Exhibit 4.1
CREDIT AGREEMENT
DATED AS OF March 4, 2003
AMONG
ITRON, INC,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Arranger and Administrative Agent
TABLE OF CONTENTS
Page No.
--------
Section 1. DEFINITIONS....................................................................................2
1.1 Certain Defined Terms..........................................................................3
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement............28
1.3 Other Definitional Provisions and Rules of Construction.......................................28
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS....................................................29
2.1 Commitments; Making of Loans; the Register; Optional Notes....................................29
2.2 Interest on the Loans.........................................................................35
2.3 Fees..........................................................................................39
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions
Regarding Payments; Application of Proceeds of Collateral and Payments Under Subsidiary
Guaranty......................................................................................41
2.5 Use of Proceeds...............................................................................46
2.6 Special Provisions Governing Eurodollar Rate Loans............................................46
2.7 Increased Costs; Taxes; Capital Adequacy......................................................49
2.8 Statement of Lenders; Obligation of Lenders and the Issuing Lender to Mitigate................53
Section 3. LETTERS OF CREDIT.............................................................................53
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein.................53
3.2 Letter of Credit Fees.........................................................................56
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit............................57
3.4 Obligations Absolute..........................................................................59
3.5 Nature of Issuing Lender's Duties.............................................................60
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT.....................................................61
4.1 Conditions to Term Loans and Initial Revolving Loans and Swing Line Loans.....................61
4.2 Conditions to All Loans.......................................................................68
4.3 Conditions to Letters of Credit...............................................................69
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES......................................................70
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.................70
i
5.2 Authorization of Borrowing, Etc...............................................................71
5.3 Financial Condition...........................................................................71
5.4 No Material Adverse Change; No Restricted Junior Payments.....................................72
5.5 Title to Properties; Liens; Real Property; Intellectual Property..............................72
5.6 Litigation; Adverse Facts.....................................................................73
5.7 Payment of Taxes..............................................................................73
5.8 Performance of Agreements.....................................................................74
5.9 Governmental Regulation.......................................................................74
5.10 Securities Activities.........................................................................74
5.11 Employee Benefit Plans........................................................................74
5.12 Certain Fees..................................................................................75
5.13 Environmental Protection......................................................................75
5.14 Employee Matters..............................................................................76
5.15 Solvency......................................................................................76
5.16 Matters Relating to Collateral................................................................76
5.17 Related Agreements............................................................................77
5.18 Disclosure....................................................................................78
Section 6. COMPANY'S AFFIRMATIVE COVENANTS...............................................................78
6.1 Financial Statements and Other Reports........................................................78
6.2 Existence, Etc................................................................................82
6.3 Payment of Taxes and Claims; Tax .............................................................83
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation Proceeds......83
6.5 Inspection Rights; Lender Meeting.............................................................85
6.6 Compliance with Laws, etc.....................................................................86
6.7 Environmental Matters.........................................................................86
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
After the Closing Date........................................................................87
6.9 Matters Relating to Real Property Collateral..................................................89
6.10 Matters Relating to Leased Real Property Assets...............................................89
6.11 Interest Rate Protection......................................................................89
6.12 Deposit Accounts and Cash Management Systems..................................................89
6.13 Post Closing Matters..........................................................................90
ii
Section 7. COMPANY'S NEGATIVE COVENANTS..................................................................91
7.1 Indebtedness..................................................................................91
7.2 Liens and Related Matters.....................................................................92
7.3 Investments; Acquisitions.....................................................................93
7.4 Contingent Obligations........................................................................94
7.5 Restricted Junior Payments....................................................................95
7.6 Financial Covenants...........................................................................95
7.7 Restriction on Fundamental Changes; Asset Sales...............................................96
7.8 Consolidated Capital Expenditures.............................................................97
7.9 Transactions with Shareholders and Affiliates.................................................97
7.10 Sales and Lease-Backs.........................................................................97
7.11 Conduct of Business...........................................................................98
7.12 Amendments or Waivers of Related Agreements...................................................98
7.13 Fiscal Year...................................................................................98
Section 8. EVENTS OF DEFAULT.............................................................................98
8.1 Failure to Make Payments When Due.............................................................98
8.2 Default in Other Agreements...................................................................98
8.3 Breach of Certain Covenants...................................................................99
8.4 Breach of Warranty............................................................................99
8.5 Other Defaults Under Loan Documents...........................................................99
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc..........................................99
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...........................................100
8.8 Judgments and Attachments....................................................................100
8.9 Dissolution..................................................................................100
8.10 Employee Benefit Plans.......................................................................100
8.11 Material Adverse Effect......................................................................101
8.12 Change in Control............................................................................101
8.13 Invalidity of Loan Documents; Failure of Security; Repudiation of Obligations................101
8.14 Failure to Consummate Merger.................................................................101
Section 9. ADMINISTRATIVE AGENT.........................................................................102
9.1 Appointment..................................................................................102
9.2 Powers and Duties; General Immunity..........................................................103
iii
9.3 Independent Investigation by Lenders; No Responsibility For Appraisal of Creditworthiness....104
9.4 Right to Indemnity...........................................................................105
9.5 Successor Administrative Agent and Swing Line Lender.........................................105
9.6 Collateral Documents and Guaranties..........................................................106
9.7 Duties of Other Agents.......................................................................107
9.8 Administrative Agent May File Proofs of Claim................................................107
Section 10. MISCELLANEOUS................................................................................108
10.1 Successors and Assigns; Assignments and Participations in Loans and Letters of Credit........108
10.2 Expenses.....................................................................................111
10.3 Indemnity....................................................................................112
10.4 Set-Off; Security Interest in Deposit Accounts...............................................113
10.5 Ratable Sharing..............................................................................113
10.6 Amendments and Waivers.......................................................................114
10.7 Independence of Covenants....................................................................115
10.8 Notices; Effectiveness of Signatures.........................................................115
10.9 Survival of Representations, Warranties and Agreements.......................................116
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative........................................116
10.11 Marshalling; Payments Set Aside..............................................................117
10.12 Severability.................................................................................117
10.13 Obligations Several; Independent Nature of Lenders' Rights; Damage Waiver....................117
10.14 Release of Security Interest or Guaranty.....................................................117
10.15 Applicable Law...............................................................................118
10.16 Construction of Agreement; Nature of Relationship............................................118
10.17 Consent to Jurisdiction and Service of Process...............................................118
10.18 Waiver of Jury Trial.........................................................................119
10.19 Confidentiality..............................................................................120
10.20 Counterparts; Effectiveness..................................................................121
Signature pages S-1
iv
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE
IV FORM OF TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF COMPANY COUNSEL
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII FORM OF SECURITY AGREEMENT
XIII FORM OF SUBSIDIARY GUARANTY
XIV FORM OF COLLATERAL ACCESS AGREEMENT
XV FORM OF MORTGAGE
v
SCHEDULES
1.1A CERTAIN EXISTING ▇▇▇▇▇ FARGO LETTERS OF CREDIT
1.1B CERTAIN EXISTING SILICON ENERGY CORP. LETTERS OF CREDIT
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CAPITAL STRUCTURE BEFORE AND AFTER MERGER
4.1Q CLOSING DATE MORTGAGED PROPERTY
5.1 SUBSIDIARIES OF COMPANY
5.5B REAL PROPERTY
5.5C INTELLECTUAL PROPERTY
5.6 LITIGATION
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN CONTINGENT OBLIGATIONS
vi
EXECUTION VERSION
ITRON, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of March 4, 2003 and entered
into by and among ITRON, INC., a Washington corporation ("Company"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as "Lenders"), and ▇▇▇▇▇ FARGO
BANK, NATIONAL ASSOCIATION ("▇▇▇▇▇ Fargo"), as arranger and administrative agent
for Lenders (in such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, Company's direct wholly owned Subsidiary, Shadow
Combination, Inc. (these and other capitalized terms used in these recitals
without definition being used as defined in subsection 1.1), plans to acquire
all of the outstanding Capital Stock of Silicon Energy Corp. for Cash in an
amount equal to the Merger Consideration (as defined in the Merger Agreement);
WHEREAS, on the Closing Date, Shadow Combination, Inc. will be
merged with and into Silicon Energy Corp. pursuant to the Merger Agreement, with
Silicon Energy Corp. being the surviving corporation in the Merger;
WHEREAS, Lenders, at the request of Company, have agreed to
extend certain credit facilities to Company, the proceeds of which will be used
(i) to fund the Acquisition Financing Requirements and (ii) to provide financing
for working capital and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Administrative
Agent, on behalf of Lenders, a First Priority Lien on substantially all of its
real, personal and mixed property, including a pledge of all of the capital
stock of its Domestic Subsidiaries and 66% of the capital stock of its
Significant Foreign Subsidiaries; and
WHEREAS, all of the Domestic Subsidiaries of Company have agreed
to guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of their real, personal and
mixed property, including a pledge of all of the capital stock of their Domestic
Subsidiaries and 66% of the capital stock of their Significant Foreign
Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders and
Administrative Agent agree as follows:
2
Section 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"Acquisition Financing Requirements" means the aggregate of all
amounts necessary (i) to finance a portion of the purchase price payable in
connection with the Merger, (ii) to refinance certain Indebtedness outstanding
under the Existing Company Credit Agreement and the Existing Silicon Energy
Corp. Credit Agreements, and (iii) to pay Transaction Costs.
"Additional Mortgaged Property" has the meaning set forth in
subsection 6.9.
"Additional Mortgages" has the meaning set forth in subsection
6.9.
"Administrative Agent" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agents" means Administrative Agent and other agents.
"Agreement" means this Credit Agreement dated as of March 4,
2003, as it may be amended, supplemented or otherwise modified from time to
time.
"Approved Fund" means a Fund that is administered or managed by
(i) a Lender, (ii) an Affiliate of a Lender, or (iii) an entity or an Affiliate
of an entity that administers or manages a Lender.
"Asset Sale" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a) inventory sold
in the ordinary course of business, (b) sales, assignments, transfers or
dispositions of accounts in the ordinary course of business for purposes of
collection, (c) sales of Cash Equivalents, provided that the proceeds of
3
such sales are used to purchase Cash Equivalents, and (d) any such other assets
to the extent that the aggregate value of such assets sold in any single
transaction or related series of transactions is equal to $1,000,000 or less).
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit IX annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (i) the Prime Rate
or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"Base Rate Margin" means the margin over the Base Rate used in
determining the rate of interest of Base Rate Loans pursuant to subsection 2.2A.
"Benghiat Appeal Bond" means one or more surety bonds posted by
Company to stay enforcement pending appeal of any judgment entered against it in
the Benghiat Litigation.
"Benghiat Appeal Bond Amount" means the amount of any Standby
Letter of Credit required by the bonding company in order to post the Benghiat
Appeal Bond.
"Benghiat Letter of Credit" means a Standby Letter of Credit in
a face amount not to exceed the lesser of $20,000,000 and the Benghiat Appeal
Bond Amount.
"Benghiat Litigation" means that certain litigation to which
Company is a party known as Itron, Inc. v. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, being Civil Case No.
99-CV-501 presently pending in the United States District Court for the District
of Minnesota.
"Business Day" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of California or the State of
Washington or is a day on which banking institutions located in such state are
authorized or required by law or other governmental action to close, and (ii)
with respect to all notices, determinations, fundings and payments in connection
with the Eurodollar Rate or any Eurodollar Rate Loans, any day that is a
Business Day described in clause (i) above and that is also a day for trading by
and between banks in Dollar deposits in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
4
"Capital Stock" means the capital stock or other equity
interests of a Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within 15 months
after such date; (ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within 15 months after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's ("S&P") or ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's"); (iii) commercial paper maturing no more than 15 months from
the date of creation thereof and having, at the time of the acquisition thereof,
a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within 15 months after
such date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States or any state thereof or the
District of Columbia that (a) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody's.
"Change in Control" means any of the following: (i) any Person,
either individually or acting in concert with one or more other Persons, shall
have acquired beneficial ownership, directly or indirectly, of Securities of
Company (or other Securities convertible into such Securities) representing 30%
or more of the combined voting power of all Securities of Company entitled to
vote in the election of members of the Governing Body of Company, other than
Securities having such power only by reason of the happening of a contingency,
or (ii) the occurrence of a change in the composition of the Governing Body of
Company such that a majority of the members of any such Governing Body are not
Continuing Members. As used herein, the term "beneficially own" or "beneficial
ownership" shall have the meaning set forth in the Exchange Act and the rules
and regulations promulgated thereunder.
"Closing Date" means the date on which the initial Loans are
made.
"Closing Date Mortgaged Property" has the meaning set forth in
subsection 4.1Q.
"Closing Date Mortgage" has the meaning set forth in subsection
4.1Q.
"Closing Date Mortgage Policy" has the meaning set forth in
subsection 4.1Q.
5
"Collateral" means, collectively, all of the real, personal and
mixed property (including Capital Stock ) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"Collateral Access Agreement" means any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgement or agreement of
any landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor in possession of any
inventory of any Loan Party, substantially in the form of Exhibit XIV annexed
hereto with such changes thereto as may be agreed to by Administrative Agent in
the reasonable exercise of its discretion.
"Collateral Account" has the meaning assigned to that term in
the Security Agreement.
"Collateral Documents" means, the Security Agreement, the
Foreign Pledge Agreements, the Mortgages, the Control Agreements and all other
instruments or documents delivered by any Loan Party pursuant to this Agreement
or any of the other Loan Documents in order to grant to Administrative Agent, on
behalf of Lenders, a Lien on any real, personal or mixed property (including
Capital Stock) of that Loan Party as security for the Obligations.
"Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services by
Company or any of its Subsidiaries in the ordinary course of business of Company
or such Subsidiary.
"Commitments" means the commitments of Lenders to make Loans as
set forth in subsection 2.1A and subsection 3.3.
"Company" has the meaning assigned to that term in the
introduction to this Agreement.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit VII annexed hereto.
"Confidential Information Memorandum" means the Confidential
Information Memorandum dated February, 2003 and any supplement thereto prepared
by ▇▇▇▇▇ Fargo relating to the credit facilities evidenced by this Agreement.
"Consolidated Capital Expenditures" means, for any period, the
sum of the (i) aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries (net of any proceeds of any related
financing with respect to such expenditures) minus (ii) to the extent included
in clause (i) of this definition, (a) the total cash
6
consideration expended by Company and its Subsidiaries during such period to
acquire (by purchase or otherwise) the business, property or fixed assets of any
Person, or the Capital Stock of any Person that, as a result of the Merger or a
Permitted Acquisition, becomes a Subsidiary of Company and (b) all expenditures
to purchase Outsourcing Project Assets. For purposes of this definition, the
purchase price of equipment that is purchased simultaneously with the trade-in
of existing equipment or with insurance proceeds shall be included in
Consolidated Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment for the
equipment being traded in at such time or the amount of such proceeds, as the
case may be.
"Consolidated EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) any reserve
created in respect of the Benghiat Litigation, less any payment of any
judicially determined amount owed pursuant to the Benghiat Litigation, all of
the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense, (ii) scheduled principal payments in respect of Consolidated
Total Funded Debt, and (iii) Consolidated Operating Lease Payments, all of the
foregoing as determined on a consolidated basis for Company and its Subsidiaries
in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, net costs under Interest Rate Agreements and amounts referred to in
subsection 2.3 payable to Administrative Agent and Lenders that are considered
interest expense in accordance with GAAP, but excluding, however, any such
amounts referred to in subsection 2.3 payable on or before the Closing Date.
"Consolidated Leverage Ratio" means, as of the last day of any
Fiscal Quarter, the ratio of (i) Consolidated Total Funded Debt as at such day
to (ii) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on
such day.
"Consolidated Net Income" means, for any period, the net income
(or loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Company) in which any other Person (other than
Company or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Company or
any of its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of Company
or is merged into or consolidated with Company or any of its Subsidiaries or
that Person's assets are acquired by Company or any of its
7
Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to asset sales or returned surplus assets
of any Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"Consolidated Operating Lease Payments" means, for any period,
the aggregate amount of all rents paid under all Operating Leases of Company and
its Subsidiaries as lessee (net of sublease income), all as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"Consolidated Tangible Net Worth" means, as at any date of
determination, the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficits) of Company and its
Subsidiaries on a consolidated basis determined in conformity with GAAP minus
the sum of (i) goodwill, Intellectual Property and other intangible assets, (ii)
treasury stock, and (iii) obligations due to Company or any of its Subsidiaries
from any stockholder, employee or Affiliate of Company or any of its
Subsidiaries.
"Consolidated Total Funded Debt" means, as at any date of
determination, the sum of (i) the aggregate stated balance sheet amount of all
Indebtedness for borrowed money of Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, including, without limitation, the
aggregate principal amount of all outstanding Loans and the aggregate principal
amount of all outstanding Indebtedness incurred in connection with an
Outsourcing Project, (ii) the aggregate amount of that portion of obligations
with respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (iii) the Letter of Credit Usage, and
(iv) the aggregate amount of all Contingent Obligations.
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans,
8
advances, stock purchases, capital contributions or otherwise), or (2) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclause
(1) or (2) of this sentence, the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported, or, if less, the amount to which such Contingent Obligation is
specifically limited.
"Continuing Member" means, during any period of twelve
consecutive months after the Closing Date, any member of the Governing Body of
Company who (i) was a member of such Governing Body at the beginning of such
twelve-month period or (ii) was nominated for election or elected to such
Governing Body with the affirmative vote of a majority of the members who were
either members of such Governing Body at the beginning of such twelve-month
period or whose nomination or election was previously so approved.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Control Agreement" means an agreement, satisfactory in form and
substance to Administrative Agent and executed by the financial institution at
which a Deposit Account or an account in which Investment Property is
maintained, pursuant to which such financial institution confirms and
acknowledges Administrative Agent's security interest in such Deposit Account,
and agrees that the financial institution will comply with instructions
originated by Administrative Agent as to disposition of funds in the Deposit
Account, without further consent by Company or any Subsidiary and waives its
right to set off with respect to amounts in the Deposit Account.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"Deposit Account" means a demand, time, savings, passbook or
similar account maintained with a Person engaged in the business of banking,
including a savings bank, savings and loan association, credit union or trust
company.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Domestic Subsidiary" means any Subsidiary of Company that is
incorporated or organized under the laws of the United States, any state thereof
or in the District of Columbia.
"Eligible Assignee" means (i) any Lender, any Affiliate of any
Lender and any Approved Fund of any Lender; and (ii) (a) a commercial bank
organized under the laws of the United States or any state thereof; (b) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; (c) a commercial bank organized under
9
the laws of any other country or a political subdivision thereof; provided that
(1) such bank is acting through a branch or agency located in the United States
or (2) such bank is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (d) any other entity that is an "accredited
investor" (as defined in Regulation D under the Securities Act) that extends
credit or buys loans as one of its businesses including insurance companies,
mutual funds and lease financing companies; provided that neither Company nor
any Affiliate of Company shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Government Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Government
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Company or any of its Subsidiaries or
any Facility.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA Affiliate", as applied to any Person, means (i) any
corporation that is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of a Person or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of such
Person or such Subsidiary within the meaning of this definition with respect to
the period such entity was an ERISA Affiliate of such Person or such Subsidiary
and with respect to liabilities arising after such period for which such Person
or such Subsidiary could be liable under the Internal Revenue Code or ERISA.
10
"ERISA Event" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof,
or against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (ix) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (or any
other Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) (A) the rate per annum (rounded upward to the
nearest 1/16 of one percent) that appears on the Moneyline Telerate page 3750
(or such other comparable page as may, in the opinion of Administrative Agent,
replace such page for the purpose of displaying such rate) as the interbank
offered rate for Dollar deposits with maturities comparable to such Interest
Period as of approximately 11:00 a.m. (London time) on such Interest Rate
Determination Date, or (B) if such rate is not available at such time for any
reason, the arithmetic average (rounded upward to the nearest 1/16 of one
percent) of the offered quotations, if any, to first class banks in the London
interbank market by ▇▇▇▇▇ Fargo for Dollar deposits of amounts in same day funds
11
comparable to the principal amount of the Eurodollar Rate Loan of ▇▇▇▇▇ Fargo
for which the Eurodollar Rate is then being determined with maturities
comparable to such Interest Period as of approximately 11:00 A.M. (New York
time) on such Interest Rate Determination Date by (ii) a percentage equal to
100% minus the stated maximum rate of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Eurodollar Rate as provided in subsection 2.2A.
"Eurodollar Rate Margin" means the margin over the Eurodollar
Rate used in determining the rate of interest of Eurodollar Rate Loans pursuant
to subsection 2.2A.
"Event of Default" means each of the events set forth in Section
8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of Administrative Agent in the New York
foreign exchange market for the sale of such currency in exchange for Dollars at
12:00 noon (New York time) one Business Day prior to such date, expressed as a
number of units of such currency per one Dollar.
"Existing Company Credit Agreement" means that certain Credit
Agreement dated as of February 15, 2002 between Company and ▇▇▇▇▇ Fargo, as
amended prior to the Closing Date.
"Existing Silicon Energy Corp. Credit Agreements" means (i) that
certain Loan and Security Agreement dated as of May 29, 2002 between Silicon
Energy Corp. and Silicon Valley Bank and (ii) that certain Security Agreement
dated as of July 12, 2002 between Silicon Energy Corp. and certain purchasers
identified therein, in each case as amended prior to the Closing Date.
"Existing Silicon Energy Corp. Letters of Credit" means those
letters of credit issued for the account of Silicon Energy Corp. identified on
Schedule 1.1B annexed hereto.
"Existing ▇▇▇▇▇ Fargo Letters of Credit" means those letters of
credit issued for the account of Company identified on Schedule 1.1A annexed
hereto.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company or any of its Subsidiaries
or any of their respective predecessors or Affiliates.
12
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term in
subsection 6.1(xi).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Permitted Encumbrances) and (ii) such Lien is the only Lien (other than
Permitted Encumbrances and Liens permitted pursuant to subsection 7.2) to which
such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to the
calendar year in which such Fiscal Year ends.
"Flood Hazard Property" means the Closing Date Mortgaged
Property or an Additional Mortgaged Property located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards.
"Foreign Plan" means any employee benefit plan maintained by
Company or any of its Subsidiaries that is mandated or governed by any law, rule
or regulation of any Government Authority other than the United States, any
state thereof or any other political subdivision thereof.
"Foreign Pledge Agreement" means each pledge agreement or
similar instrument governed by the laws of a country other than the United
States, executed on the Closing Date or from time to time thereafter in
accordance with subsection 6.8 by Company or any Domestic Subsidiary that owns
Capital Stock of one or more Significant Foreign Subsidiaries organized in such
country, in form and substance satisfactory to Administrative Agent, as such
Foreign Pledge Agreement may be amended, supplemented or otherwise modified from
time to time.
"Foreign Subsidiary" means any Subsidiary of Company that is not
a Domestic Subsidiary.
"Fund" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
13
"Funding and Payment Office" means (i) the office of
Administrative Agent and Swing Line Lender located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or (ii) such other office of
Administrative Agent and Swing Line Lender as may from time to time hereafter be
designated as such in a written notice delivered by Administrative Agent and
Swing Line Lender to Company and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"Governing Body" means the board of directors or other body
having the power to direct or cause the direction of the management and policies
of a Person that is a corporation, partnership, trust or limited liability
company.
"Government Authority" means any political subdivision or
department thereof, any other governmental or regulatory body, commission,
central bank, board, bureau, organ or instrumentality or any court, in each case
whether federal, state, local or foreign.
"Governmental Authorization" means any permit, license,
registration, authorization, plan, directive, consent, order or consent decree
of or from, or notice to, any Government Authority.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Government Authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.
14
"Hazardous Materials Activity" means any past, current, proposed
or threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither case
constitute Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term
in subsection 10.3.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Intellectual Property" means all patents, trademarks, trade
names, copyrights, technology, software, know-how and processes used in or
necessary for the conduct of the business of Company and its Subsidiaries as
currently conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
six months, "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
15
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.
"Interest Rate Determination Date", with respect to any Interest
Period, means the second Business Day prior to the first day of such Interest
Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter, and any successor
statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment (other than adjustments for the
repayment of, or the refund of capital with respect to, the original principal
amount of any such Investment).
"Investment Property" has the meaning set forth in the UCC.
"IP Collateral" means, collectively, the Intellectual Property
that constitutes Collateral under the Security Agreement.
"Issuing Lender", with respect to any Letter of Credit, means
the Revolving Lender that agrees or is otherwise obligated to issue such Letter
of Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided however, that in no event shall any Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Lender" and "Lenders" means the Persons identified as "Lenders"
and listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise requires.
16
"Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by the
Issuing Lender for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination,
the sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then outstanding
plus (ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender and not theretofore reimbursed out of the proceeds of
Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed by Company.
For purposes of this definition, any amount described in clause (i) or (ii) of
the preceding sentence which is denominated in a currency other than Dollars
shall be valued based on the applicable Exchange Rate for such currency as of
the applicable date of determination.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Term Loans, Revolving
Loans or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Company in favor of the Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"Loan Party" means each of Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise), or prospects of Company and its Subsidiaries taken as a whole, or
(ii) the impairment of the ability of any Loan Party to perform, or of
Administrative Agent or Lenders to enforce, the Obligations.
"Material Contract" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to renew
could have a Material Adverse Effect.
"Merger" means the acquisition of Silicon Energy Corp. in
accordance with the terms of the Merger Agreement.
17
"Merger Agreement" means that certain Agreement and Plan of
Merger by and among Silicon Energy Corp., Company and Shadow Combination, Inc.
dated as of January 18, 2003 in the form delivered to Administrative Agent and
Lenders prior to their execution of this Agreement and as such agreement may be
amended from time to time thereafter to the extent permitted under subsection
7.12.
"Merger Date" means the date that the Merger becomes effective
in accordance with the terms of the Merger Agreement.
"Mortgage" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XV annexed hereto or in
such other form as may be approved by Administrative Agent in its sole
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, or (ii) at Administrative Agent's option,
in the case of an Additional Mortgaged Property, an amendment to an existing
Mortgage, in form satisfactory to Administrative Agent, adding such Additional
Mortgaged Property to the Real Property Assets encumbered by such existing
Mortgage, in either case as such security instrument or amendment may be
amended, supplemented or otherwise modified from time to time. "Mortgages" means
all such instruments, including the Closing Date Mortgage and any Additional
Mortgages, collectively.
"Multiemployer Plan" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds", means with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset
Sale, and (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Asset Sale (including
Indebtedness used to obtain financing for Outsourcing Project Assets).
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder, or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
18
"Net Securities Proceeds" means the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses) from the (i)
issuance of Capital Stock of or incurrence of Indebtedness by Company or any of
its Subsidiaries, and (ii) capital contributions made by a holder of Capital
Stock of Company.
"Non-US Lender" means a Lender that is organized under the laws
of any jurisdiction other than the United States or any state or other political
subdivision thereof.
"Notes" means one or more of the Term Notes, Revolving Notes or
Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit I annexed hereto.
"Notice of Conversion/Continuation" means a notice substantially
in the form of Exhibit II annexed hereto.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Administrative Agent, Lenders or any of them
under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"Officer" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"Officer's Certificate", as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.
"Operating Lease", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"Organizational Documents" means the documents (including
Bylaws, if applicable) pursuant to which a Person that is a corporation,
partnership, trust or limited liability company is organized.
"Outsourcing Project" means a project under which Company
constructs a meter reading system consisting of hardware and software within the
service territory of a utility or the equivalent and enters into a contract with
such Person for the construction of the meter
19
reading system and long-term operations and maintenance thereof for a price to
be paid as the output is delivered.
"Outsourcing Project Assets" means the hardware and software
components of the meter reading system that comprises an Outsourcing Project
together with the rights to Intellectual Property and licenses necessary to
operate and maintain the meter reading system, the trade and contract
receivables arising from Company's performance under the contracts relating to
the Outsourcing Project and the Capital Stock of the related Outsourcing Project
Subsidiary, if any.
"Outsourcing Project Subsidiary" means a wholly-owned special
purpose Subsidiary of Company formed for the purpose of obtaining financing for
an Outsourcing Project.
"Participant" means a purchaser of a participation in the rights
and obligations under this Agreement pursuant to subsection 10.1C.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA, and, for purposes of subsection 8.10, any Foreign Plan.
"Permitted Acquisition" has the meaning assigned to that term in
subsection 7.3(vi).
"Permitted Encumbrances" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien imposed by a Government
Authority in connection with any Foreign Plan, any such Lien relating to or
imposed in connection with any Environmental Claim, and any such Lien expressly
prohibited by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, and other Liens imposed by law, in each case
incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the
case of any such amounts overdue for a period in excess of five
days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been
made for any such contested amounts, and (2) in the case of a
Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion
of the Collateral on account of such Lien;
20
(iii) Liens arising solely by virtue of any statutory or
common law provision relating to banker's Liens, rights of
set-off or similar rights and remedies as to deposit accounts or
other funds maintained with a creditor depository institution;
provided that (a) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against
access by Company or any of its Subsidiaries owning the affected
deposit account or other funds maintained with a creditor
depository institution in excess of those set forth by
regulations promulgated by the Federal Reserve Board or any
foreign regulatory agency performing an equivalent function, and
(b) such deposit account is not intended by Company or any of
its Subsidiaries to provide collateral to the
depository institution;
(iv) deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the
performance of statutory obligations, bids, leases, government
contracts, trade contracts, and other similar obligations
(exclusive of obligations for the payment of borrowed money), so
long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on
account thereof;
(v) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(vi) licenses (with respect to Intellectual Property and
other property), leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral Documents
and not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries or
resulting in a material diminution in the value of any
Collateral as security for the Obligations;
(vii) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title, in each case
which do not and will not interfere in any material respect with
the ordinary conduct of the business of Company or any of its
Subsidiaries or result in a material diminution in the value of
any Collateral as security for the Obligations;
(viii) any (a) interest or title of a lessor or sublessor under
any lease not prohibited by this Agreement, (b) Lien or
restriction that the interest or title of such lessor or
sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any
Lien or restriction referred to in the preceding clause (b),
so long as the holder of such Lien or restriction agrees to
recognize the rights of such lessee or sublessee under such
lease;
(ix) Liens arising from filing UCC financing statements
relating solely to leases not prohibited by this Agreement;
21
(x) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
in connection with the importation of goods;
(xi) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the
use of any real property;
(xii) Liens granted pursuant to the Collateral Documents; and
(xiii) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the
ordinary course of business of Company and its Subsidiaries.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged
Collateral" as defined in the Security Agreement and any Foreign Pledge
Agreement.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"Pricing Certificate" means an Officer's Certificate of Company
certifying the Consolidated Leverage Ratio as at the last day of any Fiscal
Quarter and setting forth the calculation of such Consolidated Leverage Ratio in
reasonable detail, which Officer's Certificate may be delivered to
Administrative Agent at any time on or after the date of delivery by Company of
the Compliance Certificate with respect to the period ending on the last day of
such Fiscal Quarter.
"Prime Rate" means the rate that ▇▇▇▇▇ Fargo announces at its
principal office in San Francisco, California from time to time as its prime
lending rate, as in effect from time to time. The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer. ▇▇▇▇▇ Fargo or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"Proceedings" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the Term
Loan of any Lender, the percentage obtained by dividing (x) the Term Loan
Exposure of that Lender by (y) the aggregate Term Loan
22
Exposure of all Lenders,(ii) with respect to all payments, computations and
other matters relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender or any Letters of Credit issued or participations therein deemed
purchased by any Lender or any assignments of any Swing Line Loans deemed
purchased by any Lender, the percentage obtained by dividing (x) the Revolving
Loan Exposure of that Lender by (y) the aggregate Revolving Loan Exposure of all
Lenders, and (iii) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Term Loan Exposure of that
Lender plus the Revolving Loan Exposure of that Lender by (y) the sum of the
aggregate Term Loan Exposure of all Lenders plus the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1. The initial Pro
Rata Share of each Lender for purposes of each of clauses (i), (ii), and (iii)
of the preceding sentence is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Refunded Swing Line Loans" has the meaning assigned to that
term in subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection
2.1D.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, (i) the Merger
Agreement, (ii) that certain escrow agreement attached as Exhibit A to the
Merger Agreement, (iii) that certain common stock purchase agreement attached as
Exhibit G to the Merger Agreement, and (iv) certain shareholder support
agreements dated on or about January 18, 2003 by and between Company and certain
shareholders of Company and as such agreements may be amended from time to time
thereafter to the extent permitted under subsection 7.12.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including, without
limitation, the movement of any Hazardous Materials through the air, soil,
surface water or groundwater.
23
"Request for Issuance" means a request substantially in the form
of Exhibit III annexed hereto.
"Requisite Lenders" means Lenders having or holding at least 66
2/3% of the sum of the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of Company or any of its Subsidiaries now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock of Company or any of its Subsidiaries now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, premium, if any, or interest on,
or redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Revolving Lender" means a Lender that has a Revolving Loan
Commitment and/or that has an outstanding Revolving Loan.
"Revolving Loan Commitment" means the commitment of a Revolving
Lender to make Revolving Loans to Company pursuant to subsection 2.1A(ii), and
"Revolving Loan Commitments" means such commitments of all Revolving Lenders in
the aggregate.
"Revolving Loan Commitment Termination Date" means March 4,
2006.
"Revolving Loan Exposure" means, with respect to any Revolving
Lender, as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment, and (ii)
after the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender
plus (b) in the event that Lender is the Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by the Issuing Lender
(in each case net of any participations purchased by other Revolving Lenders in
such Letters of Credit or in any unreimbursed drawings thereunder) plus (c) the
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit plus (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any assignments thereof
purchased by other Revolving Lenders) plus (e) the aggregate amount of all
assignments purchased by that Lender in any outstanding Swing Line Loans.
"Revolving Loans" means the Loans made by Revolving Lenders to
Company pursuant to subsection 2.1A(ii).
24
"Revolving Notes" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Revolving
Lenders, substantially in the form of Exhibit V annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated, certificated or uncertificated, or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Security Agreement" means the Security Agreement executed and
delivered on the Closing Date by Company and its Subsidiaries (other than
Outsourcing Project Subsidiaries) and by Silicon Energy Corp. and its
Subsidiaries, substantially in the form of Exhibit XII annexed hereto, as such
Security Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.
"Shadow Combination, Inc." means Shadow Combination, Inc., a
Delaware corporation.
"Significant Foreign Subsidiary" means as of any date of
determination, each Foreign Subsidiary of Company that had on the last day of
the Fiscal Quarter then most recently ended either (i) total assets (excluding
intercompany Indebtedness owing from Company or any of its Subsidiaries) with a
book value equal to 5% or greater of the total assets (excluding intercompany
Indebtedness) of Company and its Subsidiaries, on a consolidated basis, or (ii)
total revenue (excluding intercompany revenue) equal to 10% or greater of the
total revenue (excluding intercompany revenue) of Company and its Subsidiaries,
on a consolidated basis, in each case as determined in accordance with GAAP.
"Silicon Energy Corp." means Silicon Energy Corp., a Delaware
corporation.
"Silicon Energy Corp. Fiscal Year" means, prior to consummation
of the Merger, the fiscal year of Silicon Energy Corp. and its Subsidiaries
ending on December 31 of each calendar year. For purposes of this Agreement, any
particular Silicon Energy Corp. Fiscal Year shall be designated by reference to
the calendar year in which the Silicon Energy Corp. Fiscal Year ends.
"Solvent", with respect to any Person, means that as of the date
of determination both (i)(a) the then fair saleable value of the property of
such Person is (1) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (2) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts
25
as they become absolute and due considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations with respect
to Capital Leases or Operating Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries, in any case if required by law or governmental rule or regulation
or in accordance with custom and practice in the industry.
"Subordinated Indebtedness" means any Indebtedness of Company
incurred from time to time and subordinated in right of payment to the
Obligations.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, trust, limited liability company, association, or other business
entity of which more than 50% of the total voting power of shares of stock or
other ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the members of the Governing Body is at
the time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination thereof; provided
that in no event shall any Joint Venture be considered to be a Subsidiary of any
Person.
"Subsidiary Guarantor" means any Subsidiary of Company that
executes and delivers a counterpart of the Subsidiary Guaranty on the Closing
Date or from time to time thereafter pursuant to subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by Subsidiaries of Company (other than Outsourcing Project
Subsidiaries) and by Silicon Energy Corp. and its Subsidiaries on the Closing
Date and to be executed and delivered by additional Subsidiaries of Company from
time to time thereafter in accordance with subsection 6.8, substantially in the
form of Exhibit XIII annexed hereto, as such Subsidiary Guaranty may hereafter
be amended, supplemented or otherwise modified from time to time.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 9.1B.
26
"Swing Line Lender" means ▇▇▇▇▇ Fargo, or any Person serving as
a successor Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).
"Swing Line Note" means any promissory note of Company issued
pursuant to subsection 2.1E to evidence the Swing Line Loans of Swing Line
Lender, substantially in the form of Exhibit VI annexed hereto, as it may be
amended, supplemented or otherwise modified from time to time.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed, including interest, penalties, additions to tax and any similar
liabilities with respect thereto; except that, in the case of a Lender, there
shall be excluded (i) taxes that are imposed on the overall net income or net
profits (including franchise taxes imposed in lieu thereof) (a) by the United
States, (b) by any other Government Authority under the laws of which such
Lender is organized or has its principal office or maintains its applicable
lending office, or (c) by any jurisdiction solely as a result of a present or
former connection between such Lender and such jurisdiction (other than any such
connection arising solely from such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any of the
Loan Documents), and (ii) any branch profits taxes imposed by the United States
or any similar tax imposed by any other jurisdiction in which such Lender is
located.
"Term Loan Commitment" means the commitment of a Lender to make
a Term Loan to Company pursuant to subsection 2.1A(i), and "Term Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Term Loan Exposure", with respect to any Lender, means, as of
any date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment, and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.
"Term Loan Maturity Date" means March 4, 2006.
"Term Loans" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"Term Notes" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Term Loans of any Lender,
substantially in the form of Exhibit IV annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
27
"Title Company" means one or more title insurance companies
reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"Transaction Costs" means the fees, costs and expenses payable
by Company on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents and the Related Agreements.
"UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.
"▇▇▇▇▇ Fargo" has the meaning assigned to that term in the
introduction to this Agreement.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (ii), (iii),
and (xi) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize GAAP as in effect on the date of determination, applied
in a manner consistent with that used in preparing the financial statements
referred to in subsection 5.3. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan
Document, and Company, Administrative Agent or Requisite Lenders shall so
request, Administrative Agent, Lenders and Company shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of Requisite Lenders),
provided that, until so amended, such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and Company shall
provide to Administrative Agent and Lenders reconciliation statements provided
for in subsection 6.1(v).
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Section and subsection headings in this Agreement are
included herein for convenience of reference only and
28
shall not constitute a part of this Agreement for any other purpose or be given
any substantive effect.
C. The use in any of the Loan Documents of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; OPTIONAL NOTES.
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, each Lender hereby severally agrees to make the Loans as
described in subsections 2.1A(i) and, 2.1A(ii) and Swing Line Lender hereby
agrees to make the Swing Line Loans as described in subsection 2.1A(iii).
(i) Term Loans. Each Lender that has a Term Loan Commitment
severally agrees to lend to Company on the Closing Date an amount not
exceeding its Pro Rata Share of the aggregate amount of the Term Loan
Commitments to be used for the purposes identified in subsection 2.5A.
The amount of each Lender's Term Loan Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto and the aggregate amount of
the Term Loan Commitments is $50,000,000; provided that the Term Loan
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Term Loan Commitments pursuant to subsection 10.1B.
Company may make only one borrowing under the Term Loan Commitments.
Amounts borrowed under this subsection 2.1A(i) and subsequently repaid
or prepaid may not be reborrowed.
(ii) Revolving Loans. Each Revolving Lender severally agrees,
subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Company from time to time
during the period from the Closing Date to but excluding the Revolving
Loan Commitment Termination Date an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5B.
The original amount of each Revolving Lender's Revolving Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate original amount of the Revolving Loan
Commitments is $55,000,000; provided that the Revolving Loan
Commitments of Revolving Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to
subsection 10.1B and shall be reduced from time to time by the amount
of any reductions thereto made pursuant to subsection 2.4. Each
Revolving Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment
29
Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date. Amounts
borrowed under this subsection 2.1A(ii) may be repaid and reborrowed to
but excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the following limitations: (a) in no event shall
the Total Utilization of Revolving Loan Commitments at any time exceed
the Revolving Loan Commitments then in effect and (b) in no event shall
the Revolving Loan Commitments exceed $35,000,000 prior to issuance of
the Benghiat Letter of Credit.
(iii) Swing Line Loans.
(a) General Provisions. Swing Line Lender hereby
agrees, subject to the limitations set forth below with respect
to the maximum amount of Swing Line Loans permitted
to be outstanding from time to time, to make a portion of the
Revolving Loan Commitments available to Company from time to
time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date by
making Swing Line Loans to Company in an aggregate amount
not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5B,
notwithstanding the fact that such Swing Line Loans, when
aggregated with Swing Line Lender's outstanding Revolving
Loans and Swing Line Lender's Pro Rata Share of the Letter
of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of
the Swing Line Loan Commitment is $5,000,000; provided that
any reduction of the Revolving Loan Commitments made
pursuant to subsection 2.4 that reduces the aggregate
Revolving Loan Commitments to an amount less than the then
current amount of the Swing Line Loan Commitment shall
result in an automatic corresponding reduction of the Swing
Line Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further action on
the part of Company, Administrative Agent or Swing Line
Lender. The Swing Line Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Swing
Line Loans and all other amounts owed hereunder with respect
to the Swing Line Loans shall be paid in full no later than
that date. Amounts borrowed under this subsection 2.1A(iii)
may be repaid and reborrowed to but excluding the Revolving
Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan
Commitment shall be subject to the limitation that in no event
shall the Total Utilization of Revolving Loan Commitments at
any time exceed the Revolving Loan Commitments then in effect.
30
(b) Swing Line Loan Prepayment with Proceeds of
Revolving Loans. With respect to any Swing Line Loans that have
not been voluntarily prepaid by Company pursuant to subsection
2.4B(i), Swing Line Lender may, at any time in its sole and
absolute discretion and shall, on or prior to the tenth Business
Day after the date any Swing Line Loan is made, deliver to
Administrative Agent (with a copy to Company), no later than
10:00 A.M. (California time) on the first Business Day in
advance of the proposed Funding Date, a notice (which shall
be deemed to be a Notice of Borrowing given by Company)
requesting Revolving Lenders to make Revolving Loans that
are Base Rate Loans on such Funding Date in an amount equal
to the amount of such Swing Line Loans (the "Refunded Swing
Line Loans") outstanding on the date such notice is given.
Company hereby authorizes the giving of any such notice and
the making of any such Revolving Loans. Anything contained
in this Agreement to the contrary notwithstanding, (1) the
proceeds of such Revolving Loans made by Revolving Lenders
other than Swing Line Lender shall be immediately delivered
by Administrative Agent to Swing Line Lender (and not to
Company) and applied to repay a corresponding portion of the
Refunded Swing Line Loans and (2) on the day such Revolving
Loans are made, Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with
the proceeds of a Revolving Loan made by Swing Line Lender,
and such portion of the Swing Line Loans deemed to be so
paid shall no longer be outstanding as Swing Line Loans and
shall no longer be due under the Swing Line Note, if any, of
Swing Line Lender but shall instead constitute part of Swing
Line Lender's outstanding Revolving Loans and shall be due
under the Revolving Note, if any, of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing
Line Lender to charge Company's accounts with Administrative
Agent and Swing Line Lender (up to the amount available in
each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by
Revolving Lenders, including the Revolving Loan deemed to be
made by Swing Line Lender, are not sufficient to repay in
full the Refunded Swing Line Loans. If any portion of any
such amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Company from Swing
Line Lender in any bankruptcy proceeding, in any assignment
for the benefit of creditors or otherwise, the loss of the
amount so recovered shall be ratably shared among all
Lenders in the manner contemplated by subsection 10.5.
(c) Swing Line Loan Assignments. If for any reason
(1) Revolving Loans are not made upon the request of Swing Line
Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender
in respect of any outstanding Swing Line Loans, or (2) the
Revolving Loan Commitments are terminated at a time when any
Swing Line Loans are outstanding, each Revolving Lender shall be
deemed to, and hereby agrees to, have purchased an assignment of
such outstanding Swing Line Loans in an amount equal to its Pro
Rata Share (calculated, in the case of the
31
foregoing clause (2), immediately prior to such termination of
the Revolving Loan Commitments) of the unpaid amount of such
Swing Line Loans together with accrued interest thereon. Upon
one Business Day's notice from Swing Line Lender, each
Revolving Lender shall deliver to Swing Line Lender an
amount equal to its respective assignment in same day funds
at the Funding and Payment Office. In order to further
evidence such assignment (and without prejudice to the
effectiveness of the assignment provisions set forth above),
each Revolving Lender agrees to enter into an Assignment
Agreement at the request of Swing Line Lender in form and
substance reasonably satisfactory to Swing Line Lender. In
the event any Revolving Lender fails to make available to
Swing Line Lender the amount of such Revolving Lender's
assignment as provided in this paragraph, Swing Line Lender
shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of
errors among banks for three Business Days and thereafter at
the Base Rate. In the event Swing Line Lender receives a
payment of any amount in which other Revolving Lenders have
purchased assignments as provided in this paragraph, Swing
Line Lender shall promptly distribute to each such other
Revolving Lender its Pro Rata Share of such payment.
(d) Revolving Lenders' Obligations. Anything
contained herein to the contrary notwithstanding, each Revolving
Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to subsection
2.1A(iii)(b) and each Revolving Lender's obligation to purchase
an assignment of any unpaid Swing Line Loans pursuant to the
immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance,
including (1) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against Swing
Line Lender, Company or any other Person for any reason
whatsoever; (2) the occurrence or continuation of an Event of
Default or a Potential Event of Default; (3) the occurrence of
any Material Adverse Effect; (4) any breach of this Agreement or
any other Loan Document by any party thereto; or (5) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that such obligations
of each Revolving Lender are subject to the condition that (x)
Swing Line Lender believed in good faith that all conditions
under Section 4 to the making of the applicable Refunded Swing
Line Loans or other unpaid Swing Line Loans, as the case may be,
were satisfied at the time such Refunded Swing Line Loans or
unpaid Swing Line Loans were made, or (y) the satisfaction of
any such condition not satisfied had been waived in
accordance with subsection 10.6 prior to or at the time such
Refunded Swing Line Loans or other unpaid Swing Line Loans
were made.
B. Borrowing Mechanics. Term Loans or Revolving Loans made
on any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(iii) or Revolving Loans made
pursuant to subsection 3.3B) shall be
32
in an aggregate minimum amount of $500,000 and multiples of $100,000 in excess
of that amount; provided that Term Loans or Revolving Loans made on any Funding
Date as Eurodollar Rate Loans with a particular Interest Period shall be in an
aggregate minimum amount of $1,000,000 and multiples of $100,000 in excess of
that amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $500,000 and multiples of $100,000 in excess of that amount.
Whenever Company desires that Lenders make Term Loans or Revolving Loans it
shall deliver to Administrative Agent a duly executed Notice of Borrowing no
later than 10:00 A.M. (California time) at least three Business Days in advance
of the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least
one Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Administrative Agent a duly executed Notice of
Borrowing no later than 12:00 Noon (California time) on the proposed Funding
Date. Term Loans and Revolving Loans may be continued as or converted into Base
Rate Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D.
In lieu of delivering a Notice of Borrowing, Company may give Administrative
Agent telephonic notice by the required time of any proposed borrowing under
this subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a duly executed Notice of Borrowing to Administrative
Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by an Officer or
other person authorized to borrow on behalf of Company or for otherwise acting
in good faith under this subsection 2.1B or under subsection 2.2D, and upon
funding of Loans by Lenders, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans
pursuant to subsection 2.2D, in each case in accordance with this Agreement,
pursuant to any such telephonic notice Company shall have effected Loans or a
conversion or continuation, as the case may be, hereunder.
Company shall notify Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which Company is required
to certify in the applicable Notice of Borrowing is no longer true and correct
as of the applicable Funding Date, and the acceptance by Company of the proceeds
of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G,
a Notice of Borrowing for, or a Notice of Conversion/Continuation for conversion
to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing or to effect
a conversion or continuation in accordance therewith.
Notwithstanding the foregoing provisions of this subsection
2.1B, no Eurodollar Rate Loans may be made and no Base Rate Loan may be
converted into a Eurodollar Rate Loan until the earlier of the sixtieth day
after the Closing Date and the date specified by
33
Administrative Agent to Company on which the primary syndication of the Loans
has been completed.
C. Disbursement of Funds. All Term Loans and Revolving
Loans shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that neither Administrative
Agent nor any Lender shall be responsible for any default by any other Lender in
that other Lender's obligation to make a Loan requested hereunder nor shall the
Commitment of any Lender to make the particular type of Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly after
receipt by Administrative Agent of a Notice of Borrowing pursuant to subsection
2.1B (or telephonic notice in lieu thereof), Administrative Agent shall notify
each Lender for that type of Loan or Swing Line Lender, as the case may be, of
the proposed borrowing. Each such Lender shall make the amount of its Loan
available to Administrative Agent not later than 12:00 Noon (California time) on
the applicable Funding Date, and Swing Line Lender shall make the amount of its
Swing Line Loan available to Administrative Agent not later than 2:00 P.M.
(California time) on the applicable Funding Date, in each case in same day funds
in Dollars, at the Funding and Payment Office. Except as provided in subsection
2.1A(iii) or subsection 3.3B with respect to Revolving Loans used to repay
Refunded Swing Line Loans or to reimburse the Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans made
on the Closing Date) and 4.2 (in the case of all Loans), Administrative Agent
shall make the proceeds of such Loans available to Company on the applicable
Funding Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from Lenders to be
credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to a Funding Date for any Loans that such Lender does not intend to
make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
34
D. The Register. Administrative Agent, acting for these
purposes solely as an agent of Company (it being acknowledged that
Administrative Agent, in such capacity, and its officers, directors, employees,
agent and affiliates shall constitute Indemnitees under subsection 10.3), shall
maintain (and make available for inspection by Company upon reasonable prior
notice at reasonable times) at its address referred to in subsection 10.8 a
register for the recordation of, and shall record, the names and addresses of
Lenders and the Term Loan Commitment, Revolving Loan Commitment, Swing Line Loan
Commitment, Term Loan, Revolving Loans and Swing Line Loans of each Lender from
time to time (the "Register"). Company and Administrative Agent shall deem and
treat the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes hereof;
all amounts owed with respect to any Commitment or Loan shall be owed to the
Lender listed in the Register as the owner thereof; and any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans. Each Lender shall record on its internal
records the amount of its Loans and Commitments and each payment in respect
hereof, and any such recordation shall be conclusive and binding on Company,
absent manifest error, subject to the entries in the Register, which shall,
absent manifest error, govern in the event of any inconsistency with any
Lender's records. Failure to make any recordation in the Register or in any
Lender's records, or any error in such recordation, shall not affect any Loans
or Commitments or any Obligations in respect of any Loans.
E. Optional Notes. If so requested by any Lender by written
notice to Company (with a copy to Administrative Agent) at least two Business
Days prior to the Closing Date or at any time thereafter, Company shall execute
and deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to subsection
10.1) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a promissory note or
promissory notes to evidence such Lender's Term Loan, Revolving Loans or Swing
Line Loans, substantially in the form of Exhibit IV, Exhibit V or Exhibit VI
annexed hereto, respectively, with appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. Rate of Interest. Subject to the provisions of
subsections 2.6 and 2.7, each Term Loan and each Revolving Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Eurodollar Rate. Subject to the provisions of
subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate. The applicable
basis for determining the rate of interest with respect to any Term Loan or any
Revolving Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B
(subject to the last sentence of subsection 2.1B), and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D (subject to the last
sentence of subsection 2.1B). If on any day a
35
Term Loan or Revolving Loan is outstanding with respect to which notice has not
been delivered to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the rate of interest,
then for that day that Loan shall bear interest determined by reference to the
Base Rate.
(i) Subject to the provisions of subsections 2.2E, 2.2G and
2.7, the Term Loans and the Revolving Loans shall bear interest through
maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base
Rate plus the Base Rate Margin set forth in the table below
opposite the Consolidated Leverage Ratio for the four Fiscal
Quarter period for which the applicable Pricing Certificate has
been delivered pursuant to subsection 6.1(iv); or
(b) if a Eurodollar Rate Loan, then at the sum of
the Eurodollar Rate plus the Eurodollar Rate Margin set forth in
the table below opposite the Consolidated Leverage Ratio for the
four Fiscal Quarter period for which the applicable Pricing
Certificate has been delivered pursuant to subsection 6.1(iv):
Consolidated Eurodollar Rate Base
Leverage Ratio Margin Rate Margin
-------------------------------------------------------------------------------
Greater than
Or equal to 2:00:1.00 2.75% 1.50%
-------------------------------------------------------------------------------
Greater than or equal to but 1.75:1.00
less than 2.00:1.00 2.50% 1.25%
-------------------------------------------------------------------------------
Greater than or equal to but 1.50:1.00
less than 1.75:1.00 2.25% 1.00%
-------------------------------------------------------------------------------
Less than 1.50:1.00 2.00% 0.75%
provided that, until the delivery of the Pricing Certificate for the
Fiscal Quarter ending June 30, 2003, the applicable margin for Term
Loans and Revolving Loans that are Eurodollar Rate Loans shall be 2.50%
per annum and for Term Loans and Revolving Loans that are Base Rate
Loans shall be 1.25% per annum.
(ii) Upon delivery of the Pricing Certificate by Company to
Administrative Agent pursuant to subsection 6.1(iv), the Base Rate
Margin and the Eurodollar Rate Margin shall automatically be adjusted in
accordance with such Pricing Certificate, such adjustment to become
effective on the next succeeding Business Day following the receipt by
Administrative Agent of such Pricing Certificate (subject to the
provisions of
36
the foregoing clauses (i) and (ii)); provided that, if at any time a
Pricing Certificate is not delivered at the time required pursuant to
subsection 6.1(iv), from the time such Pricing Certificate was required
to be delivered until delivery of such Pricing Certificate, the
applicable margins shall be the maximum percentage amount for the
relevant Loan set forth above.
(iii) Subject to the provisions of subsections 2.2E, 2.2G and
2.7, the Swing Line Loans shall bear interest through maturity at the
sum of the Base Rate plus the applicable Base Rate Margin for Revolving
Loans minus a rate equal to the commitment fee percentage then in
effect as determined pursuant to subsection 2.3A.
B. Interest Periods. In connection with each Eurodollar
Rate Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice
of Conversion/Continuation, as the case may be, select an interest period (each
an "Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Term Loans shall extend beyond the Term Loan Maturity Date, and no
Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any type of Term
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of such type of Term Loans unless the sum
of (a) the aggregate principal amount of such
37
type of Term Loans that are Base Rate Loans plus (b) the aggregate
principal amount of such type of Term Loans that are Eurodollar Rate
Loans with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on such type of Term
Loans on such date;
(vii) there shall be no more than five Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have
selected an Interest Period of one month.
C. Interest Payments. Subject to the provisions of
subsection 2.2E, interest on each Loan shall be payable in arrears on and to
each Interest Payment Date applicable to that Loan, upon any prepayment of that
Loan (to the extent accrued on the amount being prepaid) and at maturity
(including final maturity); provided that in the event any Swing Line Loans or
any Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4B(i), interest accrued on such Loans through the date of such prepayment
shall be payable on the next succeeding Interest Payment Date applicable to Base
Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans or Revolving Loans equal to $1,000,000
and multiples of $100,000 in excess of that amount from Loans bearing interest
at a rate determined by reference to one basis to Loans bearing interest at a
rate determined by reference to an alternative basis, or (ii) upon the
expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $1,000,000 and multiples of
$100,000 in excess of that amount as a Eurodollar Rate Loan; provided, however,
that a Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a duly executed Notice of
Conversion/Continuation to Administrative Agent no later than 10:00 A.M.
(California time) at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least
three Business Days in advance of the proposed conversion/continuation date (in
the case of a conversion to, or a continuation of, a Eurodollar Rate Loan). In
lieu of delivering a Notice of Conversion/Continuation, Company may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a duly executed Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender of the Loan subject to the Notice of Conversion/Continuation.
E. Default Rate. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by
38
applicable law, any interest payments thereon not paid when due and any fees and
other amounts then due and payable hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable upon demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable under this Agreement with
respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans); provided that, in
the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall
thereafter bear interest payable upon demand at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. Payment or acceptance of the increased rates of interest provided for in
this subsection 2.2E is not a permitted alternative to timely payment and shall
not constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
Loan, the date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
G. Maximum Rate. Notwithstanding the foregoing provisions
of this subsection 2.2, in no event shall the rate of interest payable by
Company with respect to any Loan exceed the maximum rate of interest permitted
to be charged under applicable law.
2.3 FEES.
A. Commitment Fees. Company agrees to pay to Administrative
Agent, for distribution to each Revolving Lender in proportion to that Lender's
Pro Rata Share, commitment fees for the period from and including the Closing
Date to and excluding the Revolving Loan Commitment Termination Date equal to
the average of the daily excess of the Revolving Loan Commitments over the sum
of (i) the aggregate principal amount of outstanding Revolving Loans (but not
any outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage
multiplied by a rate per annum equal to the percentage set forth in the table
below opposite the Consolidated Leverage Ratio for the four Fiscal Quarter
period for which the applicable Pricing Certificate has been delivered pursuant
to subsection 6.1(iv):
39
Consolidated Commitment
Leverage Ratio Fee Percentage
Greater than 0.500%
or equal to 2.00:1.00
Greater than or equal to 1.75:1.00 0.375%
but less than 2.00:1.00
Greater than or equal to 1.50:1.00 0.375%
but less than 1.75:1.00
Less than 1.50:1.00 0.250%
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, commencing on the first
such date to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date; provided that until the delivery of the Pricing Certificate
for the Fiscal Quarter ending June 30, 2003, the applicable commitment fee
percentage shall be 0.375% per annum. Upon delivery of the Pricing Certificate
by Company to Administrative Agent pursuant to subsection 6.1(iv), the
applicable commitment fee percentage shall automatically be adjusted in
accordance with such Pricing Certificate, such adjustment to become effective on
the next succeeding Business Day following the receipt by Administrative Agent
of such Pricing Certificate; provided that, if at any time a Pricing Certificate
is not delivered at the time required pursuant to subsection 6.1(iv), from the
time such Pricing Certificate was required to be delivered until delivery of
such Pricing Certificate, the applicable commitment fee percentage shall be the
maximum percentage amount set forth above.
B. Other Fees. Company agrees to pay to Administrative
Agent such fees in the amounts and at the times separately agreed upon between
Company and Administrative Agent.
40
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN
COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION
OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER SUBSIDIARY
GUARANTY.
A. Scheduled Payments of Term Loans. Company shall make
principal payments on the Term Loans in quarterly installments on the dates and
in the amounts set forth below:
Date Scheduled Repayment
--------------------------------------------------
June 30, 2003 $ 4,166,666.66
September 30, 2003 $ 4,166,666.66
December 31, 2003 $ 4,166,666.66
--------------------------------------------------
March 31, 2004 $ 4,166,666.66
June 30, 2004 $ 4,166,666.66
September 30, 2004 $ 4,166,666.66
December 31, 2004 $ 4,166,666.66
--------------------------------------------------
March 31, 2005 $ 4,166,666.66
June 30, 2005 $ 4,166,666.66
September 30, 2005 $ 4,166,666.66
December 31, 2005 $ 4,166,666.66
--------------------------------------------------
March 4, 2006 $4,166,666.74
--------------------------------------------------
; provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.4B(iv); and
provided further, that the Term Loans and all other amounts owed hereunder with
respect to the Term Loans shall be paid in full no later than the Term Loan
Maturity Date, and the final installment payable by Company in respect of the
Term Loans on such date shall be in an amount, if such amount is different from
that specified above, sufficient to repay all amounts owing by Company under
this Agreement with respect to the Term Loans.
B. Prepayments and Unscheduled Reductions in Revolving Loan
Commitments.
(i) Voluntary Prepayments. Company may, upon written or
telephonic notice to Administrative Agent on or prior to 12:00 Noon
(California time) on the date of prepayment, which notice, if
telephonic, shall be promptly confirmed in writing, at any time and from
time to time without premium or penalty prepay any Swing Line Loan on
any Business Day in whole or in part in an aggregate minimum amount of
$500,000 and multiples of $100,000 in excess of that amount. Company
may, upon not less than one Business Day's prior written or telephonic
notice, in the case of Base Rate Loans, and
41
three Business Days' prior written or telephonic notice, in the case of
Eurodollar Rate Loans, in each case given to Administrative Agent by
12:00 Noon (California time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender for the Loans to
be prepaid), at any time and from time to time without premium or
penalty, except as set forth in subsection 2.7A, prepay any Term Loans
or Revolving Loans on any Business Day in whole or in part in an
aggregate minimum amount of $1,000,000 and multiples of $100,000 in
excess of that amount. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice
shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in
subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Revolving
Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving
Loan Commitments in an amount up to the amount by which the Revolving
Loan Commitments exceed the Total Utilization of Revolving Loan
Commitments at the time of such proposed termination or reduction;
provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $5,000,000 and
multiples of $1,000,000 in excess of that amount. Company's notice to
Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Loan Commitments shall be effective on the date specified in Company's
notice and shall reduce the Revolving Loan Commitment of each
Revolving Lender proportionately to its Pro Rata Share. Any such
voluntary reduction of the Revolving Loan Commitments shall be applied
as specified in subsection 2.4B(iv).
(iii) Mandatory Prepayments. The Loans shall be prepaid in the
amounts and under the circumstances set forth below, all such
prepayments and/or reductions to be applied as set forth below or as
more specifically provided in subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the date of receipt by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds in respect of
any Asset Sale, Company shall prepay the Term Loans in an
aggregate amount equal to such Net Asset Sale Proceeds. Nothing
contained herein shall be construed to permit any sale of assets
prohibited by subsection 7.7.
(b) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Administrative
Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be applied
to prepay the
42
Term Loans pursuant to the provisions of subsection 6.4C,
Company shall prepay the Term Loans in an aggregate amount equal
to such Net Insurance/Condemnation Proceeds.
(c) Prepayments and Reductions Due to Issuance of
Equity Securities. On the date of receipt of the Net Securities
Proceeds from the issuance of any Capital Stock of Company or of
any Subsidiary of Company or from any capital contribution to
Company by any holder of Capital Stock thereof after the Closing
Date, Company shall prepay the Term Loans in an aggregate amount
equal to 75% of such Net Securities Proceeds.
(d) Prepayments and Reductions Due to Issuance of
Indebtedness. On the date of receipt of the Net Securities
Proceeds from the issuance of any Indebtedness of Company or any
of its Subsidiaries (other than an Outsourcing Project
Subsidiary) after the Term Loan Closing Date, other than
Indebtedness permitted pursuant to subsection 7.1, Company shall
prepay the Term Loans in an aggregate amount equal to such Net
Securities Proceeds.
(e) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Term Loans pursuant to
subsections 2.4B(iii)(a)-(d), Company shall deliver to
Administrative Agent an Officer's Certificate demonstrating the
calculation of the amount of the applicable Net Asset Sale
Proceeds, Net Insurance/Condemnation Proceeds or Net Securities
Proceeds, as the case may be, that gave rise to such prepayment
and/or reduction. In the event that Company shall subsequently
determine that the actual amount was greater than the amount set
forth in such Officer's Certificate, Company shall promptly make
an additional prepayment of the Term Loans in an amount equal to
the amount of such excess, and Company shall concurrently
therewith deliver to Administrative Agent an Officer's
Certificate demonstrating the derivation of the additional
amount resulting in such excess.
(f) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Company shall from time to time
prepay first the Swing Line Loans and second the Revolving Loans
to the extent necessary so that the Total Utilization of
Revolving Loan Commitments shall not at any time exceed the
Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of
Loans and Order of Maturity. Any voluntary prepayments pursuant
to subsection 2.4B(i) shall be applied as specified by Company
in the applicable notice of prepayment; provided that in the
event Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be
applied first, to repay outstanding Swing Line Loans to the
full extent thereof, second, to repay
43
outstanding Revolving Loans to the full extent thereof, and
third, to repay outstanding Term Loans to the full extent
thereof. Any voluntary prepayments of the Term Loans pursuant to
subsection 2.4B(i) shall be applied to reduce the scheduled
installments of principal of the Term Loans set forth in
subsection 2.4A(i) in inverse chronological order.
(b) Application of Mandatory Prepayments by Type of
Loans. Except as provided in subsection 2.4D, any amount
required to be applied as a mandatory prepayment of the Loans
pursuant to subsections 2.4B(iii)(a)-(d) shall be applied first,
to prepay the Term Loans to the full extent thereof, second, to
the extent of any remaining portion of such amount, to prepay
the Swing Line Loans to the full extent thereof, and third, to
the extent of any remaining portion of such amount, to prepay
the Revolving Loans to the full extent thereof.
(c) Application of Mandatory Prepayments of Term
Loans to the Scheduled Installments of Principal Thereof. Any
mandatory prepayments of the Term Loans pursuant to subsection
2.4B(iii), shall be applied to reduce the scheduled installments
of principal of the Term Loans set forth in subsection 2.4A(i),
in inverse chronological order.
(d) Application of Prepayments to Base Rate Loans
and Eurodollar Rate Loans. Considering Term Loans and Revolving
Loans being prepaid separately, any prepayment thereof shall be
applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner that minimizes the amount of any payments required to be
made by Company pursuant to subsection 2.6D.
(v) Mandatory Reduction of Revolving Loan Commitment. Upon
issuance of the Benghiat Letter of Credit, the Revolving Loan
Commitments shall be reduced to an amount equal to $35,000,000 plus
the face amount of the Benghiat Letter of Credit.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations shall be made in
Dollars in same day funds, without defense, setoff or counterclaim,
free of any restriction or condition, and delivered to Administrative
Agent not later than 12:00 Noon (California time) on the date due at
the Funding and Payment Office for the account of Lenders; funds
received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding
Business Day.
(ii) Application of Payments to Principal and Interest.
Except as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date
44
when interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall
be apportioned among all outstanding Loans to which such payments
relate, in each case proportionately to Lenders' respective Pro Rata
Shares. Administrative Agent shall promptly distribute to each Lender,
at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may
request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender, if any,
when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata
Share of any Eurodollar Rate Loans, Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
D. Application of Proceeds of Collateral and Payments after
Event of Default.
Upon termination of the Revolving Loan Commitments or upon the
occurrence and during the continuation of an Event of Default, if requested by
Requisite Lenders (a) all payments received on account of the Obligations,
whether from Company, from any Subsidiary Guarantor or otherwise, shall be
applied by Administrative Agent against the Obligations, and (b) all proceeds
received by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any Collateral
Document may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by Administrative Agent against, the applicable
Secured Obligations (as defined in such Collateral Document), in each case in
the following order of priority:
45
(i) to the payment of all costs and expenses of such sale,
collection or other realization, all other expenses, liabilities and
advances made or incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative Agent is entitled
to compensation (including the fees described in subsection 2.3),
reimbursement and indemnification under any Loan Document and all
advances made by Administrative Agent thereunder for the account of
the applicable Loan Party, and to the payment of all costs and
expenses paid or incurred by Administrative Agent in connection with
the Loan Documents, all in accordance with subsections 9.4, 10.2 and
10.3 and the other terms of this Agreement and the Loan Documents;
(ii) thereafter, to the payment of all other Obligations for
the ratable benefit of the holders thereof (subject to the provisions
of subsection 2.4C(ii) hereof); and
(iii) thereafter, to the payment to or upon the order of such
Loan Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. Term Loans. The proceeds of the Term Loans shall be
applied by Company to fund the Acquisition Financing Requirements.
B. Revolving Loans; Swing Line Loans. The proceeds of any
Revolving Loans and any Swing Line Loans shall be applied by Company for working
capital and other general corporate purposes, which may include the making of
intercompany loans to any of Company's wholly-owned Subsidiaries, in accordance
with subsection 7.1(iii), for their own general corporate purposes
C. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as
practicable after 10:00 A.M. (California time) on each Interest Rate
Determination Date, Administrative Agent shall determine in accordance with the
terms of this Agreement (which determination shall, absent manifest error, be
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the
46
applicable Interest Period and shall promptly give notice thereof (in writing or
by telephone confirmed in writing) to Company and each Lender.
B. Inability to Determine Applicable Interest Rate. In the
event that Administrative Agent shall have determined (which determination shall
be conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date, that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Eurodollar Rate, Administrative Agent shall on such date give
notice (by telefacsimile or by telephone confirmed in writing) to Company and
each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Administrative Agent
notifies Company and Lenders that the circumstances giving rise to such notice
no longer exist, and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the Loans in respect of
which such determination was made shall be deemed to be for a Base Rate Loan.
C. Illegality or Impracticability of Eurodollar Rate Loans.
In the event that on any date any Lender shall have determined (which
determination shall be conclusive and binding upon all parties hereto but shall
be made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market or
the position of such Lender in that market, then, and in any such event, such
Lender shall be an "Affected Lender" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "Affected Loans") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to
47
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of
Interest Periods. Company shall compensate each Lender, upon written request by
that Lender pursuant to subsection 2.8, for all reasonable losses, expenses and
liabilities (including any interest paid by that Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender) a borrowing of any Eurodollar Rate
Loan does not occur on a date specified therefor in a Notice of Borrowing or a
telephonic request therefor, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment
or other principal payment or any conversion of any of its Eurodollar Rate Loans
(including any prepayment or conversion occasioned by the circumstances
described in subsection 2.6C) occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had funded each of its
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period, whether or not
its Eurodollar Rate Loans had been funded in such manner.
G. Eurodollar Rate Loans After Default. After the
occurrence of and during the continuation of a Potential Event of Default or an
Event of Default, (i) Company may not elect to have a Loan be made or maintained
as, or converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan, and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be for a
Base Rate Loan or, if the conditions to making a Loan set forth in subsection
4.2 cannot then be satisfied, to be rescinded by Company.
48
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. Compensation for Increased Costs. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (including the Issuing
Lender) shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or other Government Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other Government Authority (whether or not having the force of
law):
(i) subjects such Lender to any additional Tax with respect
to this Agreement or any of its obligations hereunder (including with
respect to issuing or maintaining any Letters of Credit or purchasing
or maintaining any participations therein or maintaining any
Commitment hereunder) or any payments to such Lender of principal,
interest, fees or any other amount payable hereunder;
ii) imposes, modifies or holds applicable any reserve,
special deposit, compulsory loan, insurance charge or similar
requirement against assets held by, or deposits or other liabilities
in or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
Taxes) on or affecting such Lender or its obligations hereunder or the
London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining its Loans or Commitments or agreeing to
issue, issuing or maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any amount
received or receivable by such Lender with respect thereto; then, in any such
case, Company shall promptly pay to such Lender, upon receipt of the statement
referred to in subsection 2.8A, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder and any additional amounts to the
extent necessary to take into account any taxes (including for these purposes
any income, recordation, mortgage, stamp or documentary taxes) such Lender may
incur as a result of such additional amounts.
B. TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents shall be
paid free and clear of, and without
49
any deduction or withholding on account of, any Tax imposed, levied,
collected, withheld or assessed by or within the United States or any
political subdivision in or of the United States or any other
jurisdiction from or to which a payment is made by or on behalf of
Company or by any federation or organization of which the United
States or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b) Company shall pay any such Tax when such Tax is
due, such payment to be made (if the liability to pay is imposed
on Company) for its own account or (if that liability is imposed
on Administrative Agent or such Lender, as the case may be) on
behalf of and in the name of Administrative Agent or such
Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required shall
be increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Administrative
Agent or such Lender, as the case may be, receives on the due
date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made, and
shall be increased to the extent necessary to take into account
any taxes (including for these purposes any income, recordation,
mortgage, stamp and documentary taxes) Administrative Agent or
such Lender, as the case may be, may incur as a result of such
payment; and
(d) within 30 days after paying any sum from which
it is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which it
is required by clause (b) above to pay, Company shall deliver to
Administrative Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date on which such Lender became a Lender in any such
requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect on the date on which such
Lender became a Lender, in respect of payments to such Lender.
50
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (a "Non-US Lender") shall
deliver to Administrative Agent and to Company, on or prior to
the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), two
original copies of Internal Revenue Service Form W-8BEN or
W-8ECI (or any successor forms) properly completed and duly
executed by such Lender, or, in the case of a Non-US Lender
claiming exemption from United States federal withholding tax
under Section 871(h) or 881(c) of the Internal Revenue Code with
respect to payments of "portfolio interest", a form W-8BEN, and,
in the case of a Lender that has certified in writing to
Administrative Agent that it is not a "bank" (as defined in
Section 881(c)(3)(A) of the Internal Revenue Code), a
certificate of such Lender certifying that such Lender is not
(i) a "bank" for purposes of Section 881(c) of the Internal
Revenue Code, (ii) a ten-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Internal Revenue Code) of
Company, or (iii) a controlled foreign corporation related to
Company (within the meaning of Section 864(d)(4) of the Internal
Revenue Code) in each case together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that such
Lender is not subject to United States withholding tax with
respect to any payments to such Lender of interest payable under
any of the Loan Documents.
(b) Each Non-US Lender, to the extent it does not
act or ceases to act for its own account with respect to any
portion of any sums paid or payable to such Lender under any of
the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to Administrative
Agent and to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof), on or
prior to the date of the Assignment Agreement pursuant to which
it becomes a Lender (in the case of each other Lender), or on
such later date when such Lender ceases to act for its own
account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the
reasonable exercise of its discretion), (1) two original copies
of the forms or statements required to be provided by such
Lender under subsection 2.7B(iii)(a), properly completed and
duly executed by such Lender, to establish the portion of
any such sums paid or payable with respect to which such
Lender acts for its own account that is not subject to
United States withholding tax, and (2) two original copies
of Internal Revenue Service Form W-8IMY (or any successor
forms) properly completed and duly executed by such Lender,
together with any information, if any, such Lender chooses
to transmit with such form, and any
51
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder, to
establish that such Lender is not acting for its own account
with respect to a portion of any such sums payable to such
Lender.
(c) Each Non-US Lender hereby agrees, from time to
time after the initial delivery by such Lender of such forms,
whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence so delivered obsolete or
inaccurate in any material respect, that such Lender shall
promptly (1) deliver to Administrative Agent and to Company two
original copies of renewals, amendments or additional or
successor forms, properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required in order to confirm or establish that such
Lender is not subject to United States withholding tax with
respect to payments to such Lender under the Loan Documents and,
if applicable, that such Lender does not act for its own account
with respect to any portion of such payment, or (2) notify
Administrative Agent and Company of its inability to deliver any
such forms, certificates or other evidence.
(d) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii), (1) with respect to any Tax required to be
deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender chooses to
transmit with an Internal Revenue Service Form W-8IMY pursuant
to subsection 2.7B(iii)(b)(2), or (2) if such Lender shall have
failed to satisfy the requirements of clause (a), (b) or (c)(1)
of this subsection 2.7B(iii); provided that if such Lender shall
have satisfied the requirements of subsection 2.7B(iii)(a) on
the date such Lender became a Lender, nothing in this subsection
2.7B(iii)(d) shall relieve Company of its obligation to pay any
amounts pursuant to subsection 2.7B(ii)(c) in the event that, as
a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing
the fact that such Lender is not subject to withholding as
described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any Government Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Government Authority, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption,
52
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement referred to in
subsection 2.8A, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction increased to the extent necessary to take
into account any taxes (including for these purposes any income, recordation,
mortgage, stamp or documentary taxes) such Lender may incur as a result of such
additional amounts.
2.8 STATEMENT OF LENDERS; OBLIGATION OF LENDERS AND THE ISSUING
LENDER TO MITIGATE.
A. Statements. Each Lender claiming compensation or
reimbursement pursuant to subsection 2.6D, 2.7 or 2.8B shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such compensation or
reimbursement, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
B. Mitigation. Each Lender and the Issuing Lender agrees
that, as promptly as practicable after the officer of such Lender or the Issuing
Lender responsible for administering the Loans or Letters of Credit of such
Lender or the Issuing Lender, as the case may be, becomes aware of the
occurrence of an event or the existence of a condition that would cause such
Lender to become an Affected Lender or that would entitle such Lender or the
Issuing Lender to receive payments under subsection 2.7, use reasonable effort
to make, issue, fund or maintain the Commitments of such Lender or the Affected
Loans or Letters of Credit of such Lender or the Issuing Lender through another
lending or letter of credit office of such Lender or the Issuing Lender, if (i)
as a result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or the Issuing Lender pursuant
to subsection 2.7 would be materially reduced, and (ii) as determined by such
Lender or the Issuing Lender in its sole discretion, such action would not
otherwise be disadvantageous to such Lender or the Issuing Lender; provided that
such Lender or the Issuing Lender will not be obligated to utilize such other
lending or letter of credit office pursuant to this subsection 2.8B unless
Company agrees to pay all incremental expenses incurred by such Lender or the
Issuing Lender as a result of utilizing such other lending or letter of credit
office as described above.
Section 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. Letters of Credit. In addition to Company requesting
that Lenders make Revolving Loans pursuant to subsection 2.1A(ii) and that Swing
Line Lender make Swing Line Loans pursuant to subsection 2.1A(iii), Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the 30th day prior
to the Revolving Loan Commitment Termination Date, that the
53
Issuing Lender issue Letters of Credit payable on a sight basis for the account
of Company for the purposes specified in the definitions of Commercial Letters
of Credit and Standby Letters of Credit. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Company herein set forth, the Issuing Lender shall issue such Letters of Credit
in accordance with the provisions of this subsection 3.1; provided that Company
shall not request that the Issuing Lender issue (and the Issuing Lender shall
not issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed (a) $25,000,000 at
any time prior to entry of a judgment in the Benghiat Litigation and
(b) $25,000,000 plus the face amount of the Benghiat Letter of Credit
at any time on or after entry of a judgment in the Benghiat
Litigation;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) ten days prior to the Revolving Loan
Commitment Termination Date, and (b) the date which is one year from
the date of issuance of such Standby Letter of Credit; provided that
the immediately preceding clause (b) shall not prevent the Issuing
Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not to
exceed one year each unless the Issuing Lender elects not to extend
for any such additional period; and provided further that the Issuing
Lender shall elect not to extend such Standby Letter of Credit if it
has knowledge that an Event of Default has occurred and is continuing
(and has not been waived in accordance with subsection 10.6) at the
time the Issuing Lender must elect whether or not to allow such
extension;
(iv) any Standby Letter of Credit issued for the purpose of
supporting (a) trade payables or (b) any Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code);
(v) any Commercial Letter of Credit having an expiration
date (a) later than the earlier of (1) the Revolving Loan Commitment
Termination Date and (2) the date which is 180 days from the date of
issuance of such Commercial Letter of Credit, or (b) that is otherwise
unacceptable to the Issuing Lender in its reasonable discretion; or
(vi) any Letter of Credit for any purpose other than securing
the Benghiat Appeal Bond if, after giving effect to such issuance, the
Letter of Credit Usage would exceed $35,000,000.
On and after the Closing Date, the Existing ▇▇▇▇▇ Fargo
Letters of Credit shall be deemed for all purposes, including for
purposes of the fees to be collected pursuant to subsection 3.2, and
reimbursement of all costs and expenses to the extent provided herein,
to be Letters of Credit outstanding under this Agreement and entitled
to the
54
benefits of this Agreement and the other Loan Documents, and
shall be governed by the applications and agreements pertaining
thereto and by this Agreement.
B. Mechanics of Issuance.
(i) Request for Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to Administrative
Agent a Request for Issuance no later than 12:00 Noon (California
time) at least three Business Days (in the case of Standby Letters of
Credit) or five Business Days (in the case of Commercial Letters of
Credit), or in each case such shorter period as may be agreed to by
the Issuing Lender in any particular instance, in advance of the
proposed date of issuance. The Issuing Lender, in its reasonable
discretion, may require changes in the text of the proposed Letter of
Credit or any documents described in or attached to the Request for
Issuance. In furtherance of the provisions of subsection 10.8, and not
in limitation thereof, Company may submit Requests for Issuance by
telefacsimile and Administrative Agent and the Issuing Lender may rely
and act upon any such Request for Issuance without receiving an
original signed copy thereof. No Letter of Credit shall require
payment against a conforming demand for payment to be made thereunder
on the same business day (under the laws of the jurisdiction in which
the office of the Issuing Lender to which such demand for payment is
required to be presented is located) that such demand for payment is
presented if such presentation is made after 10:00 A.M. (in the time
zone of such office of the Issuing Lender) on such business day.
Company shall notify Administrative Agent prior to the
issuance of any Letter of Credit in the event that any of the matters
to which Company is required to certify in the applicable Request for
Issuance is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date
of such issuance, as to the matters to which Company is required to
certify in the applicable Request for Issuance.
(ii) Determination of Issuing Lender. Upon receipt of a
Request for Issuance pursuant to subsection 3.1B(i) requesting the
issuance of a Letter of Credit, Administrative Agent shall be the
Issuing Lender with respect to such Letter of Credit, notwithstanding
the fact that the Letter of Credit Usage with respect to such Letter
of Credit and with respect to all other Letters of Credit issued by
Administrative Agent, when aggregated with Administrative Agent's
outstanding Revolving Loans and Swing Line Loans, may exceed
Administrative Agent's Revolving Loan Commitment then in effect;
provided that Administrative Agent shall not be obligated to issue any
Letter of Credit denominated in a foreign currency which in the
judgment of Administrative Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set
forth in subsection 4.3, the Issuing Lender shall issue the requested
Letter of Credit in accordance with the Issuing Lender's standard
operating procedures.
55
(iv) Notification to Revolving Lenders. Upon the issuance of
or amendment to any Standby Letter of Credit the Issuing Lender shall
promptly notify Administrative Agent and Company of such issuance or
amendment in writing and such notice shall be accompanied by a copy of
such Letter of Credit or amendment. Upon receipt of such notice,
Administrative Agent shall notify each Revolving Lender in writing of
such issuance or amendment and the amount of such Revolving Lender's
respective participation in such Standby Letter of Credit or
amendment, and, if so requested by a Revolving Lender, Administrative
Agent shall provide such Lender with a copy of such Letter of Credit
or amendment.
C. Revolving Lenders' Purchase of Participations in Letters
of Credit. Immediately upon the issuance of each Letter of Credit, each
Revolving Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased from the Issuing Lender a participation in such Letter of Credit and
any drawings honored thereunder in an amount equal to such Revolving Lender's
Pro Rata Share of the maximum amount that is or at any time may become available
to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, payable directly to the Issuing Lender for its own
account, equal to 0.125% per annum of the daily amount available to be
drawn under such Standby Letter of Credit, and (b) a letter of credit
fee, payable to Administrative Agent for the account of Revolving
Lenders, equal to the applicable Eurodollar Rate Margin for Term Loans
multiplied by the daily amount available to be drawn under such Standby
Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) each March 31, June 30,
September 30 and December 31 of each year and computed on the basis of a
360-day year for the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the Issuing Lender for its own
account, equal to the greater of (X) $500 and (Y) 0.125% per annum of
the daily amount available to be drawn under such Commercial Letter of
Credit, and (b) a letter of credit fee, payable to Administrative Agent
for the account of Revolving Lenders, equal to the applicable Eurodollar
Rate Margin for Term Loans multiplied by the daily amount available to
be drawn under such Commercial Letter of Credit, each such fronting fee
or letter of credit fee to be payable in arrears on and to (but
excluding) each March 31, June 30, September 30 and December 31 of each
year and computed on the basis of a 360-day year for the actual number
of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clauses (i) and (ii)
above), documentary and processing charges payable
56
directly to the Issuing Lender for its own account in accordance with
the Issuing Lender's standard schedule for such charges in effect at
the time of such issuance, amendment, transfer or payment, as the case
may be.
For purposes of calculating any fees payable under
clauses (i) and (ii) of this subsection 3.2, (1) the daily amount
available to be drawn under any Letter of Credit shall be determined as
of the close of business on any date of determination and (2) any
amount described in such clauses which is denominated in a currency
other than Dollars shall be valued based on the applicable Exchange
Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described
in clause (i)(b) or (ii)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Revolving Lender its Pro Rata Share of
such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF
CREDIT.
A. Responsibility of Issuing Lender With Respect to
Drawings. In determining whether to honor any drawing under any Letter of Credit
by the beneficiary thereof, the Issuing Lender shall be responsible only to
examine the documents delivered under such Letter of Credit with reasonable care
so as to ascertain whether they appear on their face to be in accordance with
the terms and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters
of Credit. In the event the Issuing Lender has determined to honor a drawing
under a Letter of Credit issued by it, the Issuing Lender shall immediately
notify Company and Administrative Agent, and Company shall reimburse the Issuing
Lender on or before the Business Day immediately following the date on which
such drawing is honored (the "Reimbursement Date") in an amount in Dollars
(which amount, in the case of a payment under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) and in same day funds equal to the amount of
such payment; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and the Issuing Lender prior to 10:00 A.M. (California time) on the date
such drawing is honored that Company intends to reimburse the Issuing Lender for
the amount of such payment with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Revolving Lenders to make Revolving Loans that
are Base Rate Loans on the Reimbursement Date in an amount in Dollars (which
amount, in the case of a payment under a Letter of Credit which is denominated
in a currency other than Dollars, shall be calculated by reference to the
applicable Exchange Rate) equal to the amount of such payment, and (ii) subject
to satisfaction or waiver of the conditions specified in subsection 4.2B,
Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans that
are Base Rate Loans in the amount of such payment, the proceeds of which shall
be applied directly by Administrative Agent to reimburse the Issuing Lender for
the amount of such payment; and provided further that if for any reason proceeds
of Revolving Loans are not received by the Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such payment, Company shall reimburse
the Issuing Lender, on demand, in an amount in same day funds equal to the
excess of the amount of such payment over the aggregate amount of such Revolving
Loans, if any, which are so received. Nothing in
57
this subsection 3.3B shall be deemed to relieve any Revolving Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may have against any
Revolving Lender resulting from the failure of such Revolving Lender to make
such Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under
Letters of Credit.
(i) Payment by Revolving Lenders. In the event that Company
shall fail for any reason to reimburse the Issuing Lender as provided
in subsection 3.3B in an amount (calculated, in the case of a payment
under a Letter of Credit denominated in a currency other than Dollars,
by reference to the applicable Exchange Rate) equal to the amount of
any payment by the Issuing Lender under a Letter of Credit issued by
it, the Issuing Lender shall promptly notify each other Lender of the
unreimbursed amount of such honored drawing and of such other
Revolving Lender's respective participation therein based on such
Revolving Lender's Pro Rata Share. Each Revolving Lender shall make
available to the Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the office of the
Issuing Lender specified in such notice, not later than 12:00 Noon
(California time) on the first business day (under the laws of the
jurisdiction in which such office of the Issuing Lender is located)
after the date notified by the Issuing Lender. In the event that any
Revolving Lender fails to make available to the Issuing Lender on such
business day the amount of such Revolving Lender's participation in
such Letter of Credit as provided in this subsection 3.3C, the Issuing
Lender shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the rate
customarily used by the Issuing Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
Nothing in this subsection 3.3C shall be deemed to prejudice the right
of any Lender to recover from the Issuing Lender any amounts made
available by such Revolving Lender to the Issuing Lender pursuant to
this subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by the Issuing Lender in respect of
which payment was made by such Revolving Lender constituted gross
negligence or willful misconduct on the part of the Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event the Issuing Lender shall have been reimbursed by
other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
portion of any payment by the Issuing Lender under a Letter of Credit
issued by it, the Issuing Lender shall distribute to each other
Revolving Lender that has paid all amounts payable by it under
subsection 3.3C(i) with respect to such payment such other Revolving
Lender's Pro Rata Share of all payments subsequently received by the
Issuing Lender from Company in reimbursement of such payment under the
Letter of Credit when such payments are received. Any such
distribution shall be made to a Revolving Lender at its primary
address set forth below its name on the appropriate signature page
hereof or at such other address as such Revolving Lender may request.
58
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to
the Issuing Lender, with respect to payments under any Letters of Credit
issued by it, interest on the amount paid by the Issuing Lender in
respect of each such payment from the date a drawing is honored to but
excluding the date such amount is reimbursed by Company (including any
such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date
such drawing is honored to but excluding the Reimbursement Date, the
rate then in effect under this Agreement with respect to Revolving Loans
that are Base Rate Loans, and (b) thereafter, a rate which is 2% per
annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be computed
on the basis of a 360-day year for the actual number of days elapsed in
the period during which it accrues and shall be payable on demand or, if
no demand is made, on the date on which the related drawing under a
Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by the Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a payment under a Letter
of Credit issued by it, (a) the Issuing Lender shall distribute to each
other Revolving Lender, out of the interest received by the Issuing
Lender in respect of the period from the date such drawing is honored to
but excluding the date on which the Issuing Lender is reimbursed for the
amount of such payment (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B), the amount
that such other Revolving Lender would have been entitled to receive in
respect of the letter of credit fee that would have been payable in
respect of such Letter of Credit for such period pursuant to subsection
3.2 if no drawing had been honored under such Letter of Credit, and (b)
in the event the Issuing Lender shall have been reimbursed by other
Revolving Lenders pursuant to subsection 3.3C(i) for all or any portion
of such payment, the Issuing Lender shall distribute to each other
Revolving Lender that has paid all amounts payable by it under
subsection 3.3C(i) with respect to such payment such other Revolving
Lender's Pro Rata Share of any interest received by the Issuing Lender
in respect of that portion of such payment so reimbursed by other
Revolving Lenders for the period from the date on which the Issuing
Lender was so reimbursed by other Revolving Lenders to but excluding the
date on which such portion of such payment is reimbursed by Company. Any
such distribution shall be made to a Revolving Lender at its primary
address set forth below its name on the appropriate signature page
hereof or at such other address as such Revolving Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse the Issuing Lender for
payments under the Letters of Credit issued by it and to repay any Revolving
Loans made by Revolving Lenders pursuant to subsection 3.3B and the obligations
of Revolving Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
59
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), the Issuing Lender or other
Revolving Lender or any other Person or, in the case of a Revolving
Lender, against Company, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including
any underlying transaction between Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other 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;
(iv) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by the Issuing Lender under the applicable
Letter of Credit shall not have constituted gross negligence or willful
misconduct of the Issuing Lender under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction).
3.5 NATURE OF ISSUING LENDER'S DUTIES.
As between Company and the Issuing Lender, Company assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit issued by
the Issuing Lender by, the respective beneficiaries of such Letters of Credit.
In furtherance and not in limitation of the foregoing, the Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
60
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Issuing Lender, including any act or
omission by a Government Authority, and none of the above shall affect or
impair, or prevent the vesting of, any of the Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5, any
action taken or omitted by the Issuing Lender under or in connection with the
Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put the Issuing Lender
under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against the
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of the Issuing Lender, as determined by a final judgment of a
court of competent jurisdiction.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of
Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS AND SWING
LINE LOANS.
The obligations of Lenders to make the Term Loans and any
Revolving Loans and Swing Line Loans to be made, and to issue any Letters of
Credit to be issued, on the Closing Date are, in addition to the conditions
precedent specified in subsection 4.2, subject to prior or concurrent
satisfaction of the following conditions:
A. Loan Party Documents. On or before the Closing Date,
Company shall, and shall cause each other Loan Party to, deliver to Lenders (or
to Administrative Agent with sufficient originally executed copies, where
appropriate, for each Lender) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:
(i) Copies of the Organizational Documents of such Person,
certified by the Secretary of State of its jurisdiction of organization
or, if such document is of a type that may not be so certified,
certified by the secretary or similar officer of the applicable Loan
61
Party, together with a good standing certificate from the Secretary of
State of its jurisdiction of organization and each other state in which
such Person is qualified to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each dated a
recent date prior to the Closing Date;
(ii) Resolutions of the Governing Body of such Person
approving and authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, certified as of the Closing Date
by the secretary or similar officer of such Person as being in full
force and effect without modification or amendment;
(iii) Signature and incumbency certificates of the officers of
such Person executing the Loan Documents to which it is a party;
(iv) Executed originals of the Loan Documents to which such
Person is a party; and
(v) Such other documents as Administrative Agent may
reasonably request.
B. Fees. Company shall have paid to Administrative Agent,
for distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
C. Corporate and Capital Structure; Ownership.
(i) Corporate Structure. The corporate organizational
structure of Company and its Subsidiaries, both before and after giving
effect to the Merger, shall be as set forth on Schedule 4.1C annexed
hereto.
(ii) Capital Structure and Ownership. The capital structure
and ownership of Company and its Subsidiaries, both before and after
giving effect to the Merger, shall be as set forth on Schedule 4.1C
annexed hereto.
D. Related Agreements. Administrative Agent shall have
received a fully executed or conformed copy of the Merger Agreement and each
other Related Agreement and any documents executed in connection therewith, and
the Merger Agreement and each other Related Agreement shall be in full force and
effect, in compliance in all material respects with applicable laws and
regulations, and no provision thereof shall have been amended, supplemented,
waived or otherwise modified in any respect determined by Administrative Agent
to be material, in each case without the prior written consent of Administrative
Agent.
E. Officer's Certificate. Administrative Agent shall have
received an Officer's Certificate from each of the parties to the Merger
Agreement to the effect that (i) the representations and warranties of such
party, if any, in the Merger Agreement are true, correct and complete in all
material respects on and as of the Closing Date to the same extent as though
made on and as of that date, (ii) the Merger Agreement is in full force and
effect and no
62
provision thereof has been modified or waived in any respect without the consent
of Administrative Agent, and (iii) each such Person has complied with all
agreements and conditions contained in the Merger Agreement and any agreements
or documents referred to therein required to be performed or complied with by
each of them on or before the Closing Date and none of such Persons is in
default in their performance or compliance with any of the terms or provisions
thereof.
F. Representations and Warranties; Performance of
Agreements. Company shall have delivered to Administrative Agent an Officer's
Certificate, in form and substance satisfactory to Administrative Agent, to the
effect that the representations and warranties in Section 5 are true, correct
and complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent; provided that, if a representation and warranty, covenant
or condition is qualified as to materiality, with respect to such representation
and warranty, covenant or condition the applicable materiality qualifier set
forth above shall be disregarded for purposes of this condition.
G. Financial Statements; Pro Forma Financial Statements.
Lenders shall have received from Company (i) audited financial statements of
Silicon Energy Corp. and its Subsidiaries for Fiscal Years 2000 and 2001,
consisting of balance sheets and the related consolidated statements of income,
stockholders' equity and cash flows for such Fiscal Years, (ii) unaudited
financial statements of Silicon Energy Corp. and its Subsidiaries as at
September 30, 2002, consisting of a balance sheet and the related consolidated
statements of income, stockholders' equity and cash flows for the nine-month
period ending on such date, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the financial condition of
Silicon Energy Corp. and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments, (iii) a
pro forma consolidated balance sheet of Company and its Subsidiaries as at the
Closing Date, prepared in accordance with GAAP and reflecting the consummation
of the Merger and the transactions contemplated by the Loan Documents and the
Related Agreements, and (iv) projected financial statements (including a
consolidated balance sheet, income statements and cash flow statements) of
Company and its Subsidiaries for Fiscal Years 2002 through and including 2006,
giving effect to the Merger and the transactions contemplated by the Loan
Documents, all of the foregoing in form and substance satisfactory to
Administrative Agent.
H. Opinions of Counsel to Loan Parties. Lenders shall have
received originally executed copies of one or more favorable written opinions of
▇▇▇▇▇▇▇ Coie LLP, counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibit VIII annexed hereto and as to such other matters
63
as Administrative Agent acting on behalf of Lenders may reasonably request (this
Credit Agreement constituting a written request by Company to such counsel to
deliver such opinions to Lenders).
I. Opinion of Administrative Agent's Counsel. Lenders shall
have received originally executed copies of a favorable written opinion of
O'Melveny & ▇▇▇▇▇ LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of Exhibit X annexed hereto.
J. Opinion of Counsel Delivered Under Related Agreements.
Administrative Agent shall have received copies of each of the opinions of
counsel delivered to the parties under the Related Agreements, together with a
letter from each such counsel authorizing Lenders to rely upon such opinion to
the same extent as though it were addressed to Lenders.
K. Solvency Assurances. On the Closing Date, Administrative
Agent and Lenders shall have received an Officer's Certificate of Company dated
the Closing Date, substantially in the form of Exhibit XI annexed hereto and
with appropriate attachments, in each case demonstrating that, after
giving effect to the consummation of the transactions contemplated by the Loan
Documents, Company and each Subsidiary Guarantor will be Solvent.
L. Evidence of Insurance. Administrative Agent shall have
received a certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Administrative Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
M. Necessary Governmental Authorizations and Consents;
Expiration of Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Merger and other transactions
contemplated by the Loan Documents and the continued operation of the business
conducted by Company and its Subsidiaries in substantially the same manner as
conducted prior to the Closing Date. Each such Governmental Authorization and
consent shall be in full force and effect, except in a case where the failure to
obtain or maintain a Governmental Authorization or consent, either individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. All applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the Merger or the financing
thereof. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable Government Authority to take action to
set aside its consent on its own motion shall have expired.
N. Consummation of Merger.
64
(i) All conditions to the Merger set forth in the Merger
Agreement shall have been satisfied or the fulfillment of any such
conditions shall have been waived and in the case of a waiver of a
material condition to the performance of the obligations of Company with
the consent of the Administrative Agent;
(ii) The Merger shall become effective concurrently with the
making of the Loans in accordance with the terms of the Merger Agreement
and any documents executed or delivered in connection therewith and in
accordance with the laws of the State of Delaware and the State of
Washington; and
(iii) The cash consideration paid by Company and its
Subsidiaries for the Capital Stock of Silicon Energy Corp. shall not
exceed $71,200,000.
Administrative Agent shall have received satisfactory evidence of the
filing of the documents with the Delaware Secretary of State and the Washington
Secretary of State effecting the Merger.
O. Environmental Reports. Administrative Agent shall have
received reports and other information, in form, scope and substance
satisfactory to Administrative Agent, regarding environmental matters relating
to Company, Silicon Energy Corp. and their respective Subsidiaries and the
Facilities, which reports shall include (i) a Phase I environmental assessment
for each of the Facilities currently owned by Company, Silicon Energy Corp. or
any of their respective Subsidiaries which (a) conforms to the ASTM Standard
Practice for Environmental Site Assessments: Phase I Environmental Site
Assessment Process, E 1527, (b) was conducted no more than six months prior to
the Closing Date by one or more environmental consulting firms reasonably
satisfactory to Administrative Agent, (c) includes an assessment of
asbestos-containing materials at such Facilities, and (d) is accompanied by an
estimate of the reasonable worst-case cost of investigating and remediating any
Hazardous Materials Activity identified in such Phase I environmental
assessments as giving rise to an actual or potential material violation of any
Environmental Law or as presenting a material risk of giving rise to a material
Environmental Claim, and (ii) a current compliance audit setting forth an
assessment of Company's, Silicon Energy Corp.'s and their respective
Subsidiaries' and such Facilities' current and past compliance with
Environmental Laws and an estimate of the cost of rectifying any non-compliance
with current Environmental Laws identified therein and the cost of compliance
with reasonably anticipated future Environmental Laws identified therein.
P. Security Interests in Collateral. To the extent not
otherwise satisfied pursuant to subsection 4.1Q, Administrative Agent shall have
received evidence satisfactory to it that Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (ii), (iii),
and (iv) below) that may be necessary or, in the opinion of Administrative
Agent, desirable in order to create in favor of Administrative Agent, for the
benefit of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in all Collateral. Such actions shall include the
following:
65
(i) Stock Certificates and Instruments. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Administrative
Agent) representing all Capital Stock pledged pursuant to the Security
Agreement and any Foreign Pledge Agreement, and (b) all promissory notes
or other instruments (duly endorsed, where appropriate, in a manner
satisfactory to Administrative Agent) evidencing any Collateral;
(ii) Lien Searches and UCC Termination Statements. Delivery
to Administrative Agent of (a) the results of a recent search, by a
Person satisfactory to Administrative Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of any Loan Party, together with copies of all such filings
disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search (other
than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement);
(iii) UCC Financing Statements and Fixture Filings. Delivery
to Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly authorized by each applicable Loan
Party with respect to all personal and mixed property Collateral of such
Loan Party, for filing in all jurisdictions as may be necessary or, in
the opinion of Administrative Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral
Documents;
(iv) PTO Cover Sheets, Etc. Delivery to Administrative Agent
of all cover sheets or other documents or instruments required to be
filed with the PTO in order to create or perfect Liens in respect of any
IP Collateral;
(v) Control Agreements. Delivery to Administrative Agent of
such control agreements with financial institutions and other Persons in
order to perfect Liens in respect of Deposit Accounts, securities
accounts and other Collateral pursuant to the Collateral Documents; and
(vi) Foreign Pledge Agreements. Execution and delivery to
Administrative Agent of Foreign Pledge Agreements with respect to 66% of
the Capital Stock owned by Company or a Domestic Subsidiary of all
Significant Foreign Subsidiaries with respect to which Administrative
Agent deems a Foreign Pledge Agreement necessary or advisable to perfect
or otherwise protect the First Priority Liens granted to Administrative
Agent on behalf of Lenders in such Capital Stock, and the taking of all
such other actions under the laws of such jurisdictions as
Administrative Agent may deem necessary or advisable to perfect or
otherwise protect such Liens.
Q. Closing Date Mortgage; Closing Date Mortgage Policy,
Etc. Administrative Agent shall have received from Company:
66
(i) Closing Date Mortgage. A fully executed and notarized
Mortgage (the "Closing Date Mortgage"), in proper form for recording in
all appropriate places in all applicable jurisdictions, encumbering the
Real Property Asset listed in Schedule 4.1Q annexed hereto
(the "Closing Date Mortgaged Property");
(ii) Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to Administrative Agent) in
each state in which the Closing Date Mortgaged Property is located with
respect to the enforceability of the form of Closing Date Mortgage to be
recorded in such state and such other matters as Administrative Agent
may reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent;
(iii) Title Insurance. (a) an ALTA mortgagee title insurance
policy or unconditional commitments therefor (the "Closing Date Mortgage
Policy") issued by the Title Company with respect to the Closing Date
Mortgaged Property listed in Part A of Schedule 4.1Q annexed hereto, in
amounts not less than the respective amounts designated therein with
respect to the Closing Date Mortgaged Property, insuring fee simple
title to, or a valid leasehold interest in such Closing Date Mortgaged
Property vested in such Loan Party and assuring Administrative Agent
that the Closing Date Mortgage creates a valid and enforceable First
Priority mortgage Lien on the Closing Date Mortgaged Property encumbered
thereby, subject only to a standard survey exception, which the Closing
Date Mortgage Policy (1) shall include an endorsement for mechanics'
liens, for future advances under this Agreement and for any other
matters reasonably requested by Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as Administrative
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that Company has (i) delivered to
the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Closing Date Mortgage
Policy, and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company
in connection with the issuance of the Closing Date Mortgage Policy and
all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Closing Date
Mortgage in the appropriate real estate records;
(iv) Title Reports. With respect to the Closing Date
Mortgaged Property listed in Part B of Schedule 4.1Q annexed hereto, a
title report issued by the Title Company with respect thereto, dated not
more than 30 days prior to the Closing Date and satisfactory in form and
substance to Administrative Agent;
(v) Copies of Documents Relating to Title Exceptions. Copies
of all recorded documents listed as exceptions to title or otherwise
referred to in the Closing Date Mortgage Policy or in the title reports
delivered pursuant to subsection 4.1Q(iv); and
(vi) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to whether
67
(1) the Closing Date Mortgaged Property is a Flood Hazard Property and
(2) the community in which any such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if there are
any such Flood Hazard Properties, Company's written acknowledgement of
receipt of written notification from Administrative Agent (1) as to the
existence of each such Flood Hazard Property and (2) as to whether the
community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the
event any such Flood Hazard Property is located in a community that
participates in the National Flood Insurance Program, evidence that
Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System.
R. Collateral Access Agreements. A Collateral Access
Agreement with respect to each leased Real Property Asset identified on Schedule
5.5B annexed hereto.
S. Termination of Existing Credit Agreements and Related
Liens. On the Closing Date, Company, Silicon Energy Corp. and their respective
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding under
the Existing Company Credit Agreement and the Existing Silicon Energy Corp.
Credit Agreements, (b) terminated any commitments to lend or make other
extensions of credit thereunder, (c) delivered to Administrative Agent all
documents or instruments necessary to release all Liens securing Indebtedness or
other obligations of Company, Silicon Energy Corp. and their respective
Subsidiaries thereunder, and (d) made arrangements satisfactory to
Administrative Agent with respect to the letters of credit outstanding
thereunder.
T. Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
U. No Material Adverse Change. There shall not have
occurred any Material Adverse Effect since December 31, 2001 relating to Company
and its Subsidiaries, taken as a whole, or Silicon Energy Corp. and its
Subsidiaries, taken as a whole.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by a duly
authorized Officer of Company.
68
B. As of that Funding Date:
(i) The representations and warranties contained herein and
in the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date; provided, that, if a representation and warranty is qualified as
to materiality, with respect to such representation and warranty the
materiality qualifier set forth above shall be disregarded for purposes
of this condition;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date; and
(iv) No order, judgment or decree of any arbitrator or
Government Authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the Issuing Lender is obligated to issue such Letter of Credit) is subject to
the following conditions precedent:
A. On or before the date of issuance of the initial Letter
of Credit pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of
Credit, Administrative Agent shall have received, in accordance with the
provisions of subsection 3.1B(i), an originally executed Request for Issuance
(or a facsimile copy thereof) in each case signed by a duly authorized Officer
of Company, together with all other information specified in subsection 3.1B(i)
and such other documents or information as the Issuing Lender may reasonably
require in connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
69
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce the Issuing Lender to issue Letters of Credit and to
induce Revolving Lenders to purchase participations therein, Company (for
purposes of this Section 5, references to Company and its Subsidiaries shall be
deemed to include Silicon Energy Corp. and its respective Subsidiaries, whether
or not the Merger has occurred) represents and warrants to each Lender:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. Organization and Powers. Each of Company, Silicon Energy
Corp. and their respective Subsidiaries is a corporation , partnership, trust or
limited liability company duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization as specified in Schedule 5.1
annexed hereto, as such Schedule 5.1 may be supplemented from time to time
pursuant to the provisions of subsection 6.1(xiv). Each of Company, Silicon
Energy Corp. and their respective Subsidiaries has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Each of Company,
Silicon Energy Corp. and their respective Subsidiaries is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, in each case
except in jurisdictions where the failure to be so qualified or in good standing
has not had and could not reasonably be expected to result in a Material Adverse
Effect.
C. Conduct of Business. Company, Silicon Energy Corp. and
their respective Subsidiaries are engaged only in the businesses permitted to be
engaged in pursuant to subsection 7.11
D. Subsidiaries. All of the Subsidiaries of Company
(including Silicon Energy Corp. and its Subsidiaries) and their jurisdictions of
organization are identified in Schedule 5.1 annexed hereto, as said Schedule 5.1
may be supplemented from time to time pursuant to the provisions of subsection
6.1(xiv). The Capital Stock of each of the Subsidiaries of Company identified in
Schedule 5.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable and none of such Capital Stock constitutes
Margin Stock. Each of the Subsidiaries of Company identified in Schedule 5.1
annexed hereto (as so supplemented) is a corporation, partnership, trust or
limited liability company duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization set forth therein,
has all requisite power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted, and is
qualified to do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such power and authority has not had and could not
reasonably be expected to result in a Material Adverse Effect. Schedule 5.1
annexed hereto (as
70
so supplemented) correctly sets forth the ownership interest of Company, Silicon
Energy Corp. and each of their respective Subsidiaries in each of the
Subsidiaries of Company and Silicon Energy Corp. identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and Related Agreements have been duly
authorized by all necessary action on the part of each Loan Party that is a
party thereto.
B. No Conflict. The execution, delivery and performance
by Loan Parties of the Loan Documents and Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Organizational Documents of Company or any of its Subsidiaries
or any order, judgment or decree of any court or other Government Authority
binding on Company or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company or any of its Subsidiaries, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Company or any of its Subsidiaries (other than any Liens
created under any of the Loan Documents in favor of Administrative Agent on
behalf of Lenders), or (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of Company or any of
its Subsidiaries, except for such approvals or consents which will be obtained
on or before the Closing Date and disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and
performance by Loan Parties of the Loan Documents and Related Agreements to
which they are parties and the consummation of the transactions contemplated by
the Loan Documents and such Related Agreements do not and will not require any
Governmental Authorization.
D. Binding Obligation. Each of the Loan Documents and the
Related Agreements has been duly executed and delivered by each Loan Party that
is a party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request (i) the annual report on Form 10-K for Company and its Subsidiaries for
the Fiscal Year ended December 31, 2001, and (ii) the quarterly report on Form
10-Q for Company and its Subsidiaries for the Fiscal Quarter ended September 30,
2002. All such statements other than pro forma financial statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position (on a consolidated basis) of the entities described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows (on a
71
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Except for the
accrual of $7,400,000 taken in the fourth Fiscal Quarter of 2002 in connection
with the Benghiat Litigation, neither Company nor any of its Subsidiaries has
(and will not have following the funding of the initial Loans) any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that, as of the Closing Date, is not
reflected in the foregoing financial statements or the notes thereto and, as of
any Funding Date, is not reflected in the most recent financial statements
delivered to Lenders pursuant to subsection 6.1 or the notes thereto and that,
in any such case, is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 2001, no event or change has occurred that
has resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Neither Company nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by
subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY; INTELLECTUAL
PROPERTY.
A. Title to Properties; Liens. Company and its Subsidiaries
(including Silicon Energy Corp. and its Subsidiaries) have (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in the financial
statements referred to in subsection 5.3 or in the most recent financial
statements delivered pursuant to subsection 6.1, in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 7.7. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5B
annexed hereto, as such Schedule 5.5B may be supplemented from time to time
pursuant to the provisions of subsection 6.1(xv), contains a true, accurate and
complete list of (i) all fee interests in any Real Property Assets, and (ii) all
leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Property Asset, regardless of whether a Loan Party is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease, sublease or assignment. Except as specified in Schedule 5.5B annexed
hereto, each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and Company does not have knowledge of any
default that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
72
C. Intellectual Property. As of the Closing Date, Company
and its Subsidiaries (including Silicon Energy Corp. and its Subsidiaries) own
or have the right to use, all Intellectual Property used in the conduct of their
business, except where the failure to own or have such right to use in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. Except for the Intellectual Property pertaining to the Benghiat
Litigation identified in Schedule 5.6 annexed hereto, no claim has been asserted
and is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does Company know of any valid basis for any such claim, except
for such claims that in the aggregate could not reasonably be expected to result
in a Material Adverse Effect. The use of such Intellectual Property by Company
and its Subsidiaries (including Silicon Energy Corp. and its Subsidiaries) does
not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. All federal and state and all foreign
registrations of and applications for Intellectual Property, and all
unregistered Intellectual Property, that are owned or licensed by Company or any
of its Subsidiaries (including Silicon Energy Corp. and its Subsidiaries) on the
Closing Date are described on Schedule 5.5C annexed hereto.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are
no Proceedings (whether or not purportedly on behalf of Company, Silicon Energy
Corp. or any of their respective Subsidiaries) at law or in equity, or before or
by any court or other Government Authority (including any Environmental Claims)
that are pending or, to the knowledge of Company, threatened against or
affecting Company, Silicon Energy Corp. or any of their respective Subsidiaries
or any property of Company, Silicon Energy Corp. or any of their respective
Subsidiaries and that, individually or in the aggregate, would be likely to
result in a Material Adverse Effect. None of Company, Silicon Energy Corp. or
any of their Subsidiaries (i) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, would be likely to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or other Government Authority, that, individually or in
the aggregate, would be likely to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company, Silicon Energy Corp. and their respective Subsidiaries and upon their
respective properties, assets, income, businesses and franchises that are due
and payable have been paid when due and payable. Company knows of no proposed
tax assessment against Company, Silicon Energy Corp. or any of their respective
Subsidiaries that is not being actively contested by Company, Silicon Energy
Corp. or any of their respective Subsidiaries in good faith and by appropriate
proceedings; provided that such reserves or other appropriate
73
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS.
Neither Company nor any of its Subsidiaries (including Silicon Energy
Corp. and its Subsidiaries) is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if any,
would not be likely to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither Company, Silicon Energy Corp. nor any of their
respective Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act
or the Investment Company Act of 1940 or under any other federal or state
statute or regulation which may limit its ability to incur Indebtedness or which
may otherwise render all or any portion of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not
more than 25% of the value of the assets (either of Company only or of Company
and its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Except as set forth in Schedule 5.11 annexed hereto,
Company, each of its Subsidiaries and each of their respective ERISA Affiliates
are in compliance with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each such
Employee Benefit Plan. Each Employee Benefit Plan that is intended to qualify
under Section 401(a) of the Internal Revenue Code is so qualified.
B. Except as set forth in Schedule 5.11 annexed hereto,
no ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the
Internal Revenue Code, no Employee Benefit Plan provides health or welfare
benefits (through the purchase of
74
insurance or otherwise) for any retired or former employee of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension
Plan, the amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all such Pension
Plans (excluding for purposes of such computation any such Pension Plans with
respect to which assets exceed benefit liabilities), does not exceed $2,500,000.
E. As of the most recent valuation date for each
Multiemployer Plan for which the actuarial report is available, the potential
liability of Company, its Subsidiaries and their respective ERISA Affiliates for
a complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, does not exceed $2,500,000.
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, other
than those payable in connection with the Merger, and Company hereby indemnifies
Lenders against, and agrees that it will hold Lenders harmless from, any claim,
demand or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any outstanding
written order, consent decree or settlement agreement with any Person
relating to (a) any Environmental Law, (b) any Environmental Claim, or
(c) any Hazardous Materials Activity that, individually or in the
aggregate, would be likely to result in a Material Adverse Effect;
(ii) neither Company nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 ▇.▇.▇.▇▇. 9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities that would be
likely to form the basis of an Environmental Claim against Company or
any of its Subsidiaries that, individually or in the aggregate, would be
likely to result in a Material Adverse Effect;
75
(iv) neither Company nor any of its Subsidiaries nor, to
Company's knowledge, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law indicating
past or present treatment of Hazardous Materials at any Facility, and
none of Company's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent;
(v) Company maintains an environmental management system for
its and each of its Subsidiaries' operations that demonstrates a
commitment to environmental compliance and includes procedures for (a)
preparing and updating written compliance manuals covering pertinent
regulatory areas, (b) tracking changes in applicable Environmental Laws
and modifying operations to comply with new requirements thereunder, (c)
training employees to comply with applicable environmental requirements
and updating such training as necessary, (d) performing regular internal
compliance audits of each Facility and ensuring correction of any
incidents of non-compliance detected by means of such audits, and (e)
reviewing the compliance status of off-site waste disposal facilities;
and
(vi) compliance by Company and its Subsidiaries with all
current or reasonably foreseeable future requirements pursuant to or
under Environmental Laws would not, individually or in the aggregate, be
likely to result in a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that would be likely to result in a
Material Adverse Effect.
5.15 SOLVENCY.
Each Loan Party, upon the incurrence of any Obligations by
such Loan Party on any date on which this representation is made, will be,
Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A. Creation, Perfection and Priority of Liens. The
execution and delivery of the Collateral Documents by Loan Parties, together
with (i) the actions taken on or prior to the Closing Date pursuant to
subsections 4.1P, 4.1Q, 6.8 and 6.9, and (ii) the delivery to Administrative
Agent of any Pledged Collateral not delivered to Administrative Agent at the
time of execution and delivery of the applicable Collateral Document (all of
which Pledged Collateral has been so delivered) are effective to create in favor
of Administrative Agent for the benefit of Lenders, as security for the
respective Secured Obligations (as defined in the applicable Collateral Document
in respect of any Collateral), a valid First Priority Lien on all of the
Collateral, and all filings and other actions necessary or desirable to perfect
and maintain the perfection and First Priority status of such Liens have been
duly made or taken and remain in full force and effect, other than the filing of
any UCC financing statements delivered to
76
Administrative Agent for filing (but not yet filed) and the periodic filing of
UCC continuation statements in respect of UCC financing statements filed by or
on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval
or other action by, and no notice to or filing with, any Government Authority is
required for either (i) the pledge or grant by any Loan Party of the Liens
purported to be created in favor of Administrative Agent pursuant to any of the
Collateral Documents, or (ii) the exercise by Administrative Agent of any rights
or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities.
C. Absence of Third-Party Filings. Except such as may have
been filed in favor of Administrative Agent as contemplated by subsection 5.16A
and to evidence permitted lease obligations and other Liens permitted pursuant
to subsection 7.2, (i) no effective UCC financing statement, fixture filing or
other instrument similar in effect covering all or any part of the Collateral is
on file in any filing or recording office, and (ii) no effective filing covering
all or any part of the IP Collateral is on file in the PTO.
D. Margin Regulations. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information
supplied to Administrative Agent by or on behalf of any Loan Party with respect
to any of the Collateral (in each case taken as a whole with respect to any
particular Collateral) is accurate and complete in all material respects.
5.17 RELATED AGREEMENTS.
A. Delivery of Related Agreements. Company has delivered to
Lenders complete and correct copies of each Related Agreement and of all
exhibits and schedules thereto.
B. Silicon Energy Corp.'s Warranties. Except to the extent
otherwise set forth herein, each of the representations and warranties given by
Silicon Energy Corp. to Company and Shadow Combination, Inc. in the Merger
Agreement is true and correct as of the date hereof (or as of any earlier date
to which such representation and warranty specifically relates) and will be true
and correct as of the Closing Date and the Merger Date (or as of such earlier
date, as the case may be), in each case subject to the qualifications set forth
in the schedules to the Merger Agreement, except to the extent the failure of
any such representation or warranty to be true and correct would not be likely
to result in a Material Adverse Affect.
C. Warranties of Company. Subject to the qualifications set
forth therein, each of the representations and warranties given by Company to
Silicon Energy Corp. in the
77
Merger Agreement is true and correct in all material respects as of the date
hereof and will be true and correct in all material respects as of the Closing
Date.
D. Survival. Notwithstanding anything in the Merger
Agreement to the contrary, the representations and warranties of Company set
forth in subsections 5.17B and 5.17C shall, solely for purposes of this
Agreement, survive the Closing Date for the benefit of Lenders.
5.18 DISCLOSURE.
No representation or warranty of Company or any of its
Subsidiaries (including Silicon Energy Corp. and its Subsidiaries) contained in
the Confidential Information Memorandum as of its date or in any Loan Document
or Related Agreement or in any other document, certificate or written statement
furnished to Lenders by or on behalf of Company or any of its Subsidiaries
(including Silicon Energy Corp. and its Subsidiaries) for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company
(other than matters of a general economic nature) that, individually or in the
aggregate, would be likely to result in a Material Adverse Effect and that have
not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company and each of its Subsidiaries will, on a consolidated
basis, maintain a system of accounting established and administered in
accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP. Company will deliver to Administrative Agent
and Lenders:
(i) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential
78
Event of Default, or becoming aware that any Lender has given any notice
(other than to Administrative Agent) or taken any other action with
respect to a claimed Event of Default or Potential Event of Default, (b)
that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to a claimed default
or event or condition of the type referred to in subsection 8.2, or (c)
of the occurrence of any event or change that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, an
Officer's Certificate specifying the nature and period of existence of
such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of
Default, Potential Event of Default, default, event or condition, and
what action Company has taken, is taking and proposes to take with
respect thereto;
(ii) Quarterly Financials: 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 the consolidated balance sheet of Company
and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders' equity and cash
flows of Company and its Subsidiaries for such Fiscal Quarter and for
the period from the beginning of the then current Fiscal Year to the end
of such Fiscal Quarter, setting forth in each case in comparative form
the corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for
the current Fiscal Year, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, and (b) in
the case of such consolidated financial statements, a report thereon of
Deloitte & Touche LLP or other independent certified public accountants
of recognized national standing selected by Company and satisfactory to
Administrative Agent, which report shall be unqualified, shall express
no doubts about the ability of Company and its Subsidiaries to continue
as a going concern, and shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the
79
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iv) Compliance and Pricing Certificates: together with each
delivery of financial statements pursuant to subdivisions (ii) and
(iii) above, (a) an Officer's Certificate of Company stating that
the signers have reviewed the terms of this Agreement and have made, or
caused to be made under their supervision, a review in reasonable detail
of the transactions and condition of Company and its Subsidiaries during
the accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officer's Certificate, of any condition
or event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Company has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
with the restrictions contained in Section 7, in each case to the extent
compliance with such restrictions is required to be tested at the end of
the applicable accounting period; in addition, on or before the 45th day
following the end of each Fiscal Quarter, a Pricing Certificate
demonstrating in reasonable detail the calculation of the Consolidated
Leverage Ratio as of the end of the four-Fiscal Quarter period then
ended;
(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the preparation
of the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (ii), (iii), or (xii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies
been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (ii), (iii), or (xii) of this
subsection 6.1 following such change, consolidated financial statements
of Company and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) the two full Fiscal Years
immediately preceding the Fiscal Year in which such change is made, in
each case prepared on a pro forma basis as if such change had been in
effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (ii), (iii), or (xii) of
this subsection 6.1 following such change, if required pursuant to
subsection 1.2, a written statement of the chief accounting officer or
chief financial officer of Company setting forth the differences
(including any differences that would affect any calculations relating
to the financial covenants set forth in subsection 7.6) which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public accountants
in connection with each annual, interim or special audit of the
financial statements of Company and its Subsidiaries made by such
80
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(vii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by Company
to its security holders or by any Subsidiary of Company to its security
holders other than Company or another Subsidiary of Company, (b) all
regular and periodic reports and all registration statements (other than
on Form S-8 or a similar form) and prospectuses, if any, filed by
Company or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other statements
made available generally by Company or any of its Subsidiaries to the
public concerning material developments in the business of Company or
any of its Subsidiaries;
(viii) Litigation or Other Proceedings: (a) promptly upon any
Officer of Company obtaining knowledge of (1) the institution of, or
non-frivolous threat of, any Proceeding against or affecting Company or
any of its Subsidiaries or any property of Company or any of its
Subsidiaries not previously disclosed in writing by Company to Lenders,
or (2) any material development in any Proceeding that, in any case:
(x) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect;
or
(y) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated
hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Year, a schedule of all Proceedings involving an alleged
individual liability of, or claims against or affecting, Company or any
of its Subsidiaries equal to or greater than $2,500,000, and promptly
after request by Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable Administrative
Agent and its counsel to evaluate any of such Proceedings;
(ix) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(x) ERISA Notices: with reasonable promptness, copies of (a)
all notices received by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor concerning
an ERISA Event; and (b) copies of such
81
other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xi) Financial Plans: as soon as practicable and in any event
no later than 30 days after the end of each Fiscal Year, a consolidated
plan and financial forecast for the next Fiscal Year (the "Financial
Plan" for such Fiscal Year), including, (a) a forecasted consolidated
balance sheet and forecasted consolidated statements of income and cash
flows of Company and its Subsidiaries for such Fiscal Year, together
with a projected Compliance Certificate for such Fiscal Year and an
explanation of the assumptions on which such forecasts are based, (b)
forecasted consolidated statements of income and cash flows of Company
and its Subsidiaries for each Fiscal Quarter of such Fiscal Year,
together with an explanation of the assumptions on which such forecasts
are based, and (c) such other information and projections as any Lender
may reasonably request;
(xii) Insurance: as soon as practicable after any material
change in insurance coverage maintained by Company and its Subsidiaries
notice thereof to Administrative Agent specifying the changes and
reasons therefor;
(xiii) Governing Body: with reasonable promptness, written
notice of any change in the Governing Body of Company;
(xiv) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Company, and (b) all of the data required to be set forth in Schedule
5.1 annexed hereto with respect to all Subsidiaries of Company (it being
understood that such written notice shall be deemed to supplement
Schedule 5.1 annexed hereto for all purposes of this Agreement);
(xv) Real Property Assets: promptly upon Company or any
Subsidiary acquiring any new Real Property Asset, a written notice
setting forth all of the data required to be set forth in Schedule 5.5B
annexed hereto with respect to all Real Property Assets of Company and
its Subsidiaries (it being understood that such written notice shall be
deemed to supplement Schedule 5.5B annexed hereto for all purposes of
this Agreement);
(xvi) Good Standing Certificates: upon request by
Administrative Agent, good standing certificates as to each Loan Party
from its jurisdiction of organization; and
(xvii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 EXISTENCE, ETC..
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its existence in the
82
jurisdiction of organization specified on Schedule 5.1 and all rights and
franchises material to its business; provided, however that neither Company nor
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Governing Body of Company or such Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of Company or such Subsidiary, as the case may be, and that the loss
thereof is not disadvantageous in any material respect to Company, such
Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX .
A. Company will, and will cause each of its Subsidiaries
to, pay all taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any penalty accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such tax, assessment, charge or
claim need be paid if it is being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, so long as (i) such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor, and (ii) in the case of a
tax, assessment, charge or claim which has or may become a Lien against any of
the Collateral, such proceedings conclusively operate to stay the sale of any
portion of the Collateral to satisfy such charge or claim.
B. Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. Maintenance of Properties. Company will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries
(including all Intellectual Property) and from time to time will make or cause
to be made all appropriate repairs, renewals and replacements thereof.
B. Insurance. Company will maintain or cause to be
maintained, with financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business interruption
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of Company and its
Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry.
Without limiting the generality of the foregoing, Company will maintain or cause
to be maintained (i) flood insurance with respect to each Flood Hazard Property
that is located in a community that participates in the National Flood Insurance
Program,
83
in each case in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (ii) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times satisfactory to Administrative Agent in its
commercially reasonable judgment. Each such policy of insurance shall (a) name
Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear, and (b) in the case of each business
interruption and casualty insurance policy, contain a loss payable clause or
endorsement, satisfactory in form and substance to Administrative Agent, that
names Administrative Agent for the benefit of Lenders as the loss payee
thereunder for any covered loss in excess of $2,500,000 and provides for at
least 30 days prior written notice to Administrative Agent of any modification
or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company
or any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long
as no Event of Default or Potential Event of Default shall have occurred
and be continuing, Company or such Subsidiary may retain and apply such
Net Insurance/Condemnation Proceeds for working capital purposes, and
(b) if an Event of Default or Potential Event of Default shall have
occurred and be continuing, Company shall apply an amount equal to such
Net Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B;
(ii) Net Insurance/Condemnation Proceeds Received by Company.
Upon receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse the costs
of repairing, restoring or replacing the assets in respect of which such
Net Insurance/Condemnation Proceeds were received or, to the extent not
so applied, to prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4B, and (b) if an Event of
Default or Potential Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B.
(iii) Net Insurance/Condemnation Proceeds Received by
Administrative Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, (a) if the aggregate
amount of Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of any
covered loss exceeds $2,500,000, or if and to the extent Company would
have been required to apply such Net Insurance/Condemnation Proceeds (if
it had received them directly) to prepay the Loans and/or reduce the
Revolving Loan Commitments, Administrative Agent shall, and Company
hereby authorizes
84
Administrative Agent to, apply such Net Insurance/Condemnation Proceeds
to prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in subsection 2.4B, and (b) to the extent the
foregoing clause (a) does not apply and (1) the aggregate amount of such
Net Insurance/Condemnation Proceeds received (and reasonably expected to
be received) by Administrative Agent in respect of any covered loss does
not exceed $2,500,000, Administrative Agent shall deliver such Net
Insurance/Condemnation Proceeds to Company, and Company shall, or shall
cause one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received, and (2) if the aggregate amount of Net
Insurance/Condemnation Proceeds received (and reasonably expected to be
received) by Administrative Agent in respect of any covered loss exceeds
$2,500,000, Administrative Agent shall hold such Net
Insurance/Condemnation Proceeds pursuant to the terms of the Security
Agreement and, so long as Company or any of its Subsidiaries proceeds
diligently to repair, restore or replace the assets of Company or such
Subsidiary in respect of which such Net Insurance/Condemnation Proceeds
were received, Administrative Agent shall from time to time disburse to
Company or such Subsidiary from the Collateral Account, to the extent of
any such Net Insurance/Condemnation Proceeds remaining therein in
respect of the applicable covered loss, amounts necessary to pay the
cost of such repair, restoration or replacement after the receipt by
Administrative Agent of invoices or other documentation reasonably
satisfactory to Administrative Agent relating to the amount of costs so
incurred and the work performed (including, if required by
Administrative Agent, lien releases and architects' certificates);
provided, however that if at any time Administrative Agent reasonably
determines (A) that Company or such Subsidiary is not proceeding
diligently with such repair, restoration or replacement, or (B) that
such repair, restoration or replacement cannot be completed with the Net
Insurance/Condemnation Proceeds then held by Administrative Agent for
such purpose, together with funds otherwise available to Company for
such purpose, or that such repair, restoration or replacement cannot be
completed within 180 days after the receipt by Administrative Agent of
such Net Insurance/Condemnation Proceeds, Administrative Agent shall,
and Company hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in
subsection 2.4B.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. Inspection Rights. Company shall, and shall cause each
of its Subsidiaries to, permit- any authorized representatives designated by any
Lender to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
85
B. Lender Meeting. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's principal offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries
and all other Persons on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Government Authority (including all Environmental Laws), noncompliance with
which would be likely to result in, individually or in the aggregate, a Material
Adverse Effect.
6.7 ENVIRONMENTAL MATTERS.
A. Environmental Disclosure. Company will deliver to
Administrative Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility that,
individually or in the aggregate, would be likely to result in a
Material Adverse Effect or with respect to any Environmental Claims
that, individually or in the aggregate, would be likely to result in a
Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, and (b) any remedial action taken by
Company or any other Person in response to (1) any Hazardous Materials
Activities the existence of which would be likely to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims that,
individually or in the aggregate, would be likely to result in a
Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, would be likely to result in a
Material Adverse Effect, (b) any Release required to be reported to any
federal, state or local governmental or regulatory agency, and (c) any
request for information from any governmental agency that suggests such
agency is investigating whether Company or any of its Subsidiaries may
be potentially responsible for any Hazardous Materials Activity.
86
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that would be likely to (1) expose Company or any of
its Subsidiaries to, or result in, Environmental Claims that would be
likely to result in, individually or in the aggregate, a Material
Adverse Effect, or (2) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for
their respective operations, and (b) any proposed action to be taken by
Company or any of its Subsidiaries to modify current operations in a
manner that would be likely to subject Company or any of its
Subsidiaries to any additional obligations or requirements under any
Environmental Laws that would be likely to result in, individually or in
the aggregate, a Material Adverse Effect.
B. Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall, in compliance with all applicable
Environmental Laws, promptly undertake, and shall cause each of its
Subsidiaries promptly to undertake, any and all investigations, studies,
sampling, testing, abatement, cleanup, removal, remediation or other
response actions necessary to remove, remediate, clean up or ▇▇▇▇▇ any
Hazardous Materials Activity on, under or about any Facility that is in
violation of any Environmental Laws or that presents a material risk of
giving rise to an Environmental Claim. (ii) Actions with Respect to
Environmental Claims and Violations of Environmental Laws. Company shall
promptly take, and shall cause each of its Subsidiaries promptly to
take, any and all actions necessary to (i) cure any violation of
applicable Environmental Laws by Company or its Subsidiaries that would
be likely to result in, individually or in the aggregate, a Material
Adverse Effect, and (ii) make an appropriate response to any
Environmental Claim against Company or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder where
failure to do so would be likely to result in, individually or in the
aggregate, a Material Adverse Effect.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS AFTER THE CLOSING DATE.
A. Execution of Subsidiary Guaranty and Personal Property
Collateral Documents. In the event that any Person becomes a Domestic Subsidiary
of Company (other than an Outsourcing Project Subsidiary) after the date hereof,
Company will promptly notify Administrative Agent of that fact and cause such
Domestic Subsidiary to execute and deliver to Administrative Agent a counterpart
of the Subsidiary Guaranty and Security Agreement and to take all such further
actions and execute all such further documents and instruments (including
actions, documents and instruments comparable to those described in subsection
4.1P) as may be necessary or, in the opinion of Administrative Agent, desirable
to create in favor of Administrative Agent, for the benefit of Lenders, a valid
and perfected First Priority Lien on all
87
of the personal and mixed property assets of such Domestic Subsidiary described
in the applicable forms of Collateral Documents. In addition, as provided in the
Security Agreement, Company shall, or shall cause the Subsidiary that owns the
Capital Stock of such Domestic Subsidiary, to execute and deliver to
Administrative Agent a supplement to the Security Agreement and to deliver to
Administrative Agent all certificates representing such Capital Stock of such
Domestic Subsidiary (accompanied by irrevocable undated stock powers, duly
endorsed in blank).
B. Significant Foreign Subsidiaries. In the event that any
Person becomes a Significant Foreign Subsidiary of Company after the date
hereof, Company will promptly notify Administrative Agent of that fact and, if
such Subsidiary is directly owned by Company or a Domestic Subsidiary, cause
such Domestic Subsidiary to execute and deliver to Administrative Agent such
documents and instruments and take such further actions (including actions,
documents and instruments comparable to those described in subsection 4.1P) as
may be necessary, or in the reasonable opinion of Administrative Agent,
desirable to create in favor of Administrative Agent, for the benefit of
Lenders, a valid and perfected First Priority Lien on 66% of the capital stock
of such Foreign Subsidiary.
C. Subsidiary Organizational Documents, Legal Opinions,
Etc. Company shall deliver to Administrative Agent, together with such Loan
Documents, (i) certified copies of such Subsidiary's Organizational Documents,
together with, if such Subsidiary is a Domestic Subsidiary, a good standing
certificate from the Secretary of State of the jurisdiction of its organization
and each other state in which such Person is qualified to do business and, to
the extent generally available, a certificate or other evidence of good standing
as to payment of any applicable franchise or similar taxes from the appropriate
taxing authority of each of such jurisdictions, each to be dated a recent date
prior to their delivery to Administrative Agent, (ii) a certificate executed by
the secretary or similar officer of such Subsidiary as to (a) the fact that the
attached resolutions of the Governing Body of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, (iii) an executed supplement to the Security Agreement evidencing the
pledge of the Capital Stock of such Subsidiary by Company or a Subsidiary of
Company that owns such Capital Stock, accompanied by certificate evidencing such
Capital Stock, together with an irrevocable undated stock powers duly endorsed
in blank and satisfactory in form and substance to Administrative Agent, and
(iv) a favorable opinion of counsel to such Subsidiary, in form and substance
satisfactory to Administrative Agent and its counsel, as to (a) the due
organization and good standing of such Subsidiary, (b) the due authorization,
execution and delivery by such Subsidiary of such Loan Documents, (c) the
enforceability of such Loan Documents against such Subsidiary, and (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
88
6.9 MATTERS RELATING TO REAL PROPERTY COLLATERAL.
A. Additional Mortgages, Etc. From and after the Closing
Date, in the event that (i) Company or any Subsidiary Guarantor acquires any
Real Property Asset or (ii) at the time any Person becomes a Subsidiary
Guarantor, such Person owns or holds any Real Property Asset, in either case
excluding any such Real Property Asset the encumbrancing of which requires the
consent of any applicable lessor or then-existing senior lienholder, where
Company and its Subsidiaries have attempted in good faith, but are unable, to
obtain such lessor's or senior lienholder's consent (any such non-excluded Real
Property Asset described in the foregoing clause (i) or (ii) being an
"Additional Mortgaged Property"), Company or such Subsidiary Guarantor shall,
upon request of Administrative Agent, deliver to Administrative Agent, as soon
as practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, a fully executed and
notarized Mortgage (an "Additional Mortgage"), in proper form for recording in
all appropriate places in all applicable jurisdictions, encumbering the interest
of such Loan Party in such Additional Mortgaged Property; and such opinions,
appraisal, documents, title insurance, environmental reports that would have
been delivered on the Closing Date if such Additional Mortgaged Property were a
Closing Date Mortgaged Property or that may be reasonably required by
Administrative Agent.
B. Real Estate Appraisals. Company shall, and shall cause
each of its Subsidiaries to, permit an independent real estate appraiser
satisfactory to Administrative Agent, upon reasonable notice, to visit and
inspect any Additional Mortgaged Property for the purpose of preparing an
appraisal of such Additional Mortgaged Property satisfying the requirements of
any applicable laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent in its
discretion).
6.10 MATTERS RELATING TO LEASED REAL PROPERTY ASSETS.
From and after the Closing Date, in the event that Company or
any Subsidiary acquires any leased Real Property Asset, Company shall, upon
request of Administrative Agent, deliver to Administrative Agent, as soon as
practicable thereafter, a Collateral Access Agreement relating to such leased
Real Property Asset.
6.11 INTEREST RATE PROTECTION.
At all times after the date that is 90 days after the Closing
Date, Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Term Loans, in an aggregate notional principal amount of not less
than 50% of the aggregate principal amount of the Term Loans, each such Interest
Rate Agreement to be in form and substance satisfactory to Administrative Agent
and with a term of not less than two years.
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
From and after the Closing Date in the case of Company and its
Subsidiaries, and from and after the date that is 90 days after the Closing Date
in the case of Company, Silicon
89
Energy Corp. and its Subsidiaries, Company shall, and shall cause each of its
Domestic Subsidiaries to, use and maintain its Deposit Accounts and cash
management systems in a manner reasonably satisfactory to Administrative Agent.
Company shall not permit any of such Deposit Accounts or any account in which
Investment Property is maintained at any time to have a principal balance in
excess of $1,000,000 unless Company or such Domestic Subsidiary, as the case may
be, has (i) executed and delivered to Administrative Agent a Control Agreement,
and (ii) taken all other steps necessary or, in the opinion of Administrative
Agent, desirable to ensure that Administrative Agent has a perfected security
interest in such Deposit Account or other account; provided that, if Company or
such Domestic Subsidiary is unable to obtain a Control Agreement from the
financial institution at which the Deposit Account or other account is
maintained, Company shall, or shall cause such Domestic Subsidiary to, within 30
days after receiving a written request by Administrative Agent to do so,
transfer all amounts in the applicable Deposit Account or other account to a
Deposit Account or other account maintained at a financial institution from
which Company or such Domestic Subsidiary has obtained a Control Agreement.
Company shall not permit the aggregate amount on deposit in all Deposit Accounts
of Company and of its Domestic Subsidiaries (other than Deposit Accounts
maintained with Administrative Agent) at any time to exceed $1,000,000.
6.13 POST CLOSING MATTERS.
A. Employee Benefit Plans. Company shall (i) within 90 days
of the Closing Date file with the IRS a request for a compliance statement(s)
under the IRS's Employee Plan Compliance Resolution System, described in Revenue
Procedure 2002-47, addressing applicable compliance failures under the defined
contribution plans of Silicon Energy Corp., SRC Systems, Inc. and EPS Solutions,
Inc. and (ii) use commercially reasonable efforts to resolve the compliance
failures under the defined contribution plans of Silicon Energy Corp., SRC
Systems, Inc. and EPS Solutions, Inc.
B. EPS Solutions, Inc. Stock Certificate. Within 14 days of
the Closing Date, Company shall deliver to Administrative Agent the original
stock certificate (which certificate shall be accompanied by an irrevocable and
undated stock power, duly endorsed in blank and otherwise in form and substance
satisfactory to Administrative Agent) representing all the Capital Stock of EPS
Solutions, Inc., a Subsidiary of Silicon Energy Corp.
C. Consent of Alameda Real Estate Investments, L.P. If
required by Administrative Agent in its discretion, Company shall obtain as soon
as possible, but in no event later than 90 days following the Closing Date, the
acknowledgement and consent of Alameda Real Estate Investments, L.P. (in form
and substance satisfactory to Administrative Agent), to that certain Collateral
Access Agreement dated as of the date hereof by and between Wind River Systems,
Inc. and Silicon Energy Corp.
90
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant thereto,
the Indebtedness corresponding to the Contingent Obligations so
extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any Subsidiary Guarantor, and any Subsidiary Guarantor
may become and remain liable with respect to Indebtedness to Company or
any other Subsidiary Guarantor; provided that (a) a Lien on all such
intercompany Indebtedness shall have been granted to Administrative
Agent for the benefit of Lenders, (b) if such intercompany Indebtedness
is evidenced by a promissory note or other instrument, such promissory
note or instrument shall have been pledged to Administrative Agent
pursuant to the Security Agreement, and (c) the aggregate principal
amount of all such Indebtedness does not exceed $2,500,000 at any time
outstanding;
(iv) Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in Schedule 7.1
annexed hereto;
(v) Outsourcing Project Subsidiaries may become and remain
liable with respect to Indebtedness obtained to finance Outsourcing
Projects in an aggregate principal amount not to exceed $35,000,000 at
any time outstanding;
(vi) Company and its Domestic Subsidiaries may become and
remain liable with respect to other Indebtedness (including Capital
Leases) in an aggregate principal amount not to exceed $5,000,000 at any
time outstanding; and
(vii) Foreign Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $2,500,000 at any time outstanding.
91
7.2 LIENS AND RELATED MATTERS.
A. Prohibition on Liens. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens on any asset existing at the time of acquisition
of such asset by Company or a Subsidiary, or Liens to secure the payment
of all or any part of the purchase price of an asset upon the
acquisition of such asset by Company or a Subsidiary or to secure any
Indebtedness permitted hereby incurred by Company or a Subsidiary at the
time of or within ninety days after the acquisition of such asset, which
Indebtedness is incurred for the purpose of financing all or any part of
the purchase price thereof; provided, however, that (a) the Lien shall
apply only to the asset so acquired and proceeds thereof and (b) the
aggregate amount of all Indebtedness secured thereby does not exceed
$5,000,000 at any time;
(iv) Liens described in Schedule 7.2 annexed hereto;
(v) Liens on Outsourcing Project Assets securing
Indebtedness permitted by subsection 7.1(v); and
(vi) Liens on Cash and Cash Equivalents with a fair market
value not to exceed $1,103,000 securing Contingent Obligations permitted
by subsection 7.4(vi).
B. No Further Negative Pledges. Neither Company nor any of
its Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, except with respect to specific property encumbered to
secure payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to an Asset Sale or Outsourcing Project Assets.
C. No Restrictions on Subsidiary Distributions to Company
or Other Subsidiaries. Company will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's Capital Stock owned by Company or any other
92
Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company, except (a)
as provided in this Agreement, (b) as may be provided in an agreement with
respect to an Asset Sale, and (c) as provided in an agreement with respect to
Indebtedness incurred by an Outsourcing Project Subsidiary.
7.3 INVESTMENTS; ACQUISITIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, or acquire, by purchase or otherwise, all
or substantially all the business, property or fixed assets of, or Capital Stock
or other ownership interest of any Person, or any division or line of business
of any Person except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company and Company and Subsidiary Guarantors may make and own
additional equity Investments in Company and Subsidiary Guarantors;
(iii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsection 7.1(iii);
(iv) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.8;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(vi) Company may make additional Investments, in the equity
or debt Securities of other Persons, directly or in the form of advances
on royalty payments that Company expects would be due to it in due
course in an aggregate amount for all such Investments and all
Contingent Obligations permitted by subsection 7.4(v) not to exceed
$5,000,000 at any time;
(vii) So long as no Event of Default shall have occurred and
be continuing or would result either before or after giving effect
thereto, Company and its Subsidiaries may from time to time acquire
(each, a "Permitted Acquisition") assets (including Capital Stock and
including Capital Stock of Subsidiaries formed in connection with any
such acquisition); provided that (a) the target of such acquisition (1)
is in the same or related business as Company and its Subsidiaries and
(2) has generated Consolidated EBITDA over the twelve month period
ending prior to the date of acquisition of not less than negative
$5,000,000, (b) the Cash consideration for any such acquisition shall
not exceed $10,000,000 and the total consideration for any such
acquisition shall not
93
exceed $25,000,000, (c) Company shall, and shall cause its Subsidiaries
to, comply with the requirements of subsections 6.8 and 6.9 with respect
to each such acquisition that results in a Person becoming a Subsidiary,
and (d) Company shall deliver to Administrative Agent a Compliance
Certificate demonstrating in reasonable detail pro forma compliance with
the provisions of subsection 7.6 after giving effect to such
acquisition;
(viii) Company may acquire and hold obligations of one or more
officers or other employees of Company or its Subsidiaries in connection
with such officers' or employees' acquisition of shares of Company's
Capital Stock, so long as no cash is actually advanced by Company or any
of its Subsidiaries to such officers or employees in connection with the
acquisition of any such obligations;
(ix) Company and its Subsidiaries may receive and hold
promissory notes and other non-cash consideration received in connection
with any Asset Sale permitted by subsection 7.7;
(x) Company and its Subsidiaries may acquire Securities in
connection with the satisfaction or enforcement of Indebtedness or
claims due or owing to Company or any of its Subsidiaries or as security
for any such Indebtedness or claim;
(xi) Company and its Subsidiaries may consummate the Merger;
and
(xii) Company may make Investments in Outsourcing Project
Assets with the proceeds of Indebtedness permitted by subsection 7.1(v)
in an aggregate amount not to exceed $35,000,000.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under subsection
6.11;
(iii) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in Schedule 7.4
annexed hereto;
(iv) Company may become and remain liable with respect to
Contingent Obligations under guaranties of Indebtedness of Outsourcing
Project Subsidiaries permitted under subsection 7.1(v);
(v) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under guarantees of
additional Indebtedness in an aggregate
94
amount for all such Contingent Obligations and all Investments permitted
by subsection 7.3(vi) not to exceed $5,000,000 at any time; and
(vi) For a period not to exceed 90 days following the Closing
Date, Contingent Obligations in respect of the Existing Silicon Energy
Corp. Letters of Credit in an aggregate face amount not to exceed
$1,103,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment; provided that so long as no Potential
Event of Default or Event of Default shall have occurred and be continuing
either before or after giving effect thereto, Company may repurchase Capital
Stock from employee stockholders of Company in an aggregate amount not to exceed
$500,000 in any Fiscal Year.
7.6 FINANCIAL COVENANTS.
A. Minimum Fixed Charge Coverage Ratio. Company shall not
permit the ratio of (i) Consolidated EBITDA plus Consolidated Operating Lease
Payments minus the sum of (a) Consolidated Capital Expenditures, (b) repurchases
of Capital Stock permitted hereunder, and (c) current taxes based on income of
Company and its Subsidiaries paid in Cash to (ii) Consolidated Fixed Charges for
any four-Fiscal Quarter period ending during any of the periods set forth below
to be less than the correlative ratio indicated:
MINIMUM FIXED
PERIOD CHARGE COVERAGE RATIO
--------------------------------- ----------------------------
Closing Date to December 31, 2003 1.50:1.00
January 1, 2004 and thereafter 1.75:1.00
B. Maximum Leverage Ratio. Company shall not permit the
Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal
Quarter during any of the periods set forth below to exceed the correlative
ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
--------------------------------- ----------------------------
Closing Date to December 31, 2003 2.25:1.00
January 1, 2004 and thereafter 2.00:1.00
95
C. Minimum Consolidated Tangible Net Worth. Company shall
not permit Consolidated Tangible Net Worth at any time to be less than the sum
of (i) 85% of Consolidated Tangible Net Worth at the Closing Date plus (ii) 75%
of Consolidated Net Income (to the extent positive) for each Fiscal Quarter
ending after the Closing Date plus (iii) 100% of the proceeds of any issuance of
the Capital Stock of Company after the Closing Date.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Company shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of its Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets (including its
notes or receivables and Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, except:
(i) any Subsidiary of Company (other than an Outsourcing
Project Subsidiary) may be merged with or into Company or any
wholly-owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary Guarantor; provided that, in the case of such a merger,
Company or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving Person;
(ii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;
(iii) Company and its Subsidiaries may dispose of obsolete,
worn out or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may make Asset Sales of
assets having a fair market value not in excess of $5,000,000; provided
that (a) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; (b) the
consideration received shall be Cash or non-Cash consideration permitted
by subsection 7.3; and (c) the proceeds of such Asset Sales shall be
applied as required by subsection 2.4B(iii)(a) or subsection 2.4D;
(v) Company or a Subsidiary may sell or dispose of shares of
Capital Stock of any of its Subsidiaries in order to qualify members of
the Governing Body of the Subsidiary if required by applicable law; and
(vi) any Person may be merged with or into any Subsidiary of
Company if the acquisition of the Capital Stock of such Person by
Company or such Subsidiary would have been permitted pursuant to
subsection 7.3; provided that if a Subsidiary is not the surviving or
continuing Person, the surviving Person becomes a Subsidiary and
complies
96
with the provisions of subsection 6.8 and (c) no Potential Event of
Default or Event of Default shall have occurred or be continuing after
giving effect thereto.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to,
make or incur Consolidated Capital Expenditures, in any Fiscal Year indicated
below, in an aggregate amount in excess of the corresponding amount set forth
below opposite such Fiscal Year:
MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES
----------- --------------------
2003 $25,000,000
2004 $25,000,000
2005 $25,000,000
7.9 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Company or with any Affiliate of Company or of any such
holder, on terms that are less favorable to Company or that Subsidiary, as the
case may be, than those that might be obtained at the time from Persons who are
not such a holder or Affiliate; provided that the foregoing restriction shall
not apply to (i) any transaction between Company and any of its wholly-owned
Subsidiaries or between any of its wholly-owned Subsidiaries, or (ii) reasonable
and customary fees paid to members of the Governing Bodies of Company and its
Subsidiaries.
7.10 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) that Company or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Company or any of its Subsidiaries), or (ii) that Company or
any of its Subsidiaries intends to use for substantially the same purpose as any
other property that has been or is to be sold or transferred by Company or any
of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease.
97
7.11 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company, Silicon Energy Corp. and their respective
Subsidiaries on the Closing Date, and similar or related businesses, and (ii)
such other lines of business as may be consented to by Requisite Lenders.
7.12 AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS.
Neither Company nor any of its Subsidiaries will agree to any
material amendment to, or waive any of its material rights under, any Related
Agreement after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment or waiver.
7.13 FISCAL YEAR.
Company shall not change its Fiscal Year-end from December 31.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of or
interest on any Loan when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory prepayment or otherwise; failure by
Company to pay when due any amount payable to the Issuing Lender in
reimbursement of any drawing under a Letter of Credit; or failure by Company to
pay any fee or any other amount due under this Agreement within five days after
the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay
when due any principal of or interest on or any other amount payable in
respect of one or more items of Indebtedness (other than Indebtedness
referred to in subsection 8.1) or Contingent Obligations in an
individual principal amount of $500,000 or more or with an aggregate
principal amount of $500,000 or more, in each case beyond the end of any
grace period provided therefor; or
(ii) breach or default by Company or any of its Subsidiaries
with respect to any other material term of (a) one or more items of
Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above, or (b) any loan
agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), if the effect of
such breach or default is to cause, or to permit the holder or holders
of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness
98
or Contingent Obligation(s) to become or be declared due and payable
prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice,
lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 20
days after the earlier of (i) an Officer of Company or such Loan Party becoming
aware of such default or (ii) receipt by Company and such Loan Party of notice
from Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC..
(i) A court having jurisdiction in the premises shall enter
a decree or order for relief in respect of Company or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other
similar relief shall be granted under any applicable federal or state
law; or
(ii) an involuntary case shall be commenced against Company
or any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Company
or any of its Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other
custodian of Company or any of its Subsidiaries for all or a substantial
part of its property; or a warrant of attachment, execution or similar
process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
99
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC..
(i) Company or any of its Subsidiaries shall have an order
for relief entered with respect to it or commence a voluntary case under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry
of an order for relief in an involuntary case, or to the conversion of
an involuntary case to a voluntary case, under any such law, or shall
consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its
property; or Company or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or
(ii) Company or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Governing Body of Company or
any of its Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Except for the Benghiat Litigation described in Schedule 5.6
annexed hereto, any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $2,500,000
or (ii) in the aggregate at any time an amount in excess of $2,500,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 45 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Subsidiaries decreeing the dissolution or split up of Company or
that Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events or similar events
in respect of any Foreign Plans that individually or in the aggregate results in
or might reasonably be expected to result in liability of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in excess of $2,500,000
during the term of this Agreement; or there shall exist an amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA) and unfunded
liabilities in respect of Foreign Plans, individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities), which exceeds
$2,500,000; or
100
8.11 MATERIAL ADVERSE EFFECT.
Any event or change shall occur that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect; or
8.12 CHANGE IN CONTROL.
A Change in Control shall have occurred; or
8.13 INVALIDITY OF LOAN DOCUMENTS; FAILURE OF SECURITY; REPUDIATION
OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any
Loan Document or any provision thereof, for any reason other than the
satisfaction in full of all Obligations, shall cease to be in full force and
effect (other than in accordance with its terms) or shall be declared to be null
and void, (ii) Administrative Agent shall not have or shall cease to have a
valid and perfected First Priority Lien in any Collateral purported to be
covered by the Collateral Documents having a fair market value, individually or
in the aggregate, exceeding $1,000,000, in each case for any reason other than
the failure of Administrative Agent or any Lender to take any action within its
control, or (iii) any Loan Party shall contest the validity or enforceability of
any Loan Document or any provision thereof in writing or deny in writing that it
has any further liability, including with respect to future advances by Lenders,
under any Loan Document or any provision thereof to which it is a party; or
8.14 FAILURE TO CONSUMMATE MERGER.
The Merger shall not be consummated in accordance with the Merger
Agreement or the Merger shall be unwound, reversed or otherwise rescinded in
whole or in part for any reason;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan and the
obligation of the Issuing Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written request
or with the written consent of Requisite Lenders, by written notice to Company,
declare all or any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due and payable,
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by Company, and the obligation of each Lender
to make any Loan and the obligation of the Issuing Lender to issue any Letter of
Credit hereunder shall thereupon terminate; provided that the foregoing shall
not affect
101
in any way the obligations of Revolving Lenders under subsection 3.3C(i) or the
obligations of Revolving Lenders to purchase assignments of any unpaid Swing
Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Security Agreement and shall be applied as therein provided.
SECTION 9. ADMINISTRATIVE AGENT
9.1 APPOINTMENT.
A. Appointment of Administrative Agent. ▇▇▇▇▇ Fargo is
hereby appointed Administrative Agent hereunder and under the other Loan
Documents. Each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. Administrative Agent agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 9 are solely for the benefit of Administrative Agent
and Lenders and no Loan Party shall have rights as a third party beneficiary of
any of the provisions thereof. In performing its functions and duties under this
Agreement, Administrative Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any other Loan Party.
B. Appointment of Supplemental Collateral Agents. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or
102
performance thereof by such Supplemental Collateral Agent shall run to and be
enforceable by either Administrative Agent or such Supplemental Collateral
Agent, and (ii) the provisions of this Section 9 and of subsections 10.2 and
10.3 that refer to Administrative Agent shall inure to the benefit of such
Supplemental Collateral Agent and all references therein to Administrative Agent
shall be deemed to be references to Administrative Agent and/or such
Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other
Loan Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably
authorizes Administrative Agent to take such action on such Lender's behalf and
to exercise such powers, rights and remedies hereunder and under the other Loan
Documents as are specifically delegated or granted to Administrative Agent by
the terms hereof and thereof, together with such powers, rights and remedies as
are reasonably incidental thereto. Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents. Administrative Agent may exercise such powers, rights
and remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender or
Company; and nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by such Agent to Lenders or by or on
behalf of Company to such Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
103
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. Exculpatory Provisions. No Agent or any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by such Agent under or in connection with any of the Loan Documents
except to the extent caused by such Agent's gross negligence or willful
misconduct. An Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against an Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).
D. Agents Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, an Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans and the Letters
of Credit, an Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include each
Agent in its individual capacity. An Agent and its Affiliates may accept
deposits from, lend money to, acquire equity interests in and generally engage
in any kind of commercial banking, investment banking, trust, financial advisory
or other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
9.3 INDEPENDENT INVESTIGATION BY LENDERS; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS.
Each Lender agrees that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue
104
to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. No Agent shall have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and no Agent shall have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify each Agent and its officers, directors, employees, agents,
attorneys, professional advisors and Affiliates to the extent that any such
Person shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements and fees and
disbursements of any financial advisor engaged by Agents) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against an Agent or and other such Persons in exercising the powers, rights and
remedies of an Agent or performing the duties of an Agent hereunder or under the
other Loan Documents or otherwise in its capacity as an Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of an Agent resulting solely from such Agent's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction. If any indemnity furnished to an Agent or any other such
Person for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
9.5 SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER.
A. Successor Administrative Agent. Any Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company.
Upon any such notice of resignation, Requisite Lenders shall have the right,
upon five Business Days' notice to Company, to appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as an Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of ▇▇▇▇▇ Fargo or its successor as Swing Line Lender, and
any successor Administrative Agent appointed pursuant to subsection 9.5A shall,
upon its acceptance of such appointment, become the successor Swing Line Lender
for all purposes hereunder. In such event (i) Company shall prepay any
outstanding
105
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring
Administrative Agent and Swing Line Lender shall surrender any Swing Line Note
held by it to Company for cancellation, and (iii) if so requested by the
successor Administrative Agent and Swing Line Lender in accordance with
subsection 2.1E, Company shall issue a new Swing Line Note to the successor
Administrative Agent and Swing Line Lender substantially in the form of Exhibit
VI annexed hereto, in the principal amount of the Swing Line Loan Commitment
then in effect and with other appropriate insertions.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party and to be the agent for and representative of Lenders under the
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Subsidiary Guaranty; provided that Administrative
Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any Collateral
Document or the Subsidiary Guaranty, or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of Requisite Lenders (or, if required pursuant to subsection 10.6, all
Lenders); provided further, however, that, without further written consent or
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented, (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the Capital
Stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of Company) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented, or (c)
subordinate the Liens of Administrative Agent, on behalf of Lenders, to any
Liens permitted by subsection 7.2; provided that, in the case of a sale of such
item of Collateral or stock referred to in subdivision (a) or (b), the
requirements of subsection 10.14 are satisfied. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, Administrative Agent
and each Lender hereby agree that (1) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce any the Subsidiary Guaranty, it being understood and agreed that
all powers, rights and remedies under the Collateral Documents and the
Subsidiary Guaranty may be exercised solely by Administrative Agent for the
benefit of Lenders in accordance with the terms thereof, and (2) in the event of
a foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
106
9.7 DUTIES OF OTHER AGENTS.
None of the Lenders identified in this Agreement as a
"co-agent" or Syndication Agent shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of such
Lenders shall have or be deemed to have a fiduciary relationship with any
Lender.
9.8 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to Company or any of the Subsidiaries of
Company, Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether Administrative Agent shall have made any demand on
Company) shall be entitled and empowered, by intervention in such proceeding or
otherwise
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Loans and any
other Obligations that are owing and unpaid and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of Lenders and Agents (including any claim for the reasonable
compensation, expenses, disbursements and advances of Lenders and Agents
and their agents and counsel and all other amounts due Lenders and
Agents under subsections 2.3 and 10.2) allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.
Nothing herein contained shall be deemed to authorize
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lenders or to authorize
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
107
SECTION 10. MISCELLANEOUS
10.1 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS IN LOANS
AND LETTERS OF CREDIT.
A. General. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Lenders (it
being understood that Lenders' rights of assignment are subject to the further
provisions of this subsection 10.1). Neither Company's rights or obligations
hereunder nor any interest therein may be assigned or delegated by Company
without the prior written consent of all Lenders (and any attempted assignment
or transfer by Company without such consent shall be null and void). No sale,
assignment or transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Revolving Lender effecting such sale, assignment,
transfer or participation. Anything contained herein to the contrary
notwithstanding, except as provided in subsection 2.1A(iii) and subsection 10.5,
the Swing Line Loan Commitment and the Swing Line Loans of Swing Line Lender may
not be sold, assigned or transferred as described below to any Person other than
a successor Administrative Agent and Swing Line Lender to the extent
contemplated by subsection 9.5. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Affiliates of each of Administrative Agent
and Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Any Lender may assign
to one or more Eligible Assignees all or any portion of its rights and
obligations under this Agreement; provided that (a), except (1) in the
case of an assignment of the entire remaining amount of the assigning
Lender's rights and obligations under this Agreement, or (2) in the case
of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund of a Lender, the aggregate amount of the Revolving Loan Exposure or
Term Loan Exposure of the assigning Lender and the assignee subject to
each such assignment shall not be less than $3,000,000, unless each of
Administrative Agent and, so long as no Event of Default has occurred
and is continuing, Company otherwise consents each such consent not to
be unreasonably withheld or delayed), (b) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement with respect to the
Loan or the Commitment assigned, (c) the parties to each assignment
shall execute and deliver to Administrative Agent an Assignment
Agreement, together with a processing and recordation fee of $3,500
(unless the assignee is an Affiliate or an Approved Fund of the
assignor, in which case no fee shall be required), and the Eligible
Assignee, if it shall not be a Lender, shall deliver to Administrative
Agent information reasonably requested by Administrative Agent,
including such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment
108
Agreement may be required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii), and (d), except in the case of an assignment to
another Lender, an Affiliate of a Lender or an Approved Fund of a
Lender, Administrative Agent and, if no Event of Default has occurred
and is continuing, Company, shall have consented thereto (which consent
shall not be unreasonably withheld). Upon such execution and delivery
and consent, from and after the effective date specified in such
Assignment Agreement, (y) 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 Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive
the termination of this Agreement under subsection 10.9B) and be
released from its obligations under this Agreement (and, in the case of
an Assignment Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto; provided that, anything
contained in any of the Loan Documents to the contrary notwithstanding,
if such Lender is the Issuing Lender with respect to any outstanding
Letters of Credit such Lender shall continue to have all rights and
obligations of the Issuing Lender with respect to such Letters of Credit
until the cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The assigning Lender
shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its Notes, if any, to
Administrative Agent for cancellation, and thereupon new Notes shall, if
so requested by the assignee and/or the assigning Lender in accordance
with subsection 2.1E, be issued to the assignee and/or to the assigning
Lender, substantially in the form of Exhibit IV or Exhibit V annexed
hereto, as the case may be, with appropriate insertions, to reflect the
new Commitments and/or outstanding Revolving Loans and/or outstanding
Term Loans of the assignee and/or the assigning Lender. Other than as
provided in subsection 2.1A(iii) and subsection 10.5, any assignment or
transfer by a Lender of rights or obligations under this Agreement that
does not comply with this subsection 10.1B shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection 10.1C.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment
evidenced thereby (in each case to the extent such consent is required
pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement
by executing a counterpart thereof as provided therein (which acceptance
shall evidence any required consent of Administrative Agent to such
assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Company.
109
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
(iii) Deemed Consent by Company. If the consent of Company to
an assignment or to an Eligible Assignee is required hereunder
(including a consent to an assignment which does not meet the minimum
assignment thresholds specified in subsection 10.1B(i)), Company shall
be deemed to have given its consent five Business Days after the date
notice thereof has been delivered by the assigning Lender (through
Administrative Agent) unless such consent is expressly refused by
Company prior to such fifth Business Day.
C. Participations. Any Lender may, without the consent of,
or notice to, Company or Administrative Agent, sell participations to one or
more Persons (other than a natural Person or Company or any of its Affiliates)
in all or a portion of such Lender's rights and/or obligations under this
Agreement; provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, and (iii) Company,
Administrative Agent and Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver directly affecting (i) the extension of
the regularly scheduled maturity of any portion of the principal amount of or
interest on any Loan allocated to such participation, or (ii) a reduction of the
principal amount of or the rate of interest payable on any Loan allocated to
such participation. Subject to the further provisions of this subsection 10.1C,
Company agrees that each Participant shall be entitled to the benefits of
subsections 2.6D and 2.7 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection 10.1B. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
subsection 10.4 as though it were a Lender, provided such Participant agrees to
be subject to subsection 10.5 as though it were a Lender. A Participant shall
not be entitled to receive any greater payment under subsections 2.6D and 2.7
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant unless the sale of the participation
to such Participant is made with Company's prior written consent. A Participant
that would be a Non-US Lender if it were a Lender shall not be entitled to the
benefits of subsection 2.7 unless Company is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of Company, to
comply with subsection 2.7B(iii) as though it were a Lender.
D. Pledges and Assignments. Any Lender may at any time
pledge or assign a security interest in all or any portion of its Loans, and the
other Obligations owed to such Lender, to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to
any Federal Reserve Bank; provided that (i) no Lender shall be relieved of any
of its obligations hereunder as a result of any such assignment or pledge and
(ii) in no event shall any assignee or pledgee be considered to be a "Lender" or
be entitled to require the assigning Lender to take or omit to take any action
hereunder.
110
E. Information. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. Agreements of Lenders. Each Lender listed on the
signature pages hereof hereby agrees (i) that it is an Eligible Assignee
described in clause (ii) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the agreements of such
Lender contained in Section 2(c) of such Assignment Agreement are incorporated
herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all actual costs and reasonable
expenses of negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto; (ii) all costs and
expenses of furnishing all opinions by counsel for Company (including any
opinions requested by Agents or Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) all reasonable
fees, expenses and disbursements of counsel to Administrative Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all actual costs and reasonable
expenses of creating and perfecting Liens in favor of Administrative Agent on
behalf of Lenders pursuant to any Collateral Document, including filing and
recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all actual costs
and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any environmental audits or
reports provided for under subsection 4.1O or 6.9A; (vi) all actual costs and
reasonable expenses incurred by Administrative Agent in connection with the
custody or preservation of any of the Collateral; (vii) all other actual costs
and reasonable expenses incurred by Administrative Agent in connection with the
syndication of the Commitments; (viii) all actual costs and reasonable expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and fees, costs and expenses of accountants, advisors and consultants,
incurred by Administrative Agent and its counsel relating to efforts to (a)
evaluate or assess any Loan Party, its business or
111
financial condition and (b) protect, evaluate, assess or dispose of any of the
Collateral; and (ix) all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel), fees, costs and expenses
of accountants, advisors and consultants and costs of settlement, incurred by
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the Loan
Documents) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders (including the Issuing
Lender), and the officers, directors, employees, agents and Affiliates of Agents
and Lenders (collectively called the "Indemnitees"), from and against any and
all Indemnified Liabilities (as hereinafter defined); provided that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, the failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto Government Authority, or any enforcement
of any of the Loan Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty)), (ii) the statements contained in the commitment letter delivered by
any Lender to Company with respect thereto, or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
112
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy, Company
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, time or
demand, provisional or final, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender or any Affiliate
of that Lender to or for the credit or the account of Company and each other
Loan Party against and on account of the Obligations of Company or any other
Loan Party to that Lender (or any Affiliate of that Lender) or to any other
Lender (or any Affiliate of any other Lender) under this Agreement, the Letters
of Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or any other amounts due hereunder
shall have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
Company hereby further grants to Administrative Agent and each Lender a security
interest in all deposits and accounts maintained with Administrative Agent or
such Lender as security for the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such
113
payment to purchase assignments (which it shall be deemed to have purchased from
each seller of an assignment simultaneously upon the receipt by such seller of
its portion of such payment) of the Aggregate Amounts Due to the other Lenders
so that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them; provided that if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such assignments shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
purchaser of an assignment so purchased may exercise any and all rights of a
Lender as to such assignment as fully as if that Lender had complied with the
provisions of subsection 10.1B with respect to such assignment. In order to
further evidence such assignment (and without prejudice to the effectiveness of
the assignment provisions set forth above), each purchasing Lender and each
selling Lender agree to enter into an Assignment Agreement at the request of a
selling Lender or a purchasing Lender, as the case may be, in form and substance
reasonably satisfactory to each such Lender.
10.6 AMENDMENTS AND WAIVERS.
No amendment modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by Company therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders; provided that no such amendment, modification, termination, waiver or
consent shall, without the consent of (a) each Lender with Obligations directly
affected whose consent shall be required for any such amendment, modification,
termination or waiver in addition to that of Requisite Lenders) (1) reduce the
principal amount of any Loan, (2) increase the maximum aggregate amount of
Letters of Credit, (3) postpone the date or reduce the amount of any scheduled
payment (but not prepayment) of principal of any Loan, (4) postpone the date on
which any interest or any fees are payable, (5) decrease the interest rate borne
by any Loan (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any
fees payable hereunder including any change in the manner in which any financial
ratio used in determining any interest rate or fee is calculated that would
result in a reduction of any such rate or fee), (6) reduce the amount or
postpone the due date of any amount payable in respect of any Letter of Credit,
(7) extend the expiration date of any Letter of Credit beyond the Revolving Loan
Commitment Termination Date, or (8) change in any manner the obligations of
Revolving Lenders relating to the purchase of participations in Letters of
Credit; (b) each Lender, (1) change in any manner the definition of "Pro Rata
Share" or the definition of "Requisite Lenders" (except for any changes
resulting solely from an increase in Commitments approved by Requisite Lenders),
(2) change in any manner any provision of this Agreement that, by its terms,
expressly requires the approval or concurrence of all Lenders, (3) increase the
maximum duration of Interest Periods permitted hereunder, (4) release any Lien
granted in favor of Administrative Agent with respect to all or substantially
all of the Collateral or release all or substantially all of the Subsidiary
Guarantors from their obligations under the Subsidiary Guaranty, in each case
other than in accordance with the terms of the Loan Documents, or (5) change in
any manner or waive the provisions contained in subsection 8.1 or this
subsection
114
10.6. In addition, (i) any amendment, modification, termination or waiver of any
of the provisions contained in Section 4 shall be effective only if evidenced by
a writing signed by or on behalf of Administrative Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of subsection 2.1A(iii) or of any other provision of this
Agreement relating to the Swing Line Loan Commitment or the Swing Line Loans
shall be effective without the written concurrence of Swing Line Lender, (iv) no
amendment, modification, termination or waiver of any provision of Section 3
shall be effective without the written concurrence of Administrative Agent and,
with respect to the purchase of participations in Letters of Credit, without the
written concurrence of the Issuing Lender that has issued an outstanding Letter
of Credit or has not been reimbursed for a payment under a Letter of Credit, (v)
no amendment, modification, termination or waiver of any provision of Section 9
or of any other provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of Administrative Agent shall be effective
without the written concurrence of Administrative Agent, and (vi) no Commitment
of a Lender shall be increased without the consent of such Lender.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company. Notwithstanding the foregoing, after
consulting with Company, Administrative Agent may cause amendment documents to
be prepared and all parties hereto agree to execute such documents in order to
change the pricing, terms and structure either of the Loans or other Obligations
hereunder (provided that the Administrative Agent shall not change the aggregate
amount of the Commitments hereunder), if Administrative Agent determines that
such changes are necessary in order to successfully complete the syndication of
the Obligations hereunder and to reduce the final Commitment of ▇▇▇▇▇ Fargo to
$40,000,000. These rights will survive the execution and delivery of this
Agreement and the Closing Date until the Commitment of ▇▇▇▇▇ Fargo has been
reduced to $40,000,000.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 NOTICES; EFFECTIVENESS OF SIGNATURES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, or sent
115
by telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile in complete and legible form, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Administrative Agent, Swing Line Lender and
the Issuing Lender shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent. Electronic mail and Internet
and intranet websites may be used to distribute routine communications, such as
financial statements and other information as provided in subsection 6.1;
provided, however, that no signature with respect to any notice, request,
agreement, waiver, amendment or other document or any notice that is intended to
have binding effect may be sent by electronic mail.
Loan Documents and notices under the Loan Documents may be
transmitted and/or signed by telefacsimile. The effectiveness of any such
documents and signatures shall, subject to applicable law, have the same force
and effect as an original copy with manual signatures and shall be binding on
all Loan Parties, Agents and Lenders. Administrative Agent may also require that
any such documents and signature be confirmed by a manually-signed copy thereof;
provided, however, that the failure to request or deliver any such
manually-signed copy shall not affect the effectiveness of any facsimile
document or signature.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Company set forth in subsections 2.6D,
2.7, 10.2, 10.3, 10.4, 10.17 and 10.18 and the agreements of Lenders set forth
in subsections 9.2C, 9.4, 10.5 and 10.18 shall survive the payment of the Loans,
the cancellation or expiration of the Letters of Credit and the reimbursement of
any amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of an Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
116
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither any Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS;
DAMAGE WAIVER.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders, or Lenders and Company, as a partnership, an association, a Joint
Venture or any other kind of entity. The amounts payable at any time hereunder
to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
To the extent permitted by law, Company shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with or as a result of this
Agreement (including, without limitation, subsection 2.1C hereof), any other
Loan Document, any transaction contemplated by the Loan Documents, any Loan or
the use of proceeds thereof.
10.14 RELEASE OF SECURITY INTEREST OR GUARANTY.
Upon the proposed sale or other disposition of any Collateral
to any Person (other than an Affiliate of Company) that is permitted by this
Agreement or to which Requisite Lenders have otherwise consented, or the sale or
other disposition of all of the Capital Stock of a
118
Subsidiary Guarantor to any Person (other than an Affiliate of Company)
permitted by this Agreement or to which Requisite Lenders have otherwise
consented, for which a Loan Party desires to obtain a security interest release
or a release of the Subsidiary Guaranty from Administrative Agent, such Loan
Party shall deliver an Officer's Certificate (i) stating that the Collateral or
the Capital Stock subject to such disposition is being sold or otherwise
disposed of in compliance with the terms hereof and (ii) specifying the
Collateral or Capital Stock being sold or otherwise disposed of in the proposed
transaction. Upon the receipt of such Officer's Certificate, Administrative
Agent shall, at such Loan Party's expense, so long as Administrative Agent (a)
has no reason to believe that the facts stated in such Officer's Certificate are
not true and correct and (b), if the sale or other disposition of such item of
Collateral or Capital Stock constitutes an Asset Sale, shall have received
evidence satisfactory to it that arrangements satisfactory to it have been made
for delivery of the Net Asset Sale Proceeds if and as required by subsection
2.4, execute and deliver such releases of its security interest in such
Collateral or such Subsidiary Guaranty, as may be reasonably requested by such
Loan Party.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (INCLUDING SECTION
1646.5 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.
10.16 CONSTRUCTION OF AGREEMENT; NATURE OF RELATIONSHIP.
Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent nor any Lender or
other Agent has any fiduciary relationship with or duty to Company arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent, the other Agents and Lenders, on
one hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF CALIFORNIA, CITY AND COUNTY OF SAN FRANCISCO. BY
EXECUTING AND DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY
118
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 410.40 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND
119
EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement that has been identified in
writing as confidential by Company in accordance with such Lender's customary
procedures for handling confidential information of this nature, it being
understood and agreed by Company that in any event a Lender may make disclosures
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such information and instructed to keep such information
confidential), (b) to the extent requested by any Government Authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this subsection 10.19, to (i) any Eligible Assignee of or participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Agreement, or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of Company, (g) with the consent of Company,
(h) to the extent such information (i) becomes publicly available other than as
a result of a breach of this subsection 10.19, or (ii) becomes available to
Administrative Agent or any Lender on a nonconfidential basis from a source
other than Company, or (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Lender's or its
Affiliates' investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates and that no written or oral communications from
counsel to an Agent and no information that is or is designated as privileged or
as attorney work product may be disclosed to any Person unless such Person is a
Lender or a participant hereunder; provided that, unless specifically prohibited
by applicable law or court order, each Lender shall notify Company of any
request by any Government Authority or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such Government Authority) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries. In addition, Administrative
Agent and Lenders may disclose the existence of this Agreement and information
about this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to Administrative Agent and Lenders.
Notwithstanding anything to contrary herein, Company and Administrative Agent
hereby agree that Company (and each of its employees, representatives and
agents) is permitted
120
to disclose to any and all Persons, without limitation of any kind, the
structure and tax aspects of the transactions contemplated by the Loan
Documents, and all materials of any kind (including opinions and other tax
analyses) that are provided to Company related to such structure and tax
aspects. In this regard, Company acknowledges and agrees that the Company's
disclosure of the structure or tax aspects of such transactions is not limited
in any way by an express or implied understanding or agreement, oral or written
(whether or not such agreement or understanding is legally binding).
Furthermore, Company acknowledges and agrees that it does not know or have
reason to know that its use or disclosure of information relating to the
structure or tax aspects of the transactions contemplated by the Loan Documents
is limited in any other manner for the benefit of any other Person.
10.20 COUNTERPARTS; EFFECTIVENESS
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.
[Remainder of page intentionally left blank]
121
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
ITRON, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: Vice President and Chief Financial Officer
Notice Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President and
Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, individually
and as Administrative Agent
By: /s/ ▇▇▇ ▇▇▇▇
----------------------------------------------
Title: Vice President and Senior Relationship
Manager
Notice Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Vice President and Senior Relationship Manager
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
Spokane, Washington
ABA#
-----------------------------------------
For Acct.:
-----------------------------------
Ref: Itron, Inc.
S-1
SCHEDULE 2.1
LENDERS' COMMITMENTS AND PRO RATA SHARES
Term Loan Revolving Loan Pro Rata
Lender Commitment Commitment Share
-------------------------------------- ------------- --------------- --------
▇▇▇▇▇ Fargo Bank, National Association $50,000,000 $55,000,000 100%
------------- --------------- --------
TOTAL $50,000,000 $55,000,000 100%
Schedule-2
