaries
thereof other than such property purchased with the proceeds of such purchase
money Indebtedness; and
(xvi) Additional Liens securing Indebtedness owing
by the Borrowers or any Subsidiaries thereof not in excess of $5,000,000 in the
aggregate at any time outstanding.
(f) Merger; Acquisitions; Etc. Purchase or otherwise
acquire, or permit any Subsidiary to purchase or otherwise acquire, whether in
one or a series of transactions, all or a substantial portion of the business
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, of any person, or all or a substantial portion of the Capital Stock
of or other ownership interest in any other person, nor merge or consolidate or
amalgamate with any other person or take any other action having a similar
effect, nor enter into any joint venture or similar arrangement with any other
person, provided, however, that this Section 5.2(f) shall not prohibit (i)
Permitted OEM Divestiture Purchases that are governed by and comply with the
terms of Section 5.2(r), including, without limitation, the Philips Acquisition,
(ii) purchases and acquisitions that are governed by Section 5.2(i) because such
purchases and acquisitions are not for a substantial portion of the business
assets, rights, revenues, property or Capital Stock of any Person, (iii) a
merger of a Wholly-Owned Subsidiary of the Company with the Company or a
Wholly-Owned Subsidiary of the Company or any transfer of the Capital Stock of a
Wholly-Owned Subsidiary of the Company between Wholly-Owned Subsidiaries of the
Company or a Wholly-Owned Subsidiary of the Company and the Company, (iv) asset
or Capital Stock transfers between Wholly-Owned Subsidiaries of the Company or
the Company and one of its Wholly-Owned Subsidiaries, and (v) joint ventures or
similar arrangements between Wholly-Owned Subsidiaries of the Company or the
Company and one of its Wholly-Owned Subsidiaries; provided, further, that this
Section 5.2(f) shall not prohibit any merger, acquisition or joint venture if
(i) in the case of a merger, a Borrower or a Wholly-Owned Subsidiary thereof
shall be the surviving or continuing corporation thereof, (ii) immediately
before and after such merger or acquisition, no Default or Event of Default
shall exist or shall have occurred and be continuing and the representations and
warranties contained in Article IV shall be true and correct on and as of the
date thereof (both before and after such merger or acquisition is consummated)
as if made on the date such merger or acquisition is consummated, (iii) the
aggregate amount paid or payable in cash for (A) any single merger, acquisition
or joint venture by any Borrower or Subsidiary does not exceed $50,000,000, and
(B) all such mergers, acquisitions or joint ventures by the Borrowers and
Subsidiaries after the Effective Date does not exceed $150,000,000, and (iv)
prior to the consummation of any such merger or acquisition, the Company shall
have provided to the Banks an opinion of counsel and a certificate of the chief
financial officer of the Company (attaching computations and pro forma financial
statements to demonstrate compliance with all financial covenants hereunder both
before and after such merger, acquisition or joint venture has been completed),
stating that such merger or acquisition complies with this Section 5.2(f) and
that any other conditions under this Agreement relating to such transaction have
been satisfied.
53
(g) Disposition of Assets; Dissolution of Subsidiaries;
Etc. (i) Sell, lease, license, transfer, assign or otherwise dispose of, or
permit any Subsidiary to sell, lease, license, transfer, assign or otherwise
dispose of, all or a substantial portion of its business, assets, rights,
revenues or property, real, personal or mixed, tangible or intangible, whether
in one or a series of transactions, other than inventory sold in the ordinary
course of business upon customary credit terms and sales of scrap or obsolete
material or equipment, provided, however, that this Section 5.2(g) shall not
prohibit (A) any such sale, lease, license, transfer, assignment or other
disposition if the consolidated book value (disregarding any write-downs of such
book value other than ordinary depreciation and amortization) of all of the
business, assets, rights, revenues and property of the Company and its
Subsidiaries disposed of in any consecutive twelve-month period shall be less
than 10% of the consolidated book value of the assets of the Company and its
Subsidiaries as of the beginning of such twelve month period and the aggregate
book value of all assets disposed of after the Effective Date shall be less than
25% of the consolidated book value of assets of the Company and its Subsidiaries
at the time of any such disposition and if, immediately before and after such
transaction, no Default or Event of Default shall exist or shall have occurred
and be continuing, (B) sales by any Borrower or any Subsidiary of accounts
receivable pursuant to Permitted Receivables Transactions (subject to the
limitation on the amount of financing which may be provided in all such
transactions set forth in the definition of the term "Permitted Receivables
Transaction" herein) or (C) any such sale, lease, license, transfer, assignment
or other disposition between Wholly-Owned Subsidiaries of the Company or a
Wholly-Owned Subsidiary of the Company and the Company.
(ii) Dissolve or terminate the existence of any
Subsidiary of the Company other than the dissolution or termination of any
Subsidiary possessing immaterial assets or liabilities or no continuing business
purpose, in either case as determined by the Company in its reasonable
discretion.
(h) Nature of Business. Make any substantial change in
the nature of its business from that engaged in on the date of this Agreement or
engage in any other businesses other than the design, development and
manufacturing of computer-grade electronic products.
(i) Investments, Loans and Advances. Purchase or
otherwise acquire any Capital Stock of or other ownership interest in, or debt
securities of or other evidences of Indebtedness of, any other person; nor make
any loan or advance of any of its funds or property or make any other extension
of credit to, or make any investment or acquire any interest whatsoever in, any
other person; nor incur any Contingent Liability owing by or constituting an
obligation of another Person; provided, however, that this Section 5.2(i) shall
not apply to:
(i) Permitted OEM Divestiture Purchases governed
by and permitted under Section 5.2(r) and those transactions that are governed
by and permitted under Section 5.2(f);
54
(ii) extensions of trade credit made in the
ordinary course of business on customary credit terms and commission, travel and
similar advances made to officers and employees in the ordinary course of
business;
(iii) commercial paper of any United States issuer
having the highest rating then given by ▇▇▇▇▇'▇ Investors Service, Inc., or
Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, direct
obligations of and obligations fully guaranteed by the United States of America
or any agency or instrumentality thereof, or certificates of deposit of any
commercial bank which is a member of the Federal Reserve System and which has
capital, surplus and undivided profit (as shown on its most recently published
statement of condition) aggregating not less than $100,000,000, provided,
however, that each of the foregoing investments has a maturity date not later
than 365 days after the acquisition thereof by the Company or any of its
Subsidiaries;
(iv) those investments, loans, advances and other
transactions described in Schedule 5.2(i) hereto, having the same terms as
existing on the date of this Agreement, together with extensions and renewals
thereof, but no increase in the amount of such investment, loan or advance shall
be permitted, unless otherwise permitted pursuant to clause (vi) hereof;
(v) investments in, or loans and advances to,
any Subsidiary
(x) which was a Subsidiary prior to
such investment, loan or advance,
and
(y) in the case of a Domestic
Subsidiary, is a Guarantor or, in
the case of a Foreign Subsidiary,
has 65% of its Capital Stock or
the Capital Stock of any direct or
indirect Foreign Subsidiary parent
pledged pursuant to the Security
Documents; and
(vi) other investments, loans and advances not
exceeding an aggregate amount of $50,000,000 at any time.
(j) Transactions with Affiliates. Enter into, become a
party to, or become liable in respect of, any contract or undertaking with any
Affiliate except (i) in the ordinary course of business and on terms not less
favorable to a Borrower or any Subsidiary than those which could be obtained if
such contract or undertaking were an arms length transaction with a person other
than an Affiliate, or (ii) pursuant to or in connection with a Permitted
Receivables Transaction.
(k) Sale and Leaseback Transactions. Become or remain
liable in any way, whether directly or by assignment or as a guarantor or other
contingent obligor, for the obligations of the lessee or user under any lease or
contract for the use of any real or personal property if such property is owned
on the date of this Agreement or thereafter acquired by such Borrower or any of
its Subsidiaries and has been or is to be sold or transferred to any other
person and was, is or will be used by such Borrower or any such
55
Subsidiary for substantially the same purpose as such property was used by the
Borrower or such Subsidiary prior to such sale or transfer if the net present
value of the aggregate rental obligations under any such leases or contracts
(discounted at the implied interest rate of such lease or contract) exceeds 10%
of the total assets of such Borrower and its Subsidiaries on a consolidated
basis.
(l) Negative Pledge Limitation. Enter into any agreement
with any person that prohibits or limits the ability of any Borrower or any
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, other than:
(i) this Agreement, the Short-Term Credit
Agreement or the agreements, documents and instruments delivered in connection
herewith or therewith;
(ii) the Note Purchase Agreement;
(iii) the Senior Indenture;
(iv) any agreement evidencing a Permitted
Receivables Transaction so long as such limitation relates to the receivables
subject thereto or the property the sale of which gives rise to such
receivables;
(v) any agreement evidencing purchase money
Indebtedness so long as such Indebtedness is permitted hereunder and such
prohibition or limitation relates only to property acquired with the proceeds of
such purchase money Indebtedness;
(vi) any agreement evidencing Indebtedness
secured by Liens described in Section 5.2(e)(x) so long as such Indebtedness is
permitted hereunder and such prohibition or limitation relates only to the fixed
assets or real property acquired with the proceeds of such Indebtedness;
(vii) any agreement evidencing Indebtedness
arising in connection with Capital Leases permitted under Section 5.2(d) (xii)
so long as such prohibition or limitation relates only to the property subject
to such Capital Lease; and
(viii) those agreements evidencing supply or
consignment arrangements where Liens granted in connection therewith are
permitted under Section 5.2(e); provided, however, that such prohibition or
limitation shall only related to the property subject to such supply or
consignment arrangement.
(m) Inconsistent Agreements. Enter into any agreement
containing any provision which would be violated or breached in any material
respect by this Agreement or any of the transactions contemplated hereby or by
performance by any Borrower or any of its Subsidiaries of its obligations in
connection therewith.
(n) Accounting Changes. A Borrower shall not change its
fiscal year or make any significant changes (i) in accounting treatment and
reporting practices
56
except as permitted by Generally Accepted Accounting Principles and disclosed to
the Banks, or (ii) in tax reporting treatment except as permitted by law and
disclosed to the Banks.
(o) Additional Covenants. If at any time any Borrower
shall enter into or be a party to any instrument or agreement, including all
such instruments or agreements in existence as of the date hereof and all such
instruments or agreements entered into after the date hereof, relating to or
amending any terms or conditions applicable to any of its Indebtedness which
includes covenants, terms, conditions or defaults not substantially provided for
in this Agreement or more favorable to the lender or lenders thereunder than
those provided for in this Agreement, then the Borrowers shall promptly so
advise the Agent and the Banks. Thereupon, the Agent shall request, and, upon
notice to the Borrowers, the Agent and the Banks shall enter into an amendment
to this Agreement or an additional agreement (as the Agent may request),
providing for substantially the same covenants, terms, conditions and defaults
as those provided for in such instrument or agreement to the extent required and
as may be selected by the Agent. In addition to the foregoing, any covenants,
terms, conditions or defaults in the Private Placement Documents, the Short-Term
Credit Agreement or the Senior Indenture not substantially provided for in this
Agreement or more favorable to the holders of the Private Placement Debt or the
Senior Notes issued in connection therewith, or the "Banks" party to the
Short-Term Credit Agreement, including, without limitation, as set forth in any
amendments or waivers thereto, are hereby incorporated by reference into this
Agreement to the same extent as if set forth fully herein.
(p) Foreign Subsidiaries. Permit any Foreign Subsidiary
(other than any Foreign Subsidiary formed or incorporated in Mexico which is not
a Significant Foreign Subsidiary) to exist which is not (i) a Significant
Foreign Subsidiary, (ii) a Subsidiary of a Significant Foreign Subsidiary, or
(iii) a Subsidiary for which, within 120 days after the Effective Date or the
date of its acquisition or formation, whichever is later, 65% of its Capital
Stock has been pledged to the Collateral Agent for the equal and ratable benefit
of the Banks, the Note Purchasers, the Short-Term Lenders, and the Senior
Trustee on behalf of holders from time to time of Applicable Senior Debt
Securities and shall not permit less than 100% of the general partnership
interests in Jabil Circuit Cayman L.P. to be pledged to the Collateral Agent for
the equal and ratable benefit of the Banks, the Note Purchasers, the Short-Term
Lenders, and the Senior Trustee on behalf of holders from time to time of
Applicable Senior Debt Securities.
(q) Dividends and Other Restricted Payments. At any time
when the long-term debt ratings of the Company as assigned by both ▇▇▇▇▇'▇
Investors Service, Inc. and Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, are less than investment grade, make, pay, declare or
authorize any dividend, payment or other distribution in respect of any class of
its Capital Stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of shares of its Capital Stock (together with any dividend or other
distribution, "Distributions") other than (i) Distributions to the extent
payable solely in shares of Capital Stock of the Company and (ii) Distributions
by Subsidiaries of the Company, if the aggregate amount of such Distributions
(excluding consideration paid in
57
other Capital Stock of the Company but including any such Distribution then
being paid or authorized) from and after the Effective Date would not exceed 20%
of the Net Worth of the Company at such time.
(r) Permitted OEM Divestiture Purchases. Acquire, or
permit any Subsidiary to acquire, whether through an acquisition of Capital
Stock or of assets, all or any substantial portion of a division, line of
business or separate facility of any other person, or make any similar purchase
or acquisition, other than (i) mergers and acquisitions that are not Permitted
OEM Divestiture Purchases but otherwise comply with the terms of Sections 5.2(f)
and 5.2(i), and (ii) Permitted OEM Divestiture Purchases for which the aggregate
consideration paid or payable does not exceed $250,000,000 individually or,
together with all other Permitted OEM Divestiture Purchases occurring after the
Effective Date, $500,000,000; provided, that so long as the aggregate
consideration paid or payable in connection with the Philips Acquisition does
not exceed $275,000,000, the Philips Acquisition shall constitute a Permitted
OEM Divestiture Purchase and shall be permitted hereunder; provided, further,
that the purchase price for the assets subject to the Philips Acquisition, if
permitted hereunder, shall not be included in any determination of the amounts
set forth in clause (ii) of this Section 5.2(r).
ARTICLE VI.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall constitute an "Event of Default" hereunder unless
waived by the Majority Banks pursuant to Section 9.1:
(a) Nonpayment of Principal. Any Borrower shall fail to
pay when due any principal of the Notes; or
(b) Nonpayment of Interest. Any Borrower shall fail to
pay when due any interest or any fees or any other amount payable hereunder and
such failure shall remain unremedied for five days; or
(c) Misrepresentation. Any representation or warranty
made by any Borrower or any Guarantor in Article IV hereof, any other Loan
Document or any other certificate, report, financial statement or other document
furnished by or on behalf of any Borrower or any Guarantor in connection with
this Agreement shall prove to have been incorrect in any material respect when
made or deemed made; or
(d) Certain Covenants. Any Borrower shall fail to perform
or observe any term, covenant or agreement contained in Section 5.2 hereof; or
(e) Other Defaults. Any Borrower or any Guarantor shall
fail to perform or observe any other term, covenant or agreement contained in
this Agreement or any other Loan Document, and any such failure shall remain
unremedied for 30 calendar days after written notice thereof shall have been
given to the Company by the Agent (or such longer or shorter period of time as
may be specified in any Security Document); or
58
(f) Cross Default. (i) Any Borrower, any Guarantor or any
of their respective Subsidiaries shall fail to pay any part of the principal of,
the premium, if any, or the interest on, or any other payment of money due under
any of its Indebtedness (other than Indebtedness hereunder), beyond any period
of grace provided with respect thereto, which individually or together with
other such Indebtedness as to which any such failure exists has an aggregate
outstanding principal amount in excess of $5,000,000; or (ii) any Borrower, any
Guarantor or any of their respective Subsidiaries shall fail to perform or
observe any other term, covenant or agreement contained in any agreement,
document or instrument evidencing or securing any such Indebtedness having such
aggregate outstanding principal amount, or under which any such Indebtedness was
issued or created, beyond any period of grace, if any, provided with respect
thereto and such Borrower, such Guarantor or such Subsidiary has been notified
by the creditor of such default, and the effect of any such failure is either
(x) to cause, or permit the holders of such Indebtedness (or a trustee on behalf
of such holders) to cause, any payment of such Indebtedness to become due prior
to its due date or (y) to permit the holders of such Indebtedness (or a trustee
on behalf of such holders) to elect a majority of the board of directors of such
Borrower, such Guarantor or such Subsidiary; or
(g) Judgments. One or more final unappealable judgments
or orders for the payment of money in an aggregate amount of $10,000,000 shall
be rendered against or shall affect any Borrower or any of their respective
Subsidiaries, or any other judgment or order (whether or not for the payment of
money) shall be rendered against or shall affect any Borrower or any of their
respective Subsidiaries which causes or would cause a Material Adverse Effect;
or
(h) ERISA. The occurrence of a Reportable Event that
results in or would result in material liability of any Borrower, any Subsidiary
of any Borrower or their ERISA Affiliates to the PBGC or to any Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the occurrence of any Reportable Event which would constitute
grounds for termination of any Plan of any Borrower, their respective
Subsidiaries or their ERISA Affiliates by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer any such
Plan and such Reportable Event is not corrected within thirty (30) days after
the occurrence thereof; or the filing by any Borrower, any Subsidiary of any
Borrower or any of their ERISA Affiliates of a notice of intent to terminate a
Plan or the institution of other proceedings to terminate a Plan; or any
Borrower, any Subsidiary of any Borrower or any of their ERISA Affiliates shall
fail to pay when due any material liability to the PBGC or to a Plan; or the
PBGC shall have instituted proceedings to terminate, or to cause a trustee to be
appointed to administer, any Plan of any Borrower, their respective Subsidiaries
or their ERISA Affiliates; or any person engages in a Prohibited Transaction
with respect to any Plan which results in or could result in material liability
of the any Borrower, any Subsidiary of any Borrower, any of their ERISA
Affiliates, any Plan of any Borrower, their respective Subsidiaries or their
ERISA Affiliates or fiduciary of any such Plan; or failure by any Borrower, any
Subsidiary of any Borrower or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of any Borrower, any Subsidiary of any Borrower or any of their
59
ERISA Affiliates to the PBGC or any Plan; or the withdrawal of any Borrower, any
of their respective Subsidiaries or any of their ERISA Affiliates from a Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(9a)(2) of ERISA; or any Borrower, any of their respective
Subsidiaries or any of their ERISA Affiliates becomes an employer with respect
to any Multiemployer Plan without the prior written consent of the Majority
Banks; or
(i) Insolvency, Etc. Any Borrower or any Guarantor shall
be dissolved or liquidated (or any judgment, order or decree therefor shall be
entered), or shall generally not pay its debts as they become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against any Borrower or any Guarantor, any proceeding or
case seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief or protection of debtors or seeking the entry of an
order for relief, or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its assets, rights,
revenues or property, and, if such proceeding is instituted against any Borrower
or any Guarantor and is being contested by such Borrower in good faith by
appropriate proceedings, such proceeding shall remain undismissed or unstayed
for a period of 60 days; or any Borrower or such Guarantor shall take any action
(corporate or other) to authorize or further any of the actions described above
in this subsection; or
(j) Loan Documents. Any event of default described in any
Loan Document shall have occurred and be continuing, or any provision of Article
VIII hereof or of any Loan Document shall at any time for any reason cease to be
valid and binding and enforceable against any obligor thereunder, or the
validity, binding effect or enforceability thereof shall be contested by any
person, or any obligor, shall deny that it has any or further liability or
obligation thereunder, or any Loan Document shall be terminated, invalidated or
set aside, or be declared ineffective or inoperative or in any way cease to give
or provide to the Banks and the Agent the benefits purported to be created
thereby.
(k) Change of Control. The Company shall experience a
Change of Control. For purposes of this Section 6.1(k), a "Change of Control"
shall occur if during any twelve-month period (i) any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934,
as amended) shall have acquired beneficial ownership (within the meaning of Rule
13D-3 promulgated by the Securities and Exchange Commission under said Act) of
50% or more in voting power of the voting shares of the Company that were
outstanding as of the date of this Agreement and (ii) a majority of the board of
directors of the Company shall cease for any reason to consist of individuals
who as of a date twelve months prior to any date compliance herewith is
determined were directors of the Company.
6.2 Remedies.
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(a) Upon the occurrence and during the continuance of any
Event of Default, the Agent may, with the consent of the Majority Banks, and,
upon being directed to do so by the Majority Banks, shall by notice to the
Borrowers (i) terminate the Commitments or (ii) declare the outstanding
principal of, and accrued interest on, the Notes and all other amounts owing
under this Agreement to be immediately due and payable, or (iii) demand
immediate delivery of cash collateral, and the Borrowers agree to deliver such
cash collateral upon demand, in an amount equal to the maximum amount that may
be available to be drawn at any time prior to the stated expiry of all
outstanding Letters of Credit, or any one or more of the foregoing, whereupon
the Commitments shall terminate forthwith and all such amounts, including cash
collateral, shall become immediately due and payable, provided that in the case
of any event or condition described in Section 6.1(i) with respect to any
Borrower, the Commitments shall automatically terminate forthwith and all such
amounts, including cash collateral, shall automatically become immediately due
and payable without notice; in all cases without demand, presentment, protest,
diligence, notice of dishonor or other formality, all of which are hereby
expressly waived. Such cash collateral delivered in respect of outstanding
Letters of Credit shall be deposited in a special cash collateral account to be
held by the Agent as collateral security for the payment and performance of the
Borrowers' obligations under this Agreement to the Banks and the Agent.
(b) The Agent may, with the consent of the Majority
Banks, and, upon being directed to do so by the Majority Banks, shall, in
addition to the remedies provided in Section 6.2(a), exercise and enforce any
and all other rights and remedies available to it or the Banks, whether arising
under this Agreement, the Notes, any other Loan Document or under applicable
law, in any manner deemed appropriate by the Agent, including suit in equity,
action at law, or other appropriate proceedings, whether for the specific
performance (to the extent permitted by law) of any covenant or agreement
contained in this Agreement or any other Loan Document or in aid of the exercise
of any power granted in this Agreement or any other Loan Document.
(c) Upon the occurrence and during the continuance of any
Event of Default, each Bank may at any time and from time to time, without
notice to any Borrower (any requirement for such notice being expressly waived
by each Borrower) set off and apply against any and all of the obligations of
each Borrower now or hereafter existing under this Agreement, whether owing to
such Bank or any other Bank or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of any Borrower and any property of any Borrower from time to time in possession
of such Bank, irrespective of whether or not such Bank shall have made any
demand hereunder and although such obligations may be contingent and unmatured.
Each of the Borrowers hereby grants to the Banks and the Agent a lien on and
security interest in all such deposits, indebtedness and property as collateral
security for the payment and performance of the obligations of each Borrower
under this Agreement. The rights of such Bank under this Section 6.2(c) are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which such Bank may have.
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6.3 Distribution of Proceeds of Collateral. Subject to the terms
of the Intercreditor Agreement, all proceeds received by the Agent pursuant to
the Security Documents for application to the Bank Obligations or any payments
on any of the liabilities secured by the Security Documents received by the
Agent or any Bank upon and during the continuance of any Event of Default shall
be allocated and distributed as follows:
(a) First, to the payment of all costs and expenses,
including without limitation all reasonable attorneys' fees, of the Agent in
connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all costs, expenses and
fees, including without limitation, facility fees and reasonable attorneys fees,
owing to the Banks pursuant to the Bank Obligations on a pro rata basis in
accordance with the Bank Obligations consisting of fees, costs and expenses
owing to the Banks under the Bank Obligations, for application to payment of
such liabilities;
(c) Third, to the Banks on a pro rata basis in accordance
with the Bank Obligations consisting of interest owing to the Banks under the
Bank Obligations, for application to payment of such liabilities;
(d) Fourth, to the Banks on a pro rata basis in
accordance with the Bank Obligations consisting of principal (including, without
limitation, any cash collateral for any outstanding Letters of Credit as
contemplated in Section 6.4 or as otherwise contemplated by this Agreement)
owing to the Banks under the Bank Obligations, for application to payment of
such liabilities;
(e) Fifth, to the payment of any and all other amounts
owing to the Banks on a pro rata basis in accordance with the total amount of
such Indebtedness owing to each of the Banks, for application to payment of such
liabilities; and
(f) Sixth, to the Borrowers or such other person as may
be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Bank shall be delivered
by the Agent to such Defaulting Bank. Instead, such payments shall, for so long
as such Defaulting Bank shall be a Defaulting Bank, be held by the Agent, and
the Agent is hereby authorized and directed by all parties hereto to hold such
funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due
from such Defaulting Bank to the Agent; and
(ii) Second, to Loans required to be made by such
Defaulting Bank on any borrowing date to the extent such Defaulting Bank fails
to make such Loans.
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Notwithstanding the foregoing, upon the termination of the Commitments
and the payment and performance of all of the Advances (other than those owing
to a Defaulting Bank), any funds then held in escrow by the Agent pursuant to
the preceding sentence shall be distributed to each Defaulting Bank, pro rata in
proportion to amounts that would be due to each Defaulting Bank but for the fact
that it is a Defaulting Bank.
6.4 Letter of Credit Liabilities. For the purposes of payments and
distributions under Section 6.3, the full amount of Bank Obligations on account
of any Letter of Credit then outstanding but not drawn upon shall be deemed to
be then due and owing. Amounts distributable to the Banks on account of such
Bank Obligations under such Letter of Credit shall be deposited in a separate
interest bearing collateral account in the name of and under the control of the
Agent and held by the Agent first as security for such Letter of Credit Bank
Obligations and then as security for all other Bank Obligations and the amount
so deposited shall be applied to the Letter of Credit Bank Obligations at such
times and to the extent that such Letter of Credit Bank Obligations become
absolute liabilities and if and to the extent that the Letter of Credit Bank
Obligations fail to become absolute Bank Obligations because of the expiration
or termination of the underlying letters of credit without being drawn upon then
such amounts shall be applied to the remaining Bank Obligations in the order
provided in Section 6.3. Each Borrower hereby grants to the Agent, for the
benefit of the Banks, a lien and security interest in all such funds deposited
in such separate interest bearing collateral account, as security for all the
Bank Obligations as set forth above.
ARTICLE VII.
THE AGENT AND THE BANKS
7.1 Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto. The provisions of this Article VII
are solely for the benefit of the Agent and the Banks, and the Borrowers shall
not have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for the Borrowers.
7.2 Agent and Affiliates. The Agent in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise or refrain from exercising the same as though it were not the
Agent. Bank One and its affiliates may (without having to account therefor to
any Bank) accept deposits from, lend money to, and generally engage in any kind
of banking, trust, financial advisory or other business with any Borrower or any
Subsidiary of any Borrower as if it were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Banks.
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7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Bank, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actions under the Notes), the Agent shall
not be required to exercise any discretion or take any action, but the Agent
shall take such action or omit to take any action pursuant to the written
instructions of the Majority Banks and may request instructions from the
Majority Banks. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, pursuant to the written instructions of the Majority
Banks, which instructions and any action or omission pursuant thereto shall be
binding upon all of the Banks; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action or
omission may expose the Agent to personal liability or is contrary to this
Agreement, the Notes or applicable law.
7.4 Reliance by Agent. The Agent shall be entitled to rely upon
any certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The Agent
may employ agents (including without limitation collateral agents) and may
consult with legal counsel (who may be counsel for the Borrowers), independent
public accountants and other experts selected by it and shall not be liable to
the Banks, except as to money or property received by it or its authorized
agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.5 Default. The Agent shall not be deemed to have knowledge of
the occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Bank or a Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice, the Agent shall give prompt written notice
thereof to the Banks.
7.6 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable to the Banks for any
action taken or not taken by it or them in connection herewith with the consent
or at the request of the Majority Banks or in the absence of its or their own
gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any recital, statement, warranty
or representation contained in this Agreement or any Note or any Guaranty, or in
any certificate, report, financial statement or other document furnished in
connection with this Agreement, (ii) the performance or observance of any of the
covenants or agreements of
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any Borrower or any Guarantor, (iii) the satisfaction of any condition specified
in Article II hereof, or (iv) the validity, effectiveness, legal enforceability,
value or genuineness of this Agreement or the Notes or any collateral subject
thereto or any other instrument or document furnished in connection herewith.
7.7 Nonreliance on Agent and Other Banks. Each Bank acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decision in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
any Borrower or any Guarantor of this Agreement, the Notes or any other
documents referred to or provided for herein or to inspect the properties or
books of any Borrower or any Guarantor and, except for notices, reports and
other documents and information expressly required to be furnished to the Banks
by the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any information concerning the affairs, financial
condition or business of the Borrowers or any of their respective Subsidiaries
which may come into the possession of the Agent or any of its affiliates.
7.8 Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrowers, but without limiting any obligation
of the Borrowers to make such reimbursement), ratably according to the
respective principal amounts of the Advances then outstanding made by each of
them (or if no Advances are at the time outstanding, ratably according to the
respective amounts of their Commitments), from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or the transactions contemplated hereby or any
action taken or omitted by the Agent under this Agreement, provided, however,
that no Bank shall be liable for any portion of such claims, damages, losses,
liabilities, costs or expenses resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including without limitation reasonable fees and
expenses of counsel) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Borrowers, but
without limiting the obligation of the Borrowers to make such reimbursement.
Each Bank agrees to reimburse the Agent promptly upon demand for its ratable
share of any amounts owing to the Agent by the Banks pursuant to this Section.
If the indemnity furnished to the Agent under this Section shall, in the
judgment of the Agent, be insufficient or become impaired, the Agent may call
for additional indemnity from the Banks and cease, or not commence, to take any
action until such additional indemnity is furnished.
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7.9 Resignation of Agent. The Agent may resign as such at any time
upon thirty days' prior written notice to the Borrowers and the Banks. In the
event of any such resignation, the Company and the Majority Banks shall, by an
instrument in writing delivered to the Banks and the Agent, appoint a successor,
which shall be a Bank or any other commercial bank organized under the laws of
the United States or any State thereof and having a combined capital and surplus
of at least $500,000,000. If a successor is not so appointed or does not accept
such appointment before the Agent's resignation becomes effective, the resigning
Agent may appoint a temporary successor to act until such appointment by the
Company and the Majority Banks is made and accepted, which temporary successor
must also meet the standards set forth in the preceding sentence. Any successor
to the Agent shall execute and deliver to the Borrowers and the Banks an
instrument accepting such appointment and thereupon such successor Agent,
without further act, deed, conveyance or transfer shall become vested with all
of the properties, rights, interests, powers, authorities and obligations of its
predecessor hereunder with like effect as if originally named as Agent
hereunder. Upon request of such successor Agent, the Borrowers and the resigning
Agent shall execute and deliver such instruments of conveyance, assignment and
further assurance and do such other things as may reasonably be required for
more fully and certainly vesting and confirming in such successor Agent all such
properties, rights, interests, powers, authorities and obligations. The
provisions of this Article VII shall thereafter remain effective for such
resigning Agent with respect to any actions taken or omitted to be taken by such
Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Banks agree among themselves that, in
the event that any Bank shall obtain payment in respect of any Advance or any
other obligation owing to the Banks under this Agreement through the exercise of
a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Banks on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Bank shall
promptly notify the Agent and purchase from the other Banks participations in
such Advances and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all of the
Banks share such payment in accordance with such ratable shares. The Banks
further agree among themselves that if payment to a Bank obtained by such Bank
through the exercise of a right of set-off, banker's lien, counterclaim or
otherwise as aforesaid shall be rescinded or must otherwise be restored, each
Bank which shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Bank
whose payment shall have been rescinded or otherwise restored. The Borrowers
agree that any Bank so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Bank were a holder of such Advance or other obligation in the amount of
such participation. The Banks further agree among themselves that, in the event
that amounts received by the Banks and the Agent hereunder are insufficient to
pay all such obligations or insufficient to pay all such obligations when due,
the fees and other amounts owing to the Agent in such capacity shall be paid
therefrom before payment of obligations owing to the Banks under this Agreement,
other than agency fees and arrangement fees payable
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pursuant to Section 2.3(d) of this Agreement which shall be paid on a pro rata
basis with amounts owing to the Banks. Except as otherwise expressly provided in
this Agreement, if any Bank or the Agent shall fail to remit to the Agent or any
other Bank an amount payable by such Bank or the Agent to the Agent or such
other Bank pursuant to this Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Bank at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Banks and the Agent that if the Agent or any
Bank shall engage in any other transactions with any Borrower and shall have the
benefit of any collateral or security therefor which does not expressly secure
the obligations arising under this Agreement except by virtue of a so-called
dragnet clause or comparable provision, the Agent or such Bank shall be entitled
to apply any proceeds of such collateral or security first in respect of the
obligations arising in connection with such other transaction before application
to the obligations arising under this Agreement.
ARTICLE VIII.
GUARANTY
As an inducement to the Banks and the Agent to enter into the
transactions contemplated by this Agreement, each Guarantor agrees with the
Banks and the Agent as follows:
8.1 Guarantee of Obligations.
(a) Each Guarantor hereby (i) guarantees, as principal
obligor and not as surety only, to the Banks the prompt payment of the principal
of and any and all accrued and unpaid interest (including interest which
otherwise may cease to accrue by operation of any insolvency law, rule,
regulation or interpretation thereof) on the Advances and all other obligations
of each Borrower to the Banks and the Agent under this Agreement when due,
whether by scheduled maturity, acceleration or otherwise, all in accordance with
the terms of this Agreement and the Notes, including, without limitation,
default interest, indemnification payments and all reasonable costs and expenses
incurred by the Banks and the Agent in connection with enforcing any obligations
of the Borrowers hereunder, including without limitation the reasonable fees and
disbursements of counsel, (ii) guarantees the prompt and punctual performance
and observance of each and every term, covenant or agreement contained in this
Agreement and the Notes to be performed or observed on the part of each
Borrower, (iii) guarantees the prompt and complete payment of all obligations
and performance of all covenants of any Borrower under any interest rate or
currency swap agreements or similar transactions with any Bank, and (iv) agrees
to make prompt payment, on demand, of any and all reasonable costs and expenses
incurred by the Banks or the Agent in connection with enforcing the obligations
of the Guarantor hereunder, including, without limitation, the reasonable fees
and disbursements of counsel (all of the foregoing being collectively referred
to as the "Guaranteed Obligations").
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(b) If for any reason any duty, agreement or obligation
of any Borrower contained in this Agreement shall not be performed or observed
by any Borrower as provided therein, or if any amount payable under or in
connection with this Agreement shall not be paid in full when the same becomes
due and payable, each Guarantor undertakes to perform or cause to be performed
promptly each of such duties, agreements and obligations and to pay forthwith
each such amount to the Agent for the account of the Banks regardless of any
defense or setoff or counterclaim which any Borrower may have or assert, and
regardless of any other condition or contingency.
8.2 Waivers and Other Agreements. Each Guarantor hereby
unconditionally (a) waives any requirement that the Banks or the Agent, upon the
occurrence of an Event of Default first make demand upon, or seek to enforce
remedies against any Borrower before demanding payment under or seeking to
enforce the obligations of any Guarantor hereunder, (b) covenants that the
obligations of each Guarantor hereunder will not be discharged except by
complete performance of all obligations of the Borrowers contained in this
Agreement, the Notes and the other Loan Documents, (c) agrees that the
obligations of each Guarantor hereunder shall remain in full force and effect
without regard to, and shall not be affected or impaired, without limitation, by
any invalidity, irregularity or unenforceability in whole or in part of this
Agreement, the Notes or any other Loan Document, or any limitation on the
liability of any Guarantor thereunder, or any limitation on the method or terms
of payment thereunder which may or hereafter be caused or imposed in any manner
whatsoever (including, without limitation, usury laws), (d) waives diligence,
presentment and protest with respect to, and any notice of default or dishonor
in the payment of any amount at any time payable by any Borrower under or in
connection with this Agreement, the Notes or any other Loan Document, and
further waives any requirement of notice of acceptance of, or other formality
relating to, the obligations of any Guarantor hereunder and (e) agrees that the
Guaranteed Obligations shall include any amounts paid by any Borrower to the
Banks or the Agent which may be required to be returned to any Borrower or to
its representative or to a trustee, custodian or receiver for any Borrower.
8.3 Nature of Guaranty. The obligations of each Guarantor
hereunder constitute an absolute and unconditional and irrevocable guaranty of
payment and not a guaranty of collection and are wholly independent of and in
addition to other rights and remedies of the Banks and the Agent and are not
contingent upon the pursuit by the Banks and the Agent of any such rights and
remedies, such pursuit being hereby waived by each Guarantor.
8.4 Obligations Absolute. The obligations, covenants, agreements
and duties of each Guarantor under this Agreement shall not be released,
affected or impaired by any of the following whether or not undertaken with
notice to or consent of such Guarantor: (a) an assignment or transfer, in whole
or in part, of the Advances made to any Borrower or of this Agreement or any
Note although made without notice to or consent of such Guarantor, or (b) any
waiver by any Bank or the Agent or by any other person, of the performance or
observance by any Borrower of any of the agreements, covenants, terms or
conditions contained in this Agreement or in the other Loan Documents, or (c)
any indulgence in or the extension of the time for payment by any
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Borrower of any amounts payable under or in connection with this Agreement or
any other Loan Document, or of the time for performance by any Borrower of any
other obligations under or arising out of this Agreement or any other Loan
Document, or the extension or renewal thereof, or (d) the modification,
amendment or waiver (whether material or otherwise) of any duty, agreement or
obligation of any Borrower set forth in this Agreement or any other Loan
Document (the modification, amendment or waiver from time to time of this
Agreement and the other Loan Documents being expressly authorized without
further notice to or consent of any Guarantor), or (e) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of any Borrower or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings, affecting any Borrower or any of
its assets, or (f) the merger or consolidation of any Borrower or the Guarantors
with any other person, or (g) the release of discharge of any Borrower or any
Guarantor from the performance or observance of any agreement, covenant, term or
condition contained in this Agreement or any other Loan Document, by operation
of law, or (h) any other cause whether similar or dissimilar to the foregoing
which would release, affect or impair the obligations, covenants, agreements or
duties of any Guarantor hereunder.
8.5 No Investigation by Banks or Agent. Each Guarantor hereby
waives unconditionally any obligation which, in the absence of such provision,
the Banks or the Agent might otherwise have to investigate or to assure that
there has been compliance with the law of any jurisdiction with respect to the
Guaranteed Obligations recognizing that, to save both time and expense, each
Guarantor has requested that the Banks and the Agent not undertake such
investigation. Each Guarantor hereby expressly confirms that the obligations of
such Guarantor hereunder shall remain in full force and effect without regard to
compliance or noncompliance with any such law and irrespective of any
investigation or knowledge of any Bank or the Agent of any such law.
8.6 Indemnity. As a separate, additional and continuing
obligation, each Guarantor unconditionally and irrevocably undertakes and agrees
with the Banks and the Agent that, should the Guaranteed Obligations not be
recoverable from such Guarantor under Section 8.1 for any reason whatsoever
(including, without limitation, by reason of any provision of this Agreement or
the Notes or any other agreement or instrument executed in connection herewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any knowledge thereof by any Bank or the Agent at any
time, each Guarantor as sole, original and independent obligor, upon demand by
the Agent, will make payment to the Agent for the account of the Banks and the
Agent of the Guaranteed Obligations by way of a full indemnity in such currency
and otherwise in such manner as is provided in this Agreement and the Notes.
8.7 Subordination, Subrogation, Etc. Each Guarantor agrees that
any present or future indebtedness, obligations or liabilities of any Borrower
to such Guarantor shall be fully subordinate and junior in right and priority of
payment to any present or future indebtedness, obligations or liabilities of the
Borrower to the Banks and the Agent. Each Guarantor waives any right of
subrogation to the rights of any Bank or the Agent against any Borrower or any
other person obligated for payment of the Guaranteed Obligations and any right
of reimbursement or indemnity whatsoever arising or accruing out of any
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payment which the Guarantor may make pursuant to this Agreement and the Notes,
and any right of recourse to security for the debts and obligations of any
Borrower, unless and until the entire principal balance of and interest on the
Guaranteed Obligations shall have been paid in full.
8.8 Waiver. To the extent that it lawfully may, each Guarantor
agrees that it will not at any time insist upon or plead, or in any manner
whatsoever claim or take any benefit or advantage of any applicable present or
future stay, extension or moratorium law, which may affect observance or
performance of the provisions of this Agreement or the Notes; nor will it claim,
take or insist upon any benefit or advantage of any present or future law
providing for the evaluation or appraisal of any security for its obligations
hereunder or any Borrower under this Agreement and under the Notes prior to any
sale or sales thereof which may be made under or by virtue of any instrument
governing the same; nor will it, after any such sale or sales claim or exercise
any right, under any applicable law, to redeem any portion of such security so
sold.
8.9 Joint and Several Obligations; Contribution Rights.
(a) Notwithstanding anything to the contrary set forth
herein or in any Note or in any other Loan Document, the obligations of the
Guarantors hereunder are joint and several.
(b) If any Guarantor makes a payment in respect of the
Guaranteed Obligations it shall have the rights of contribution set forth below
against the other Guarantors; provided that such Guarantor shall not exercise
its right of contribution until all the Guaranteed Obligations shall have been
finally paid in full in cash. If any Guarantor makes a payment in respect of the
Guaranteed Obligations that is smaller in proportion to its Payment Share (as
hereinafter defined) than such payments made by the other Guarantors are in
proportion to the amounts of their respective Payment Shares, the Guarantor
making such proportionately smaller payment shall, when permitted by the
preceding sentence, pay to the other Guarantors an amount such that the net
payments made by the Guarantor in respect of the Bank Obligations shall be
shared among the Guarantors pro rata in proportion to their respective Payment
Shares. If any Guarantor receives any payment that is greater in proportion to
the amount of its Payment Shares than the payments received by the other
Guarantors are in proportion to the amounts of their respective Payment Shares,
the Guarantor receiving such proportionately greater payment shall, when
permitted by the second preceding sentence, pay to the other Guarantors an
amount such that the payments received by the Guarantors shall be shared among
the Guarantors pro rata in proportion to their respective Payment Shares.
Notwithstanding anything to the contrary contained in this paragraph or in this
Agreement, no liability or obligation of any Guarantor that shall accrue
pursuant to this paragraph shall be paid nor shall it be deemed owed pursuant to
this paragraph until all of the Bank Obligations shall be finally paid in full
in cash.
For purposes hereof, the "Payment Share" of each Guarantor shall be the
sum of (a) the aggregate proceeds of the Guaranteed Obligations received by such
Guarantor plus (b) the product of (i) the aggregate Guaranteed Obligations
remaining unpaid on the
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date such Guaranteed Obligations become due and payable in full, whether by
stated maturity, acceleration, or otherwise (the "Determination Date") reduced
by the amount of such Guaranteed Obligations attributed to such Guarantors
pursuant to clause (a) above, times (ii) a fraction, the numerator of which is
such Guarantor's net worth on the effective date of this Agreement (determined
as of the end of the immediately preceding fiscal reporting period of such
Guarantor), and the denominator of which is the aggregate net worth of all
Guarantors on such effective date.
(c) It is the intent of each Guarantor, the Agent and the
Banks that each Guarantor's maximum Guaranteed Obligations shall be in, but not
in excess of:
(i) in a case or proceeding commenced by or
against such Guarantor under the Bankruptcy Code on or within one year from the
date on which any of the Guaranteed Obligations are incurred, the maximum amount
that would not otherwise cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Agent and the Banks) to be avoidable or
unenforceable against such Guarantor under (A) Section 548 of the Bankruptcy
Code or (B) any state fraudulent transfer or fraudulent conveyance act or
statute applied in such case or proceeding by virtue of Section 544 of the
Bankruptcy Code; or
(ii) in a case or proceeding commenced by or
against such Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranteed Obligations are incurred, the maximum amount
that would not otherwise cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Agent and the Banks) to be avoidable or
unenforceable against such Guarantor under any state fraudulent transfer or
fraudulent conveyance act or statute applied in any such case or proceeding by
virtue of Section 544 of the Bankruptcy Code;
(iii) in a case or proceeding commenced by or
against such Guarantor under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt, dissolution,
liquidation or similar debtor relief laws), the maximum amount that would not
otherwise cause the Guaranteed Obligations (or any other obligations of such
Guarantor to the Agent and the Banks) to be avoidable or unenforceable against
such Guarantor under such law, statute or regulation including, without
limitation, any state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding.
(d) The Guarantors acknowledge and agree that they have
requested that the Banks make credit available to the Borrowers with each
Guarantor expecting to derive benefit, directly and indirectly, from the loans
and other credit extended by the Banks to the Borrowers.
ARTICLE IX.
MISCELLANEOUS
9.1 Amendments, Etc.
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(a) No amendment, modification, termination or waiver of
any provision of this Agreement nor any consent to any departure therefrom shall
be effective unless the same shall be in writing and signed by the Borrowers and
the Majority Banks and, to the extent any rights or duties of the Agent may be
affected thereby, the Agent, provided, however, that no such amendment,
modification, termination, waiver or consent shall, without the consent of the
Agent and all of the Banks, (i) authorize or permit the extension of time for,
or any reduction of the amount of, any payment of the principal of, or interest
on or the rate at which interest accrues on, the Notes or any installment
thereof or any Letter of Credit reimbursement obligation, or any fees or other
amount payable hereunder, (ii) amend or terminate the respective Commitment of
any Bank (other than in connection with any assignment permitted hereunder or an
increase or decrease, as applicable, of the Commitments which occurs under
Sections 2.2 and 3.1(d), in which case such amendment or termination shall be
deemed to occur, subject to the requirements of Sections 2.11, 3.1(d), and 9.6,
as applicable, automatically upon the effectiveness of such assignment,
increase, or decrease, as applicable) or modify the provisions of this Section
regarding the taking of any action under this Section or the provisions of
Section 7.10 or the definition of Majority Banks, (iii) amend or modify the
Guaranty (other than any amendment solely for the purpose of adding or deleting
a Borrowing Subsidiary) or provide for the release or discharge of any
Guarantor's obligations under the Guaranty, (iv) provide for the release of any
material portion of the collateral subject to any Security Document, (v) amend,
modify or waive any other provision hereof requiring consent of all of the Banks
or (vi) increase the principal amount of the Swing Line Facility.
(b) Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(c) Notwithstanding anything herein to the contrary, no
Bank that is in default of any of its obligations, covenants or agreements under
this Agreement shall be entitled to vote (whether to consent or to withhold its
consent) with respect to any amendment, modification, termination or waiver of
any provision of this Agreement or any departure therefrom or any direction from
the Banks to the Agent, and, for purposes of determining the Majority Banks at
any time when any Bank is in default under this Agreement, the Commitments and
Advances of such defaulting Banks shall be disregarded.
9.2 Notices.
(a) Except as otherwise provided in Section 9.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Borrowers in care of the Company at 10560 ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Chief Financial
Officer, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, and to the Agent and the Banks at the
respective addresses and numbers for notices set forth on the signatures pages
hereof, or to such other address as may be designated by any Borrower, the Agent
or any Bank by notice to the other parties hereto. All notices and other
communications shall be deemed to have been given at the time of actual delivery
thereof to such address, or if sent by certified or registered mail, postage
prepaid, to such address,
72
on the third day after the date of mailing, or if deposited prepaid with Federal
Express or other nationally recognized overnight delivery service prior to the
deadline for next day delivery, on the Business Day next following such deposit,
provided, however, that notices to the Agent shall not be effective until
received.
(b) Notices by a Borrower to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Advances pursuant to Section 2.4, requests for continuations or conversions
of Loans pursuant to Section 2.7 and notices of prepayment pursuant to Section
3.1 shall be irrevocable and binding on the Borrowers.
(c) Any notice to be given by a Borrower to the Agent
pursuant to Sections 2.4 or 2.7 and any notice to be given by the Agent or any
Bank hereunder, may be given by telephone, and all such notices given by a
Borrower must be immediately confirmed in writing in the manner provided in
Section 9.2(a). Any such notice given by telephone shall be deemed effective
upon receipt thereof by the party to whom such notice is to be given.
9.3 No Waiver By Conduct; Remedies Cumulative. No course of
dealing on the part of the Agent or any Bank, nor any delay or failure on the
part of the Agent or any Bank in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the Agent's or such Bank's rights and remedies hereunder;
nor shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Agent or any Bank under this Agreement
or any other Loan Document is intended to be exclusive of any other right or
remedy, and every right and remedy shall be cumulative, except as limited by
this Agreement, and in addition to every other right or remedy granted
thereunder or now or hereafter existing under any applicable law. Every right
and remedy granted by this Agreement or the Notes or any Guaranty or by
applicable law to the Agent or any Bank may be exercised from time to time and
as often as may be deemed expedient by the Agent or any Bank and, unless
contrary to the express provisions of this Agreement or the Notes or such
Guaranty, irrespective of the occurrence or continuance of any Default or Event
of Default.
9.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of any Borrower or any
Guarantor made herein, in any Guaranty or in any certificate, report, financial
statement or other document furnished by or on behalf of any Borrower or any
Guarantor in connection with this Agreement shall be deemed to be material and
to have been relied upon by the Banks, notwithstanding any investigation
heretofore or hereafter made by any Bank or on such Bank's behalf, and those
covenants and agreements of the Borrowers set forth in Sections 3.7, 3.9 and 9.5
hereof shall survive the repayment in full of the Advances and the termination
of the Commitments for a period of one year from such repayment or termination.
9.5 Expenses.
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(a) Each of the Borrowers agrees to pay, or reimburse the
Agent for the payment of, on demand, (i) the reasonable fees, without premium,
and expenses of counsel to the Agent, including without limitation the
reasonable fees and expenses of counsel (including, without limitation, Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇) in connection with the preparation, execution, delivery and
administration of the Loan Documents and the consummation of the transactions
contemplated hereby, and in connection with advising the Agent as to its rights
and responsibilities with respect thereto, and in connection with any
amendments, waivers or consents in connection therewith, and (ii) all stamp and
other taxes and fees payable or determined to be payable by the Agent or any
Bank in connection with the execution, delivery, filing or recording of this
Agreement, the Notes and the consummation of the transactions contemplated
hereby, and any and all liabilities of the Agent and the Banks with respect to
or resulting from any delay in paying or omitting to pay such taxes or fees, and
(iii) all reasonable costs and expenses of the Agent and the Banks (including
without limitation reasonable fees and expenses of counsel, including without
limitation counsel who are employees of the Agent or the Banks, and whether
incurred through negotiations, legal proceedings or otherwise) in connection
with any Default or Event of Default or the enforcement of, or the exercise or
preservation of any rights under the Loan Documents or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement and (iv) all reasonable costs and expenses of the Agent and the Banks
(including reasonable fees and expenses of counsel) in connection with any
action or proceeding relating to a court order, injunction or other process or
decree restraining or seeking to restrain the Agent from paying any amount
under, or otherwise relating in any way to, any Letter of Credit and any and all
costs and expenses which any of them may incur relative to any payment under any
Letter of Credit. Notwithstanding anything to the contrary contained herein,
prior to the occurrence of an Event of Default or a Default, the Borrower shall
not be required to reimburse any Person other than the Agent for any fees and
expenses of such Person's counsel incurred in connection with the preparation,
negotiation, delivery, administration or modification (whether by waiver,
amendment or otherwise) of this Agreement or the other Loan Documents.
(b) Each of the Borrowers hereby indemnifies and agrees
to hold harmless the Banks, the Issuing Bank and the Agent, their affiliates and
their respective officers, directors, employees and agents, harmless from and
against any and all claims, damages, losses, liabilities, costs or expenses of
any kind or nature whatsoever which the Banks, the Issuing Bank or the Agent or
any such person may incur or which may be claimed against any of them by reason
of or in connection with any Letter of Credit, and neither any Bank, the Issuing
Bank nor the Agent, their affiliates or any of their respective officers,
directors, employees or agents shall be liable or responsible for: (i) the use
which may be made of any Letter of Credit or for any acts or omissions of any
beneficiary in connection therewith; (ii) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such documents
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (iii) payment by the Issuing Bank to the beneficiary under
any Letter of Credit against presentation of documents which do not comply with
the terms of any Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; (iv) any error,
omission, interruption or delay in transmission, dispatch or delivery of any
74
message or advice, however transmitted, in connection with any Letter of Credit;
or (v) any other event or circumstance whatsoever arising in connection with any
Letter of Credit; provided, however, that the Borrowers shall not be required to
indemnify the Banks, the Issuing Bank and the Agent and such other persons, and
the Issuing Bank shall be liable to the Borrowers to the extent, but only to the
extent, of any direct, as opposed to consequential or incidental, damages
suffered by any Borrower which were caused by (A) the Issuing Bank's wrongful
dishonor of any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other documentation
strictly complying with the terms and conditions of such Letter of Credit, or
(B) payment by the Issuing Bank to the beneficiary under any Letter of Credit
against presentation of documents which do not comply with the terms of the
Letter of Credit to the extent, but only to the extent, that such payment
constitutes gross negligence or willful misconduct of the Issuing Bank. It is
understood that in making any payment under a Letter of Credit, the Issuing Bank
will rely on documents presented to it under such Letter of Credit as to any and
all matters set forth therein without further investigation and regardless of
any notice or information to the contrary, and such reliance and payment against
documents presented under a Letter of Credit substantially complying with the
terms thereof shall not be deemed gross negligence or willful misconduct of the
Issuing Bank in connection with such payment. It is further acknowledged and
agreed that a Borrower may have rights against the beneficiary or others in
connection with any Letter of Credit with respect to which the Issuing Bank is
alleged to be liable and it shall be a precondition of the assertion of any
liability of the Issuing Bank under this Section that such Borrower shall first
have exhausted all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in connection with such
Letter of Credit and any related transactions.
(c) Each of the Borrowers hereby indemnifies and agrees
to hold harmless the Banks and the Agent, their affiliates and their respective
officers, directors, employees and agents, from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature whatsoever
(including reasonable attorneys fees and disbursements incurred in connection
with any investigative, administrative or judicial proceeding whether or not
such person shall be designated as a party thereto) which the Banks or the Agent
or any such person may incur or which may be claimed against any of them by
reason of or in connection with entering into this Agreement or the transactions
contemplated hereby, including without limitation those arising under
Environmental Laws; provided, however, that the Borrowers shall not be required
to indemnify any such Bank and the Agent or such other person, to the extent,
but only to the extent, that such claim, damage, loss, liability, cost or
expense is attributable to the gross negligence or willful misconduct of such
Bank or the Agent, as the case may be.
(d) In consideration of the execution and delivery of
this Agreement by each Bank and the extension of the Commitments, each of the
Borrowers hereby indemnifies, exonerates and holds the Agent, each Bank, their
affiliates and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
75
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(i) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this
Agreement and any other agreement or instrument executed in connection herewith
by any of the Indemnified Parties (including without limitation any action
brought by or on behalf of any Borrower as the result of any determination by
the Majority Banks not to fund any Advance);
(iii) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by any Borrower or any of its
Subsidiaries of any portion of the stock or assets of any person, whether or not
the Agent or such Bank is party thereto;
(iv) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter relating
to the protection of the environment or the release by any Borrower or any of
its Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission, discharging or releasing from,
any real property owned or operated by any Borrower or any of its Subsidiaries
of any Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, such Borrower or such
Subsidiary, except for any such Indemnified Liabilities arising for the account
of a particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of any Borrower conducted subsequent to a foreclosure on
such property to the extent of the relevant Indemnified Party's gross negligence
or willful misconduct, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, each of the Borrowers hereby agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Each of the
Borrowers shall be obligated to indemnify the Indemnified Parties for all
Indemnified Liabilities subject to and pursuant to the foregoing provisions,
regardless of whether the Company or any of its Subsidiaries had knowledge of
the facts and circumstances giving rise to such Indemnified Liability.
9.6 Successors and Assigns; Additional Banks.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no Borrower may, without the prior consent of the Banks, assign
its rights or obligations hereunder or under the Notes and the Banks shall not
be obligated to make any Loan hereunder to any entity other than the Borrowers.
76
(b) Any Bank may, without the prior consent of the
Company or the Agent sell to any financial institution or institutions, and such
financial institution or institutions may further sell, a participation interest
(undivided or divided) in, the Advances and such Bank's Commitment and rights
and benefits under this Agreement and the other Loan Documents, and to the
extent of that participation interest such participant or participants shall
have the same rights and benefits against the Borrowers under Section 3.7, 3.9
and 6.2(c) as it or they would have had if such participant or participants were
the Bank making the Loans to the Borrowers hereunder, provided, however, that
(i) such Bank's obligations under this Agreement shall remain unmodified and
fully effective and enforceable against such Bank, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement, and (v) such Bank shall
not grant to its participant any rights to consent or withhold consent to any
action taken by such Bank or the Agent under this Agreement other than action
requiring the consent of all of the Banks hereunder.
(c) The Agent from time to time in its sole discretion
may appoint agents for the purpose of servicing and administering this Agreement
and the transactions contemplated hereby and enforcing or exercising any rights
or remedies of the Agent provided under this Agreement, the Notes or otherwise.
In furtherance of such agency, the Agent may from time to time direct that the
Borrowers provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. Each Borrower hereby consents
to the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(d) Each Bank may, with the prior consent of the Company
and the Agent prior to the occurrence of an Event of Default, and solely with
the consent of the Agent subsequent to the occurrence and continuance of an
Event of Default (in either case which consents shall not be unreasonably
withheld or delayed) assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations, (ii) except in the case of an assignment of all of a Bank's rights
and obligations under this Agreement, the amount of the Commitment of the
assigning Bank being assigned pursuant to each such assignment (determined as of
the date of the Assignment and Acceptance with respect to such assignment) shall
in no event be less than $5,000,000, and in integral multiples of $1,000,000
thereafter, or such lesser amount as the Company and the Agent may consent to,
(iii) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance in substantially the form of Exhibit H hereto (an "Assignment and
Acceptance"), together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,500, and (iv) any Bank may without the
consent of
77
the Company or the Agent, and without paying any fee, assign to any Affiliate of
such Bank that is a bank or financial institution or to another Bank all or a
portion of its rights and obligations under this Agreement. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and (y) the Bank assignor thereunder shall, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights (other than
its rights to payment under the indemnities set forth in this Agreement for the
period during which it was a Bank hereunder) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party
hereto).
(e) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Bank or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Bank.
(f) The Agent shall maintain at its address designated on
the signature pages hereof a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Banks and the Commitment of, and principal amount of the Advances owing
to, each Bank from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Borrowing Subsidiaries, the Agent and the Banks may treat each
person whose name is recorded in the Register as a Bank
78
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company or any Bank at any reasonable time and from time
to time upon reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee, together with any Note or Notes
subject to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment hereunder, a new Note to the order of the assigning Bank in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Note or Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
Exhibit H hereto.
(h) No Borrower shall be liable for any costs or expenses
of any Bank in effectuating any participation or assignment under this Section
9.6.
(i) INTENTIONALLY OMITTED.
(j) The Banks may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.6, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Borrowers.
(k) Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Loans owing to it and the Note or Notes held by it) in favor of
any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Bank from its obligations
under this Agreement.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
9.8 Governing Law; Consent to Jurisdiction. This Agreement is a
contract made under, and shall be governed by and construed in accordance with,
the law of the State of Illinois applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of law
principles of such State. Each Borrower further agrees that any legal action or
proceeding with respect to this Agreement or the Notes or the transactions
contemplated hereby may be brought in any court of the State of
79
Illinois, or in any court of the United States of America sitting in Illinois,
and each Borrower hereby irrevocably submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property, and irrevocably appoints ▇▇▇▇▇ ▇▇▇▇▇, whose address is set forth in
Section 9.2, as its agent for service of process and irrevocably consents to the
service of process in connection with any such action or proceeding by personal
delivery to such agent or to the Borrowers or by the mailing thereof by
registered or certified mail, postage prepaid to the Borrowers at the address
set forth in Section 9.2. Nothing in this paragraph shall affect the right of
the Banks and the Agent to serve process in any other manner permitted by law or
limit the right of the Banks or the Agent to bring any such action or proceeding
against the Borrowers or property in the courts of any other jurisdiction. Each
Borrower hereby irrevocably waives any objection to the laying of venue of any
such suit or proceeding in the above described courts.
9.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
9.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
9.11 Integration and Severability. This Agreement and the Notes
embody the entire agreement and understanding between the Borrowers and the
Agent and the Banks, and supersede all prior agreements and understandings,
relating to the subject matter hereof. In case any one or more of the
obligations of any Borrower under this Agreement or the Notes shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining obligations of such Borrower and the other
Borrowers shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of the Borrowers
under this Agreement or the Notes in any other jurisdiction.
9.12 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or such condition exists.
9.13 Interest Rate Limitation. Notwithstanding any provisions of
this Agreement or the Notes, in no event shall the amount of interest paid or
agreed to be paid by any Borrower exceed an amount computed at the highest rate
of interest permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or the Notes at the
time performance of such provision shall be due, shall involve exceeding the
interest rate limitation validly prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the
80
obligations to be fulfilled shall be reduced to an amount computed at the
highest rate of interest permissible under applicable law, and if for any reason
whatsoever any Bank shall ever receive as interest an amount which would be
deemed unlawful under such applicable law such interest shall be automatically
applied to the payment of principal of such Bank's Advances outstanding
hereunder (whether or not then due and payable) and not to the payment of
interest, or shall be refunded to the Borrowers if such principal and all other
obligations of the Borrowers to such Bank have been paid in full.
9.14 Joint and Several Obligations; Contribution Rights; Savings
Clause.
(a) Notwithstanding anything to the contrary set forth
herein or in any Note or in any other Loan Document, the obligations of the
Domestic Borrowers hereunder and under the Notes and the other Loan Documents
are joint and several.
(b) If any Borrower makes a payment in respect of the
Bank Obligations it shall have the rights of contribution set forth below
against the other Borrowers; provided that no Borrower shall exercise its right
of contribution until all the Bank Obligations shall have been finally paid in
full in cash. If any Borrower makes a payment in respect of the Bank Obligations
that is smaller in proportion to its Payment Share (as hereinafter defined) than
such payments made by the other Borrowers are in proportion to the amounts of
their respective Payment Shares, the Borrower making such proportionately
smaller payment shall, when permitted by the preceding sentence, pay to the
other Borrowers an amount such that the net payments made by the Borrower in
respect of the Bank Obligations shall be shared among the Borrowers pro rata in
proportion to their respective Payment Shares. If any Borrower receives any
payment that is greater in proportion to the amount of its Payment Shares than
the payments received by the other Borrowers are in proportion to the amounts of
their respective Payment Shares, the Borrower receiving such proportionately
greater payment shall, when permitted by the second preceding sentence, pay to
the other Borrowers an amount such that the payments received by the Borrowers
shall be shared among the Borrowers pro rata in proportion to their respective
Payment Shares. Notwithstanding anything to the contrary contained in this
paragraph or in this Agreement, no liability or obligation of any Borrower that
shall accrue pursuant to this paragraph shall be paid nor shall it be deemed
owed pursuant to this paragraph until all of the Bank Obligations shall be
finally paid in full in cash.
For purposes hereof, the "Payment Share" of each Borrower shall be the
sum of (a) the aggregate proceeds of the Bank Obligations received by such
Borrower plus (b) the product of (i) the aggregate Bank Obligations remaining
unpaid on the date such Bank Obligations become due and payable in full, whether
by stated maturity, acceleration, or otherwise (the "Determination Date")
reduced by the amount of such Bank Obligations attributed to such Borrower
pursuant to clause (a) above, times (ii) a fraction, the numerator of which is
such Borrower's net worth on the effective date of this Agreement (determined as
of the end of the immediately preceding fiscal reporting period of such
Borrower), and the denominator of which is the aggregate net worth of all
Borrowers on such effective date.
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(c) It is the intent of each Borrower, the Agent and the
Banks that each Borrower's maximum Bank Obligations shall be, but not in excess
of:
(i) in a case or proceeding commenced by or
against such Borrower under the Bankruptcy Code on or within one year from the
date on which any of the Bank Obligations are incurred, the maximum amount that
would not otherwise cause the Bank Obligations (or any other obligations of such
Borrower to the Agent and the Banks) to be avoidable or unenforceable against
such Borrower under (A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such case
or proceeding by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or
against such Borrower under the Bankruptcy Code subsequent to one year from the
date on which any of the Bank Obligations are incurred, the maximum amount that
would not otherwise cause the Bank Obligations (or any other obligations of such
Borrower to the Agent and the Banks) to be avoidable or unenforceable against
such Borrower under any state fraudulent transfer or fraudulent conveyance act
or statute applied in any such case or proceeding by virtue of Section 544 of
the Bankruptcy Code;
(iii) in a case or proceeding commenced by or
against such Borrower under any law, statute or regulation other than the
Bankruptcy Code (including, without limitation, any other bankruptcy,
reorganization, arrangement, moratorium, readjustment of debt, dissolution,
liquidation or similar debtor relief laws), the maximum amount that would not
otherwise cause the Bank Obligations (or any other obligations of such Borrower
to the Agent and the Banks) to be avoidable or unenforceable against such
Borrower under such law, statute or regulation including, without limitation,
any state fraudulent transfer or fraudulent conveyance act or statute applied in
any such case or proceeding.
(d) The Domestic Borrowers acknowledge and agree that
they have requested that the Banks make credit available to the Borrowers with
each Domestic Borrower expecting to derive benefit, directly and indirectly,
from the loans and other credit extended by the Banks to the Borrowers.
(e) The joint and several obligations of the Domestic
Borrowers described in this Section 9.14 shall remain in full force and effect
without regard to and shall not be released, affected or impaired by: (i) any
amendment, assignment, transfer, modification of or addition or supplement to
the Bank Obligations, this Agreement, any Note or any other Loan Document,
except to the extent any such amendment, assignment, transfer or modification
specifically relates to the matters set forth in Section 9.14; (ii) any
extension, indulgence, increase in the Bank Obligations or other action or
inaction in respect of any of the Loan Documents or otherwise with respect to
the Bank Obligations, or any acceptance of security for, or guaranties of, any
of the Bank Obligations or Loan Documents, or any surrender, release, exchange,
impairment or alteration of any such security or guaranties including without
limitation the failing to perfect a security interest in any such security or
abstaining from taking advantage or of realizing upon any
82
guaranties or upon any security interest in any such security; (iii) any default
by any Borrower under, or any lack of due execution, invalidity or
unenforceability of, or any irregularity or other defect in, any of the Loan
Documents; (iv) any waiver by the Banks or any other person of any required
performance or otherwise of any condition precedent or waiver of any requirement
imposed by any of the Loan Documents, any guaranties or otherwise with respect
to the Bank Obligations; (v) any exercise or non-exercise of any right, remedy,
power or privilege in respect of this Agreement or any of the other Loan
Documents; (vi) any sale, lease, transfer or other disposition of the assets of
any Borrower or any consolidation or merger of any Borrower with or into any
other person, corporation, or entity, or any transfer or other disposition by
any Borrower or any other holder of any shares of Capital Stock of any Borrower;
(vii) any bankruptcy, insolvency, reorganization or similar proceedings
involving or affecting any Borrower; (viii) the release or discharge of any
Borrower from the performance or observance of any agreement, covenant, term or
condition under any of the Bank Obligations or contained in any of the Loan
Documents by operation of law; or (ix) any other cause whether similar or
dissimilar to the foregoing which, in the absence of this provision, would
release, affect or impair the obligations, covenants, agreements and duties of
any Borrower hereunder, including without limitation any act or omission by the
Agent, or the Bank or any other any person which increases the scope of such
Borrower's risk; and in each case described in this paragraph whether or not any
Borrower shall have notice or knowledge of any of the foregoing, each of which
is specifically waived by each Borrower. Each Borrower warrants to the Banks
that it has adequate means to obtain from each other Borrower on a continuing
basis information concerning the financial condition and other matters with
respect to the Borrowers and that it is not relying on the Agent or the Banks to
provide such information either now or in the future.
9.15 Waivers, Etc. Each Borrower unconditionally waives: (a) notice
of any of the matters referred to in Section 9.14(e) above; (b) all notices
which may be required by statute, rule or law or otherwise to preserve any
rights of the Agent, or the Bank, including, without limitation, presentment to
and demand of payment or performance from the other Borrowers and protect for
non-payment or dishonor; (c) any right to the exercise by the Agent, or the Bank
of any right, remedy, power or privilege in connection with any of the Loan
Documents; (d) any requirement that the Agent, or the Bank, in the event of any
default by any Borrower, first make demand upon or seek to enforce remedies
against, such Borrower or any other Borrower before demanding payment under or
seeking to enforce this Agreement against any other Borrower; (e) any right to
notice of the disposition of any security which the Agent, or the Bank may hold
from any Borrower or otherwise and any right to object to the commercial
reasonableness of the disposition of any such security; and (f) all errors and
omissions in connection with the Agent, or the Bank's administration of any of
the Bank Obligations, any of the Loan Documents', or any other act or omission
of the Agent, or the Bank which changes the scope of the Borrower's risk, except
as a result of the gross negligence or willful misconduct of the Agent, or the
Bank. The obligations of each Borrower hereunder shall be complete and binding
forthwith upon the execution of this Agreement and subject to no condition
whatsoever, precedent or otherwise, and notice of acceptance hereof or action in
reliance hereon shall not be required.
83
9.16 Waiver of Jury Trial. The Borrowers, the Banks and the Agent,
after consulting or having had the opportunity to consult with counsel,
knowingly, voluntarily and intentionally waive any right either of them may have
to a trial by jury in any litigation based upon or arising out of this Agreement
or any other Loan Document or any of the transactions contemplated by this
Agreement or any course of conduct, dealing, statements (whether oral or
written) or actions of any of them. Neither any Borrower, any Bank nor the Agent
shall seek to consolidate, by counterclaim or otherwise, any such action in
which a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to have
been modified in any respect or relinquished by any party hereto except by a
written instrument executed by such party.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.
84
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first written above.
JABIL CIRCUIT, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President, Global Business Units
364-Day Loan Agreement
Signature Page
Address for Notices: BANK ONE, NA, (Main Office Chicago) as
a Bank and as Agent
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Associate Director
Commitment Amount: $50,000,000
86
Address for Notices: SUNTRUST BANK, as Co-Syndication
Agent
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Managing Director
Commitment Amount: $42,500,000
87
Address for Notices: THE ROYAL BANK OF SCOTLAND, as
Co-Syndication Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/s ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Senior Vice President
Commitment Amount: $425,000,000
88
Address for Notices: THE BANK OF NOVA SCOTIA
Scotia Capital, New York Agency
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Managing Director
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $15,000,000
89
Address for Notices: ABN AMRO BANK N.V., as Senior
Managing Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ Vickory_Prealta
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇-Prealta
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Senior Vice President
Commitment Amount: $30,000,000
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Print Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: Vice President
90
Address for Notices: CITIBANK, N.A., as Managing Agent
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $25,000,000
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Address for Notices: KEY CORPORATE CAPITAL, INC., as
Managing Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Senior Vice President
Commitment Amount: $25,000,000
92
Address for Notices: ROYAL BANK OF CANADA
Loans Administration
Royal Bank of Canada
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: Manager, Loans Administration Its: Senior Manager
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $15,000,000
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Address for Notices: BNP PARIBAS
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Vice President
Commitment Amount: $12,500,000
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇ Pho
Print Name: ▇▇▇▇▇▇▇ ▇▇▇ Pho
Its: Associate
94
Address for Notices: US BANK, NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $12,500,000
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Address for Notices: COMERICA BANK
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Print Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Vice President
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount: $12,500,000
96
Address for Notices: FIRST COMMERCIAL BANK (NEW
YORK AGENCY)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇. ▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇ ▇.▇. ▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: VP & GM
Commitment Amount: $7,500,000
97
Address for Notices: IDBBANK, ISRAEL DISCOUNT BANK
OF NEW YORK
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Its: Senior Vice President and Manager
Commitment Amount: $5,000,000
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: First Vice President
98