CONFORMED COPY
EXHIBIT 10.2
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CREDIT AGREEMENT
dated as of
August 4, 1999
among
SCG HOLDING CORPORATION,
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC,
as Borrower,
The Lenders Party Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
CREDIT LYONNAIS NEW YORK BRANCH,
as Co-Documentation Agent,
DLJ CAPITAL FUNDING, INC.,
as Co-Documentation Agent,
and
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Co-Documentation Agent
---------------------------
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms...................................................1
Section 1.02. Classification of Loans and Borrowings.........................26
Section 1.03. Terms Generally................................................26
Section 1.04. Accounting Terms; GAAP.........................................26
Section 1.05. Interim Financial Calculations.................................26
ARTICLE II
THE CREDITS
Section 2.01. Commitments....................................................27
Section 2.02. Loans and Borrowings...........................................27
Section 2.03. Requests for Borrowings........................................29
Section 2.04. Swingline Loans................................................29
Section 2.05. Letters of Credit..............................................30
Section 2.06. Funding of Borrowings..........................................34
Section 2.07. Interest Elections.............................................35
Section 2.08. Termination and Reduction of Commitments.......................36
Section 2.09. Repaymentof Loans; Evidence of Debt............................37
Section 2.10. Amortization of Term Loans.....................................38
Section 2.11. Prepayment of Loans............................................40
Section 2.12. Fees...........................................................42
Section 2.13. Interest.......................................................43
Section 2.14. Alternate Rate of Interest.....................................44
Section 2.15. Increased Costs................................................44
Section 2.16. Break Funding Payments.........................................45
Section 2.17. Taxes..........................................................46
Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs....47
Section 2.19. Mitigation Obligations; Replacement of Lenders.................48
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Organization; Powers...........................................49
Section 3.02. Authorization; Enforceability..................................50
Section 3.03. Governmental Approvals; No Conflicts...........................50
Section 3.04. Financial Condition; No Material Adverse Change................50
Section 3.05. Properties.....................................................51
Section 3.06. Litigation and Environmental Matters...........................51
Section 3.07. Compliance with Laws and Agreements............................52
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 3.08. Investment and Holding Company Status..........................52
Section 3.09. Taxes..........................................................52
Section 3.10. ERISA..........................................................52
Section 3.11. Disclosure.....................................................52
Section 3.12. Subsidiaries...................................................53
Section 3.13. Insurance......................................................53
Section 3.14. Labor Matters..................................................53
Section 3.15. Solvency.......................................................53
Section 3.16. Senior.........................................................54
Section 3.17. Year 2000......................................................54
ARTICLE IV
CONDITIONS
Section 4.01. Effective Date.................................................54
Section 4.02. Each Credit Event..............................................56
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Financial Statements and Other Information.....................57
Section 5.02. Notices of Material Events.....................................58
Section 5.03. Information Regarding Collateral...............................59
Section 5.04. Existence; Conduct of Business.................................60
Section 5.05. Payment of Obligations.........................................60
Section 5.06. Maintenance of Properties......................................60
Section 5.07. Insurance......................................................60
Section 5.08. Casualty and Condemnation......................................60
Section 5.09. Books and Records; Inspection and Audit Rights.................60
Section 5.10. Compliance with Laws...........................................61
Section 5.11. Use of Proceeds and Letters of Credit..........................61
Section 5.12. Additional Subsidiaries........................................61
Section 5.13. Further Assurances.............................................61
Section 5.14. Interest Rate Protection.......................................62
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Indebtedness; Certain Equity Securities........................62
Section 6.02. Liens..........................................................64
Section 6.03. Fundamental Changes............................................65
Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions......65
Section 6.05. Asset Sales....................................................67
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 6.06. Sale and Leaseback Transactions................................68
Section 6.07. Hedging Agreements.............................................68
Section 6.08. Restricted Payments; Certain Payments of Indebtedness..........68
Section 6.09. Transactions with Affiliates...................................70
Section 6.10. Restrictive Agreements.........................................70
Section 6.11. Amendment of Material Documents................................71
Section 6.12. Interest Expense Coverage Ratio................................71
Section 6.13. Leverage Ratio.................................................72
Section 6.14. Capital Expenditures...........................................72
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default..............................................72
Section 7.02. Exclusion of Immaterial Subsidiaries...........................75
ARTICLE VIII
THE ADMINISTRATIVE AGENT
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices........................................................77
Section 9.02. Waivers; Amendments............................................78
Section 9.03. Expenses; Indemnity; Damage Waiver.............................79
Section 9.04. Successors and Assigns.........................................81
Section 9.05. Survival.......................................................83
Section 9.06. Counterparts; Integration; Effectiveness.......................83
Section 9.07. Severability...................................................84
Section 9.08. Right of Setoff................................................84
Section 9.09. Governing Law; Jurisdiction; Consent to Service of Process.....84
Section 9.10. Waiver of Jury Trial...........................................85
Section 9.11. Headings.......................................................85
Section 9.12. Confidentiality................................................85
Section 9.13. Interest Rate Limitation.......................................86
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SCHEDULES:
Schedule 1.01 -- Mortgaged Properties
Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Borrower's Counsel
Exhibit B-2 -- Form of Opinion of Local Counsel
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Form of Security Agreement
Exhibit G -- Form of Collateral Assignment
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CREDIT AGREEMENT dated as of August 4, 1999, among SCG HOLDING
CORPORATION, SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, the LENDERS party hereto,
and THE CHASE MANHATTAN BANK, as administrative agent, collateral agent and
syndication agent hereunder, and CREDIT LYONNAIS NEW YORK BRANCH, DLJ CAPITAL
FUNDING, INC. and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as co-documentation agents
hereunder.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate
of a Person solely by reason of his or her being an officer or director of such
Person.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable
Percentages shall be determined based upon the Revolving Commitments most
recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day (a) with respect to any Tranche
B Term Loan, (i) 2.50% per annum, in the case of an ABR Loan, or (ii) 3.50% per
annum, in the case of a Eurodollar Loan, (b) with respect to any Tranche C Term
Loan, (i) 2.75% per annum, in the case of an ABR Loan, or (ii) 3.75% in the case
of a Eurodollar Loan, and (c) with respect to any ABR Loan or Eurodollar Loan
that is a Revolving Loan or a Tranche A Term Loan, or with respect to the
commitment fees payable hereunder, as the case may be, the applicable rate per
annum set forth below under the caption "ABR Spread", "Eurodollar Spread" or
"Commitment Fee Rate", as the case may be, based upon the Leverage Ratio as of
the most recent determination date, provided that until the delivery to the
Administrative Agent, pursuant to Section 5.01(a), of Holdings's consolidated
financial statements for Holdings's fiscal year ending on December 31, 1999, the
"Applicable Rate" for purposes of clause (c) above shall be the applicable rate
per annum set forth below in Category 1:
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ABR Eurodollar Commitment Fee
Leverage Ratio: Spread Spread Rate
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Category 1 2.00% 3.00% 0.50%
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Greater than or equal to 3.00 to 1.00
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Category 2 1.75% 2.75% 0.50%
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Greater than or equal to 2.50 to 1.00
and less than 3.00 to 1.00
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Category 3 1.50% 2.50% 0.50%
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Greater than or equal to 2.00 to 1.00
and less than 2.50 to 1.00
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Category 4 1.25% 2.25% 0.50%
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Less than 2.00 to 1.00
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For purposes of the foregoing, (a) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of Holdings's fiscal year based
upon Holdings's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (b) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the first Business Day after the date of delivery to the
Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the
next such change, provided that the Leverage Ratio shall be deemed to be in
Category 1 (i) at any time that an Event of Default has occurred and is
continuing or (ii) at the option of the Administrative Agent or at the request
of the Required Lenders if Holdings fails to deliver the consolidated financial
statements required to be delivered by it pursuant to Section 5.01(a) or (b),
during the period from the expiration of the time for delivery thereof until
such consolidated financial statements are delivered.
"Approved Fund" means, with respect to any Lender that is a fund
that invests in bank loans and similar commercial extensions of credit, any
other fund that invests in bank loans and similar commercial extensions of
credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
2
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States, provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrower" means Semiconductor Components Industries, LLC, a
Delaware limited liability company.
"Borrowing" means (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed, provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, without duplication,
(a) the additions to property, plant and equipment and other capital
expenditures of the Borrower and its consolidated Subsidiaries that are (or
would be) set forth in a consolidated statement of cash flows of the Borrower
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Borrower and its consolidated Subsidiaries during
such period, provided that the term "Capital Expenditures" (i) shall be net of
landlord construction allowances, (ii) shall not include expenditures made in
connection with the repair or restoration of assets with insurance or
condemnation proceeds and (iii) shall not include the purchase price of
equipment to the extent consideration therefor consists of used or surplus
equipment being traded in at such time or the proceeds of a concurrent sale of
such used or surplus equipment, in each case in the ordinary course of business.
3
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital lease obligations on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"Certificate of Designation" means the certificate of designations
of Holdings with respect to the Cumulative Preferred Stock.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person other than Holdings of
any Equity Interest in Borrower; (b) prior to an IPO, the failure by TPG to own
(and retain the right to vote), directly or indirectly, beneficially and of
record, Equity Interests in Holdings representing greater than 40% of each of
the aggregate ordinary voting power and aggregate equity value represented by
the issued and outstanding Equity Interests in Holdings; (c) after an IPO, the
failure by TPG to own (and retain the right to vote), directly or indirectly,
beneficially and of record, Equity Interests in Holdings representing at least
15% of each of the aggregate ordinary voting power and the aggregate equity
value represented by the issued and outstanding Equity Interests in Holdings;
(d) after an IPO, the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof), of Equity Interests
representing a greater percentage of either the aggregate ordinary voting power
or the aggregate equity value of Holdings than owned, directly or indirectly,
beneficially and of record, by TPG; (e) occupation of a majority of the seats
(other than vacant seats) on the board of directors of Holdings by Persons who
were neither (i) nominated by the board of directors of Holdings nor (ii)
appointed by directors so nominated; or (f) the occurrence of a "Change of
Control", as defined in the Subordinated Debt Documents.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority first made or issued after the date of this
Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Tranche A Term Loans, Tranche B Term Loans, Tranche C Term Loans or Swingline
Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment, Tranche A Commitment, Tranche B Commitment
or Tranche C Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
4
"Collateral Agent" means the "Collateral Agent", as defined in any
applicable Security Document.
"Collateral and Guarantee Requirement" means the requirement that:
(a) the Administrative Agent shall have received from each Loan
Party either (i) a counterpart of each of the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement, the Pledge Agreement,
the Collateral Assignment and the Security Agreement duly executed and
delivered on behalf of such Loan Party or (ii) in the case of any Person
that becomes a Loan Party after the Effective Date, a supplement to each
of the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement, the Pledge Agreement and the Security Agreement, in each case
in the form specified therein, duly executed and delivered on behalf of
such Loan Party;
(b) all outstanding Equity Interests of the Borrower and each
Subsidiary owned directly by or directly on behalf of any Loan Party shall
have been pledged pursuant to the Pledge Agreement (except that the Loan
Parties shall not be required to pledge more than 65% of the outstanding
voting stock of any Foreign Subsidiary and shall not be required to pledge
any Equity Interests in any Foreign Joint Venture Company to the extent
that such a pledge is prohibited by the constitutive documents of such
Foreign Joint Venture Company or applicable law) and the Administrative
Agent shall have received certificates or other instruments representing
all such Equity Interests, together with stock powers or other instruments
of transfer with respect thereto endorsed in blank;
(c) all Indebtedness of Holdings, the Borrower and each Subsidiary
that is owing to any Loan Party shall be evidenced by a promissory note
and shall have been pledged pursuant to the Pledge Agreement and the
Administrative Agent shall have received all such promissory notes,
together with instruments of transfer with respect thereto endorsed in
blank;
(d) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create the
Liens intended to be created by the Security Agreement and the Pledge
Agreement and perfect such Liens to the extent required by, and with the
priority required by, the Security Agreement and the Pledge Agreement,
shall have been filed, registered or recorded or delivered to the
Administrative Agent for filing, registration or recording;
(e) the Administrative Agent shall have received (i) counterparts of
a Mortgage with respect to each Mortgaged Property duly executed and
delivered by the record owner of such Mortgaged Property, (ii) a policy or
policies of title insurance issued by a nationally recognized title
insurance company insuring the Lien of each such Mortgage as a valid first
Lien on the Mortgaged Property described therein, free of any other Liens
except as expressly permitted by Section 6.02, together with such
endorsements, coinsurance and reinsurance as the Administrative Agent or
the Required Lenders may reasonably request, and (iii) such surveys,
abstracts, appraisals, legal opinions and other
5
documents as the Administrative Agent or the Required Lenders may
reasonably request with respect to any such Mortgage or Mortgaged
Property; and
(f) each Loan Party shall have obtained all material consents and
approvals required to be obtained by it in connection with the execution
and delivery of all Security Documents to which it is a party, the
performance of its obligations thereunder and the granting by it of the
Liens thereunder.
"Collateral Assignment" means the Collateral Assignment,
substantially in the form of Exhibit G, between the Borrower and the Collateral
Agent.
"Commitment" means a Revolving Commitment, Tranche A Commitment,
Tranche B Commitment or Tranche C Commitment, or any combination thereof (as the
context requires).
"Consolidated Cash Interest Expense" means, for any period (subject
to Section 1.05), the excess of (a) the sum of (i) the interest expense
(including (i) the aggregate amount of accrued letter of credit fees and (ii)
imputed interest expense in respect of Capital Lease Obligations) of the
Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, (ii) any interest accrued during such period in
respect of Indebtedness of the Borrower or any Subsidiary that is required to be
capitalized rather than included in consolidated interest expense for such
period in accordance with GAAP, (iii) the amount of cash dividends paid on any
preferred stock by Holdings during such period and (iv) any cash payments made
during such period in respect of obligations referred to in clause (b)(ii) below
that were amortized or accrued in a previous period, minus (b) the sum of (i) to
the extent included in such consolidated interest expense for such period,
non-cash amounts attributable to amortization of financing costs paid in a
previous period, plus (ii) to the extent included in such consolidated interest
expense for such period, non-cash amounts attributable to amortization of debt
discounts or accrued interest or dividends payable in kind for such period
(including with respect to the Junior Subordinated Note or the Cumulative
Preferred Stock).
"Consolidated EBITDA" means, for any period (subject to Section
1.05), Consolidated Net Income for such period plus (a) without duplication and
to the extent deducted in determining such Consolidated Net Income, the sum of
(i) consolidated interest expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) the aggregate amount of letter of credit fees
accrued during such period, (v) all extraordinary charges during such period,
(vi) noncash expenses during such period resulting from the grant of stock
options to management and employees of Holdings, the Borrower or any of the
Subsidiaries, (vii) the aggregate amount of deferred financing expenses for such
period, (viii) all other noncash expenses or losses of Holdings, the Borrower or
any of the Subsidiaries for such period (excluding any such charge that
constitutes an accrual of or a reserve for cash charges for any future period),
(ix) any non-recurring fees, expenses or charges realized by Holdings, the
Borrower or any of the Subsidiaries for such period related to any offering of
capital stock or incurrence of Indebtedness and (x) noncash dividends on the
Cumulative Preferred Stock and minus (b) without duplication and to the extent
included in determining such Consolidated Net Income, (i) any extraordinary
gains for such period and (ii) all noncash items increasing Consolidated Net
Income for such period
6
(excluding any items that represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period), all determined on a
consolidated basis in accordance with GAAP. For purposes of calculating the
Leverage Ratio as of any date, if the Borrower or any consolidated Subsidiary
has made any Permitted Acquisition or sale, transfer, lease or other disposition
of assets outside of the ordinary course of business permitted by Section 6.05
during the period of four consecutive fiscal quarters ending on the date on
which the most recent fiscal quarter ended, Consolidated EBITDA for the relevant
period for testing compliance shall be calculated after giving pro forma effect
thereto, as if such Permitted Acquisition or sale, transfer, lease or other
disposition of assets outside of the ordinary course of business (and any
related incurrence, repayment or assumption of Indebtedness with any new
Indebtedness being deemed to be amortized over the applicable testing period in
accordance with its terms) had occurred on the first day of the relevant period
for testing compliance.
"Consolidated Net Income" means, for any period, the net income or
loss of Holdings, the Borrower and the Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income or loss (a) the income of any Person (other than a
consolidated Subsidiary) in which any other Person (other than Holdings, the
Borrower or any consolidated Subsidiary or any director holding qualifying
shares in compliance with applicable law) owns an Equity Interest, except to the
extent of the amount of dividends or other distributions actually paid to the
Borrower or any of the consolidated Subsidiaries by such Person during such
period, and (b) the income or loss of any Person accrued prior to the date on
which it becomes a Subsidiary or is merged into or consolidated with the
Borrower or any consolidated Subsidiary or the date on which such Person's
assets are acquired by the Borrower or any consolidated Subsidiary.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
The terms "Controlling" and "Controlled" have meanings correlative thereto.
"Cumulative Preferred Stock" means the 12% Cumulative Preferred
Stock of Holdings with an aggregate liquidation preference on the Effective Date
of $209,000,000.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Documentation Agents" means Credit Lyonnais New York Branch, DLJ
Capital Funding, Inc. and ▇▇▇▇▇▇ Commercial Paper Inc., in their capacity as
co-documentation agents hereunder.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
7
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or restoration
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, administrative oversight costs, fines, penalties or indemnities),
of Holdings, the Borrower or any Subsidiary directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Equity Contribution" means the contribution by TPG of not less than
$337,500,000 to the Investor.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan under
Section 4042 of ERISA; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
8
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excess Cash Flow" means, for any fiscal year, the sum (without
duplication) of:
(a) Consolidated Net Income for such fiscal year, adjusted to
exclude any gains or losses attributable to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or losses
deducted in determining such Consolidated Net Income for such fiscal year;
plus
(c) the sum of (i) the amount, if any, by which Net Working Capital
decreased during such fiscal year plus (ii) the net amount, if any, by
which the consolidated deferred revenues of Holdings, the Borrower and the
consolidated Subsidiaries increased during such fiscal year; minus
(d) the sum of (i) any non-cash gains included in determining such
Consolidated Net Income for such fiscal year plus (ii) the amount, if any,
by which Net Working Capital increased during such fiscal year plus (iii)
the net amount, if any, by which the consolidated deferred revenues of
Holdings, the Borrower and the consolidated Subsidiaries decreased during
such fiscal year; minus
(e) Capital Expenditures for such fiscal year (except (i) to the
extent attributable to the incurrence of Capital Lease Obligations or
otherwise financed by incurring Long-Term Indebtedness or (ii) Capital
Expenditures made pursuant to the first proviso to Section 2.11(c) or the
proviso to the first paragraph of Section 6.14); minus
(f) the aggregate principal amount of Long-Term Indebtedness repaid
or prepaid by the Borrower and the consolidated Subsidiaries during such
fiscal year, excluding (i) Indebtedness in respect of Revolving Loans and
Letters of Credit, (ii) Term Loans prepaid pursuant to Section 2.11(a),
2.11(c) or (d), and (iii) repayments or prepayments of Long-Term
Indebtedness financed by incurring other Long-Term Indebtedness; minus
(g) the aggregate amount of all prepayments of Revolving Loans made
during such period to the extent accompanying reductions of the total
Revolving Commitments.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) doing business,
income or franchise taxes imposed on (or measured by) its net income, capital or
any similar alternate basis by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
9
Section 2.19(b)), any withholding tax that (i) is in effect and would apply to
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of Holdings.
"Financing Transactions" means (a) the execution, delivery and
performance by each Loan Party of the Loan Documents to which it is to be a
party, the borrowing of Loans, the use of the proceeds thereof and the issuance
of Letters of Credit hereunder, (b) the execution, delivery and performance by
each Loan Party of the Subordinated Debt Documents to which it is to be a party,
the issuance of the Subordinated Debt and the use of the proceeds thereof, (c)
the issuance by the Borrower of the Junior Subordinated Note and the use of the
proceeds thereof, (d) the issuance of the Cumulative Preferred Stock and (e) the
Equity Contribution.
"Foreign Joint Venture Companies" (i) Leshan-Phoenix Semiconductor
Co., Ltd., an entity existing under the laws of the People's Republic of China,
(ii) SMP, (iii) Tesla Sezam, a.s., a corporation existing under the laws of the
Czech Republic, and (iv) Terosil, a.s., a corporation existing under the laws of
the Czech Republic.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"Funded Indebtedness" means, as of any date, (a) the aggregate
principal amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date (other than any Indebtedness with respect to which
the Borrower is not obligated to pay or accrue any cash interest expense as of
such date), in the amount that would be reflected on a balance sheet prepared as
of such date on a consolidated basis in accordance with GAAP, and (b) the
aggregate
10
amount of any Guarantee by Holdings, the Borrower or any Subsidiary of any such
Indebtedness of any other Person.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement, substantially
in the form of Exhibit C, among Holdings, the Subsidiary Loan Parties and the
Collateral Agent for the benefit of the Secured Parties.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes,
and all substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" means SCG Holding Corporation, a Delaware corporation.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such
11
Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding anything to the contrary in this paragraph, the term
"Indebtedness" shall not include (a) obligations under Hedging Agreements or (b)
agreements providing for indemnification, purchase price adjustments or similar
obligations incurred or assumed in connection with the acquisition or
disposition of assets or stock.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Loan Parties and the Collateral
Agent.
"Information Memorandum" means the Confidential Information
Memorandum dated July 1999, as modified or supplemented prior to the Effective
Date, relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect, provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last
12
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Investor" means TPG Semiconductor Holdings LLC, a Delaware limited
liability company that is wholly owned by TPG.
"IPO" means a bona fide underwritten initial public offering of
voting common stock of Holdings as a direct result of which at least 10% of the
aggregate voting common stock of Holdings (calculated on a fully diluted basis
after giving effect to all options to acquire voting common stock of Holdings
then outstanding, regardless of whether such options are then currently
exercisable) is beneficially owned by Persons other than TPG, the Investor,
Holdings and their respective Affiliates (including, in the case of Holdings,
all directors, officers and employees of Holdings, the Borrower and any
Subsidiary).
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"Joint Venture Holding Companies" means SCG (Malaysia SMP) Holding
Corporation, SCG (Czech) Holding Corporation and SCG (China) Holding
Corporation, each a Delaware corporation.
"Junior Subordinated Note" means the 10% Junior Subordinated Note
due 2011 of the Borrower.
"LC Disbursement" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Leshan JV Agreement" means the Joint Venture Contract dated as of
March 1, 1995, by and between Leshan Radio Company, Ltd. and Motorola
International Development Corporation.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
13
"Leverage Ratio" means, on any date, the ratio of (a) Funded
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of Holdings ended on such date (or, if such date is
not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of Holdings most recently ended prior to such date).
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow ▇▇▇▇▇ Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the LIBO Rate with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement and the Security Documents.
"Loan Parties" means Holdings, the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in accordance
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, properties, financial condition or prospects of
Holdings, the Borrower and the Subsidiaries, taken as a whole, (b) the ability
of the Loan Parties to perform their obligations under the Loan Documents or (c)
any material rights of or benefits available to the Lenders under the Loan
Documents.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings, the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $10,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the
14
obligations of Holdings, the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that Holdings, the Borrower or such Subsidiary
would be required to pay if such Hedging Agreement were terminated at such time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be reasonably
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real property
and the improvements thereto owned by a Loan Party and identified on Schedule
1.01, and includes each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event, including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty or other insured damage, insurance proceeds in excess of
$1,000,000, and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses (including underwriting discounts and
commissions and collection expenses) paid or payable by Holdings, the Borrower
and the Subsidiaries to third parties in connection with such event, (ii) in the
case of a sale, transfer or other disposition of an asset (including pursuant to
a sale and leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made by Holdings, the
Borrower and the Subsidiaries as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by Holdings, the Borrower and the
Subsidiaries, and the amount of any reserves established by Holdings, the
Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower). Notwithstanding anything to the contrary set forth above, the
proceeds of any sale, transfer or other disposition of Receivables or Related
Property (or any interest therein) pursuant to any Permitted Receivables
Financing shall not be deemed to constitute Net Proceeds except to the extent
that such sale, transfer or other disposition (a) is the initial sale, transfer
or other disposition of Receivables or Related Property (or any interest
therein) in connection with the establishment of such Permitted Receivables
Financing or (b) occurs in connection with an increase in the aggregate
outstanding amount of such Permitted Receivables Financing over the
15
aggregate outstanding amount of such Permitted Receivables Financing at the time
of such initial sale, transfer or other disposition.
"Net Working Capital" means, at any date, (a) the consolidated
current assets and non-current deferred income tax assets of Holdings, the
Borrower and the consolidated Subsidiaries as of such date (excluding cash and
Permitted Investments) minus (b) the consolidated current liabilities and
non-current deferred income tax liabilities of Holdings, the Borrower and the
consolidated Subsidiaries as of such date (excluding current liabilities that
constitute Indebtedness). Net Working Capital at any date may be a positive or
negative number. Net Working Capital increases when it becomes more positive or
less negative and decreases when it becomes less positive or more negative.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Other Taxes" means any and all current or future recording, stamp,
documentary, excise, transfer, sales, property or similar taxes, charges or
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 2
to the Security Agreement or any other form approved by the Borrower and the
Administrative Agent.
"Permitted Acquisition" means any acquisition (whether by purchase,
merger, consolidation or otherwise) by the Borrower or any consolidated
Subsidiary of all or substantially all the assets of, or all the Equity
Interests in, a Person or division or line of business of a Person if, at the
time of and immediately after giving effect thereto, (a) no Default has occurred
and is continuing or would result therefrom, (b) the principal business of such
Person shall be reasonably related to a business in which the Borrower and the
Subsidiaries were engaged on the Effective Date, (c) each Subsidiary formed for
the purpose of or resulting from such acquisition shall be a Subsidiary Loan
Party and all of the Equity Interests of such Subsidiary Loan Party shall be
owned directly by the Borrower or a consolidated Subsidiary Loan Party and all
actions required to be taken with respect to such acquired or newly formed
Subsidiary Loan Party under Sections 5.12 and 5.13 shall have been taken, (d)
Holdings, the Borrower and the Subsidiaries are in compliance, on a pro forma
basis after giving effect to such acquisition (without giving effect to any cost
savings other than those actually realized as of the date of such acquisition),
with the covenants contained in Sections 6.12 and 6.13 recomputed as at the last
day of the most recently ended fiscal quarter of Holdings for which financial
statements are available, as if such acquisition (and any related incurrence or
repayment of Indebtedness, with any new Indebtedness being deemed to be
amortized over the applicable testing period in accordance with its terms) had
occurred on the first day of each relevant period for testing such compliance
and (e) Holdings has delivered to the Administrative Agent an officers'
certificate to the effect set forth in clauses (a), (b), (c) and (d) above,
together with all relevant financial information for the Person or assets to be
acquired and reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in clause (d) above.
16
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes or other governmental charges
that are not yet due or are being contested in compliance with Section
5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) Liens (other than Liens on Collateral) to secure the performance
of bids, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business and minor defects or irregularities in title that do
not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;
(g) ground leases in respect of real property on which facilities
owned or leased by the Borrower or any of the Subsidiaries are located;
(h) any interest or title of a lessor under any lease permitted by
this Agreement;
(i) 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; and
(j) leases or subleases granted to other Persons and not interfering
in any material respect with the business of the Borrower and the
Subsidiaries, taken as a whole,
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America);
17
(b) investments in commercial paper maturing not more than one year
after the date of acquisition thereof and having, at such date of
acquisition, one of the two highest credit ratings obtainable from S&P or
from ▇▇▇▇▇'▇;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing not more than one year after the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts and overnight bank deposits issued or offered by,
any commercial bank organized under the laws of the United States of
America or any State thereof or any foreign country recognized by the
United States of America that has a combined capital and surplus and
undivided profits of not less than $250,000,000 (or the foreign-currency
equivalent thereof);
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above or clause
(e) or (f) below and entered into with a financial institution satisfying
the criteria described in clause (c) above;
(e) securities issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof having maturities of not more than six months from
the date of acquisition thereof and, at the time of acquisition, having
one of the two highest credit ratings obtainable from S&P or from ▇▇▇▇▇'▇;
(f) securities issued by any foreign government or any political
subdivision of any foreign government or any public instrumentality
thereof having maturities of not more than six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest credit ratings obtainable from S&P or from ▇▇▇▇▇'▇; and
(g) investments in funds that invest solely in one or more types of
securities described in clauses (a), (e) and (f) above.
"Permitted Receivables Financing" means any financing pursuant to
which (a) the Borrower or any Subsidiary sells, conveys or otherwise transfers
to a Receivables Subsidiary, in "true sale" transactions, and (b) such
Receivables Subsidiary sells, conveys or otherwise transfers to any other Person
or grants a security interest to any other Person in, any Receivables (whether
now existing or hereafter acquired) of the Borrower or any Subsidiary or any
undivided interest therein, and any assets related thereto (including all
collateral securing such Receivables), all contracts and all Guarantees or other
obligations in respect of such Receivables, proceeds of such Receivables and
other assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving Receivables, provided that the board of directors of
Holdings shall have determined in good faith that such Permitted Receivables
Financing is economically fair and reasonable to Holdings, the Borrower and the
Subsidiaries, taken as a whole.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302
18
of ERISA, and in respect of which the Borrower or any ERISA Affiliate is an
"employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the
form of Exhibit E, among the Loan Parties and the Collateral Agent for the
benefit of the Secured Parties.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to a
Permitted Receivables Financing or a sale and leaseback transaction) of
any property or asset of the Borrower or any Subsidiary, including any
Equity Interest owned by it, other than (i) dispositions described in
clauses (a) and (b) of Section 6.05 and (ii) other dispositions resulting
in aggregate Net Proceeds not exceeding $1,000,000 during any fiscal year
of the Borrower; or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Subsidiary, but only to the
extent that the Net Proceeds therefrom have not been applied to repair,
restore or replace such property or asset within 365 days after such
event; or
(c) the incurrence by Holdings, the Borrower or any Subsidiary of
any Indebtedness, other than Indebtedness permitted by Section 6.01.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Recapitalization" means (a) the recapitalization of Holdings in
accordance with the Recapitalization Agreement pursuant to which the Investor
will acquire approximately 91% of the common stock of Holdings and (b) the
related transactions contemplated by the Recapitalization Agreement.
"Recapitalization Agreement" means the Agreement and Plan of
Recapitalization and Merger dated as of May 11, 1999, among Motorola, Holdings,
the Borrower, the Investor and TPG Semiconductor Acquisition Corp., as amended.
"Recapitalization Documents" means the Recapitalization Agreement,
the Reorganization Agreement and the Transition Agreements.
"Receivable" means the Indebtedness and payment obligations of any
Person to the Borrower or any of the Subsidiaries or acquired by the Borrower or
any of the Subsidiaries (including obligations constituting an account or
general intangible or evidenced by a note, instrument, contract, security
agreement, chattel paper or other evidence of indebtedness or security) arising
from a sale of merchandise or the provision of services by the Borrower or any
Subsidiary or the Person from which such Indebtedness and payment obligation
were acquired by the Borrower or any of the Subsidiaries, including (a) any
right to payment for goods sold or
19
for services rendered and (b) the right to payment of any interest, sales taxes,
finance charges, returned check or late charges and other obligations of such
Person with respect thereto.
"Receivables Subsidiary" means a corporation or other entity that is
a newly formed, wholly owned, bankruptcy-remote, special purpose subsidiary of
Holdings, the Borrower or any wholly owned Subsidiary (a) that engages in no
activities other than in connection with the financing of Receivables, all
proceeds thereof and all rights (contractual or other), collateral and other
assets relating thereto, and any business or activities incidental or related to
such business (including servicing of Receivables), (b) that is designated by
the board of directors of the Borrower (as provided below) as a Receivables
Subsidiary, (c) of which no portion of its Indebtedness or any other obligations
(contingent or otherwise) (i) is Guaranteed by Holdings, the Borrower or any
Subsidiary (other than pursuant to Standard Securitization Undertakings), (ii)
is recourse to or obligates Holdings, the Borrower or any Subsidiary in any way
other than pursuant to Standard Securitization Undertakings and other than any
obligation to sell or transfer Receivables or (iii) subjects any property or
asset of Holdings, the Borrower or any Subsidiary, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, (d) with which none of
Holdings, the Borrower or any Subsidiary has any material contract, agreement,
arrangement or understanding (except in connection with a Permitted Receivables
Financing) other than on terms no less favorable to Holdings, the Borrower or
such Subsidiary than those that might be obtained at the time from Persons that
are not Affiliates of Holdings, other than fees payable in the ordinary course
of business in connection with servicing Receivables, and (e) to which none of
Holdings, the Borrower or any Subsidiary has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Upon any such designation, a Financial
Officer of the Borrower shall deliver a certificate to the Administrative Agent
certifying (a) the resolution of the board of directors of the Borrower giving
effect to such designation, (b) that, to the best of such officer's knowledge
and belief after consulting with counsel, such designation complied with the
foregoing conditions, (c) that after giving effect to such designation
(including any Indebtedness permitted to exist in connection with such
designation), Holdings and the Borrower shall be in compliance, on a pro forma
basis, with the covenants set forth in Section 6.12 and 6.13 and (d) immediately
after giving effect to such designation, no Default shall have occurred and be
continuing.
"Register" has the meaning set forth in Section 9.04(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Related Property" shall mean, with respect to each Receivable:
(a) all the interest of the Borrower or any Subsidiary in the goods,
if any, sold and delivered to an obligor relating to the sale that gave
rise to such Receivable,
(b) all other security interests or Liens, and the interest of the
Borrower or any Subsidiary in the property subject thereto, from time to
time purporting to secure
20
payment of such Receivable, together with all financing statements signed
by an obligor describing any collateral securing such Receivable and
(c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable,
in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or pursuant to any obligations evidenced by a note,
instrument, contract, security agreement, chattel paper or other evidence of
Indebtedness or security and the proceeds thereof.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"Reorganization Agreement" means the Reorganization Agreement dated
as of May 11, 1999, by and among Motorola, Holdings and the Borrower, as
amended.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Equity Interests in Holdings, the Borrower or
any Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Holdings, the Borrower or any Subsidiary.
"Revolving Availability Period" means the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity Date
and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Revolving Commitments is $150,000,000.
21
"Revolving Exposure" means, with respect to any Lender at any time,
the sum of (a) the outstanding principal amount of such Lender's Revolving Loans
and (b) such Lender's LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (d) of Section
2.01.
"Revolving Maturity Date" means the earlier of (a) August 4, 2005,
or, if such day is not a Business Day, the next preceding Business Day and (b)
the date of the repayment in full of the Tranche A Term Loans.
"SCG Restructuring" means the restructuring of the business of the
Borrower and the Subsidiaries described in Section 3 of the Information
Memorandum.
"S&P" means Standard & Poor's Rating Service.
"SMP" means Surface Mount Products Malaysia Sendirian Berhad, a
Malaysian private limited liability company.
"SMP JV Agreement" means the Joint Venture Agreement dated as of
July 31, 1992, and August 17, 1992, by and between Motorola and Philips
Semiconductors International B.V.
"Secured Parties" has the meaning assigned to such term in the
Security Agreement.
"Security Agreement" means the Security Agreement, substantially in
the form of Exhibit F, among the Borrower, Holdings, the Subsidiary Loan Parties
and the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Collateral
Assignment, the Pledge Agreement, the Mortgages and each other security
agreement or other instrument or document executed and delivered pursuant to
Section 5.12 or 5.13 to secure any of the Obligations.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into at any time by Holdings, the
Borrower or any Subsidiary that are reasonably customary in an accounts
receivable transaction.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding
22
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Debt" means the Senior Subordinated Notes due 2009 to
be issued by Holdings and the Borrower as co-issuers on or prior to the
Effective Date in the aggregate principal amount of $400,000,000 and the
Indebtedness represented thereby (including the Note Guarantees, Exchange Notes
(each as defined in Subordinated Debt Documents), guarantees of Exchange Notes
and any replacement Notes).
"Subordinated Debt Documents" means the indenture under which the
Subordinated Debt is issued and all other instruments, agreements and other
documents evidencing or governing the Subordinated Debt or providing for any
Guarantee or other right in respect thereof.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of Holdings other than the
Borrower. Without limiting the generality of the definition of the term
"subsidiary", it is understood and agreed that each of (a) Tesla Sezam, a.s., a
corporation existing under the laws of the Czech Republic, (b) Terosil, a.s., a
corporation existing under the laws of the Czech Republic, (c) Slovakia
Electronic Industries, a.s., a corporation existing under the laws of Slovakia,
and (d) Leshan-Phoenix Semiconductor Co., Ltd., an entity existing under the
laws of the People's Republic of China, is a subsidiary of Holdings as of the
date hereof.
"Subsidiary Loan Party" means any Subsidiary that is not a Foreign
Subsidiary or a Receivables Subsidiary.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Revolving Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its capacity
as lender of Swingline Loans hereunder.
23
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all current or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means Tranche A Term Loans, Tranche B Term Loans and
Tranche C Term Loans.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"TPG" means TPG Partners II, L.P. and its Affiliates, provided that
no such Affiliate shall be deemed a member of TPG to the extent it ceases to be
Controlled by, or under common Control with, TPG Partners II, L.P.
"Tranche", when used in reference to any Borrowings, refers to
whether such Borrowings consist of Revolving Loans, Tranche A Term Loans,
Tranche B Term Loans or Tranche C Term Loans.
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche A Term Loans hereunder on or
after the Effective Date, expressed as an amount representing the maximum
principal amount of the Tranche A Term Loans to be made by such Lender
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Tranche A Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche A Commitment, as applicable. The initial aggregate amount of the
Lenders' Tranche A Commitments is $200,000,000.
"Tranche A Lender" means a Lender with a Tranche A Commitment or an
outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means August 4, 2005, or, if such day is
not a Business Day, the next preceding Business Day.
"Tranche A Term Loan" means a Loan made pursuant to clause (a) of
Section 2.01.
24
"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche B Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche B Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche B Commitments
is $325,000,000.
"Tranche B Lender" means a Lender with a Tranche B Commitment or an
outstanding Tranche B Term Loan.
"Tranche B Maturity Date" means August 4, 2006, or, if such day is
not a Business Day, the next preceding Business Day.
"Tranche B Term Loan" means a Loan made pursuant to clause (b) of
Section 2.01.
"Tranche C Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche C Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche C Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Tranche C
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche C Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche C Commitments
is $350,000,000.
"Tranche C Lender" means a Lender with a Tranche C Commitment or an
outstanding Tranche C Term Loan.
"Tranche C Maturity Date" means August 4, 2007, or, if such day is
not a Business Day, the next preceding Business Day.
"Tranche C Term Loan" means a Loan made pursuant to clause (c) of
Section 2.01.
"Transactions" means the Recapitalization and the Financing
Transactions.
"Transition Agreements" means agreements to be entered into with
Motorola or its Affiliates as contemplated by the Recapitalization Agreement and
as in effect on the Effective Date and as amended from time to time in
accordance with Section 6.11(b).
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
25
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time, provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
SECTION 1.05. Interim Financial Calculations. For purposes of
determining the Leverage Ratio and for purposes of determining compliance with
Sections 6.12 and 6.13:
(a) for any period of four consecutive fiscal quarters ended on or
prior to September 30, 2000, Consolidated EBITDA shall be deemed to be the
Consolidated EBITDA of Holdings, the Borrower and the Subsidiaries (or
their respective predecessor
26
entities) for such period determined on a consolidated basis in accordance
with GAAP (it being understood that Consolidated EBITDA for the fiscal
quarter ended (i) December 31, 1998, was $86,500,000, (ii) March 31, 1999,
was $76,300,000 and (iii) June 30, 1999, was $94,100,000); and
(b) (i) Consolidated Cash Interest Expense for the period of four
consecutive fiscal quarters ending on September 30, 1999, shall be equal
to the product of (A) Consolidated Cash Interest Expense for the period of
two fiscal months ending on September 30, 1999, and (B) a fraction the
numerator of which is 12 and the denominator of which is two, (ii)
Consolidated Cash Interest Expense for the period of four consecutive
fiscal quarters ending on December 31, 1999, shall be equal to the product
of (A) Consolidated Cash Interest Expense for the period of five fiscal
months ending on December 31, 1999, and (B) a fraction the numerator of
which is 12 and the denominator of which is five, (iii) Consolidated Cash
Interest Expense for the period of four consecutive fiscal quarters ending
on March 31, 2000, shall be equal to the product of (A) Consolidated Cash
Interest Expense for the period of eight fiscal months ending on March 31,
2000, and (B) a fraction the numerator of which is 12 and the denominator
of which is eight and (iv) Consolidated Cash Interest Expense for the
period of four consecutive fiscal quarters ending on June 30, 2000, shall
be equal to the product of (A) Consolidated Cash Interest Expense for the
period of 11 fiscal months ending on June 30, 2000, and (B) a fraction the
numerator of which is 12 and the denominator of which is 11.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) (i) to make a Tranche A Term Loan on the
Effective Date in a principal amount equal to the lesser of (A) its Tranche A
Commitment and (B) its Tranche A Commitment as of the date hereof multiplied by
the fraction of which the numerator is 65.5 and the denominator is 200 and (ii)
to make Tranche A Term Loans to the Borrower from time to time during the period
from and including the Effective Date to the date that is six months after the
Effective Date in an aggregate principal amount that will not result in the
aggregate principal amount of all Tranche A Term Loans made by such Lender
exceeding its Tranche A Commitment, (b) to make a Tranche B Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its Tranche B
Commitment, (c) to make a Tranche C Term Loan to the Borrower on the Effective
Date in a principal amount not to exceed its Tranche C Commitment and (d) to
make Revolving Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in
such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts
repaid or prepaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type
27
made by the Lenders ratably in accordance with their respective Commitments
of the applicable Class. The failure of any Lender to make any Loan required
to be made by it shall not relieve any other Lender of its obligations
hereunder, provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith, provided that all Borrowings made
on the Effective Date shall be ABR Borrowings. Each Swingline Loan shall be an
ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan,
provided that (i) any exercise of such option shall not affect the obligation of
the Borrower to repay such Loan in accordance with the terms of this Agreement
and (ii) the Borrower shall not be required to make any greater payment under
Section 2.17 to the applicable Lender than such Lender would have been entitled
to receive if such Lender had not exercised such option.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $10,000,000. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $500,000 and not less than $10,000,000, provided that
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving Commitments or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Each Swingline Loan shall be in an amount that is an integral multiple
of $100,000 and not less than $500,000. Borrowings of more than one Type and
Class may be outstanding at the same time, provided that there shall not at any
time be more than a total of six Eurodollar Borrowings outstanding with respect
to any Tranche of Borrowings.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Revolving Loan, Tranche A Term Loan, Tranche B Term Loan or Tranche C Term
Loan if the Interest Period requested with respect thereto would end after the
Revolving Maturity Date, Tranche A Maturity Date, Tranche B Maturity Date or
Tranche C Maturity Date, respectively.
28
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing,
Tranche A Term Borrowing, Tranche B Term Borrowing or Tranche C Term
Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) subject to the proviso to the first sentence of Section
2.02(b), whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrower from time to time during the Revolving Availability Period, in
an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$25,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments, provided that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable
29
and shall specify the requested date (which shall be a Business Day) and amount
of the requested Swingline Loan. The Administrative Agent will promptly advise
the Swingline Lender of any such notice received from the Borrower. The
Swingline Lender shall make each Swingline Loan available to the Borrower by
means of a credit to the general deposit account of the Borrower with the
Swingline Lender (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e), by
remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Swingline Loans.
Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt
of notice as provided above, to pay to the Administrative Agent, for the account
of the Swingline Lender, such Lender's Applicable Percentage of such Swingline
Loan or Swingline Loans. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Revolving Lenders. The Administrative Agent
shall notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period and prior to the date that is five
Business Days prior to the Revolving Maturity Date. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or
30
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000
and (ii) the total Revolving Exposures shall not exceed the total Revolving
Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 2:00 p.m.,
31
New York City time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
New York City time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 2:00 p.m., New
York City time, on (i) the Business Day that the Borrower receives such notice,
if such notice is received prior to 10:00 a.m., New York City time, on the day
of receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt, provided that the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.03 or 2.04
that such payment be financed with an ABR Revolving Borrowing or Swingline Loan
in an equivalent amount and, to the extent so financed, the Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.06 with respect to Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, any application for the issuance of a Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. None of
the Administrative Agent, the Lenders, the Issuing Bank or any of their Related
Parties shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to
32
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank,
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by (i) the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof or (ii) the Issuing Bank's failure to issue
a Letter of Credit in accordance with the terms of this Agreement when requested
by the Borrower pursuant to Section 2.05(b). The parties hereto expressly agree
that, in the absence of gross negligence or willful misconduct on the part of
the Issuing Bank (as finally determined by a court of competent jurisdiction),
the Issuing Bank shall be deemed to have exercised care in each such
determination and each issuance (or failure to issue) a Letter of Credit. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder, provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans,
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this
33
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and
be continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon, provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Article VII. The Borrower also shall
deposit cash collateral pursuant to this paragraph as and to the extent required
by Section 2.11(b). Each such deposit pursuant to this paragraph or Section
2.11(b) shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Revolving
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived. If
the Borrower is required to provide an amount of cash collateral hereunder
pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Event of Default shall have occurred and be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders, provided that Swingline Loans shall be made as provided
in Section 2.04. The Administrative Agent will make such
34
Loans available to the Borrower by promptly crediting the amounts so received,
in like funds, to an account of the Borrower maintained with the Administrative
Agent in New York City and designated by the Borrower in the applicable
Borrowing Request, provided that ABR Revolving Loans and Swingline Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(e)
shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
(c) Nothing in this Section 2.06 shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that the Borrower may have against any Lender as a result of any
default by any such Lender hereunder (it being understood, however, that no
Lender shall be responsible for the failure of any other Lender to fulfill its
Commitments hereunder).
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
35
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) $65,500,000 of the Tranche A Commitments shall
terminate at 5:00 p.m., New York City time, on the Effective Date and the
remainder of the Tranche A Commitments shall terminate on the date that is six
months after the Effective Date, (ii) the Tranche B Commitments and Tranche C
Commitments shall terminate at 5:00 p.m., New York City time, on the Effective
Date and (iii) the Revolving Commitments shall terminate on the Revolving
Maturity Date.
(b) The Borrower may at any time, without premium or penalty,
terminate, or from time to time reduce, the Commitments of any Class, provided
that (i) each reduction of the Commitments of any Class shall be in an amount
that is an integral multiple of $1,000,000 and not less than $10,000,000 and
(ii) the Borrower shall not terminate or reduce the Revolving
36
Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.11, the sum of the Revolving
Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable, provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
of such Lender on the Revolving Maturity Date, (ii) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each Term
Loan of such Lender as provided in Section 2.10 and (iii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of
the Revolving Maturity Date and the first date after such Swingline Loan is made
that is the 15th or last day of a calendar month and is at least five Business
Days after such Swingline Loan is made, provided that on each date that a
Revolving Borrowing is made, the Borrower shall repay all Swingline Loans that
were outstanding on the date such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof, which accounts the Administrative Agent will make
available to the Borrower upon its reasonable request.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein, provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
37
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Borrower and the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to adjustment
pursuant to paragraph (e) of this Section, the Borrower shall repay Tranche A
Term Borrowings on each date set forth below in the aggregate principal amount
set forth opposite such date:
Date Amount
---- ------
September 30, 2001 $ 7,500,000
December 31, 2001 7,500,000
March 31, 2002 7,500,000
June 30, 2002 7,500,000
September 30, 2002 10,000,000
December 31, 2002 10,000,000
March 31, 2003 10,000,000
June 30, 2003 10,000,000
September 30, 2003 12,500,000
December 31, 2003 12,500,000
March 31, 2004 12,500,000
June 30, 2004 12,500,000
September 30, 2004 20,000,000
December 31, 2004 20,000,000
March 31, 2005 20,000,000
August 4, 2005 20,000,000
(b) Subject to adjustment pursuant to paragraph (e) of this Section,
the Borrower shall repay Tranche B Term Borrowings on each date set forth below
in the aggregate principal amount set forth opposite such date:
Date Amount
---- ------
September 30, 2001 $ 812,500
December 31, 2001 812,500
March 31, 2002 812,500
June 30, 2002 812,500
September 30, 2002 812,500
December 31, 2002 812,500
March 31, 2003 812,500
38
Date Amount
---- ------
June 30, 2003 812,500
September 30, 2003 812,500
December 31, 2003 812,500
March 31, 2004 812,500
June 30, 2004 812,500
September 30, 2004 812,500
December 31, 2004 812,500
March 31, 2005 812,500
June 30, 2005 812,500
September 30, 2005 78,000,000
December 31, 2005 78,000,000
March 31, 2006 78,000,000
August 4, 2006 78,000,000
(c) Subject to adjustment pursuant to paragraph (e) of this Section,
the Borrower shall repay Tranche C Term Borrowings on each date set forth below
in the aggregate principal amount set forth opposite such date:
Date Amount
---- ------
September 30, 2001 $ 875,000
December 31, 2001 875,000
March 31, 2002 875,000
June 30, 2002 875,000
September 30, 2002 875,000
December 31, 2002 875,000
March 31, 2003 875,000
June 30, 2003 875,000
September 30, 2003 875,000
December 31, 2003 875,000
March 31, 2004 875,000
June 30, 2004 875,000
September 30, 2004 875,000
December 31, 2004 875,000
March 31, 2005 875,000
June 30, 2005 875,000
September 30, 2005 875,000
December 31, 2005 875,000
March 31, 2006 875,000
June 30, 2006 875,000
September 30, 2006 83,125,000
December 31, 2006 83,125,000
March 31, 2007 83,125,000
August 4, 2007 83,125,000
39
(d) To the extent not previously paid, (i) all Tranche A Term Loans
shall be due and payable on the Tranche A Maturity Date, (ii) all Tranche B Term
Loans shall be due and payable on the Tranche B Maturity Date and (iii) all
Tranche C Term Loans shall be due and payable on the Tranche C Maturity Date.
(e) Any prepayment of a Term Borrowing of any Class shall be applied
to reduce the subsequent scheduled repayments of the Term Borrowings of such
Class to be made pursuant to this Section ratably, provided that any prepayment
made pursuant to Section 2.11(c) shall be applied to reduce the scheduled
repayments of the Term Borrowings of such Class to be made pursuant to this
Section in reverse chronological order. If the initial aggregate amount of the
Lenders' Term Commitments of any Class exceeds the aggregate principal amount of
Term Loans of such Class that are made, then the scheduled repayments of Term
Borrowings of such Class to be made pursuant to this Section shall be reduced
ratably by an aggregate amount equal to such excess.
(f) Prior to any repayment of any Term Borrowings of any Class
hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment. Each repayment of a Borrowing shall be applied ratably to the Loans
included in the repaid Borrowing. Repayments of Term Borrowings shall be
accompanied by accrued interest on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, without premium or penalty (but subject to Section 2.16), subject to the
requirements of this Section.
(b) In the event and on each occasion that the sum of the Revolving
Exposures exceeds the total Revolving Commitments, the Borrower shall prepay
Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings are
outstanding, deposit cash collateral in an account with the Administrative Agent
pursuant to Section 2.05(j)) in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of Holdings, the Borrower or any Subsidiary in respect
of any Prepayment Event, the Borrower shall, within ten Business Days after such
Net Proceeds are received, prepay Term Borrowings in an aggregate amount equal
to such Net Proceeds, provided that, in the case of any event described in
clause (a) of the definition of the term "Prepayment Event" (other than the
sale, transfer or other disposition of Receivables in connection with a
Permitted Receivables Financing), if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that
Holdings, the Borrower and the Subsidiaries intend to apply the Net Proceeds
from such event (or a portion thereof specified in such certificate), within 180
days after receipt of such Net Proceeds, to acquire real property, equipment or
other assets to be used in the business of the Borrower and the Subsidiaries,
and certifying that no Default has occurred and is continuing, then no
prepayment shall be required pursuant to this paragraph in respect of the Net
Proceeds in respect of such event (or the portion of such Net Proceeds specified
in such
40
certificate, if applicable) except to the extent of any such Net Proceeds
therefrom that have not been so applied by the end of such 180-day period, at
which time a prepayment shall be required in an amount equal to such Net
Proceeds that have not been so applied.
(d) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 2000, the Borrower shall
prepay Term Borrowings in an aggregate amount equal to 50% of Excess Cash Flow
for such fiscal year. Each prepayment pursuant to this paragraph shall be made
on or before the date on which financial statements are delivered pursuant to
Section 5.01 with respect to the fiscal year for which Excess Cash Flow is being
calculated (and in any event within 90 days after the end of such fiscal year).
(e) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (f) of this Section. In the event of any optional or mandatory
prepayment of Term Borrowings made at a time when Term Borrowings of more than
one Class remain outstanding, the Borrower shall select Term Borrowings to be
prepaid so that the aggregate amount of such prepayment is allocated between the
Tranche A Term Borrowings, Tranche B Term Borrowings and Tranche C Term
Borrowings pro rata based on the aggregate principal amount of outstanding
Borrowings of each such Class, provided that, so long as and to the extent that
any Tranche A Term Borrowing remains outstanding, any Tranche B Lender or
Tranche C Lender may elect, by notice to the Administrative Agent by telephone
(confirmed by telecopy) at least one Business Day prior to the prepayment date,
to decline all or any portion of any prepayment of its Tranche B Term Loans or
Tranche C Term Loans, as applicable, pursuant to this Section (other than an
optional prepayment pursuant to paragraph (a) of this Section, which may not be
declined), in which case the aggregate amount of the prepayment that would have
been applied to prepay Tranche B Term Loans or Tranche C Term Loans, as
applicable, but was so declined shall be applied to prepay Tranche A Term
Borrowings.
(f) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 10:00 a.m., New York City time,
on the date of prepayment or (iii) in the case of prepayment of a Swingline
Loan, not later than 12:00 noon, New York City time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment, provided that, if a notice of optional prepayment of any
Loans is given in connection with a conditional notice of termination of the
Revolving Commitments as contemplated by Section 2.08, then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.08. Promptly following receipt of any such notice (other than a
notice relating solely to Swingline Loans), the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment or to
prepay such Borrowing in full. Each
41
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.
(g) In the event of and on each occasion of any prepayment of any
Tranche B Term Borrowing or Tranche C Term Borrowing pursuant to Section 2.11(a)
or (c), the Borrower shall pay to the Tranche B Lenders and Tranche C Lenders
whose Tranche B Term Loans or Tranche C Term Loans, as applicable, are being
prepaid a prepayment premium equal to (A) if such prepayment (or the date on
which such prepayment is required to be made) occurs on or prior to the date
that is one year after the Effective Date, 2.0% of the principal amount of the
Tranche B Term Loans or Tranche C Term Loans, as applicable, being prepaid or
(B) if such prepayment (or the date on which such prepayment is required to be
made) occurs more than one year after the Effective Date but on or prior to the
date that is two years after the Effective Date, 1.0% of the principal amount of
the Tranche B Term Loans or Tranche C Term Loans, as applicable, being prepaid.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the rate set forth in the definition of the term "Applicable
Rate" on the average daily unused amount of the Commitments of such Lender
during the period from and including the Effective Date to but excluding the
date on which such Commitment terminates (it being understood that no commitment
fee shall be payable in respect of the portion of any Commitment funded on the
Effective Date). Accrued commitment fees shall be payable in arrears on the last
day of March, June, September and December of each year and on the dates on
which the Commitments terminate, commencing on the first such date to occur
after the Effective Date. All commitment fees shall be computed on the basis of
a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees, a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate of 0.25% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as the Issuing Bank's standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Participation fees and fronting
fees accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date,
provided that all such fees
42
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, to the
fullest extent permitted by applicable law, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided in the preceding paragraphs of this Section or (ii) in
the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans
as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments, provided that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed
43
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be prima facie evidence thereof.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be prima facie evidence thereof) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist (it being understood
that the Administrative Agent will use commercially reasonable efforts to give
such notice as soon as practicable after such circumstances no longer exist),
(i) any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law (except with
respect to Taxes, which shall be governed by Section 2.17) shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate or Base CD Rate) or the Issuing Bank;
or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on a Lender's or the Issuing
Bank's capital or on the capital
44
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be prima facie
evidence thereof. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor, and provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(f) and is revoked in accordance therewith) or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount reasonably determined by such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such Loan had such event not occurred, at the Adjusted LIBO Rate that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest that would
accrue on such principal amount for such period at the interest rate that such
Lender would bid were it to bid, at the commencement of such period, for dollar
45
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be prima facie evidence thereof. The Borrower shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes, provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be prima
facie evidence thereof.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
has received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
46
(f) If the Administrative Agent or a Lender or the Issuing Bank has
received a refund of any Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.17, which the Administrative Agent or such Lender or
the Issuing Bank is able to identify as such, it shall pay such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes
giving rise to such refund), net of all reasonable out-of-pocket expenses of the
Administrative Agent or such Lender or the Issuing Bank and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund); provided, however, that the Borrower agrees to pay,
upon the request of the Administrative Agent or such Lender or the Issuing Bank,
the amount paid to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender or the Issuing Bank in the event the Administrative Agent or such
Lender or the Issuing Bank is required to repay such refund to such Governmental
Authority. Nothing contained in this Section 2.17(f) shall require the
Administrative Agent or any Lender or the Issuing Bank to make available its tax
returns (or any other information relating to its Taxes that it deems
confidential) to the Borrower or any other Person.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
47
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Revolving Loans, Term Loans
and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans, provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender
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pursuant to Section 2.17, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the reasonable judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank and Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
Nothing in this Section 2.19 shall be deemed to prejudice any rights that the
Borrower may have against any Lender as a result of any default by any such
Lender in its obligation to fund Loans hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to the
Lenders that:
SECTION 3.01. Organization; Powers. Each of Holdings, the Borrower
and the Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
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SECTION 3.02. Authorization; Enforceability. The Transactions to be
entered into by each Loan Party are within such Loan Party's powers and have
been duly authorized by all necessary action. This Agreement has been duly
executed and delivered by each of Holdings and the Borrower and constitutes, and
each other Loan Document to which any Loan Party is to be a party, when executed
and delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of Holdings, the Borrower or such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by or before, any Governmental Authority, except such as have
been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents and except where the
failure to obtain such consent or approval or make such registration or filing,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, (b) will not violate any applicable law or regulation
or the charter, by-laws or other organizational documents of Holdings, the
Borrower or any of the Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any material indenture,
agreement or other instrument binding upon Holdings, the Borrower or any of the
Subsidiaries or any of their assets, or give rise to a right thereunder to
require any payment to be made by Holdings, the Borrower or any of the
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of Holdings, the Borrower or any of the Subsidiaries, except Liens
created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
Holdings has heretofore furnished to the Lenders its combined balance sheet and
combined statements of revenues less direct and allocated expenses before taxes
(i) as of and for the fiscal year ended December 31, 1998, reported on by KPMG
LLP, independent public accountants, and (ii) as of and for the fiscal quarters
and the portions of the fiscal year ended April 3, 1999 and July 3, 1999, in
each case certified by its chief financial officer. Such financial statements
present fairly, in all material respects, the consolidated financial position
and results of operations and cash flows of Holdings, the Borrower and the
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.
(b) Holdings has heretofore furnished to the Lenders a pro forma
combined balance sheet and combined statements of revenues less direct and
allocated expenses before taxes as of and for the fiscal year ended December 31,
1998, and as of and for the fiscal quarters and the portion of the fiscal year
ended April 3, 1999 and July 3, 1999, after giving effect to the Transactions
and the effects of the SCG Restructuring and including an analysis of the
adjustments necessary to reconcile the entries in such pro forma financial
statements to the corresponding financial statements delivered pursuant to
paragraph (a) of this Section. Such pro forma consolidated financial statements
(i) have been prepared in good faith based on the same assumptions used to
prepare the pro forma financial statements included in the Information
Memorandum (which assumptions are believed by Holdings and the Borrower to be
reasonable), (ii) are based on the best information available to Holdings and
the Borrower after due inquiry,
50
(iii) accurately reflect in all material respects all adjustments necessary to
give effect to the Transactions and (iv) present fairly, in all material
respects, the pro forma consolidated financial position and results of
operations and cash flows of Holdings, the Borrower and the Subsidiaries as of
such dates and for such periods, as if the Transactions and the effects of the
SCG Restructuring had occurred on such dates or at the beginning of such
periods, as applicable.
(c) Except as disclosed in the financial statements referred to in
paragraphs (a) and (b) above or the notes thereto or in the Information
Memorandum and except for the Disclosed Matters, after giving effect to the
Transactions, none of Holdings, the Borrower or the Subsidiaries has, as of the
Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.
(d) Since December 31, 1998, after giving effect to the accounting
treatment of the Recapitalization, there has been no material adverse change in
the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings, the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Holdings, the Borrower and each of the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and subject to Permitted Encumbrances.
(b) Holdings, the Borrower and each of the Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
the Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of each real property that
is owned or leased by the Borrower or any of the Subsidiaries as of the
Effective Date after giving effect to the Transactions.
(d) As of the Effective Date, none of Holdings, the Borrower or any
of the Subsidiaries has received notice of, or has knowledge of, any material
pending or contemplated condemnation proceeding affecting any Mortgaged Property
or any sale or disposition thereof in lieu of condemnation. Neither any
Mortgaged Property nor any interest therein is subject to any right of first
refusal, option or other contractual right to purchase such Mortgaged Property
or interest therein.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings, the Borrower or any of the
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve any of the Loan Documents or
the Transactions.
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(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of Holdings, the Borrower
or any of the Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings,
the Borrower and the Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. None of
Holdings, the Borrower or any of the Subsidiaries is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Holdings, the Borrower and each of the
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) any Taxes that are being contested in good
faith by appropriate proceedings and for which Holdings, the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, would reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
the fair market value of the assets of all such underfunded Plans by an amount
that, if it were required to be fully paid, would reasonably be expected to
result in a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has engaged in a transaction with respect to any employee benefit plan
that would reasonably be expected to result in any material liability to the
Borrower or any ERISA Affiliate pursuant to Section 4069 of ERISA.
SECTION 3.11. Disclosure. Holdings and the Borrower have disclosed
to the Lenders all agreements, instruments and corporate or other restrictions
to which Holdings, the Borrower or any of the Subsidiaries is subject, and all
other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse
52
Effect. The Information Memorandum and the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished), taken as a
whole, do not contain any material misstatement of fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided that (a) with
respect to projected financial information, Holdings and the Borrower represent
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time and (b) with respect to information
regarding the semiconductor market and other industry data, Holdings and the
Borrower represent only that such information was prepared by third-party
industry research firms, and although Holdings and the Borrower believe such
information is reliable, Holdings and the Borrower cannot guarantee the accuracy
and completeness of the information and have not independently verified such
information.
SECTION 3.12. Subsidiaries. Holdings does not have any subsidiaries
other than the Borrower and the Subsidiaries. Schedule 3.12 sets forth the name
of, and the ownership interest of Holdings in, each Subsidiary and identifies
each Subsidiary that is a Subsidiary Loan Party, in each case as of the
Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of
all insurance maintained by or on behalf of Holdings, the Borrower and the
Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in
respect of such insurance that are required to have been paid have been paid.
Holdings and the Borrower believe that the insurance maintained by or on behalf
of Holdings, the Borrower and the Subsidiaries is adequate in all material
respects.
SECTION 3.14. Labor Matters. As of the Effective Date, there are no
material strikes, lockouts or slowdowns against Holdings, the Borrower or any
Subsidiary pending or, to the knowledge of Holdings or the Borrower, threatened.
Except as could not reasonably be expected to result in a Material Adverse
Effect, (a) the hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters and (b) the consummation of the Transactions will not
give rise to any right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which Holdings, the
Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital
53
with which to conduct the business in which it is engaged as such business is
now conducted and is proposed to be conducted following the Effective Date.
SECTION 3.16. Senior. The Obligations constitute "Senior
Indebtedness" under and as defined in the Subordinated Debt Documents.
SECTION 3.17. Year 2000. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the computer systems
of Holdings, the Borrower and the Subsidiaries and (b) equipment containing
embedded microchips (including systems and equipment supplied by others,
including Motorola and its Affiliates, or with which Holdings's, the Borrower's
or any Subsidiary's systems interface, including the systems and equipment of
Motorola and its Affiliates) and the testing of all such systems and equipment,
as so reprogrammed, will be completed by December 31, 1999. The cost to
Holdings, the Borrower and the Subsidiaries of such reprogramming and testing
and of the reasonably foreseeable consequences of year 2000 to Holdings, the
Borrower and the Subsidiaries (including reprogramming errors and the failure of
others' systems or equipment) will not result in a Material Adverse Effect.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of each of (i) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Borrower, substantially in the form of Exhibit B-1, and
(ii) local counsel in each jurisdiction where a Mortgaged Property is
located, substantially in the form of Exhibit B-2, and, in the case of
each such opinion required by this paragraph, covering such other matters
relating to the Loan Parties, the Loan Documents or the Transactions as
the Required Lenders shall reasonably request. Each of Holdings and the
Borrower hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan
54
Documents or the Transactions, all in form and substance satisfactory to
the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or
a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket
expenses (including fees, charges and disbursements of counsel) required
to be reimbursed or paid by any Loan Party hereunder or under any other
Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an executive
officer or Financial Officer of Holdings, together with all attachments
contemplated thereby, including the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to the Loan
Parties in the jurisdictions contemplated by the Perfection Certificate
and copies of the financing statements (or similar documents) disclosed by
such search and evidence reasonably satisfactory to the Administrative
Agent that the Liens indicated by such financing statements (or similar
documents) are permitted by Section 6.02 or have been released.
(g) The Administrative Agent shall have received evidence that the
insurance required by Section 5.07 and the Security Documents is in
effect.
(h) The Investor shall have received gross cash proceeds of not less
than $337,500,000 from the Equity Contribution.
(i) The Borrower shall have received gross cash proceeds of not less
than $400,000,000 from the issuance of the Subordinated Debt. The terms
and conditions of the Subordinated Debt and the provisions of the
Subordinated Debt Documents shall be reasonably satisfactory to the
Lenders. The Administrative Agent shall have received copies of the
Subordinated Debt Documents, certified by a Financial Officer as complete
and correct.
(j) The terms and conditions of (i) the Cumulative Preferred Stock
and (ii) the Junior Subordinated Note (including in each case the terms
and conditions relating to the dividend rate or interest rate thereof and
the redemption thereof) shall be consistent with the terms and conditions
set forth in Appendix C to the Information Memorandum and any terms and
conditions not set forth therein shall be satisfactory to the Lenders. The
Administrative Agent shall have received a copy of the Junior Subordinated
Note and the Certificate of Designations, certified by a Financial Officer
as complete and correct.
(k) All material consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Recapitalization and the
55
other Transactions shall have been obtained, and all applicable waiting
periods and appeal periods shall have expired, in each case without the
imposition of any burdensome conditions. The Recapitalization shall have
been, or substantially simultaneously with the initial funding of Loans on
the Effective Date shall be, consummated in accordance with the
Recapitalization Documents and applicable law, without any amendment to or
waiver of any material terms or conditions of the Recapitalization
Documents not approved by the Required Lenders. The Administrative Agent
shall have received copies of the Recapitalization Documents and all
certificates, opinions and other documents delivered thereunder, certified
by a Financial Officer as complete and correct.
(l) After giving effect to the Transactions, none of Holdings, the
Borrower, any of the Subsidiaries or SMP shall have outstanding any shares
of preferred stock or any Indebtedness, other than (i) Indebtedness
incurred under the Loan Documents, (ii) the Subordinated Debt, (iii) the
Junior Subordinated Note, (iv) the Cumulative Preferred Stock, (v)
Indebtedness outstanding at SMP as of the date hereof that is non-recourse
to each of Holdings, the Borrower and the Subsidiaries and (vi) the
Indebtedness set forth on Schedule 6.01. The aggregate amount of fees and
expenses (including underwriting discounts and commissions) payable or
otherwise borne by Holdings, the Borrower and its Subsidiaries in
connection with the Transactions shall not exceed $100,000,000.
(m) The Administrative Agent shall have received a solvency letter,
in form and substance satisfactory to the Lenders, from Valuation
Research, with respect to the solvency of the Loan Parties after giving
effect to the Transactions.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 5:00 p.m., New York City time, on September 30, 1999, (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set forth
in the Loan Documents shall be true and correct in all material respects
on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable,
except to the extent such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties
shall be true and correct in all material respects as to such earlier
date).
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.
56
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section. For purposes of the foregoing, the term "Borrowing"
shall not include the continuation or conversion of Loans in which the aggregate
amount of such Loans is not being increased.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of Holdings and the
Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. Holdings
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of Holdings,
its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without
any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the consolidated financial condition and results of
operations of Holdings, the Borrower and the Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of Holdings, its unaudited consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting
fairly in all material respects the consolidated financial condition and
results of operations of Holdings, the Borrower and the Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each of the first two fiscal
months of each fiscal quarter of Holdings, its unaudited consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows as of the end of and for such fiscal month and the then
elapsed portion of the fiscal year, all certified by one of its Financial
Officers as presenting in all material respects the consolidated financial
condition and results of operations of Holdings, the Borrower and the
Subsidiaries on a consolidated
57
basis in accordance with GAAP consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer of
Holdings (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.12 and 6.13 and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of Holdings' audited
financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(f) at least 30 days prior to the commencement of each fiscal year
of Holdings, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related statements
of projected operations and cash flow as of the end of and for such fiscal
year and setting forth any material assumptions used for purposes of
preparing such budget) and, promptly when available, any significant
revisions of such budget;
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings, the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange,
or, in the event the Holdings becomes a publicly traded company,
distributed by Holdings to its public stockholders generally, as the case
may be; and
(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
Holdings, the Borrower or any Subsidiary, or compliance with the terms of
any Loan Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. Holdings and the Borrower
will furnish to the Administrative Agent and each Lender written notice of the
following promptly upon Holdings's or the Borrower's obtaining knowledge
thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
Holdings, the Borrower or any
58
Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of Holdings, the Borrower and the Subsidiaries in an
aggregate amount exceeding $10,000,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of Holdings setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) Holdings will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or corporate structure or (iv) in any Loan
Party's Federal Taxpayer Identification Number. Holdings agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made, or will have been made within any statutory period, under the Uniform
Commercial Code or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral for the benefit of the Secured
Parties. Holdings also agrees promptly to notify the Administrative Agent if any
material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to paragraph (a)
of Section 5.01, Holdings shall deliver to the Administrative Agent a
certificate of a Financial Officer of Holdings (i) setting forth the information
required pursuant to Section 2 of the Perfection Certificate or confirming that
there has been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section and (ii) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Security Agreement for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period).
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SECTION 5.04. Existence; Conduct of Business. Each of Holdings and
the Borrower will, and will cause each of the Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, contracts, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of the business of the Borrower and its Subsidiaries, taken as a whole,
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03 or any sale of assets
permitted under Section 6.05.
SECTION 5.05. Payment of Obligations. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness
and other obligations, including Tax liabilities, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) Holdings, the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, keep and maintain all
property material to the conduct of the business of Holdings, the Borrower and
the Subsidiaries, taken as a whole, in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. Each of Holdings and the Borrower will, and
will cause each of the Subsidiaries to, maintain, with financially sound and
reputable insurance companies (a) insurance in such amounts (with no greater
risk retention) and against such risks as are customarily maintained by
companies of established repute engaged in the same or similar businesses
operating in the same or similar locations and (b) all insurance required to be
maintained pursuant to the Security Documents. Holdings will furnish to the
Lenders, upon request of the Administrative Agent, information in reasonable
detail as to the insurance so maintained.
SECTION 5.08. Casualty and Condemnation. Holdings (a) will furnish
to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any material portion of any Collateral or
the commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will cause the Net Proceeds of any
such event (whether in the form of insurance proceeds, condemnation awards or
otherwise) to be applied in accordance with the applicable provisions of the
Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit Rights. Each
of Holdings and the Borrower will, and will cause each of the Subsidiaries to,
keep proper books of record and account in which full, true and correct entries
are made of all material dealings and transactions in relation to its business
and activities. Each of Holdings and the Borrower will, and will cause each of
the Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records and to
discuss its affairs,
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finances and condition with its officers and independent accountants, all at
such reasonable times and at such reasonable intervals as may be reasonably
requested.
SECTION 5.10. Compliance with Laws. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds of
the Term Loans made on the Effective Date, together with the net proceeds of the
Subordinated Debt, will be paid as a dividend by the Borrower to Holdings (or,
to the extent applicable, advanced or contributed by Holdings or the Borrower to
certain of the Foreign Subsidiaries) and used by the Borrower (and, to the
extent applicable, such Foreign Subsidiaries), together with the use by the
Investor of the proceeds of the Equity Contribution, solely for the payment of
(a) amounts payable under the Recapitalization Documents as consideration for
the Recapitalization, (b) fees and expenses payable in connection with the
Transactions and (c) the repayment of $82,000,000 of Indebtedness of Foreign
Subsidiaries. The proceeds of the Revolving Loans and Swingline Loans will be
used only for general corporate purposes. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X. Letters of Credit will be issued only to support obligations of the Borrower
or any Subsidiary incurred in the ordinary course of business.
SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary
is formed or acquired after the Effective Date, Holdings will, within ten
Business Days after such Subsidiary is formed or acquired, notify the
Administrative Agent and the Lenders thereof and cause the Collateral and
Guarantee Requirement to be satisfied with respect to such Subsidiary (if it is
a Subsidiary Loan Party) and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.
SECTION 5.13. Further Assurances. (a) Each of Holdings and the
Borrower will, and will cause each Subsidiary Loan Party to, execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
that may be required under any applicable law, or which the Administrative Agent
or the Required Lenders may reasonably request, to cause the Collateral and
Guarantee Requirement to be and remain satisfied, all at the expense of the Loan
Parties. Holdings and the Borrower also agree to provide to the Administrative
Agent, from time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Security Agreement or the Pledge Agreement
that become subject to the Lien of the Security Agreement or the Pledge
Agreement upon acquisition thereof), the Borrower will notify the Administrative
Agent and the
61
Lenders thereof, and, if requested by the Administrative Agent or the Required
Lenders, the Borrower will cause such assets to be subjected to a Lien securing
the Obligations and will take, and cause the Subsidiary Loan Parties to take,
such actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in paragraph
(a) of this Section, all at the expense of the Loan Parties.
SECTION 5.14. Interest Rate Protection. As promptly as practicable,
and in any event within 90 days after the Effective Date, the Borrower will
enter into, and thereafter for a period of not less than three years after the
Effective Date will maintain in effect, one or more interest rate protection
agreements on such terms and with such parties as shall be reasonably
satisfactory to the Administrative Agent, the effect of which shall be to ensure
that at least 50% of the outstanding Long-Term Indebtedness of Holdings, the
Borrower and the consolidated Subsidiaries is effectively subject to a fixed
rate of interest.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and Holdings and the Borrower will not permit any Subsidiary
to, create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Subordinated Debt;
(iii) the Junior Subordinated Note;
(iv) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals, refinancings and replacements of
any such Indebtedness that do not increase the outstanding principal
amount thereof or result in an earlier maturity date or decreased weighted
average life thereof;
(v) Indebtedness of the Borrower to Holdings or any Subsidiary and
of any Subsidiary to the Borrower, Holdings or any other Subsidiary;
(vi) Guarantees by the Borrower and by any Subsidiary of
Indebtedness of the Borrower or any other Subsidiary, provided that
Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of
any Subsidiary that is not a Loan Party shall be subject to Section 6.04;
(vii) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital
62
Lease Obligations (provided that such Indebtedness is incurred prior to or
within 180 days after such acquisition or the completion of such
construction or improvement) and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such
assets prior to the acquisition thereof, and extensions, renewals,
refinancings and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof, provided that the
aggregate principal amount of Indebtedness permitted by this clause (vii)
shall not exceed $25,000,000 at any time outstanding;
(viii) Indebtedness of the Borrower or any Subsidiary in respect of
workers' compensation claims, self-insurance obligations, performance
bonds, surety, appeal or similar bonds and completion guarantees provided
by the Borrower and the Subsidiaries in the ordinary course of their
business, provided that upon the incurrence of Indebtedness with respect
to reimbursement type obligations regarding workers' compensation claims,
such obligations are reimbursed within 30 days following such drawing or
incurrence;
(ix) Indebtedness in respect of a Permitted Receivables Financing in
an aggregate principal amount not to exceed $100,000,000, provided that
the Net Proceeds resulting from the sale, transfer or other disposition of
Receivables in connection with such Permitted Receivables Financing are
applied in accordance with Section 2.11(c);
(x) Indebtedness of the Borrower or any Subsidiary that was (A)
Indebtedness of any other Person existing at the time such other Person
was merged with or became a Subsidiary, including Indebtedness incurred in
connection with, or in contemplation of, such other Person's merging with
or becoming a Subsidiary, and extensions, renewals, refinancings and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or
decreased weighted average life thereof, provided that the aggregate
principal amount of Indebtedness permitted under this clause (x) shall not
exceed $25,000,000 at any time outstanding;
(xi) other unsecured Indebtedness in an aggregate principal amount
not exceeding $50,000,000 at any time outstanding, provided that the
aggregate principal amount of Indebtedness of the Subsidiaries that are
not Subsidiary Loan Parties permitted by this clause (xi) shall not exceed
$25,000,000 at any time outstanding.
(b) Holdings will not create, incur, assume or permit to exist any
Indebtedness except (i) Indebtedness created under the Loan Documents, (ii) the
Subordinated Debt and (iii) Indebtedness permitted under clause (a)(v) of this
Section 6.01.
(c) Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, issue any preferred stock or other preferred Equity Interests,
except that (i) Holdings may issue the Cumulative Preferred Stock, (ii) Holdings
may issue preferred stock or other preferred Equity Interests of Holdings that
do not require mandatory cash dividends or redemptions and do not provide for
any right on the part of the holder to require redemption, repurchase or
repayment thereof, in each case prior to the date that is 91 days after August
4, 2007, and
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(iii) Holdings, the Borrower or any Subsidiary may issue directors' qualifying
shares or shares required by applicable law to be held by a Person other than
Holdings, the Borrower or any Subsidiary.
SECTION 6.02. Liens. (a) The Borrower will not, and Holdings and the
Borrower will not permit any Subsidiary to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02,
provided that (i) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations that it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary, provided that
(A) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as the case may be,
(B) such Lien shall not apply to any other property or assets of the
Borrower or any Subsidiary and (C) such Lien shall secure only those
obligations that it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(v) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary, provided that (A) such Liens
secure Indebtedness permitted by clause (vii) of Section 6.01(a), (B) such
security interests and the Indebtedness secured thereby are incurred prior
to or within 180 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed
or capital assets and (D) such security interests shall not apply to any
other property or assets of the Borrower or any Subsidiary;
(vi) sales of Receivables and Related Property (or undivided
interests therein) permitted under Section 6.05(d) and Liens on
Receivables of a Receivables Subsidiary granted in connection with any
Permitted Receivables Financing;
(vii) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of setoff or similar rights;
and
(viii) Liens in favor of a landlord on leasehold improvements in
leased premises.
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(b) Holdings will not create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect thereof, except Liens created under the Pledge Agreement and Permitted
Encumbrances.
SECTION 6.03. Fundamental Changes. (a) Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate
with it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Person may merge with Holdings or the Borrower in a
transaction in which the surviving entity is a Person organized or existing
under the laws of the United States of America, any State thereof or the
District of Columbia and, if such surviving entity is not Holdings or the
Borrower, as the case may be, such Person expressly assumes, in writing, all the
obligations of Holdings or the Borrower, as the case may be, under the Loan
Documents, (ii) any Person may merge with any Subsidiary in a transaction in
which the surviving entity is a Subsidiary and, if any party to such merger is a
Subsidiary Loan Party, is a Subsidiary Loan Party and (iii) any Subsidiary
(other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders,
provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Sections 6.04 and 6.08.
(b) The Borrower will not, and Holdings and the Borrower will not
permit any of the Subsidiaries (other than a Receivables Subsidiary) to, engage
to any material extent in any business other than businesses of the type
conducted by the Borrower and the Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
(c) Holdings will not engage in any business or activity other than
the ownership of all the outstanding shares of capital stock of the Borrower and
the Joint Venture Holding Companies and activities incidental thereto. Holdings
will not own or acquire any assets (other than shares of capital stock of the
Borrower, shares of capital stock of the Joint Venture Holding Companies, cash
and Permitted Investments) or incur any liabilities (other than liabilities
under the Loan Documents, Guarantees by Holdings of obligations of the Borrower
and the Subsidiaries under leases of real property, obligations under any stock
option plans or other benefit plans for management or employees of Holdings, the
Borrower and the Subsidiaries, liabilities imposed by law, including tax
liabilities, and other liabilities incidental to its existence and permitted
business and activities).
(d) No Receivables Subsidiary will engage in any business other than
the purchase and sale or other transfer of Receivables (or participation
interests therein) in connection with any Permitted Receivables Financing,
together with activities directly related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and Holdings and the Borrower will not
permit any of the Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned Subsidiary prior to
such merger) any Equity Interests in or evidences of
65
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:
(a) to the extent provided for by the terms of the Recapitalization;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.04;
(d) investments by the Borrower and the Subsidiaries that are Loan
Parties in Equity Interests in their respective Subsidiaries that are Loan
Parties and investments by Subsidiaries that are not Loan Parties in
Equity Interests in their respective Subsidiaries, provided that any such
Equity Interests held by a Loan Party shall be pledged pursuant to the
Pledge Agreement (subject to the limitations applicable to voting stock of
a Foreign Subsidiary and Equity Interests in the Foreign Joint Venture
Companies referred to in the definition of the term "Collateral and
Guarantee Requirement");
(e) loans or advances made by the Borrower to Holdings or any
Subsidiary and made by Holdings or any Subsidiary to the Borrower or any
other Subsidiary, provided that any such loans and advances made by a Loan
Party shall be evidenced by a promissory note pledged pursuant to the
Pledge Agreement;
(f) Guarantees constituting Indebtedness permitted by Section 6.01
(other than with respect to the Junior Subordinated Note) of Indebtedness
of the Borrower or any Subsidiary Loan Party, provided that a Subsidiary
shall not Guarantee the Subordinated Debt unless (i) such Subsidiary also
has Guaranteed the Obligations pursuant to the Guarantee Agreement, (ii)
such Guarantee of the Subordinated Debt is subordinated to such Guarantee
of the Obligations on terms no less favorable to the Lenders than the
subordination provisions of the Subordinated Debt and (iii) such Guarantee
of the Subordinated Debt provides for the release and termination thereof,
without action by any party, upon any release or termination of such
Guarantee of the Obligations;
(g) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(h) Permitted Acquisitions, provided that the sum of all
consideration paid or otherwise delivered in connection with Permitted
Acquisitions (including the principal amount of any Indebtedness issued as
deferred purchase price and the fair market value of any other non-cash
consideration) plus the aggregate principal amount of all Indebtedness
otherwise incurred or assumed in connection with, or resulting from,
Permitted Acquisitions (including Indebtedness of any acquired Persons
outstanding at the time of the applicable Permitted Acquisition) shall not
exceed, on a cumulative basis during the term of this Agreement,
$50,000,000;
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(i) any investments in or loans to any other Person received as
noncash consideration for sales, transfers, leases and other dispositions
permitted by Section 6.05;
(j) Guarantees by the Borrower and the Subsidiaries of leases
entered into by any Subsidiary as lessee;
(k) extensions of credit in the nature of accounts receivable or
notes receivable in the ordinary course of business;
(l) investments in payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(m) loans or advances to employees made in the ordinary course of
business consistent with prudent business practice and not exceeding
$5,000,000 in the aggregate outstanding at any one time;
(n) investments in or acquisitions of stock, obligations or
securities received in settlement of debts created in the ordinary course
of business and owing to the Borrower or any Subsidiary or in satisfaction
of judgments;
(o) investments in the form of Hedging Agreements permitted under
Section 6.07;
(p) investments by the Borrower or any Subsidiary in (i) the capital
stock of a Receivables Subsidiary and (ii) other interests in a
Receivables Subsidiary, in each case to the extent determined by the
Borrower in its judgment to be reasonably necessary in connection with or
required by the terms of the Permitted Receivables Financing;
(q) investments, loans, advances, guarantees and acquisitions
resulting from a foreclosure by Holdings, the Borrower or any Subsidiary
with respect to any secured investment or other transfer of title with
respect to any secured investment in default;
(r) investments, loans, advances, guarantees and acquisitions the
consideration for which consists solely of shares of common stock of
Holdings; and
(s) other investments in an aggregate amount not to exceed
$100,000,000 at any time outstanding.
SECTION 6.05. Asset Sales. The Borrower will not, and Holdings and
the Borrower will not permit any of the Subsidiaries to, sell, transfer, lease
or otherwise dispose of any asset, including any Equity Interest owned by it,
nor will the Borrower permit any of the Subsidiaries to issue any additional
Equity Interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business and the periodic clearance
of aged inventory;
67
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary, provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;
(c) transfers and dispositions in connection with the SCG
Restructuring, provided that the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance on this clause (c)
shall not exceed $10,000,000;
(d) the Borrower and the Subsidiaries may sell, without recourse
(other than Standard Securitization Undertakings and retained interests),
Receivables to a Receivables Subsidiary, and any Receivables Subsidiary
may sell Receivables and Related Property or an undivided interest therein
to any other Person, pursuant to any Permitted Receivables Financing, and
convert or exchange Receivables and Related Property into or for notes
receivable in connection with the compromise or collection thereof; and
(e) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary) that are not permitted by any other
clause of this Section, provided that the aggregate fair market value of
all assets sold, transferred or otherwise disposed of in reliance upon
this clause (e) shall not exceed $50,000,000 during any fiscal year of the
Borrower;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and for consideration of at least 80% cash or cash equivalents.
SECTION 6.06. Sale and Leaseback Transactions. The Borrower will
not, and Holdings and the Borrower will not permit any of the Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property that it intends to use for substantially the same purpose or
purposes as the property sold or transferred, except for any such sale of any
fixed or capital assets that is made for cash consideration in an amount not
less than the cost of such fixed or capital asset and is consummated within 180
days after the Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset.
SECTION 6.07. Hedging Agreements. The Borrower will not, and
Holdings and the Borrower will not permit any of the Subsidiaries to, enter into
any Hedging Agreement, other than (a) Hedging Agreements required by Section
5.14 and (b) Hedging Agreements entered into in the ordinary course of business
to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.
(a) Other than as specified in the first sentence of Section 5.11, neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to, declare
or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that (i) Holdings may declare and pay dividends with respect to
its capital stock payable solely in additional shares of its capital stock, (ii)
Subsidiaries
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may declare and pay dividends ratably with respect to their capital stock, (iii)
Holdings may make Restricted Payments, not exceeding $2,000,000 during any
fiscal year, pursuant to and in accordance with stock option plans or other
benefit plans for directors, management or employees of Holdings, the Borrower
and the Subsidiaries, including the redemption or purchase of capital stock of
Holdings held by former directors, management or employees of Holdings, the
Borrower or any Subsidiary following termination of their employment, (iv) the
Borrower may pay dividends to Holdings at such times and in such amounts, not
exceeding $2,000,000 during any fiscal year, as shall be necessary to permit
Holdings to discharge its permitted liabilities and (v) the Borrower and the
Joint Venture Holding Companies may make Restricted Payments to Holdings at such
times and in such amounts (but not prior to the fifth anniversary of the date of
issuance of the Cumulative Preferred Stock) as shall be necessary to enable
Holdings, after such fifth anniversary, to pay dividends in cash on such
Cumulative Preferred Stock as and when declared and payable, provided that, at
the time of each Restricted Payment made in reliance upon this clause (v) and
after giving pro forma effect to such payment, the Leverage Ratio shall not
exceed 1.50 to 1.00, (vi) Holdings, the Borrower and the Subsidiaries may make
Restricted Payments as and to the extent contemplated by the Recapitalization
Agreement and (vii) Holdings may make Restricted Payments on account of the
purchase, redemption or repurchase of the Cumulative Preferred Stock with the
net proceeds of a substantially concurrent IPO, provided that, after giving
effect to such purchase, redemption or repurchase, no Default or Event of
Default shall have occurred and be continuing.
(b) Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments
as and when due in respect of any Indebtedness, other than (A) payments in
respect of the Subordinated Debt and the Junior Subordinated Note
prohibited by the subordination provisions thereof, (B) principal payments
in respect of the Junior Subordinated Note and (C) cash interest payments
in respect of the Junior Subordinated Note unless, in the case of any such
payment specified in this clause (C), at the time of such payment and
after giving pro forma effect thereto the Leverage Ratio shall not exceed
1.50 to 1.00 and such payment is due and payable on or after the fifth
anniversary of the date of issuance of the Junior Subordinated Note;
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01;
(iv) payment of secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(v) payments on account of the purchase, redemption or repurchase of
the Subordinated Debt with the net proceeds of a substantially concurrent
IPO, provided that
69
(i) after giving effect to such purchase, redemption or repurchase, no
Default or Event of Default shall have occurred and be continuing, (ii) no
more than 35% of the aggregate principal amount of the Subordinated Debt
issued on or prior to the Effective Date is purchased, redeemed or
repurchased and (iii) at the time of any such payment, the net proceeds of
such IPO remaining after such payment and any Restricted Payment made
pursuant to clause (a)(vii) of this Section 6.08 are applied to prepay
Term Borrowings pursuant to Section 2.11(a) (or, if no such Borrowings are
outstanding or the outstanding amount of such Borrowings is less than the
amount of the required prepayments, then to reduce Revolving Commitments
pursuant to Section 2.08(b) by an aggregate amount equal to the amount of
the required prepayment, or the excess of such amount over the outstanding
Term Borrowings, as the case may be);
(vi) payments in respect of any Permitted Receivables Facility; and
(vii) repayment of certain Indebtedness of certain Foreign
Subsidiaries on the Effective Date as specified in the first sentence of
Section 5.11.
SECTION 6.09. Transactions with Affiliates. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions that are at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) transactions
between or among Holdings, the Borrower and the Subsidiary Loan Parties not
involving any other Affiliate, (c) to pay management, consulting and advisory
fees to TPG or its Affiliates pursuant to any financial advisory, financing,
underwriting or placement agreement or in respect of other investment banking
activities, including in connection with acquisitions or divestitures, in an
aggregate amount not to exceed $2,000,000 in any fiscal year, (d) payments of
fees and expenses to TPG and its Affiliates in connection with the Transactions,
(e) any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the board of directors of
Holdings, (f) the grant of stock options or similar rights to officers,
employees, consultants and directors of Holdings pursuant to plans approved by
the board of directors of Holdings and the payment of amounts or the issuance of
securities pursuant thereto, (g) loans or advances to employees in the ordinary
course of business consistent with prudent business practice, but in any event
not to exceed $5,000,000 in the aggregate outstanding at any one time, (h) the
Transition Agreements and (i) any Restricted Payment permitted by Section 6.08.
SECTION 6.10. Restrictive Agreements. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of Holdings,
the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary, provided that
(i) the foregoing shall not apply to restrictions and
70
conditions imposed by law or by any Loan Document or Subordinated Debt Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification if it expands the scope of, any
such restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (v) clause (a) of the foregoing shall not
apply to customary provisions in leases restricting the assignment thereof and
(vi) the foregoing shall not apply to restrictions or conditions imposed on a
Receivables Subsidiary in connection with a Permitted Receivables Financing.
SECTION 6.11. Amendment of Material Documents. (a) Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary to, amend, modify or
waive any of its rights under (i) any Subordinated Debt Document, (ii) its
certificate of incorporation, by-laws or other organizational documents
(including the SMP JV Agreement and the Leshan JV Agreement), (iii) the Junior
Subordinated Note or (iv) the Certificate of Designations.
(b) Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, amend, modify or waive any of its rights under any
Recapitalization Document or terminate any Transition Agreement, in each case to
the extent that such amendment, modification, waiver or termination would be
adverse to the Lenders.
(c) Holdings and the Borrower will not, and will not permit any
Subsidiary to, amend, modify or waive any of its rights under any Permitted
Receivables Financing to the extent that such amendment, modification or waiver
would be materially adverse to the Lenders.
SECTION 6.12. Interest Expense Coverage Ratio. The Borrower will not
permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash Interest
Expense, in each case for any period of four consecutive fiscal quarters ending
on any date during any period set forth below, to be less than the ratio set
forth below opposite such period:
Period Ratio
------ -----
August 4, 1999 to December 30, 2000 2.00 to 1.00
December 31, 2000 to June 29, 2001 2.25 to 1.00
June 30, 2001 to June 29, 2002 2.50 to 1.00
June 30, 2002 to June 29, 2003 2.75 to 1.00
June 30, 2003 and thereafter 3.00 to 1.00
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SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of the end of any fiscal quarter during any period set forth
below to exceed the ratio set forth opposite such period:
Period Ratio
------ -----
August 4, 1999 to December 30, 2000 4.75 to 1.00
December 31, 2000 to June 29, 2001 4.50 to 1.00
June 30, 2001 to December 30, 2001 4.25 to 1.00
December 31, 2001 to June 29, 2002 3.75 to 1.00
June 30, 2002 to December 30, 2002 3.50 to 1.00
December 31, 2002 to June 29, 2003 3.25 to 1.00
June 30, 2003 to December 30, 2003 3.25 to 1.00
December 31, 2003 and thereafter 3.00 to 1.00
SECTION 6.14. Capital Expenditures. The Borrower and Subsidiaries
shall not incur or make Capital Expenditures during any fiscal year (commencing
with fiscal year 1999) in an amount exceeding $200,000,000, provided that such
$200,000,000 permitted amount shall be increased with respect to any fiscal year
by an amount equal to the portion of Excess Cash Flow for the immediately
preceding fiscal year that is not required to be applied to make prepayments of
Loans pursuant to Section 2.11(d).
The amount of Capital Expenditures permitted to be made by the
immediately preceding paragraph in respect of any fiscal year shall be increased
by (a) the unused amount of Capital Expenditures that were permitted to be made
during the immediately preceding fiscal year pursuant to the immediately
preceding paragraph (without giving effect to the proviso to such paragraph)
minus (b) an amount equal to the unused permitted Capital Expenditures carried
forward to such preceding fiscal year.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events
("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this
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Agreement or any other Loan Document, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period
of five days;
(c) any representation or warranty made or deemed made by or on
behalf of Holdings, the Borrower or any Subsidiary in or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, or in any certificate or other document furnished pursuant to
or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any
material respect when made or deemed made;
(d) Holdings or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of Holdings or the Borrower) or 5.11 or in
Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent to the Borrower (which notice will be given
at the request of any Lender);
(f) Holdings, the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable after giving effect to any applicable grace period with
respect thereto;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity, provided that this
clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Holdings, the Borrower or, subject to Section 7.02,
any Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings, the Borrower or, subject to Section 7.02, any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) Holdings, the Borrower or, subject to Section 7.02, any
Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or
73
fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings, the Borrower
or, subject to Section 7.02, any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) Holdings, the Borrower or, subject to Section 7.02, any
Subsidiary shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $10,000,000 (net of amounts covered by insurance as to
which the insurer has admitted liability in writing) shall be rendered
against Holdings, the Borrower, any Subsidiary or any combination thereof
and the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any
assets of Holdings, the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in a Material
Adverse Effect;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on Collateral having, in the aggregate, a value
in excess of $5,000,000, with the priority required by the applicable
Security Document, except (i) as a result of the sale or other disposition
of the applicable Collateral in a transaction permitted under the Loan
Documents, (ii) any action taken by the Collateral Agent to release any
such Lien in compliance with the provisions of this Agreement or any other
Loan Document or (iii) as a result of the Collateral Agent's failure to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Pledge Agreement;
(n) any default or other event shall have occurred under any
document governing any Permitted Receivables Financing if the effect of
such default or other event is to cause the termination of such Permitted
Receivables Financing; or
(o) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be
74
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 7.02. Exclusion of Immaterial Subsidiaries. Solely for the
purposes of determining whether a Default has occurred under clause (h), (i) or
(j) of Section 7.01, any reference in any such clause to any "Subsidiary" shall
be deemed not to include any Subsidiary affected by any event or circumstance
referred to in any such clause that did not, as of the last day of the fiscal
quarter of the Borrower most recently ended, have assets with a value in excess
of 5.0% of the total consolidated assets of the Borrower and the Subsidiaries as
of such date, provided that if it is necessary to exclude more than one
Subsidiary from clause (h), (i) or (j) of Section 7.01 pursuant to this Section
in order to avoid a Default thereunder, all excluded Subsidiaries shall be
considered to be a single consolidated Subsidiary for purposes of determining
whether the condition specified above is satisfied.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with Holdings, the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative
75
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Holdings, the Borrower or any
of the Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Holdings, the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with any Loan Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any of and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent that
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights,
76
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Holdings or the Borrower, to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of President (Telecopy No.
602-244-4830);
(b) if to the Administrative Agent, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (212)
552-5658), with a copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Telecopy No. (212)
270-4584);
(c) if to the Issuing Bank, to The Chase Manhattan Bank, Loan and
Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(d) if to the Swingline Lender, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
77
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders,
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the maturity of any Loan, or the date of any scheduled
payment of the principal amount of any Term Loan under Section 2.10, or the
required date of reimbursement of any LC Disbursement, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount of,
waive or excuse any such scheduled payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
percentage set forth in the definition of the term "Required Lenders" or any
other provision of any Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) release Holdings or any Subsidiary Loan Party from its Guarantee
under the Guarantee Agreement (except as expressly provided in the Guarantee
Agreement), or limit its liability in respect of such Guarantee, without the
written consent of each Lender, (vii) except in strict accordance with the
express provisions of the Security Documents, release all or any substantial
part of the Collateral from the Liens of the Security Documents, without the
written
78
consent of each Lender, (viii) change any provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of payments due
to Lenders holding Loans of any Class differently than those holding Loans of
any other Class, without the written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each affected Class,
(ix) change the definition of "Interest Period" to include periods longer than
six months or (x) change the rights of the Tranche B Lenders or the Tranche C
Lenders to decline mandatory prepayments as provided in Section 2.11, without
the written consent of Tranche B Lenders or the Tranche C Lenders, as
applicable, holding a majority of the outstanding Tranche B Loans or Tranche C
Loans, as applicable, and provided further that (A) no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Bank or the Swingline Lender without the prior written
consent of the Administrative Agent, the Issuing Bank or the Swingline Lender,
as the case may be, and (B) any waiver, amendment or modification of this
Agreement that by its terms affects the rights or duties under this Agreement of
the Revolving Lenders (but not the Tranche A Lenders, Tranche B Lenders and
Tranche C Lenders), the Tranche A Lenders (but not the Revolving Lenders,
Tranche B Lenders and Tranche C Lenders), the Tranche B Lenders (but not the
Revolving Lenders, Tranche A Lenders and Tranche C Lenders) or the Tranche C
Lenders (but not the Revolving Lenders, the Tranche A Lenders and the Tranche B
Lenders) may be effected by an agreement or agreements in writing entered into
by Holdings, the Borrower and requisite percentage in interest of the affected
Class of Lenders that would be required to consent thereto under this Section if
such Class of Lenders were the only Class of Lenders hereunder at the time.
Notwithstanding the foregoing, any provision of this Agreement may be amended by
an agreement in writing entered into by Holdings, the Borrower, the Required
Lenders and the Administrative Agent (and, if their rights or obligations are
affected thereby, the Issuing Bank and the Swingline Lender) if (i) by the terms
of such agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment
and (ii) at the time such amendment becomes effective, each Lender not
consenting thereto receives payment in full of the principal of and interest
accrued on each Loan made by it and all other amounts owing to it or accrued for
its account under this Agreement.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates and the Documentation Agents and their
respective Affiliates, including the reasonable fees, charges and disbursements
of one counsel in each applicable jurisdiction for the Administrative Agent and
the Documentation Agents, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, either
Documentation Agent, the Issuing Bank or any Lender, including the reasonable
fees, charges and disbursements of any counsel for the Administrative Agent,
either Documentation Agent, the Issuing Bank or any Lender, in connection with
the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
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(b) The Borrower shall indemnify the Administrative Agent, the
Documentation Agents, the Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence, Release or threatened Release of Hazardous Materials on or
from any Mortgaged Property or any other property currently or formerly owned or
operated by Holdings, the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to Holdings, the Borrower or any of
the Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or willful misconduct of
such Indemnitee or any Related Person of such Indemnitee. It is acknowledged and
agreed by the parties hereto that, solely in their capacities as Documentation
Agents and not in their capacities as Lenders, the Documentation Agents have no
duties hereunder.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent, either Documentation Agent, the
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, such
Documentation Agent, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, such Documentation Agent, the Issuing Bank or
the Swingline Lender in its capacity as such. For purposes hereof, a Lender's
"pro rata share" shall be determined based upon its share of the sum of the
total Revolving Exposures, outstanding Term Loans and unused Commitments at the
time.
(d) To the extent permitted by applicable law, neither Holdings nor
the Borrower shall assert, and each 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 or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
80
(f) Neither Motorola nor any director, officer, employee,
stockholder or member, as such, of any Loan Party or Motorola shall have any
liability for the Obligations or for any claim based on, in respect of or by
reason of the Obligations or their creation; provided that the foregoing shall
not be construed to relieve any Loan Party of its Obligations under any Loan
Document.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). 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 (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing
Bank and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans at the time owing to it), provided that (i)
except in the case of an assignment to a Lender or an Affiliate or Approved Fund
of a Lender, each of the Borrower and the Administrative Agent (and, in the case
of an assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the Issuing
Bank and the Swingline Lender) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate or Approved Fund of a
Lender or an assignment of the entire remaining amount of the assigning Lender's
Commitments or Loans, the amount of the Commitments or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) 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, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire, and provided further that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (a), (b), (g), (h), (i), (j), (n)
or (o) of Article VII has occurred and is continuing. Subject to acceptance and
recording thereof pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement (provided that any liability of the Borrower to such
assignee under Section 2.15, 2.16 or 2.17 shall be limited to the amount, if
any, that would
81
have been payable thereunder by the Borrower in the absence of such assignment),
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph 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
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and Holdings, the Borrower, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it),
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) Holdings, the Borrower,
the Administrative Agent, the Issuing Bank and the other 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 the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents,
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 described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if
82
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.18(c) as
though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant.
A Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective
83
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower then existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement. The rights of each
Lender under this Section are in addition to other rights and remedies
(including any other rights of setoff) that such Lender may have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against Holdings, the Borrower or its
properties in the courts of any jurisdiction.
(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
84
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (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 regulatory 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 any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, or to any direct or
indirect contractual counterparties in swap agreements or such contractual
counterparties' professional advisors, (g) with the consent of the Borrower or
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than Holdings or the Borrower. For the purposes of this
Section, the term "Information" means all information received from Holdings or
the Borrower relating to Holdings or the Borrower or its business, other than
any such information that is available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis prior to disclosure by Holdings or
the Borrower. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation
85
to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
SCG HOLDING CORPORATION,
by: /s/ ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
SEMICONDUCTOR COMPONENTS
INDUSTRIES, LLC,
by /s/ ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
DLJ CAPITAL FUNDING, INC.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
87
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
SYNDICATED LOAN FUNDING TRUST
By: ▇▇▇▇▇▇ COMMERCIAL PAPER
INC., Not in its individual capacity but
solely as Asset Manager,
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
CREDIT LYONNAIS NEW YORK
BRANCH,
by /s/ Attula Koc
--------------------------------------
Name: Attula Koc
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
by /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Senior Relationship
Manager
ABN AMRO BANK N.V.,
88
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Group Vice President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
IBM CREDIT CORPORATION,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director, Commercial
Financing Solutions
Americas
BANK OF MONTREAL,
by /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Director
COMERICA WEST INCORPORATED,
by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Account Officer
89
BANK OF CHINA, NEW YORK,
by /s/ Li, Chuanjie
--------------------------------------
Name: Li, Chuanjie
Title: General Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND II, INC.,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇ ▇▇▇▇▇▇ PRIME RATE INCOME
TRUST
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory
Corp.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
90
ARCHIMEDES FUNDING II, LTD.
By: ING Capital Advisors, LLC
As Collateral Manager,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
& Portfolio Manager
KZH ING-2 LLC,
by /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
▇▇▇▇▇▇ FLOATING RATE FUND,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
KZH RIVERSIDE LLC,
by /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
91
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc.,
as its Investment Manager,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
PPM AMERICA, INC., as Attorney-in-Fact,
on behalf of ▇▇▇▇▇▇▇ NATIONAL LIFE
INSURANCE COMPANY,
by /s/ ▇▇▇▇▇▇▇ DiRe
--------------------------------------
Name: ▇▇▇▇▇▇▇ DiRe
Title: Senior Managing
Director
OLYMPIC FUNDING TRUST, SERIES
1999-1,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Agent
TYLER TRADING, INC.,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
FOOTHILL CAPITAL CORPORATION,
92
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ FINANCIAL, INC.,
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
OCTAGON LOAN TRUST
By: Octagon Credit Investors as
Manager,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Portfolio Manager
▇▇▇▇▇ ▇▇▇ FLOATING RATE LIMITED
LIABILITY COMPANY,
by /s/ ▇▇▇▇▇ ▇. Good
--------------------------------------
Name: ▇▇▇▇▇ ▇. Good
Title: Vice President,
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ Incorporated, as
Advisor to the ▇▇▇▇▇ ▇▇▇ Floating Rate
Limited Liability Company
BANK OF AMERICA, N.A.,
93
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
GALAXY CLO 1999-1, LTD.
By: SAI Investment Adviser, Inc.
its Collateral Manager,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Agent
BALANCED HIGH YIELD FUND I LTD.
By: BHF (USA) CAPITAL
CORPORATION
acting as Attorney-in-Fact,
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice
President
/s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice
President
94
KZH CRESCENT-2 LLC,
by /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
KZH CRESCENT LLC,
by /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By: TCW Asset Management Company, its
Investment Advisor,
by /s/ ▇▇▇▇ ▇. Gold
--------------------------------------
Name: ▇▇▇▇ ▇. Gold
Title: Managing Director
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
95
SEQUILS I, LTD.
By: TCW Advisors, Inc. as its Collateral
Manager,
by /s/ ▇▇▇▇ ▇. Gold
--------------------------------------
Name: ▇▇▇▇ ▇. Gold
Title: Managing Director
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRIME INCOME TRUST,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of
FIRST ALLMERICA FINANCIAL LIFE
INSURANCE COMPANY as Portfolio Manager,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
96
CYPRESSTREE SENIOR FLOATING
RATE FUND
By: CypressTree Investment
Management Company, Inc. as Portfolio
Manager,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
KZH CYPRESSTREE-1 LLC,
by /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Authorized Agent
NORTH AMERICAN SENIOR
FLOATING RATE FUND
By: CypressTree Investment
Management Company, Inc. as Portfolio
Manager,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
97
TORONTO DOMINION (NEW YORK),
INC.,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
98
SCHEDULE 1.01
-------------
MORTGAGED PROPERTY
Loan Party (Record Owner) Property
------------------------- --------
Semiconductor Components ▇▇▇▇ ▇▇▇▇▇▇ facility located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
SCHEDULE 2.01
COMMITMENTS
[To come from CS&M]
2
SCHEDULE 3.05
REAL PROPERTY
A. Owned Real Property
ENTITY PROPERTY
------ --------
Semiconductor Components ▇▇▇▇ ▇▇▇▇▇▇ facility located at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
SCG Industries Malaysia Manufacturing facilities located at ▇▇▇ ▇▇▇ ▇▇▇
▇▇▇. ▇▇▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 20050
Seremban, Nederi, Sembilan, Malaysia
Slovakia Electronics Manufacturing facility located at Vrbovska
Industries, a.s. ▇▇▇▇▇ ▇▇▇▇/▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(Ownership certificate number 8226)
SCG (Japan) Ltd. Manufacturing facility located at ▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇-▇▇▇,
Fukushima 969-3594, Japan
SCG Philippines, Inc. Manufacturing facility at Governor's Drive,
Carmona Cavite, Philippines
Terosil a.s. Manufacturing facility located at 1 maje 1000,
75661 Roznovpod Radhostem, Czech Republic
ICO 451 93 533
Tesla Sezam a.s. Manufacturing facility located at 1 maje 1000,
75661 Roznovpod Radhostem, Czech Republic
ICO 451 93 533
B. Leased Property
1) U.S. Office Sharing Agreement (includes China and Korea) dated July 31,
1999 between Motorola, Inc. and Semiconductor Components Industries,
LLC regarding: (a) ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇; (b) ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇; (c) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇; (d) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇; (e) ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇; (f) ▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇; (g) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇; (h) ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇; (i) ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇; (j) ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇;
(k) ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇; (l) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇; (m) ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇: (n) ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇; (o) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇; (p) ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇; (q) ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇; (r) ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇; (s) ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇; (t) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇; (u) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇; (v)
3
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇; (w) ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇., ▇▇▇▇▇▇▇▇▇▇,
▇▇; (x) ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇; (x) ▇▇-▇, ▇▇▇▇▇▇▇▇-▇▇▇▇,
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇, ▇▇▇▇▇; (y) ▇▇. ▇, ▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 100022, People's Republic of China; (z) ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, No. ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ of
China; and (aa) ▇▇. ▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ District, Guangzhou
510620, People's Republic of China
2) U.S. Sublease of sublease dated July 31, 1999 between Motorola, Inc. and
Semiconductor Components Industries, LLC regarding: ▇▇▇▇▇▇▇ Warehouse
3) U.S. Sublease dated July 31, 1999 between Motorola, Inc. and Semiconductor
Components Industries, LLC regarding: Scrap Reclamation Site in Tempe
4) U.S. Lease dated July 31, 1999 between Motorola, Inc. and Semiconductor
Components Industries, LLC regarding: U.S. Locations (Mesa, Chandler, ▇▇▇▇
▇▇▇▇▇▇ & Tempe)
5) U.S. Lease dated July 31, 1999 between Motorola, Inc. and Semiconductor
Components Industries, LLC regarding: U.S. Locations (52nd Street,
Phoenix, Arizona)
6) Brazil Office Sharing Agreement dated July 31, 1999 between Motorola do
Brasil Ltda. and SCG do Brasil Ltda. regarding: Suites 51, 52, 53, 54, 55
& 56 and their respective parking spaces at the Edifice Passarelli located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇-▇ ▇▇▇▇▇, ▇▇▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
7) Canada Sublease dated July 31, 1999 between Motorola Canada Limited and
SCG Canada Limited regarding: 145,846 sq. ft. at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
8) Great Britain Underlease dated July 31, 1999 between Motorola Limited and
Semiconductor Components Industries UK Limited regarding: Part of ground
floor, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
HP202NF
9) Sweden Office Sharing Agreement dated July 31, 1999 between Motorola AB
and SCGS AB regarding: 4,851 sq. meters of office space and 182 sq. meters
of storage in ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇, ▇▇▇▇▇▇ (P.O. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇)
10) Sweden (Finland) Office Sharing Agreement dated July 31, 1999 between
Motorola AB and SCGS AB regarding: 250 sq. meters of office space and 6
parking lots at ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
11) France Lease dated July 31, 1999 between Motorola Semiconducteurs SA and
SCG France SAS regarding: 1,250 sq. meters on 3rd fl. at ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇) ▇▇▇▇▇▇ Sublease dated July 31, 1999 between Motorola Semiconducteurs SA
and SCG France SAS regarding: 354 sq. meters at ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇
▇▇▇▇▇▇▇ ▇▇.▇
▇▇) ▇▇▇▇▇▇ Lease dated July 31, 1999 between Motorola Semiconducteurs SA and
SCG France SAS regarding: 510 sq. meters at ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇) ▇▇▇▇▇▇ Lease dated July 31, 1999 between Motorola Semiconducteurs SA and
SCG France SAS regarding: 880 sq. meters on 3rd fl. at ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Toulouse
15) Germany Office Sharing Agreement dated July 31, 1999 between Motorola
GmbH and Semiconductors Components Industries Germany GmbH regarding:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇) ▇▇▇▇ ▇▇▇▇ Lease dated July 31, 1999 between Motorola Semiconductors Hong
Kong Limited and SCG Hong Kong SAR Limited regarding: Unit Nos. 2307, 2308,
2309, 2310, 2311 and 2312 on ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇
Road, ▇▇▇▇ ▇▇▇▇▇, New Territories, Hong Kong
17) India Office Sharing Agreement dated July 31, 1999 between Motorola India
Limited and SCG Hong Kong SAR Limited regarding: ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
18) Ireland Office Sharing Agreement dated July 31, 1999 between Motorola
Ireland Limited and SCG Holding (Netherlands) B.V., Ireland Branch
regarding: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇
19) ▇▇▇▇▇▇ Office Sharing Agreement dated July 31, 1999 between Motorola
Isreal Semiconductor Products (SPS) Ltd. and SCG Holding (Netherlands)
B.V., ▇▇▇▇▇▇ ▇▇▇▇▇▇ regarding: 1st Shenka, Herzelia
20) Italy Sublease Agreement dated July 31, 1999 between Motorola S.p.A. and
SCG Italy S.r.l. regarding: Pal. C2, Centro Milanofiori, Assago, Milano
regarding: 100 sq. meters of floor space on the ▇▇▇ ▇▇▇▇▇.
▇▇) ▇▇▇▇▇ Office Sharing Agreement dated July 31, 1999 between Motorola Japan
Ltd. and SCG Japan Ltd. regarding: ▇▇-▇, ▇ ▇▇▇-▇▇, ▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇-▇▇,
▇▇▇▇▇, ▇▇▇▇▇
22) Japan (Sendai) Lease dated July 31, 1999 between Motorola Japan Ltd. and
SCG (Japan) Ltd. regarding: Motorola Sendai Design and Research &
Development Center, Akedori ▇-▇-▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇-▇▇▇▇,
▇▇▇▇▇
23) Malaysia Office Sharing Agreement dated July 31, 1999 between Motorola
Malaysia Sdn. Bhd. and Motorola Semiconductor Sdn. Bhd. regarding: Sixth
floor of Choo Plaza, Lot 6.02, ▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
5
Exhibit 10.2
24) Mexico Office Sharing Agreement dated July 31, 1999 between Motorola de
Mexico, S.A. and SCG Mexico, S.A. de C.V. regarding: 252 sq. meters on 2nd
fl. of building "Torre Provenza" located in Chimalhuacan ▇▇. ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
25) Netherlands Office Sharing Agreement dated July 31, 1999 between Motorola
B.V. and SCG Holding (Netherlands) B.V. regarding: 470 sq. meters at ▇▇
▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
26) Puerto Rico Office Sharing Agreement dated July 31, 1999 between Motorola
de Puerto Rico, Inc. and Semiconductor Components Industries Puerto Rico,
Inc. regarding: 12,928 sq. ft. at El Mundo Building No. 2, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
27) Singapore Sublease dated July 31, 1999 between Motorola Electronics Pte.
Ltd. and Semiconductor Components Industries Singapore Pte. Ltd. regarding:
#01-06, ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇
28) Singapore Office Sharing Agreement dated July 31, 1999 between Motorola
Electronics Pte. Ltd. and Semiconductor Components Industries Singapore,
Pte. Ltd. regarding: 10,9444 sq. ft. at ▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ 64, Mic ▇▇▇▇▇
▇, ▇▇▇▇▇▇▇▇▇
▇▇) ▇▇▇▇▇ Office Sharing Agreement dated July 31, 1999 between Motorola
Espana S.A. and SCG Holding (Netherlands) B.V. Spain Branch regarding:
Offices labeled "B" and "A" on the 9th floor in the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇
▇▇) ▇▇▇▇▇▇▇▇▇▇▇ Sublease dated July 31, 1999 between Motorola, Inc., ▇▇▇▇▇▇
▇▇▇▇▇▇ and SCG Holding (Netherlands) B.V., ▇▇▇▇▇▇ ▇▇▇▇▇▇ regarding: ▇▇▇,
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
31) Taiwan Office Sharing Agreement dated July 31, 1999 between Motorola
Electronics Taiwan, Limited and SCG Hong Kong SAR Limited, Taiwan Branch
regarding: #▇▇▇ ▇▇▇-▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
32) Thailand Office Sharing Agreement dated July 31, 1999 between Motorola
(Thailand) Limited and Semiconductor Components Industries (Thailand)
Limited regarding: 916 sq. meters on 22nd fl. of the Two Pacific Place
Building, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
33) Czechoslovakia Sublease Agreement dated July 30, 1999 between SCG Czech
Design Center, s.r.o. (formerly Rydan, s.r.o.) and Motorola, spol. s.r.o.
regarding: B. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ pod Radhostim, land registry No.
1720
6
SCHEDULE 3.06
DISCLOSED MATTERS
LITIGATION
None
ENVIRONMENTAL
None
7
Exhibit 10.2
SCHEDULE 3.12
SUBSIDIARIES
Subsidiary Equity Interest Status
---------- --------------- ------
Subsidiaries of SCG Holding Corporation
- Semiconductor Components Industries, LLC 100% Loan Party
- SCG (China) Holding Corporation 100% Loan Party
- SCG (Czech) Holding Corporation 100% Loan Party
- SCG (Malaysia SMP) Holding Corporation 100% Loan Party
Subsidiaries of Semiconductor Components Industries, LLC
- SCG Canada Limited 100%
- SCG Mexico, S.A. de C.V. 100%
- SCG (Japan) Ltd. 100%
- SCG Philippines Inc. 100%(1)
- SCG Korea Limited 100%(2)
- SCG Semiconductor Components Industries Singapore Pte Ltd 100%
- SCG Hong Kong SAR Limited 100%
- SCG (Thailand) Limited 100%(3)
- SCG Malaysia Holdings Snd. Bhd. 100%
- SCG Holding (Netherlands) B.V. 100%
- Slovakia Electronics Industries, a.s. 100%
- SCG Czech Design Center s.r.o. 100%
- SCG do Brasil Ltda 100%
- SCG Semiconductor Components Industries Puerto Rico, Inc. 100% Loan Party
- SCG International Development LLC 100% Loan Party
Subsidiary of SCG (China) Holding Corporation
- Leshan Phoenix Semiconductor Company Ltd. 51%
Subsidiary of SCG (Malaysia SMP) Holding Corporation
- Semiconductor Miniature Products (M) Sdn. Bhd. 50%
Subsidiary of SCG Malaysia Holdings Snd. Bhd.
- SGC Industries Malaysia Sdn. Bhd. 100%
Subsidiaries of SCG (Czech) Holding Corporation
-----------------------------
(1) Five shares are issued to directors as director's qualifying shares.
2,250,000 shares are issued and outstanding.
(2) Two shares are to be issued to directors as director's qualifying
shares. 5,000 shares are issued and outstanding.
(3) Seven shares are issued to directors as director's qualifying shares.
1,000 shares are issued and outstanding.
8
Subsidiary Equity Interest Status
---------- --------------- ------
- Terosil a.s. 49.9%
- Tesla Sezam a.s. 49.9%
Subsidiaries of SCG Holding (Netherlands) B.V.
- Semiconductor Components Industries Germany GmbH 100%
- SCG Investments EURL 100%
- SCG France SAS 100%
- SCG Italy S.r.l. 99%(4)
- Semiconductor Components Industries UK Limited 100%
-------------------
(4) SCG International Development LLC owns the remaining 1% interest.
9
SCHEDULE 3.13
INSURANCE
10
Exhibit 10.2
SCHEDULE 6.01
EXISTING INDEBTEDNESS
1) SCG INDUSTRIES MALAYSIA SDN. BHD.
a) Letter of Credit in favor of Tenaga Nasional Berhad for electricity
service in the amount of RM2,226,000 (approximately $585,800) under
the RM8,000,000 Letter of Credit facility, dated September 16, 1998,
between Hongkong Bank Malaysia Bhd. and Motorola Semiconductor Sdn.
Bhd. (presently, SCG Industries Malaysia Sdn. Bhd.), as renewed on
July 5, 1999
b) (i) Letter of Credit in favor of Tenaga Nasional Berhad for
electricity service in the amount of RM1,035,000 (approximately
$272,400) and (ii) Letter of Credit in favor of Custom Department to
guarantee custom duties in the amount of RM150,000 (approximately
$39,500) under the RM12,000,000 Letter of Credit facility, dated
September 16, 1998, between Hongkong Bank Malaysia Bhd. and Motorola
Electronics Sdn. Bhd., as renewed on July 5, 1999 with a reduction in
facility limit to RM1,200,000
c) Letter of Credit in favor of Custom Department to guarantee custom
duties in the amount of RM2,500,000 (approximately $657,900) under the
RM10,000,000 Letter of Credit facility, dated October 6, 1998, between
Citibank Bhd. and Motorola Semiconductor Sdn. Bhd. (presently, SCG
Industries Malaysia Sdn. Bhd.)
11
Exhibit 10.2
SCHEDULE 6.02
EXISTING LIENS
1) (A) Joint Venture Agreement dated July 27, 1992, between Motorola, Inc.
Semiconductor Products Sector and Philips Semiconductors International B.V.
and (B) Technology Cooperation Agreement between Motorola, Inc. and ▇▇▇▇▇▇▇▇
Semiconductors International B.V. dated July 9, 1992, in each case as
amended from time to time, and as amended further by the Assignment and
Amendment Agreement by and among Motorola, Inc., Philips Semiconductors
International B.V., SCG Holding Corporation and Semiconductor Miniature
Products (Malaysia) Sdn. Bhd. Dated August 4, 1999.
2) Joint Venture Contract, dated March 1, 1995, between Leshan Radio Company,
Ltd. and Motorola International Development Corp. ("MIDC");
a) Amendment No. 1 to Joint Venture Contract, dated March 1, 1995, between
Leshan Radio Company, Ltd. and MIDC;
b) Amendment No. 2 to Joint Venture Contract, dated December 11, 1995,
between Leshan Radio Company, Ltd. and MIDC;
c) Amendment No. 3 to Joint Venture Contract, dated April 12, 1996,
between Leshan Radio Company, Ltd. and Motorola (China) Investment
Limited;
d) Amendment No. 4 to Joint Venture Contract, dated January 6, 1998,
between Leshan Radio Company, Ltd. and Motorola (China) Investment
Limited;
e) Amendment No. 5 to Joint Venture Contract, dated June 29, 1998, between
Leshan Radio Company, Ltd. and Motorola (China) Investment Limited; and
f) Memorandum of Understanding, dated July 28, 1999, between Leshan Radio
Company, Ltd., SCG Holding Corporation and Motorola (China) Investment
Limited.
3) The By-laws of Amicus Realty Corporation provide that a stockholder
wishing to sell all or a part of his/its shares of common stock must give
a right of first refusal to the non-selling stockholders for a period of
thirty (30) days before he/it can sell any of such shares.
4) The manufacturing facility owned by SCG Industries Malaysia Sdn. Bhd. is
located on Lots 122 and 123 in Seremban. These lots are separate legal
parcels that are physically continuous. On June 18, 1998, the Seremban Land
Office approved a request by Motorola Semiconductor Sdn. Bhd. (a
predecessor to SCG Industries Malaysia Sdn. Bhd.) to combine the two
parcels of land into a single lot. The land title provides that any future
transfer of the land by SCG Industries Malaysia Sdn. Bhd. must be approved
first by the State Authority, and the land may only be used for the
manufacture of electronic components.
5) Property No. 26574 owned by SCG Industries Malaysia Sdn. Bhd. may only be
used in the electronic products industry.
12
Exhibit 10.2
6) Lot No. P.T. 12463 owned by SCG Industries Malaysia Sdn. Bhd. may not be
transferred, leased or changed without the approval of the State Authority,
and may only be used for an electrical substation.
13
Exhibit 10.2
SCHEDULE 6.04
EXISTING INVESTMENTS
Entity Ownership Interest
------ ------------------
Semiconductor Components - 1 share in SCG Canada Limited
Industries, LLC - 49,999 shares in SCG Mexico, S.A.
de C.V.
- 999 shares in SCG do Brasil Ltda.
- 200 shares in SCG (Japan) Ltd.
- 2,249,995 shares in SCG Philippines Inc.
- 5,000 shares in SCG Korea Limited(5)
- 999 shares in Semiconductor Components
Industries Singapore Pte Ltd
- 999 shares in SCG Hong Kong SAR Limited
- 19,993 shares in SCG (Thailand) Limited
- 999 shares in SCG Malaysia Holdings Sdn.
Bhd.
- 2,000 shares in SCG Holding (Netherlands)
B.V.
- 1,700 shares in Slovakia Electronics
Industries, a.s.
- 2 shares in SCG Czech Design Center S.T.O.
SCG International Development - 1 share in SCG do Brasil Ltda.
LLC - 1 share in SCG Mexico, S.A. de C.V.
- 1 share in SCG Hong Kong SAR Limited
- 1 share in Semiconductor Components
Industries Singapore Pte Ltd
- 1 share in SCG Malaysia Holdings Sdn. Bhd.
- 1 quota with value of 100 Euros in SCG
Italy S.r.l.
SGC (China) Holding Corporation - 51% interest in Leshan Phoenix
Semiconductor Company, Ltd.
SCG (Malaysia SMP) Holding - 30,064,354 shares in Semiconductor Miniature
Corporation Products (M) Sdn. Bhd.
SCG (Czech) Holding Corporation - 54,627 shares in Terosil a.s.
- 298,382 shares in Tesla Sezam a.s.
-------------------
(5) Two shares are to be issued to directors as director's qualifying shares.
14
SCG Philippines Inc. - 400,000 shares in Amicus Realty Corporation
- 4,900 shares in the Philippine Long
Distance Telephone Company
- 1 share in Alabang Country Club Valley
Vista Sports Club, Inc.
- 31,692 shares Manila Electric Company
SCG Mexico, S.A. de C.V. - 1 share in the Santa ▇▇▇▇▇ Golf Club
15
Exhibit 10.2
SCHEDULE 6.10
EXISTING RESTRICTIONS
1) (A) Joint Venture Agreement dated July 27, 1992, between Motorola, Inc.
Semiconductor Products Sector and Philips Semiconductors International
B.V. and (B) Technology Cooperation Agreement between Motorola, Inc. and
▇▇▇▇▇▇▇▇ Semiconductors International B.V. dated July 9, 1992, in each
case as amended from time to time, and as amended further by the Assignment
and Amendment Agreement by and among Motorola, Inc., Philips Semiconductors
International B.V., SCG Holding Corporation and Semiconductor Miniature
Products (Malaysia) Sdn. Bhd. Dated August 4, 1999.
2) Joint Venture Contract, dated March 1, 1995, between Leshan Radio Company,
Ltd. and Motorola International Development Corp. ("MIDC");
a) Amendment No. 1 to Joint Venture Contract, dated March 1, 1995,
between Leshan Radio Company, Ltd. and MIDC;
b) Amendment No. 2 to Joint Venture Contract, dated December 11, 1995,
between Leshan Radio Company, Ltd. and MIDC;
c) Amendment No. 3 to Joint Venture Contract, dated April 12, 1996,
between Leshan Radio Company, Ltd. and Motorola (China) Investment
Limited;
d) Amendment No. 4 to Joint Venture Contract, dated January 6, 1998,
between Leshan Radio Company, Ltd. and Motorola (China) Investment
Limited; and
e) Amendment No. 5 to Joint Venture Contract, dated June 29, 1998,
between Leshan Radio Company, Ltd. and Motorola (China) Investment
Limited; and
f) Memorandum of Understanding, dated July 28, 1999, between Leshan Radio
Company, Ltd., SCG Holding Corporation and Motorola (China) Investment
Limited.
3) The By-laws of Amicus Realty Corporation provide that a stockholder
wishing to sell all or a part of his/its shares of common stock must give a
right of first refusal to the non-selling stockholders for a period of
thirty (30) days before he/it can sell any of such shares.
4) The manufacturing facility owned by SCG Industries Malaysia Sdn. Bhd. is
located on Lots 122 and 123 in Seremban. These lots are separate legal
parcels that are physically continuous. On June 18, 1998, the Seremban Land
Office approved a request by Motorola Semiconductor Sdn. Bhd. (a predecessor
to SCG Industries Malaysia Sdn. Bhd.) to combine the two parcels of land
into a single lot. The land title provides that any future transfer of the
land by SCG Industries Malaysia Sdn. Bhd. must be approved first by the
State Authority, and the land may only be used for the manufacture of
electronic components.
5) Property No. 26574 owned by SCG Industries Malaysia Sdn. Bhd. may only be
used in the electronic products industry.
16
Exhibit 10.2
6) Lot No. P.T. 12463 owned by SCG Industries Malaysia Sdn. Bhd. may not be
transferred, leased or changed without the approval of the State Authority,
and may only be used for an electrical substation.
17