Exhibit 10.1
FIFTH AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
-among-
AEROFLEX INCORPORATED
(f/k/a ARX, Inc.),
AEROFLEX LABORATORIES INCORPORATED,
AEROFLEX LINTEK CORP.,
AEROFLEX SYSTEMS CORP.,
AEROFLEX MIC TECHNOLOGY CORPORATION
(f/k/a MIC Technology Corporation),
VIBRATION MOUNTINGS AND CONTROLS, INC.,
AEROFLEX UTMC MICROELECTRONIC SYSTEMS INC.
(f/k/a UTMC Microelectronic Systems Inc.),
IFR AMERICAS, INC.
and
IFR SYSTEMS, INC.,
as Borrowers,
-and-
JPMORGAN CHASE BANK
(formerly The Chase Manhattan Bank)
and
FLEET NATIONAL BANK
(formerly Fleet Bank, N.A.),
as Banks,
-and-
FLEET NATIONAL BANK
as Administrative Agent
(formerly called the "Administrator"),
and
JPMORGAN CHASE BANK
as Syndication Agent
Dated as of February 14, 2003
TABLE OF CONTENTS
Section Title Page
------- ----- ----
Introduction ....................................................................1
Recitals ....................................................................1
Agreement ....................................................................1
ARTICLE I Definitions.........................................................2
Section 1.01. Certain Defined Terms...............................................2
Section 1.02. Certain Definitions in Other Loan Instruments......................27
Section 1.03. Pronouns...........................................................27
ARTICLE II Amounts and Terms of the Obligations...............................27
Section 2.01. The Revolving Credit Loans.........................................27
Section 2.02. The Term Loans and Mortgage Loans..................................28
Section 2.03. The Notes..........................................................28
Section 2.04. Interest; Optional Fixed Rates; Additional Required Payments.......29
Section 2.05. Voluntary and Mandatory Payments...................................32
Section 2.06. Commitment Fee; Restructure Fee; Administration Fee; Etc...........34
Section 2.07. Letters of Credit..................................................34
Section 2.08. Payments and Applications..........................................38
Section 2.09. Taxes..............................................................40
Section 2.10. Lost or Damaged Notes..............................................40
Section 2.11. Maximum Interest Rate..............................................40
Section 2.12. Obligations and Communications of the Borrowers....................41
Section 2.13. Subrogation and Contribution.......................................43
Section 2.14. Waiver of Impairment of Contribution and Other Rights..............44
Section 2.15. Guaranty of Payment and Expenses...................................44
Section 2.16. Continuing Guaranty, Payment in Accordance with Terms, Etc.........44
Section 2.17. Waivers of Notice, Etc.............................................44
Section 2.18. Agreement Not Affected.............................................45
Section 2.19. Bankruptcy, Reinstatement..........................................46
Section 2.20. Transitional Matters...............................................47
ARTICLE III Representations and Warranties.....................................47
Section 3.01. Organization, Powers, Etc..........................................47
Section 3.02. Authorization, Conflicts and Validity..............................47
Section 3.03. Consents, Etc......................................................48
Section 3.04. Litigation.........................................................48
Section 3.05. Financial Statements...............................................48
Section 3.06. Absence of Defaults and Certain Agreements.........................49
Section 3.07. Compliance with Applicable Laws....................................49
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Section 3.08. Payment of Debts and Taxes.........................................49
Section 3.09. Indebtedness, Credit Support, ERISA Plans, Etc.....................49
Section 3.10. Assets and Collateral..............................................50
Section 3.11. Subsidiaries, Other Ventures, Loans and Other Investments..........53
Section 3.12. Relationship of the Borrowers......................................54
Section 3.13. [Intentionally Omitted]............................................53
Section 3.14. Federal Reserve Regulations, No Restriction on Borrowing, Etc......54
Section 3.15. No Misrepresentation by the Borrowers..............................54
ARTICLE IV Conditions to Lending..............................................55
Section 4.01. Representations and Warranties.....................................55
Section 4.02. No Default.........................................................55
Section 4.03. Borrowers' Bringdown Certificate...................................55
Section 4.04. Delivery of the Loan Instruments and Collateral....................55
Section 4.05. Opinion of Counsel to the Borrowers, Etc...........................56
Section 4.06. Supporting Documents...............................................56
ARTICLE V Affirmative Covenants..............................................56
Section 5.01. Required Notices...................................................57
Section 5.02. Information........................................................58
Section 5.03. Access to Premises, Records and Collateral.........................61
Section 5.04. Existence, Corporate Documents, Powers, Etc........................61
Section 5.05. Compliance with Applicable Laws, Operations........................62
Section 5.06. Payment of Debts, Taxes, Etc.......................................62
Section 5.07. Maintenance and Insurance..........................................62
Section 5.08. Contracts and Other Collateral.....................................63
Section 5.09. Defense of Collateral, Etc.........................................63
Section 5.10. Primary Operating Accounts.........................................64
Section 5.11. Additional Subsidiary Borrowers....................................64
ARTICLE VI Negative Covenants.................................................65
Section 6.01. Certain Financial Requirements.....................................65
Section 6.02. Indebtedness.......................................................66
Section 6.03. Credit Support.....................................................66
Section 6.04. Liens..............................................................67
Section 6.05. Sale or Disposition of Assets, Etc.................................66
Section 6.06. Investments, Loans, Advances, Etc..................................67
Section 6.07. Certain Fundamental Changes........................................67
Section 6.08. Distributions to Shareholders......................................68
Section 6.09. Use of Loans.......................................................68
Section 6.10. ERISA Plans........................................................69
Section 6.11. Transactions with Affiliates.......................................69
Section 6.12. Modification of the Subordinated Debt Documents, Etc...............70
Section 6.13. Modification of the Material Documents.............................70
Section 6.14. [Intentionally Omitted]............................................69
Section 6.15. [Intentionally Omitted]............................................69
Section 6.16. [Intentionally Omitted]............................................69
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Section 6.17. Limitation on Negative Pledges.....................................70
Section 6.18. Limitation on Foreign Assets.......................................70
ARTICLE VII Collateral.........................................................70
Section 7.01. Continuation and Grant of Security Interests.......................70
Section 7.02. Collateral Documentation...........................................72
Section 7.03. Rights of the Borrowers to the Collateral, Etc.....................73
Section 7.04. Partial Releases.................................................. 75
Section 7.05. Litigation Respecting Collateral...................................76
Section 7.06. Power of Attorney..................................................76
Section 7.07. Rights of the Banks to the Collateral, Deficiencies, Etc...........77
Section 7.08. Performance by the Administrative Agent............................79
Section 7.09. Certain Acknowledgments and Waivers by the Borrowers...............80
Section 7.10. Termination of Certain Existing Security Interests.................81
Section 7.11. Termination of Security Interests..................................80
Section 7.12. Pearl River Collateral.............................................81
ARTICLE VIII Defaults and Remedies..............................................82
Section 8.01. Events of Default..................................................82
Section 8.02. Remedies upon Default..............................................84
Section 8.03. Enforcement, Etc...................................................85
Section 8.04. Equitable Relief...................................................86
Section 8.05. Consent to Jurisdiction Waiver of Personal Service, Etc............86
Section 8.06. Waiver of Jury Trial...............................................86
Section 8.07. Waiver of Setoff, Special Damages, Etc.............................87
Section 8.08. No Fiduciary Relationship, Etc.....................................87
Section 8.09. Banks' Right of Setoff, Etc........................................88
ARTICLE IX The Administrative Agent and the Banks.............................88
Section 9.01. Appointment of Administrative Agent................................88
Section 9.02. Undivided Interest and Committed Share. Etc........................89
Section 9.03. Notice of Intent Not to Advance; Letters of Credit.................89
Section 9.04. Collection and Distribution........................................91
Section 9.05. Direct Billing, Fixed Rates, Additional Interest, Etc..............92
Section 9.06. Voting Rights, Etc.................................................93
Section 9.07. Powers and Duties of the Administrative Agent, Etc.................94
Section 9.08. Notices and Knowledge of Events of Default, Etc....................95
Section 9.09. Administration During Certain Events of Default....................96
Section 9.10. Reports and Information............................................97
Section 9.11. Bank's Representations, Warranties and Covenants...................97
Section 9.12. Credit Waivers and Exculpations....................................98
Section 9.13. Reliance on Documents and Experts..................................98
Section 9.14. Status and Liability of the Administrative Agent, Etc..............98
Section 9.15. Bank's Risk of Loss; Expenses;Indemnification......................99
Section 9.16. Invalidation of Distributions.....................................100
Section 9.17. No Waiver of Rights, Independent Transactions, Etc................100
Section 9.18. Communications with the Borrowers.................................100
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Section 9.19. Delinquent Banks..................................................101
Section 9.20. No Third Party Rights.............................................101
Section 9.21. Resignation and Successor Administrative Agent....................102
Section 9.22. Delegation of Duties by Administrative Agent......................102
Section 9.23. Syndication Agent.................................................102
ARTICLE X Miscellaneous.....................................................103
Section 10.01. Notice............................................................103
Section 10.02. Expenses of the Administrative Agent and the Banks................103
Section 10.03. Further Assurances................................................103
Section 10.04. Reliance, Exculpation and Indemnification.........................104
Section 10.05. Interpretation....................................................105
Section 10.06. Section and Other Headings........................................105
Section 10.07. Provisions of the Notes and Collateral Loan Instruments...........105
Section 10.08. Governing Law; Consent to Jurisdiction............................105
Section 10.09. Severability......................................................105
Section 10.10. Survival of Representations, Etc..................................105
Section 10.11. Counterparts......................................................107
Section 10.12. Effective Date....................................................107
Section 10.13. Successors and Assigns; Assignment................................107
Section 10.14. Limits on the Administrative Agent's Ability to Act, Etc..........109
Section 10.15. No Third Party Rights.............................................110
Section 10.16. No Waiver by Action, Etc..........................................110
Section 10.17. Modification, Amendment, Etc......................................110
Section 10.18. Entire Agreement..................................................110
Signatures..........................................................................111
Acknowledgments.....................................................................112
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EXHIBITS
Item Section Title Page
---- ------- ----- ----
Exhibit A 2.03(a) Form of Fifth Amended and Restated Revolving Promissory Note.... A-1
Exhibit B 2.03(c) Form of Mortgage Note........................................... C-1
Exhibit C 4.03 Form of Bringdown Certificate................................... D-1
Exhibit D 5.02(e) Form of Financial Covenants Compliance Certificate.............. E-I-1
Exhibit E 9.02(a) Committed Shares................................................ F-1
Exhibit F 9.04(c) Wire Instructions............................................... G-1
Exhibit G 9.21 (b) Form of Assignment and Assumption Agreement..................... H-1
Exhibit H 10.01 Addresses for Notices and Service............................... I-1
SCHEDULES
Item Title
---- -----
Schedule 3.01(c) Qualifications, Licenses and Registrations
Schedule 3.03 Required Consents
Schedule 3.04 Litigation
Schedule 3.06 Certain Existing Defaults and Adverse Agreements
Schedule 3.07 Certain Violations of Applicable Law
Schedule 3.09(a) Current Indebtedness and Existing Credit Support
Schedule 3.09(c) Existing ERISA Plans
Schedule 3.10(a) Existing Liens and Encumbrances
Schedule 3.10(e) Certain Accounts Receivable
Schedule 3.10(f) Pledged Securities and Subsidiaries
Schedule 3.10(g) Certain Contracts and other General Intangibles
Schedule 3.10(i) Certain Violations of Applicable Law
Schedule 3.11 Subsidiaries, Partnerships and Other Ventures
Schedule 6.02(b) Existing Operating Leases
Schedule 6.06(b) Existing Investments
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Introduction
This Fifth Amended and Restated Loan and Security Agreement, dated as
of February 14, 2003 is by and among Aeroflex Incorporated, a Delaware
corporation formerly known as ARX, Inc., and currently having an address at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Aeroflex"), Aeroflex
Laboratories Incorporated, a Delaware corporation currently having an address at
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Laboratories"), Aeroflex
Lintek Corp., an Ohio corporation currently having an address at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Lintek"), Aeroflex Systems Corp., a Delaware
corporation currently having an address at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("Systems"), Aeroflex MIC Technology Corporation, a Texas corporation
formerly known as MIC Technology Corporation, currently having an address at ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("MIC"), Vibration Mountings and
Controls, Inc., a New York corporation currently having an address at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Vibrations"), Aeroflex UTMC
Microelectronic Systems Inc., a Delaware corporation formerly known as UTMC
Microelectronic Systems Inc. currently having an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("UTMC"), IFR Americas, Inc., a
Delaware corporation currently having an address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ("IFR Americas") and IFR Systems, Inc., a Delaware
corporation currently having an address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ ("IFR") (Aeroflex, Laboratories, Lintek, Systems, MIC, Vibrations,
UTMC, IFR Americas and IFR are referred to herein individually as a "Borrower"
and collectively as the "Borrowers"), JPMorgan Chase Bank, formerly The Chase
Manhattan Bank, a New York state banking corporation formerly known as Chemical
Bank and currently having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("Chase"), Fleet National Bank, formerly Fleet Bank, N.A., a national
banking association currently having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Fleet"), Fleet National Bank, formerly Fleet Bank,
N.A., as Administrative Agent (formerly called the Administrator), a national
banking association currently having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Administrative Agent") and JPMorgan Chase Bank,
formerly The Chase Manhattan Bank, as Syndication Agent, a New York state
banking corporation formerly known as Chemical Bank and currently having an
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Syndication
Agent").
Recitals
The Borrowers, the Banks (as these and the other capitalized terms
used and not otherwise defined in these Recitals are defined in Article I
hereof) and the Administrative Agent are parties to the Existing Loan Agreement
pursuant to which the Banks continued a committed revolving credit facility of
$23,000,000. The Existing Loan Agreement is secured by the Existing Collateral
granted by the Borrowers to the Administrative Agent (for the benefit of all of
the Banks) under the Existing Loan Agreement.
The Borrowers have requested that the Banks extend and increase the
existing facility, replace the Lien on certain Collateral with a "springing
Lien" and modify various financial and other covenants, and the Banks have
agreed to do so.
The Borrowers and the Banks have entered into this Agreement in order
to (a) continue and restructure the existing loan facilities and provide for the
working capital needs of the Borrowers, (b) increase the maximum principal
amount of the Commitment to $50,000,000 ($10,000,000 of which may be requested
as Letters of Credit), (c) reinstate the Mortgage Loans extended under this
Agreement (which Mortgage Loans are secured by the Plainview Mortgage), (d)
confirm and continue the indebtedness, other obligations and security interests
created under the Existing Loan Agreement and other Existing Loan Instruments,
(e) provide for, continue, add to and fully restate (as amended hereby)
the representations, warranties, covenants and other obligations originally made
in or created under the Existing Loan Agreement and other Existing Loan
Instruments, and (f) amend, restate and completely replace the Existing Loan
Agreement, all upon the terms and provisions and subject to the conditions
hereinafter set forth.
Agreement
In consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration (the
receipt and adequacy of which are hereby acknowledged by the parties hereto),
the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Certain Defined Terms. As used in this Agreement, the
following capitalized terms and non-capitalized words and phrases shall have the
meanings respectively assigned to them below, which meanings shall be applicable
equally to the singular and plural forms of the terms so defined:
"Account Receivable" and "Accounts Receivable" of any referenced
person shall respectively mean any and all of the referenced person's accounts
and other rights to receive payments for goods and other products sold or leased
or for services rendered, whether or not earned by performance, recognized by
the referenced person or recorded on its books and records, and irrespective of
whether any such items may be characterized as accounts, chattel paper,
choses-in-action, contract rights, general intangibles, instruments, invoices,
notes or otherwise in any document, by any person or under any Applicable Law.
"Acquiree Adjustment Items" shall mean, as to any period of
determination, without duplication, each of the following: (i) Extraordinary
(defined as per GAAP) gains or losses included in net income (or loss) of
Aeroflex and its Subsidiaries for such period, and (ii) any non-recurring
charges related to write downs of intangible assets (including the value of
in-process research and development related to Acquisitions).
"Acquiree EBITDA" as to any Person subject to an Acquisition by the
Borrowers shall mean, for any period prior to such Person becoming a Subsidiary
of a Borrower: (a) the net income (or loss) of such Person for such period; plus
(b) the sum of any and all amounts that, in the determination of such net income
(or loss) for such period, has been deducted for (i) interest expense, (ii)
total federal, state, local and foreign income and franchise taxes and (iii)
depreciation and amortization, in each case exclusive of all Acquiree Adjustment
Items for such period, all as determined on a consolidated basis in accordance
with GAAP.
"Acquisition" shall mean the acquisition by a Borrower by purchase or
otherwise of the business, assets or Capital Stock of another Person.
"Acquisition Cost" shall mean with respect to any otherwise Permitted
Acquisition, the sum of (without duplication) (i) all cash consideration paid or
agreed to be paid by the acquirer to make such Acquisition (inclusive of
payments by such person of the seller's professional fees and expenses and other
out-of-pocket expenses in connection therewith), plus (ii) the Capital Stock
Cost, plus (iii) the fair market value of all non-cash consideration paid by
such person in connection therewith reasonably determined by the Borrowers, plus
(iv) an amount equal to the principal or stated amount of all seller
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notes and other third party Indebtedness for borrowed money assumed or incurred
by such person in connection therewith, plus (v) the maximum amount of any
purchase price to be paid pursuant to any "earn out" or comparable provision
contained in the purchase or merger agreement or any other material documents
executed in connection with the Acquisition, plus (vi) the deferred portion of
the purchase price or any other costs paid by the Borrowers in connection with
such Acquisition. The principal or stated amount of any liability assumed or
incurred by an acquirer in connection with an Acquisition which is a contingent
liability shall be an amount equal to the stated amount of such liability or, if
the same is not stated, the maximum reasonably anticipated amount payable by
such person in respect thereof as determined by such person in good faith. For
purposes of this definition, if any "earn out" provision does not provide for a
maximum payment, the amount included under subpart (v) of this definition shall
be determined by the Borrowers on a reasonable basis based on the Borrowers'
projections.
"Adjusted LIBO Rate" shall mean, as applicable to any Fixed Rate Loan,
the rate per annum as determined on the basis of the offered rates for deposits
in U.S. dollars, for a period of time comparable to such Fixed Rate Loan which
appears on the Dow ▇▇▇▇▇ Market Service (formerly known as the "Telerate Page"
and now referred to as "Dow ▇▇▇▇▇") page 3750 as of 11:00 A.M. London time on
the day that is two London Business Days preceding the first day of such Fixed
Rate Loan; provided, however, if the rate described above does not appear on the
Dow ▇▇▇▇▇ System on any applicable interest determination date, Adjusted LIBO
Rate shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as may replace
the LIBO Page on that service for the purpose of displaying such rates), as of
11:00 A.M.(London Time), on the day that is two (2) London Business Days prior
to the beginning of such Interest Period. If both the Dow ▇▇▇▇▇ and Reuters
system are unavailable, then the rate for that date will be determined on the
basis of the offered rates for deposits in U.S. dollars for a period of time
comparable to such Fixed Rate Loan which are offered by four major banks in the
London interbank market at approximately 11:00 A.M. London time, on the day that
is two (2) London Business Days preceding the first day of such Fixed Rate Loan
as selected by the Administrative Agent (at the direction of Fleet). The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for the date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time comparable to
such Fixed Rate Loan offered by major banks in New York City at approximately
11:00 A.M. New York City time, on the day that is two London Business Days
preceding the first day of such Fixed Rate Loan. In the event that the
Administrative Agent is unable to obtain any such quotation as provided above,
it will be deemed that Adjusted LIBO Rate pursuant to a Fixed Rate Loan cannot
be determined. In the event that the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to LIBOR deposits of any
Bank, then for any period during which such Reserve Percentage shall apply,
Adjusted LIBO Rate shall be equal to the amount determined above divided by an
amount equal to 1 minus the Reserve Percentage.
"Adjustment Items" shall mean, as to any period of determination,
without duplication, each of the following: (i) Extraordinary (defined as per
GAAP) gains or losses included in net income (or loss) of Aeroflex and its
Subsidiaries for such period, (ii) any non-recurring charges related to write
downs of intangible assets (including the value of in-process research and
development related to Acquisitions), (iii) $15,640,000 in aggregate
restructuring charges incurred in the Borrowers' 2002 fiscal year, allocated
$5,050,000 in the fiscal quarter ended March 31, 2002 and $10,590,000 in the
fiscal quarter ended June 30, 2002 and (iv) the December Restructuring Charge.
"Administrative Agent" shall mean Fleet or such other person as from
time to time may be designated as "Administrative Agent" in accordance with
Section 9.21 hereof.
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"Advance" shall have the meaning assigned to it in Section 2.01(b)
hereof.
"Advance Date" shall mean the actual date of the Advance, if made.
"Aeroflex" shall have the meaning assigned to it in the Introduction.
"Affected Loan" shall have the meaning assigned to it in Section
2.04(i) hereof.
"Affiliate" of a referenced Person shall mean (a) another Person
controlling, controlled by or under common control with such referenced person,
(b) any other Person beneficially owning or controlling ten percent (10%) or
more of the outstanding voting securities or rights or of the interest in the
capital, distributions or profits of the referenced Person, or (c) any director,
officer or other executive or partner, member or joint venturer in the
referenced Person. The terms "control", "controlling", "controlled' and the like
shall mean the direct or indirect possession of the power to direct or cause the
direction of the management or policies of a Person or the disposition of its
assets or properties, whether through ownership, by contract, arrangement or
understanding, or otherwise.
"Agreement" shall mean this Fifth Amended and Restated Loan and
Security Agreement, together with all schedules and exhibits hereto, as the same
may be supplemented, modified, amended, restated or replaced from time to time
in the manner provided herein.
"Applicable Euro Margin Rate" shall mean at all times during which the
Applicable Pricing Level set forth below is in effect, with respect to Revolving
Credit Loans and Mortgage Loans that are Fixed Rate Loans, the percentage set
forth below next to such Applicable Pricing Level under the heading "Applicable
Euro Margin Rate" for the indicated types of Loans corresponding to the
Applicable Pricing Level then applicable:
Applicable Euro Applicable Euro
Margin Rate Margin Rate
for Revolving for Mortgage
Applicable Pricing Level Credit Loans Loans
------------------------ --------------- ---------------
Applicable Pricing Level I 1.00% 1.50%
Applicable Pricing Level II 1.50% 1.50%
Applicable Pricing Level III 1.75% 1.50%
The Applicable Euro Margin Rate shall change from time to time simultaneously
with each change in the Applicable Pricing Level. The Applicable Pricing Level
shall change based upon the certificate (if any) delivered under Section 5.02(e)
hereof containing the required calculation of their Consolidated Funded Debt
Ratio from time to time, which change shall occur (i) in connection with each
certificate delivered with respect to each of the first three fiscal quarters of
the Borrowers, quarterly on the first day of each fiscal quarter of the
Borrowers following the date in which such certificate was delivered (for
example, in the event the Borrowers' Consolidated Funded Debt Ratio is 1.10 to
1.00 at March 31, 2003, that ratio would be calculated in the Financial Covenant
Compliance Certificate delivered in mid-May and that ratio would determine the
Applicable Pricing Level for the quarter commencing July 1, 2003, which in this
case would be Applicable Pricing Level II, as such ratio does not exceed 2.00 to
1.00 but does exceed 1.00 to 1.00) and (ii) in connection with the certificate
delivered with respect to the fourth fiscal quarter of the Borrowers, on the
first day of the first second fiscal quarter of the Borrowers following such
fourth fiscal quarter (for example, in the event the Borrowers' Consolidated
Funded Debt Ratio is 1.10 to 1.00 at June 30, 2003, that ratio would determine
the Applicable Pricing Level for the quarter commencing
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October 1, 2003 (regardless of when such certificate is delivered as long as
delivered in accordance with Section 5.02(e)), which in this case would be
Applicable Pricing Level II, as such ratio does not exceed 2.00 to 1.00 but does
exceed 1.00 to 1.00); provided, however, that irrespective of the Borrowers'
Consolidated Funded Debt Ratio, the Applicable Pricing Level shall be (a)
Applicable Pricing Level II from the Effective Date through March 31, 2003, and
(b) Applicable Pricing Level III for any fiscal quarter following a quarter in
which the Borrowers shall not have timely delivered the required calculation
certificate.
"Applicable Euro Rate" shall mean the rate of interest in effect for a
particular Interest Period with respect to the portion of the Loans subject to
it, which rate shall be equal to the sum of:
(a) the Adjusted LIBO Rate determined (in accordance with the
definition thereof) with respect to the portions of the Loans subject to
it; plus
(b) a rate per annum calculated by the Administrative Agent so as to
reimburse the affected Bank(s) for any of the increased costs and reduced
receipts described in Section 2.04(d), (f) or (i) hereof determined from
time to time by the affected Bank(s) in accordance with those Sections (and
not otherwise paid or reimbursed pursuant to those Sections), including
(without limitation) any capital adequacy assessment (without, however,
limiting any Bank's rights under those Sections if no adjustment or an
incomplete adjustment is made pursuant to this clause); plus
(c) the Applicable Euro Margin Rate for Mortgage Loans in the case of
the Mortgage Loans and the Applicable Euro Margin Rate for Revolving Credit
Loans for all other Loans.
The Applicable Euro Rate shall change from time to time simultaneously with each
corresponding change in the applicable Reserve Percentage (through a change in
the Adjusted LIBO Rate) or Applicable Euro Margin Rate, including, without
limitation, changes within Interest Periods.
"Applicable Law" shall mean any applicable law, including (without
limitation) any: (a) federal, state, territorial, county. municipal or other
governmental or quasi-governmental law, statute, ordinance, rule, regulation,
requirement or use or disposal classification or restriction, whether domestic
or foreign; (b) judicial, administrative or other governmental or
quasi-governmental order, injunction, writ, judgment, decree, ruling,
interpretation, finding or other directive, whether domestic or foreign; (c)
common law or other legal or quasi-legal precedent; (d) arbitrator's, mediator's
or referee's decision, finding, award or recommendation; or (e) charter, rule,
regulation or other organizational or governance document of any national
securities exchange or market or other self-regulatory organization.
"Applicable Percentage" shall mean at all times during which the
Applicable Pricing Level set forth below is in effect, with respect to the
Commitment Fee, the percentage set forth below next to such Applicable Pricing
Level under the heading "Applicable Percentage" corresponding to the Applicable
Pricing Level then applicable:
Applicable Pricing Level Applicable Percentage
------------------------ ---------------------
Applicable Pricing Level I 0.25%
Applicable Pricing Level II 0.25%
Applicable Pricing Level III 0.30%
-5-
The Applicable Percentage shall change from time to time simultaneously with
each change in the Applicable Pricing Level. The Applicable Pricing Level shall
change based upon the certificate (if any) delivered under Section 5.02(e)
hereof containing the required calculation of their Consolidated Funded Debt
Ratio from time to time, which change shall occur (i) in connection with each
certificate delivered with respect to each of the first three fiscal quarters of
the Borrowers, quarterly on the first day of each fiscal quarter of the
Borrowers following the date in which such certificate was delivered (for
example, in the event the Borrowers' Consolidated Funded Debt Ratio is 1.10 to
1.00 at March 31, 2003, that ratio would be calculated in the Financial Covenant
Compliance Certificate delivered in mid-May and that ratio would determine the
Applicable Pricing Level for the quarter commencing July 1, 2003, which in this
case would be Applicable Pricing Level II, as such ratio does not exceed 2.00 to
1.00 but does exceed 1.00 to 1.00) and (ii) in connection with the certificate
delivered with respect to the fourth fiscal quarter of the Borrowers, on the
first day of the first second fiscal quarter of the Borrowers following such
fourth fiscal quarter (for example, in the event the Borrowers' Consolidated
Funded Debt Ratio is 1.10 to 1.00 at June 30, 2003, that ratio would determine
the Applicable Pricing Level for the quarter commencing October 1, 2003
(regardless of when such certificate is delivered as long as delivered in
accordance with Section 5.02(e)), which in this case would be Applicable Pricing
Level II, as such ratio does not exceed 2.00 to 1.00 but does exceed 1.00 to
1.00); provided, however, that irrespective of the Borrowers' Consolidated
Funded Debt Ratio, the Applicable Pricing Level shall be (a) Applicable Pricing
Level II from the Effective Date through March 31, 2003, and (b) Applicable
Pricing Level III for any fiscal quarter following a quarter in which the
Borrowers shall not have timely delivered the required calculation certificate.
"Applicable Pricing Level" shall mean Applicable Pricing Level I,
Applicable Pricing Level II or Applicable Pricing Level III, as applicable.
"Applicable Pricing Level I" shall mean the applicable Pricing Level
at any time when the Borrowers' Consolidated Funded Debt Ratio is less than 1.00
to 1.00.
"Applicable Pricing Level II" shall mean the applicable Pricing Level
at any time when the Borrowers' Consolidated Funded Debt Ratio is greater than
or equal to 1.00 to 1.00, but less than 2.00 to 1.00.
"Applicable Pricing Level III" shall mean the applicable Pricing Level
at any time when the Borrowers' Consolidated Funded Debt Ratio is greater than
or equal to 2.00 to 1.00.
"Assignee" shall have the meaning assigned to it in Section 10.13(b)
hereof.
"Assignment Agreement" shall have the meaning assigned to it in
Section 10.13(b) hereof.
"Assignor" shall have the meaning assigned to it in Section 10.13(b)
hereof.
"Authority" shall mean any governmental or quasi-governmental
authority, including (without limitation) any federal, state, territorial,
county, municipal or other governmental or quasi-governmental agency, board,
branch, bureau, commission, court, department or other instrumentality or
political unit or subdivision, whether domestic or foreign, or any national
securities exchange or market or other self-regulatory organization.
"Bank" and "Banks" shall respectively mean any one or more of Chase
and Fleet, the Administrative Agent in its capacity as Administrative Agent or a
Bank, and any Assignee, but shall
-6-
exclude any Assignor following its assignment of all of its rights, powers,
Privileges, remedies and interests in accordance with (and to the extent
permitted by) this Agreement.
"Bank Subordinate Interest" shall have the meaning assigned to it in
Section 7.12 hereof.
"Base Rate" shall mean, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Rate in effect on such day plus 1/2 of 1%. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively and shall take effect immediately without notice or
demand of any kind.
"Base Rate Loans" shall mean Loans hereunder that bear interest at a
rate of interest determined by reference to the Base Rate.
"Beginning Effective Net Worth Amount" shall mean $165,000,000.
"books", "records" and "books and records" of a referenced person each
shall mean all of the referenced person's books and records, including (without
limitation) financial books, ledgers and other records, corporate books and
minutes, stock books and transfer ledgers, records, schedules and other evidence
of sales, Inventory and Accounts Receivable and accounts payable, rent rolls,
tax returns, registration reports and other filings with governmental
authorities, leases, contracts and other agreements, insurance policies,
correspondence, invoices, canceled checks and check registers, and other
documents and papers, whether on paper or film, in electronic storage or in some
other storage medium, and whether or not in the possession of such person.
"Borrower" and "Borrowers" shall have the meanings respectively
assigned to them in the Introduction.
"Breakage Event" shall have the meaning assigned to it in Section
2.04(i) hereof.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required to close under the laws of the State of New York and, if the applicable
day relates to a Fixed Rate Loan or an Interest Period for a Fixed Rate Loan,
"Business Day" means the day on which dealings in Dollar deposits are also
carried in the London interbank market and banks are open for business in London
and to the extent "Business Day" is used in the context of any other specific
city it shall mean any date on which commercial banks are open for business in
that city.
"Capital Expenditures" shall mean for any period, expenditures for any
fixed assets or improvements and replacements, substitutions or additions
thereto which would be treated as capital expenditures in accordance with GAAP.
"Capital Stock" shall mean, as to any person, all shares, interests,
partnership interests, limited liability company interests, participations,
rights in or other equivalents (however designated) of such person's equity
(however designated) and any rights, warrants or options exchangeable for or
convertible into such shares, interests, participations, rights or other equity.
"Capital Stock Cost" shall mean the fair market value of all Capital
Stock issued by Aeroflex in connection with an Acquisition, such fair market
value to be based on the publicly reported fair market value at the time of
execution and delivery of definitive agreements for such Acquisition.
-7-
"Change of Control" shall mean if any "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall have become
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Voting Shares entitled to exercise more than 30% of the total power of all
outstanding Voting Shares of Aeroflex or any Borrower (including any Voting
Shares which are not then outstanding of which such person or group is deemed
the beneficial owner).
"Chase" shall have the meaning assigned to it in the Introduction.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provisions of any Applicable Law in any foreign jurisdiction,
and as the same may be supplemented, modified, amended, restated or replaced
from time to time, and the rules and regulations promulgated thereunder, or any
corresponding or succeeding provisions of Applicable Law.
"Collateral" shall have the meaning assigned to it in Section 7.01(a)
hereof.
"Commitment" shall mean the commitment to make revolving credit loans
to the Borrowers by the Banks, collectively, in the aggregate principal amount
at any one time outstanding not to exceed the remainder of (i) $50,000,000 minus
(ii) the sum of all voluntary reductions made under Section 2.01(c) hereof (but
with the commitment of any particular Bank limited solely to its respective
Committed Share of the Commitment), as such amount may be further reduced from
time to time or terminated pursuant to the terms of this Agreement.
"Commitment Fee" shall have the meaning assigned to it in Section
2.06(a) hereof.
"Committed Share" shall have the meaning assigned to it in Section
9.02(a) hereof.
"Consolidated Adjusted EBITDA" shall mean, for any period,
Consolidated EBITDA for such period, adjusted on a pro forma basis to include
any and all Acquiree EBITDA.
"Consolidated EBT" shall mean for any period: (a) the net income (or
loss) of Aeroflex and its Subsidiaries for such period; plus (b) the sum of any
and all amounts that, in the determination of such net income (or loss) for such
period, has been deducted for total federal, state, local and foreign income and
franchise taxes, in each case exclusive of all Adjustment Items for such period,
all as determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of
Consolidated EBT, plus the sum of any and all amounts that, in the determination
of such Consolidated EBT for such period, has been deducted for (i) Consolidated
Net Interest Expense and (ii) depreciation and amortization, all as determined
for Aeroflex and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Effective Net Worth" shall mean, as at any date of
determination, the sum of: (a) the Consolidated Tangible Net Worth of Aeroflex
and its Subsidiaries at such date; plus (b) the aggregate principal balance
outstanding under their Consolidated Subordinated Indebtedness at such date.
"Consolidated Fixed Charge Coverage Ratio" shall mean, with respect to
Aeroflex and its Subsidiaries on a consolidated basis for the applicable period
of determination, the ratio of (A) Consolidated EBITDA for the rolling four
quarter period ending at such date of determination, plus net rental expenses
for the rolling four quarter period ending as at the last day of such period of
determination, minus federal, state, local and foreign income taxes actually
paid during the rolling four quarter period ending as at the last day of such
period of determination, minus the aggregate Consolidated Unfunded Capital
Expenditures made during the rolling four quarter period ending as at the last
day of
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such period of determination to (B) Consolidated Net Interest Expense, plus net
rental expense, each for the rolling four quarter period ending as at the last
day of such period of determination, plus the Debt Amount as at the last day of
such period of determination.
"Consolidated Funded Debt Ratio" shall mean, as at any date of
determination, the ratio of: (a) the Consolidated Senior Funded Indebtedness of
Aeroflex and its Subsidiaries at such date to (b) (i) the Consolidated Adjusted
EBITDA of Aeroflex and its Subsidiaries for the rolling four quarter period
ending at such date, minus (ii) the aggregate Consolidated Unfunded Capital
Expenditures made by Aeroflex and its Subsidiaries during the rolling four
quarter period ending at such date of determination.
"Consolidated Net Interest Expense" shall mean, for any period, the
remainder of: (a) the consolidated total interest expense of Aeroflex and its
Subsidiaries accrued for such period (including the interest component of
capitalized leases), including (without limitation) all commissions, discounts
and other fees and charges owed with respect to letters of credit and net costs
under interest rate contracts, minus (b) the total interest income accrued for
such period, plus dividends paid on account of money market Investments for such
period, all as determined on a consolidated basis in accordance with GAAP.
"Consolidated Quick Ratio" shall mean, as at any date of
determination, the ratio of: (a) the consolidated current assets of Aeroflex and
its Subsidiaries at such date consisting of cash, marketable securities,
Accounts Receivable and Gold Inventory (excluding any and all of the foregoing
to the extent they are in any way encumbered (other than Liens in favor or the
Administrative Agent), restricted, sold, assigned and/or transferred) to (b) the
sum of consolidated current liabilities of Aeroflex and its Subsidiaries at such
date (excluding deferred taxes from current liabilities for this purpose), plus,
without duplication, the principal balance of outstanding Revolving Credit Loans
on such date, plus the aggregate Letter of Credit Amount on such date; all as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Funded Indebtedness" shall mean any and all
Indebtedness of Aeroflex and its Subsidiaries with original maturities of one
year or more outstanding as at any date of determination, including all current
portions, excluding, however, from such Indebtedness (a) Consolidated
Subordinated Indebtedness, and (b) any Indebtedness secured fully and only by
cash and cash equivalents, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Subordinated Indebtedness" shall mean any and all
Permitted Subordinated Debt of Aeroflex and its Subsidiaries, all as
consolidated in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, as at any date of
determination, the remainder of (a) the total assets of Aeroflex and its
Subsidiaries at such date, excluding goodwill and patents (however classified)
and all other assets and properties properly classified as "intangible assets"
under GAAP, minus (b) the sum of the aggregate amount of the Consolidated Total
Liabilities of Aeroflex and its Subsidiaries at such date, all as determined on
a consolidated basis in accordance with GAAP.
"Consolidated Total Liabilities" shall mean, as at any date of
determination, the sum for Aeroflex and its Subsidiaries of all of their
obligations that would be included in determining their total liabilities
(including any liabilities for discontinued operations) at such date as shown on
the liabilities side of their balance sheet, all as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Unfunded Capital Expenditures" shall mean Capital
Expenditures during the period of determination that have not been financed by
any Borrower (for purposes of this definition, Capital Expenditures shall not be
deemed to have been financed if the sole source of financing thereof are
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Revolving Credit Loans), all determined for Aeroflex and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated Unsubordinated Liabilities" shall mean, as at any date
of determination, the remainder of: (a) the Consolidated Total Liabilities of
Aeroflex and its Subsidiaries at such date; minus (b) the aggregate principal
balance outstanding under the Consolidated Subordinated Indebtedness of Aeroflex
and its Subsidiaries at such date.
"Contract" and "Contracts" shall respectively mean any one or more of
the procurement or purchase contracts, purchase orders or similar agreements or
arrangements respecting the sale or provision of Inventory or other goods or
services by any Borrower, as executed and delivered from time to time, and as
the same may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.
"Corporate Document" and "Corporate Documents" shall respectively mean
any and all of the following: (a) the Certificate of Incorporation or By-Laws
(or similar organizational documents for Borrowers that are not corporations) of
any Borrower and (b) any resolution with continuing effect adopted by the Board
of Directors (or similar governing bodies for Borrowers that are not
corporations), any management or other committee of directors, or the
shareholders (or similar owners of the Capital Stock for Borrowers that are not
corporations) of any Borrower; as each has been and hereafter may be
supplemented, modified, amended, restated or replaced from time to time.
"Credit Support" by a referenced person shall respectively mean any
and all agreements, arrangements and obligations whereby the referenced person
directly or indirectly has guarantied, assumed or otherwise become liable or
responsible for the Indebtedness or other obligation of any other person,
whether contingent or otherwise, and whether or not recourse is limited to
specified amounts or any asset or property of the referenced person, including
(without limitation): (a) any guaranty or other assurance of payment or
performance of any obligation of any other person; (b) any indemnification, hold
harmless or similar agreement, arrangement or obligation respecting any
obligation of any other person to the extent same is similar to a guaranty; (c)
any pledge, hypothecation or other encumbrance, or any loan or other
availability, of any asset or property of the referenced person in respect of
any obligation of any other person; or (d) any agreement, arrangement or other
obligation (i) to purchase, repurchase or otherwise acquire any obligation of
any other person, (ii) to purchase, repurchase, sell, lease or otherwise provide
any securities or other assets and properties in connection with any obligation
of any other person, (iii) to provide any discounts, services or other
accommodations in connection with any obligation of any other person, (iv) to
make any capital contribution, advance or loan in connection with the obligation
of any other person, or (v) to otherwise enhance, support, repay or discharge
any obligation of any other person; excluding, however, any endorsement of a
negotiable instrument for collection or deposit in the ordinary course of the
referenced person's business.
"Current Indebtedness" shall mean the Indebtedness and obligations
described on Schedule 3.09(a) hereto.
"Custody Document" shall mean any instrument, indenture, agreement,
policy or other document or any statutory equivalent respecting the investment
or custody of any of the Pledged Securities with or by any holder thereof, in
each case whether now or hereafter existing, and irrespective of whether reduced
to writing, and as each has been and hereafter may be supplemented, renewed,
extended, modified, amended or restated from time to time.
"Debt Amount" shall mean, with respect to any period of determination,
that portion of Long Term Debt to be paid during the four quarter period
immediately following such date of
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determination; provided that for any calculation of the Consolidated Fixed
Charge Coverage Ratio for any period occurring during the twelve month period
immediately preceding the last day of the Revolving Credit Period, "Debt Amount"
shall exclude 75% of the Commitment (but solely to the extent the amount of such
Commitment would otherwise be included in "Debt Amount" for such period of
determination).
"December Restructuring Charge" shall mean a restructuring charge of
$2,627,000 incurred in the fiscal quarter ended December 31, 2002 relating to
certain discontinued business operations of the Borrowers.
"Default" shall mean any event that, with the giving of notice or the
passage of time (or both), would constitute an Event of Default.
"Default Declaration" shall mean any notice from the Majority Banks to
the Borrowers declaring that an Event of Default has occurred and is continuing
(as contemplated in Section 9.08(b) hereof), which may be given by the
Administrative Agent if so directed by the Majority Banks.
"Default Rate" shall mean, at any time, a rate of interest equal to 2%
per annum plus the highest rate that would then be applicable to Base Rate
Loans.
"Delinquent Bank" shall have the meaning assigned to it in Section
9.19 hereof.
"Disposition" shall mean, with respect to any Borrower, any sale,
lease, sale/leaseback, sublease, transfer, exchange or other disposition of any
part of its assets or properties (individually or in a series of transactions).
"Domestic Subsidiary" shall mean a Subsidiary of Aeroflex organized
under the laws of the United States or a state thereof.
"Effective Date" shall have the meaning assigned to it in Section
10.12 hereof.
"Eligible Assignee" shall mean any: (a) commercial bank that is
organized under the laws of the United States, or any state thereof. and has
total assets of not less than $1,000,000,000; (b) savings and loan association
or savings bank that is organized under the laws of the United States, or any
state thereof, and has total assets of not less than $500,000,000; (c)
commercial bank that (i) is organized under the laws of the Cayman Islands, or
under the laws of any country, or any political subdivision of any country, that
is a member of the Organization for Economic Cooperation and Development
("OECD") or that has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to any
Borrower, and (ii) has total assets of not less than $1,000,000,000; provided
that such bank is acting through a branch or agency located in the United
States, in the country in which it is organized or in another country described
in this clause (c); (d) central bank of any country that is a member of the
OECD; and (e) finance company, insurance company, mutual fund or other financial
institution or entity (whether a corporation, partnership or other entity) that
is engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business, and has total assets in excess of
$500,000,000.
"Environmental Claim" shall mean any: (a) responsibility, liability or
unlawful act or omission under any Environmental Law (whether alleged or
otherwise); (b) tortious act or omission or breach of contract pertaining to any
Environmental Substance (whether alleged or otherwise); or (c) other violation
or claim under any Environmental Law or in respect of any Environmental
Substance (whether alleged or otherwise).
-11-
"Environmental Law" and "Environmental Laws" shall respectively mean
any one or more of the Applicable Laws pertaining to any: (a) emission,
discharge, release, runoff, disposal or presence in the environment of any
Environmental Substance; (b) cleanup, containment, manufacturing, treatment,
handling, transportation, storage or sale of or other activity pertaining to any
Environmental Substance; or (c) other peril to public or occupational health or
safety, or to the environment that may be posed by an Environmental Substance.
"Environmental Substance" shall mean any toxic substance, hazardous
material, contaminant, waste, pollutant or other similar product or substance
reasonably determined to pose a threat to public or occupational health or
safety or to the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and as the same may be supplemented, modified amended,
restated or replaced from time to time, and the rules and regulations
promulgated thereunder, or any corresponding or succeeding provisions of
Applicable Law.
"ERISA Affiliate" and "ERISA Affiliates" shall respectively mean any
one or more of any: (a) Subsidiary of any Borrower; and (b) other trade,
business, person or persons that together with any Borrower would be deemed to
be a single employer within the meaning of Section 4001 of ERISA.
"ERISA Effect" shall mean any material and adverse effect on (a) any
Plan, (b) the assets and properties of any Plan, or (c) any funding or other
liability of any one or more of the Borrowers or any ERISA Affiliate in respect
of any Plan (individually or in the aggregate).
"ERISA Event" shall mean any: (a) "accumulated funding deficiency"
(whether or not waived), "prohibited transaction", "reportable event" (other
than any event for which the 30-day notice requirement has been waived by
regulation), "disqualification", "partial withdrawal" or "withdrawal", "partial
termination" or "termination", "insolvency", "reorganization", or the imposition
of any "penalty" or "withdrawal liability" in respect of any Plan under (and as
such words and phrases are defined in) ERISA or the Code, as applicable; (b)
other violation of ERISA, the Code or any other Applicable Law in respect of any
Plan (whether alleged or otherwise); (c) supplement or amendment to or
modification or restatement of any Plan that has had or could have an ERISA
Effect; or (d) imposition, increase or other adverse change in any funding
obligation or other liability of any one or more of the Borrowers or any ERISA
Affiliate in respect of any Plan or to the Pension Benefit Guaranty Corporation
(individually or in the aggregate).
"event" shall include (without limitation) any event, occurrence,
circumstance, condition or state of facts.
"Event of Default" shall have the meaning assigned to it in Section
8.01 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Collateral" shall mean all of the assets and properties of
the Borrowers pledged pursuant to the Existing Loan Agreement (as more
particularly described in Section 7.01 of the Existing Loan Agreement), in each
case whenever acquired or created, together with the products and proceeds
thereof, all payments and other distributions with respect thereto and any and
all renewals, substitutions, modifications and extensions of any or all of the
foregoing.
"Existing Loan Agreement" shall mean the Fourth Amended and Restated
Loan and Security Agreement among the Borrowers, Chase, Fleet and the
Administrative Agent dated as of
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February 25, 1999, as amended (which in turn had amended, restated and
completely replaced the "Existing Loan Agreement", as defined therein).
"Existing Loan Instruments" shall mean the Existing Loan Agreement,
the Existing Notes, the various mortgages, assignments, instruments and other
documents creating or evidencing the interest of the Administrative Agent or any
other Bank in any collateral securing or intended to secure anyone's obligations
under any of the foregoing, and all waivers, consents, agreements, reports,
statements, certificates, schedules and other documents executed by the
requisite person(s) pursuant to or in connection with any of the foregoing and
accepted or delivered by the Administrative Agent thereunder prior to the
Effective Date of this Agreement.
"Existing Note" and "Existing Notes" shall respectively mean any one
or more of the Fifth Amended and Restated Revolving Promissory Notes dated
February 25, 1999, issued by the Borrowers to each of (a) Chase in the original
principal amount of $9,200,000, and (b) Fleet in the original principal amount
of $13,800,000 (which amended, extended, restated and completely replaced the
"Existing Notes" as defined therein).
"Existing Obligations" shall mean any and all of the "Obligations"
under (and as defined in) the Existing Loan Agreement, together with any and all
of the Borrowers' other obligations under the Existing Notes and Existing Loan
Instruments.
"Extensions of Credit" shall mean, collectively, the Loans and the
Letters of Credit and any participations therein pursuant to Section 2.07
hereof.
"Facility Fee" shall have the meaning assigned to it in Section
2.06(b) hereof.
"Federal Funds Rate" shall mean a fluctuating annual rate of interest
in effect from time to time that for any day shall be equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fixed Rate" shall mean the rate of interest in effect for a
particular Interest Period with respect to the portion of the Loans subject to
such rate, which rate shall be equal to the Applicable Euro Rate as selected in
accordance with Sections 2.04(b) and (c) hereof. The Fixed Rate shall change
from time to time simultaneously with each corresponding change in the
Applicable Euro Margin Rate or applicable Reserve Percentage, including, without
limitation, changes within Interest Periods.
"Fixed Rate Loan" and "Fixed Rate Loans" shall respectively mean any
and all portions of the Loans bearing interest at any Fixed Rate(s).
"Fleet" shall have the meaning assigned to it in the Introduction.
"Foreign Subsidiaries" shall mean any Subsidiary of Aeroflex, other
than a Domestic Subsidiary.
"Fronting Bank" shall mean Fleet National Bank in its capacity as the
issuer of Letters of Credit.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America consistent with those applied in the preparation of the
financial statements referred to in Section 3.05 hereof.
"Gold Inventory" shall mean all inventory consisting of gold used as
raw material by MIC.
"Guaranty" shall have the meaning assigned to it in Section 2.15
hereof.
"hereunder", "herein", "hereof" and other words and phrases of like
import shall refer to each and even term and provision of this Agreement.
"IFR" shall mean IFR Systems, Inc., a Delaware corporation currently
having an address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
"IFR Americas" shall mean IFR Americas, Inc., a Delaware corporation
currently having an address at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
"IFR Debt" shall mean Indebtedness in the principal amount of not more
than $15,000,000 owing by one or more of the Borrowers to IFR Systems Ltd.
and/or IFR Ltd., each a Subsidiary of Aeroflex and each a corporation organized
under the laws of the United Kingdom.
"improvements" shall mean all land development, construction and other
improvements to real estate, whether planned, authorized, under construction or
completed, and whether or not enhancing the value of the referenced real estate,
including (without limitation) all demolitions, excavations, fills and other
site work, roads and sidewalks, water, sewer and utility lines, buildings and
other structures, and all fixtures, furnishings and equipment located on or used
in connection with the referenced real estate, whether or not affixed thereto.
"Indebtedness" of any referenced person shall mean any and all
obligations of the referenced person: (a) for borrowed money, however evidenced;
(b) evidenced by any promissory note, bond, debenture or other similar written
obligation to pay money; (c) for the deferred purchase price of any asset,
property or service; (d) under any interest rate protection, foreign currency,
exchange, or other interest or exchange rate swap or hedging agreement or
arrangement; (e) in respect of any letter of credit or banker's acceptance; (f)
to reimburse or compensate any other person respecting any provisional or other
temporary credit in advance of collection for deposits of any checks,
instruments or other documents made by the referenced person or any of its
affiliates; (g) as lessee under leases that have been capitalized or should be
capitalized under GAAP; or (h) respecting any preferred stock issued by the
referenced person bearing any mandatory dividend, interest or other return, or
subject to any repurchase or redemption, that is payable in cash or any other
property (other than as payable only with common stock or like preferred stock)
(other than any preferred stock that may be issued pursuant to the Rights
Agreement); provided, however, that in the case of Indebtedness of a Borrower,
Indebtedness shall not include obligations incurred in the ordinary course of
business that are owed by one Borrower to another. In the event the referenced
person is a corporation with one or more Subsidiaries, the term "Indebtedness"
shall mean the Indebtedness of all of them consolidated in accordance with GAAP
consistently applied as of the date of calculation.
"Independent Transaction" shall have the meaning assigned to it in
Section 9.17(b) hereof.
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"International Standby Practice" means the "International Standby
Practices (ISP98)," as promulgated by the Institute of International Banking Law
& Practice, Inc., approved by the International Chamber of Commerce ("ICC")
Commission on Banking Technique and Practice, and issued by the ICC as
Publication No. 590, or any successor code of standby letter of credit practices
among banks adopted by the Fronting Bank as a standby letter of credit issuer in
the ordinary course of its business and in effect at the time of reference.
"Interest Payment Date" shall mean (a) with respect to any Base Rate
Loan, the last day of each month and (b) with respect to any Fixed Rate Loan,
the last day of the Interest Period applicable to the borrowing of which such
Fixed Rate Loan is a part and, in the case of a Fixed Rate Loan 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.
"Interest Period" shall mean the period during which a Fixed Rate is
applicable to a portion of the Loans, which period shall be as determined
pursuant to Sections 2.04(b) and (c) hereof.
"Inventory" shall mean any and all goods, merchandise and other items
held by the referenced person (or on its behalf) for manufacture, sale, lease or
other delivery or consumption, wherever located, whether raw materials,
supplies, parts or other components, work-in-progress, finished goods, returned
goods or otherwise.
"Investment" shall mean, with respect to any referenced person, any:
(a) stock, warrant, option, put, call, bond, debenture, commercial paper,
governmental obligation, note, certificate of deposit, partnership interest
(general or limited), limited liability company membership interest, trust
interest, investment contract, commodity (other than Inventory) or future, any
foreign currency or other money, any bank, brokerage, trading or other account,
or other security, investment property, financial asset, investment or interest
or other obligation or right to acquire any such item; (b) direct or indirect
capital or other equity contribution to any other Person made or committed to by
the referenced person; (c) an Acquisition by the referenced Person; (d)
agreement or arrangement by or with the referenced Person for the purpose of
entering into any partnership or joint venture with or providing funds or credit
to or for the benefit of any other Person; or (e) direct or indirect loan,
advance or Credit Support by the referenced person to or for the benefit of any
other person, excluding, however, any: (i) current trade liability (other than
any Indebtedness) owed to the referenced Person by any other Person that arose
from the purchase or sale by the referenced person of goods or services in the
ordinary course of its business, or (ii) prepayment of expenses (A) where such
expenses are being incurred by the referenced Person in the ordinary course of
its business, (B) such expenses are of a type customarily prepaid, and (C) such
prepayment is in a commercially reasonable amount for a commercially reasonable
period. The amount of any Investment shall be the original cost of such
Investment, plus the cost of all additions thereto, and minus the amount of any
return of capital or principal to the extent such return is in cash with respect
to such Investment, without, however, any adjustments for increases or decreases
in value or write-ups, write-downs or write-offs with respect to such
Investment.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, or any corresponding provisions of any Applicable Law in any
foreign jurisdiction, and as the same may be supplemented, modified, amended or
restated from time to time, and the rules and regulations promulgated
thereunder, or any corresponding or succeeding provisions of Applicable Law.
"Issuance Date" shall mean either (i) the date duly requested by the
Borrowers under Section 2.07(b) for the issuance, renewal or extension of a
particular Letter of Credit, or such later date as may be proposed by the
Administrative Agent, or (ii) the actual date of issuance, renewal or extension
of the Letter of Credit if issued.
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"Laboratories" shall have the meaning assigned to it in the
Introduction.
"Letter of Credit" and "Letters of Credit" shall mean respectively any
one or more of the standby letters of credit issued for the account of any one
or more of the Borrowers pursuant to Section 2.07 hereof (including any and all
Letters of Credit issued pursuant to the Existing Loan Agreement that remain
outstanding on the Effective Date), whether issued by or through the actions of
one or more of the Banks, as the same may be transferred, renewed, modified,
amended, restated or replaced from time to time in the manner provided therein.
"Letter of Credit Advance" shall have the meaning assigned to it in
Section 2.07(d) hereof.
"Letter of Credit Amount" as of a particular date shall mean the sum
of (a) the aggregate issued but unadvanced face amount of all Letters of Credit
then outstanding under this Agreement; plus (b) the principal balance of the
Letter of Credit Advances then outstanding and not converted to Revolving Credit
Loans.
"Letter of Credit Fee" shall have the meaning assigned to it in
Section 2.07(e) hereof.
"Letter of Credit Participation" shall have the meaning assigned to it
in Section 9.03(b) hereof.
"liabilities" of a person shall mean all items (other than
shareholders' equity) included in the liabilities section of a balance sheet of
that person prepared in accordance with GAAP consistently applied as of the date
of calculation, including (without limitation): (a) all Indebtedness secured by
any Lien upon or in property owned by that person, to the extent attributable to
that person's interest in the property, even though that person has not assumed
or become liable for the payment of the Indebtedness; and (b) the aggregate
amount of the reserves established or that should have been established on the
books of that person in accordance with GAAP in respect of contingent
liabilities and other contingencies (except reserves that are properly treated
as deductions from assets). In the event the referenced person is a corporation
with one or more Subsidiaries, the term "liabilities" shall mean the liabilities
of all of them consolidated in accordance with GAAP consistently applied as of
the date of calculation.
"Lien" and "Liens" shall respectively refer to any one or more of the
following to which the referenced or relevant person is a party or by which the
referenced or relevant person, any of its assets or properties or any other
referenced assets or properties may be bound or subject: (a) any assignment,
pledge, mortgage, hypothecation or security interest (irrespective of whether
the referenced person is personally obligated with respect to any obligation
thereby secured); (b) any filed financing statement (other than those for which
the referenced or relevant person is the secured party or the lessee under a
true operating lease); (c) any consignment, finance lease, conditional sale
contract or other title retention agreement; (d) any assignment, pledge or other
transfer, restriction or encumbrance of any right to receive any income or other
distributions or proceeds; (e) any lien, charge, claim or other encumbrance
arising under any Applicable Law, whether in favor of an Authority or otherwise,
including (without limitation) liens for taxes, assessments and other
governmental charges and liens of mechanics, carriers, warehouses, suppliers and
laborers; (f) any restrictive covenant, lease, license, right of use, possession
or first refusal, infringement, community property or other joint ownership
interest, limitation or restriction on use or transfer, exception to title, or
other limitation or restriction on the extent, exercise or enforcement of any
right or interest respecting any asset or property; (g) with respect to any real
estate, any easement, right-of-way, servitude, encroachment, restrictive
covenant, reservation, or other exception to title; (h) any covenant or
agreement with any other person to a "Negative Pledge" (i.e., that the
referenced or relevant person will not (A) do any one or more of the things
specified in the preceding clauses or (B) sell, lease,
-16-
sublease, transfer, exchange, abandon or otherwise dispose of, surrender
management, physical possession or control of, physically alter or relocate all
or any portion of its assets or properties); or (i) any other lien, encumbrance
or adverse right or claim of any nature in, to or against any asset or property.
"Lintek" shall have the meaning assigned to it in the Introduction.
"Loan" and "Loans" shall respectively mean any and all principal
amounts outstanding from time to time (including future advances) in respect of
the Revolving Credit Loans, the Mortgage Loans, the Letter of Credit Advances
and all other amounts advanced from time to time to or on behalf of any one or
more of the Borrowers by the Administrative Agent, the Banks or their respective
designees pursuant to this Agreement or any other Loan Instrument.
"Loan Collateral" shall have the meaning assigned to it in Section
9.02(a) hereof.
"Loan Instrument" and "Loan Instruments" shall respectively mean any
one or more of this Agreement, the Revolving Credit Notes, the Mortgage Notes,
the Mortgages, the Letters of Credit, the applications for Letters of Credit,
the documents to be provided pursuant to Section 5.11 and the various other
mortgages, assignments, instruments and other documents creating or evidencing
any interest of the Administrative Agent or any other Bank in any collateral
securing or intended to secure anyone's obligations under any of the foregoing,
and all waivers, consents, agreements, reports, statements, certificates,
schedules and other documents executed by the requisite person(s) pursuant to or
in connection with any of the foregoing and accepted or delivered by the
Administrative Agent (with the consent of the Requisite Banks, as and if
required) (whether prior to, on or from time to time after the Effective Date),
as each may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.
"Loan Obligations" shall have the meaning assigned to it in Section
9.02(a) hereof.
"Long Term Debt" shall mean indebtedness for borrowed money which by
its terms matures more than 12 months after the date incurred or if maturing
sooner, the maturity thereof may be extended at the option of the debtor beyond
such 12 month period.
"Majority Banks" shall have the meaning assigned to it in Section
9.02(d) hereof.
"Margin Stock" shall mean any "margin stock" as defined in any
applicable Margin Stock Regulations.
"Margin Stock Regulations" shall mean Regulation T, U and/or X of the
Board of Governors of the Federal Reserve System, as applicable, and the rules
and regulations promulgated thereunder, as the same may be supplemented,
modified, amended, restated or replaced from time to time, or any corresponding
or succeeding provisions of Applicable Law.
"Material Adverse Effect" shall mean any material and adverse effect,
whether individually or in the aggregate, upon (a) the assets, business,
operations, properties or condition, financial or otherwise, of the Borrowers
taken as a whole, (b) the collective ability of the Borrowers to make payment
of, or to otherwise perform or satisfy, all or any part of the Obligations as
and when due, or (c) the Collateral as a whole.
"Material Contract" and "Material Contracts" shall respectively mean
any one or more of the Contracts (including Material Government Contracts), in
each case having an aggregate contract amount or payments (per Contract) of
$2,000,000 or more.
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"Material Contract Schedule" shall mean any schedule prepared by the
Borrowers from time to time listing all Material Contracts of each Borrower in
form and substance reasonably satisfactory to the Administrative Agent and the
Majority Banks. Upon the occurrence of a Trigger Event, all Contracts shall be
included in the Collateral whether or not ever listed on any Material Contract
Schedule.
"Material Document" shall mean: (a) any Subordinated Debt Document;
(b) any Other Bank Document and to the extent not included therein any facility
document related to Current Indebtedness and/or Other Debt; or (c) any other
material instrument, indenture, agreement, document, arrangement or other
obligation (i) to which any Borrower is or may be a party, (ii) by which any
Borrower or any of the Collateral is or may be bound or subject, or (iii) by
which any of the other assets and properties of any Borrower (if any) is or may
be bound or subject, in each case whether now or hereafter existing, and
irrespective of whether reduced to writing, and as each has been and hereafter
may be supplemented, modified, amended, restated or replaced from time to time.
"Material Domestic Subsidiary" shall mean each Domestic Subsidiary of
Aeroflex which (i) as at the end of the most recent fiscal quarter of Aeroflex,
had total assets with an aggregate book value of at least $500,000, or (ii) for
the four most recently completed fiscal quarters of Aeroflex accounted for more
than $1,000,000 in total sales, provided that for purposes of determining
whether any Subsidiary acquired or organized after the date hereof is a Material
Domestic Subsidiary, the financial statements of the Aeroflex and its
Subsidiaries shall be adjusted to include such Subsidiary acquired or organized
after the date hereof as if such Subsidiary had been a Subsidiary at all times
during such four fiscal quarters or, if shorter, during the period after it was
organized.
"Material Foreign Subsidiary" shall mean each Foreign Subsidiary of
Aeroflex which (i) as at the end of the most recent fiscal quarter of Aeroflex,
held 5% or more of the consolidated assets of Aeroflex and its Subsidiaries, or
(ii) for the four most recently completed fiscal quarters of Aeroflex accounted
for more than $1,000,000 of the Consolidated EBITDA, or (iii) for the four most
recently completed fiscal quarters of Aeroflex, accounted for more than
$15,000,000 of the total consolidated sales of Aeroflex and its Subsidiaries,
all as shown on the consolidated and consolidating financial statements of
Aeroflex and its Subsidiaries, provided that for purposes of determining whether
any Subsidiary acquired or organized after the date hereof is a Material Foreign
Subsidiary, the financial statements of the Aeroflex and its Subsidiaries shall
be adjusted to include such Subsidiary acquired or organized after the date
hereof as if such Subsidiary had been a Subsidiary at all times during such four
fiscal quarters or, if shorter, during the period after it was organized.
"Material Government Contract" and "Material Government Contracts"
shall respectively mean any one or more of the Contracts made directly with any
governmental Authority having an aggregate contract amount or payments (per
Contract) of $1,000,000 or more.
"Maturity Date" shall mean: (a) with respect to the Mortgage Loans,
the earlier of (i) April 30, 2008 and (ii) the date on which the maturity of the
Obligations shall have been accelerated pursuant to Section 8.02 hereof, and (b)
with respect to all other Loans, the earliest of (i) February 14, 2007, (ii)
with respect to the Revolving Credit Loans, the date on which the Commitment
shall have been reduced permanently to zero, (iii) the date payment is demanded
or otherwise due with respect to any Letter of Credit Advance or reimbursable
amount or expense or other advance as provided in Section 2.05(f) hereof, and
(iv) with respect to all Obligations the date on which the maturity of the
Obligations shall have been accelerated pursuant to Section 8.02 hereof
"MIC" shall have the meaning assigned to it in the Introduction.
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"Mortgage" shall mean any mortgage, deed of trust or other security
deed or security interest in real estate.
"Mortgage" and "Mortgages" shall respectively mean any one or more of
the Plainview Mortgage and any other mortgages from Aeroflex or any other
Borrower to the Administrative Agent as mortgagee (for the ratable benefit of
all of the Banks), as executed and delivered from time to time, and as the same
may be supplemented, modified, amended, restated or replaced from time to time
in the manner provided therein.
"Mortgage Loans" shall have the meaning assigned to it in Section 2.02
hereof.
"Mortgage Note" and "Mortgage Notes" shall respectively mean any one
or more of the Mortgage Notes dated as of February 25, 1999, issued by the
Borrowers to each of the Banks to evidence each Bank's Pro Rata Share of the
Mortgage Loans (as referenced in Section 2.03(b) hereof), as each may be
modified, amended, restated or replaced from time to time in the manner provided
therein.
"Net Worth Adjustment Amount" shall mean the sum of (i) as to any
fiscal year of the Borrowers, the greater of (a) - 0 - and (b) 50% of the net
income of Aeroflex and its Subsidiaries for such fiscal year determined in
accordance with GAAP and (ii) 75% of the sum of all net cash proceeds received
by the Borrowers (x) from the issuance of any Capital Stock after the date of
this Agreement and/or (y) the incurrence of any Permitted Subordinated Debt in
addition to that existing on the date of this Agreement. For purposes of
determining the minimum Consolidated Effective Net Worth required to be
maintained, the Net Worth Adjustment Amount shall be determined as at the last
day of each fiscal year of the Borrowers and shall be added, on a cumulative
basis, to the minimum Consolidated Effective Net Worth required to be maintained
for the next succeeding Net Worth Period. Such minimum Consolidated Effective
Net Worth shall be maintained at all times during the Net Worth Period beginning
on such date until the last day of the immediately following fiscal year at
which time and at each subsequent fiscal year end the minimum Consolidated
Effective Net Worth required to be maintained shall again be increased and
maintained accordingly.
"Net Worth Period" shall mean each period beginning the last day of
the Borrowers' fiscal year (June 30) and ending the day immediately preceding
the last day of the Borrowers' immediately following fiscal year (June 29).
"New York Real Estate Law" shall mean the Real Property Law and the
Real Property Actions and Proceedings Law of the State of New York, as amended,
and as the same may be supplemented, modified, amended, restated or replaced
from time to time, and the rules and regulations promulgated thereunder, or any
corresponding or succeeding provisions of Applicable Law.
"Note" and "Notes" shall respectively mean any one or more of the
Revolving Credit Notes and the Mortgage Notes.
"Obligations" as of any date shall mean any and all of the obligations
of the Borrowers (a) to repay the balance of the Loans then outstanding
(including future advances), including accrued and unpaid interest thereon
(including, without limitation, any and all interest and other amounts accrued
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceedings, irrespective of whether such interest and other amounts are allowed
or allowable as claims in such proceedings), (b) to pay or otherwise perform or
satisfy all of the other amounts to be paid and obligations to be performed or
otherwise satisfied by the Borrowers (whether individually, jointly, severally
or otherwise) under this Agreement and the other Loan Instruments, (c) to pay or
otherwise perform or satisfy all of the other amounts to be paid and obligations
to be performed or otherwise satisfied by the
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Borrowers under any interest rate protection, foreign currency exchange, or
other interest or exchange rate swap or hedging agreement or arrangement
(whether individually, jointly, severally or otherwise) with any of the Banks or
any of their affiliates, and (iv) to pay or otherwise satisfy any and all
overdrafts of the Borrowers honored by any of the Banks (in the sole and
absolute discretion of each Bank) and other indebtedness, liabilities or
obligations (whether under any note, Credit Support or other instrument or
document or otherwise) now or hereafter owed to any of the Banks by the
Borrowers (whether individually, jointly, severally or otherwise).
"Other Bank Debt" shall mean any and all Indebtedness owing by one or
more of the Borrowers to one or more of the Banks that is not an Extension of
Credit.
"Other Bank Debt Documents" shall mean all the documents, instruments
and agreements executed pursuant to or in connection with all or any part of the
Other Bank Debt.
"Other Debt" shall mean (a) purchase money Indebtedness incurred in
the purchase of equipment in the ordinary course of business so long as it is
either unsecured or secured only by the equipment purchased (excluding any Loans
used for such purposes), (b) Indebtedness secured by equipment and similar
tangible assets and properties (other than Collateral) refinanced in the
ordinary course of business, and (c) obligations arising under leases, whether
or not constituting Indebtedness under GAAP, excluding, however; leases (i) of
real property or (ii) having aggregate rental payments for the initial term
(discounted to present value) of less than $250,000 for any lease (with multiple
equipment schedules constituting a single lease) or series of related leases.
"Other Taxes" shall have the meaning assigned to it in Section 2.09
hereof.
"Pearl River Collateral" shall mean cash and cash equivalents in an
aggregate amount equal to $2,656,357 and the mortgage(s) encumbering the Pearl
River Project executed by MIC to support the Pearl River Financing and/or the
Pearl River Financing L/C.
"Pearl River Financing" shall mean the industrial development bond
financing to MIC from the Pearl River Financing Authority secured by a mortgage
on the Pearl River Project and secured and enhanced by the Pearl River Financing
L/C.
"Pearl River Financing Authority" shall mean the County of Rockland
(New York) Industrial Development Agency or any successor.
"Pearl River Financing Document" and "Pearl River Financing Documents"
shall respectively mean any one or more of the bonds issued to evidence and bond
the purchase agreement, indenture and other agreements executed to govern the
Pearl River Financing, the mortgage(s) encumbering the Pearl River Project
executed by MIC to support the Pearl River Financing and/or the Pearl River
Financing L/C, the Pearl River Financing L/C and related application(s) and
reimbursement agreement(s), and the guaranties executed by Aeroflex respecting
the Pearl River Financing or Pearl River Financing L/C, and any and all waivers,
consents, agreements, instruments and other documents executed by the requisite
person(s) pursuant to or in connection with any of the foregoing; in each case
whether now or hereafter existing, and as each may be supplemented, modified,
amended, restated or replaced from time to time.
"Pearl River Financing L/C" shall mean the letter(s) of credit issued
by Fleet to support the Pearl River Financing, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the mariner
provided therein.
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"Pearl River Project" shall mean the acquisition and improvement of
MIC's facility in Pearl River, New York.
"Perfect" means, with respect to any Lien, that all filings,
registrations, recordings, notices and other actions have been made or taken,
with or to any governmental Authority or other Person, in order to render such
Lien "perfected" as such term is construed under the Uniform Commercial Code,
or, if the Uniform Commercial Code is not applicable, to ensure the
enforceability of such Lien as against certain third parties and notwithstanding
any proceeding commenced under any bankruptcy or similar law. "Perfected" and
"Perfection" have corresponding meanings.
"Permitted Acquisition" shall mean an Acquisition that satisfies each
of the following conditions at the time of such Acquisition: (i) the entire
business or assets acquired or business of the entity whose Capital Stock is
acquired shall be related to any Borrower's line of business as conducted on the
date hereof; (ii) (a) the Acquisition Cost with respect to any one Acquisition
shall not exceed $15,000,000 unless Acquiree EBITDA is able to be determined by
the Borrowers to the reasonable satisfaction of the Banks and such Acquiree
EBITDA for the four most recent fiscal quarters is of a positive amount, (b) the
Capital Stock Cost with respect to any one Acquisition shall not exceed 25% of
the then fair market value of all of Aeroflex's outstanding Capital Stock and if
Capital Stock is part of the consideration, only the Capital Stock of Aeroflex
(and not its Subsidiaries) may be included as that part of the consideration for
such Acquisition, (c) the Acquisition Cost (excluding the Capital Stock Cost)
with respect to any one Acquisition shall not exceed $20,000,000, (d) the
Acquisition Cost (excluding the Capital Stock Cost) of all Acquisitions in the
aggregate which but for this clause would be Permitted Acquisitions shall not
exceed $50,000,000; (iii) at the time of such Acquisition no Default or Event of
Default exists and no Default or Event of Default would occur after giving
effect to such Acquisition; (iv) the Borrowers shall have delivered to each
Bank, not less than 10 days prior to the consummation of such Acquisition, (A) a
certificate of a financial officer of the Borrowers, in all respects reasonably
satisfactory to each Bank and dated the date of such consummation, attaching a
pro-forma compliance certificate (in a format satisfactory to the Banks)
evidencing compliance with Section 6.01 hereof (as the same may be amended from
time to time) after giving effect to such Acquisition and based on the most
recent financial statements delivered to pursuant to this Agreement; provided,
that, as to such financial covenants (and any other financial covenants now or
hereafter applying to the facilities described in this Agreement), all of such
covenants shall be deemed amended to require compliance as to the Borrowers with
the entity acquired in the Acquisition and (B) satisfactory Uniform Commercial
Code and other searches with respect to the acquiree to the extent such acquiree
is required to become a Borrower pursuant to the terms hereof; (v) the
Acquisition shall have the approval of the target company's board of directors
(or similar governing body) or shall have been recommended for approval by the
target company's board of directors (or similar governing body) and shall have
subsequently been approved by the holders of the Capital Stock of such target
company in accordance with such target company's governing documents; (vi) the
Acquisition shall have been consummated in compliance with all applicable laws
and all necessary approvals, except where the failure to so comply could not
reasonably be expected to have a material adverse effect on the acquiree or on
Aeroflex and its Subsidiaries taken as a whole; (vii) the Borrowers shall have
complied with any applicable state takeover law and any applicable supermajority
charter provisions and (viii) all governmental and third-party consents and
approvals necessary in connection with each aspect of the Acquisition shall have
been obtained (without the imposition of any unreasonable conditions) and shall
remain in effect, except where the failure to obtain same could not reasonably
be expected to have a material adverse effect on the acquiree or on Aeroflex and
its Subsidiaries taken as a whole; all applicable waiting periods shall have
expired or been terminated or waived without any material adverse action being
taken by any authority having jurisdiction; and no law or regulation shall be
applicable that restrains, prevents or imposes material adverse conditions upon
any aspect of the Acquisition.
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"Permitted Disposition" shall mean (i) a Borrower's sale or lease of
its Inventory in the ordinary course of its business, (ii) a Borrower's sale of
obsolescent equipment or equipment which is replaced by new equipment acquired
by such Borrower, (iii) a Borrower's Disposition of assets to another Borrower,
(iv) Dispositions of non-cash Permitted Investments and (v) any other
Disposition (individually or in a series of transactions) by one or more of the
Borrowers that satisfies each of the following conditions: (A) the consideration
for such Disposition is not less than fair market value of the property subject
thereto, (B) with respect to any fiscal year of Aeroflex, the total
consideration for such Disposition together with all other Dispositions made in
such fiscal year is not in an aggregate amount in excess of 5% of the book value
of the Borrowers' consolidated tangible assets as determined on the first day of
such fiscal year, (C) at least 90% of such consideration for such Disposition is
paid in cash and (D) no Event of Default or Default then exists or could result
from such Disposition (whether through any Pro Forma Effect or otherwise).
"Permitted Investments" shall mean (a) direct obligations of the
United States of America or any governmental agency thereof which are fully
guaranteed or insured by the United States of America; (b) dollar denominated
certificates of time deposit issued by any bank organized and existing under the
laws of the United States or any state thereof and having aggregate capital and
surplus in excess of $500,000,000 or by any Bank; (c) money market mutual funds
having assets in excess of $2,000,000,000; (d) money market mutual funds having
assets in excess of $500,000,000 managed by a Bank or an Affiliate of a Bank;
(e) commercial paper rated not less than P-1 or A-1 or their equivalent by
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Ratings Group,
respectively; (f) tax exempt securities of a U.S. issuer rated A or better by
Standard & Poor's Ratings Group or rated A-2 or better by ▇▇▇▇▇'▇ Investors
Service, Inc.; (g) cash; (h) asset-backed securities and mortgage-backed
securities rated AAA (or its equivalent) by Standard & Poor's Ratings Group or
▇▇▇▇▇'▇ Investors Service, Inc.; (i) bonds issued by corporations organized
under the laws of any state of the United States rated A (or its equivalent) or
better by Standard & Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc.;
and (j) short-term investments by any Foreign Subsidiary made in the ordinary
course of its business and provided that the aggregate amount of such
investments by such Foreign Subsidiaries at any one time outstanding shall not
exceed $6,000,000.
"Permitted Lien" for a referenced Person shall mean any of the
following: (a) statutory Liens incurred in the ordinary course of the referenced
person's business (i) for taxes, assessments or other governmental charges,
levies or claims, (ii) of mechanics, carriers, warehouses, suppliers and
laborers, (iii) respecting worker's compensation, unemployment insurance,
statutory obligations or social security legislation, or (iv) required by law as
a condition precedent to the transaction of the referenced person's business or
the exercise of any of the privileges or licenses by the referenced person
subject to such Lien, in each case so long as the underlying obligations are not
then required to be paid under Section 5.06 hereof and any reserve has been
established and any bond or insurance has been obtained as required by that
Section; (b) Liens incurred in respect of judgments and awards discharged within
30 days from the making thereof; (c) in the case of real estate, easements,
rights-of-way, restrictions, covenants and other agreements of record and other
similar charges or encumbrances not interfering with the ordinary conduct of the
business of the referenced person; (d) in the case of personal assets and
properties other than Collateral, any deposits made or other security interests
incurred in the ordinary course of the referenced person's business to secure
the performance of its tenders, bids, leases (other than capitalized leases),
contracts (other than for Indebtedness or Credit Support), and similar
obligations arising as a result of progress payments under government contracts;
(e) the Liens (including leases treated as Liens) encumbering equipment
purchased or property leased by the referenced person with Other Debt permitted
by Sections 6.02(a)(iv), 6.02(a)(vi) and 6.02(b) hereof so long as they
respectively secure only the corresponding purchase money Indebtedness or
capitalized lease obligations; (f) the Liens granted from time to time to the
Administrative Agent (for the benefit of all of the Banks); (g) Liens securing
indebtedness assumed by a Borrower pursuant to a Permitted Acquisition; (h)
Liens in favor of Fleet in
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connection with the Pearl River Financing, (i) other Liens incidental to the
conduct of such Person's business or the ownership of its property and assets
which were not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not materially impair the use of
the property or assets so encumbered in the operation of such Person's business,
and (j) currently existing Liens that are disclosed in Schedule 3.10(a) hereto,
including any renewals or extensions thereof, but those Liens shall not be
increased or expanded to secure other Indebtedness unless otherwise permitted by
the terms and provisions of this Agreement.
"Permitted Non-Borrower Subsidiary Transfers" shall mean any loan or
advance of money, credit or property to or investment in (by capital
contribution, loan, purchase or otherwise) by any Borrower in or to any
Subsidiary of any Borrower that is not a Borrower; provided that the aggregate
amount of all such loans, advances and investments (or if same involve the
transfer of property, the book value thereof) does not exceed $5,000,000 with
respect to all such Permitted Non-Borrower Subsidiary Transfers in the aggregate
made during the Revolving Credit Period.
"Permitted Subordinated Debt" shall mean Indebtedness of one or more
Borrowers that (i) after giving effect thereto, no Event of Default or Default
would exist or would result therefrom (whether through any Pro Forma Effect or
otherwise) and (ii) is subordinated to the Obligations on terms reasonably
satisfactory to the Majority Banks.
"Person" or "person" shall include (without limitation) any manner of
association, business trust, company, corporation, estate, governmental or other
Authority, joint venture, limited liability company, natural person,
partnership, trust or other entity.
"Plainview Property" shall mean any and all real estate and
improvements located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as
described in the Plainview Mortgage.
"Plainview Mortgage" shall mean the Mortgage, Assignment of Rents and
Security Agreement dated as of February 25, 1999, from Aeroflex, as mortgagor,
to the Administrative Agent (for the benefit of all of the Banks), as mortgagee,
respecting the Plainview Property, as the same may be supplemented, modified,
amended, restated or replaced from time to time in the manner provided therein.
"Plan" and "Plans" shall have the meanings respectively assigned to
them in Section 3.09(c) hereof.
"Pledged Security" and "Pledged Securities" shall mean (A) 100% of the
issued and outstanding Capital Stock of each Subsidiary of Aeroflex to the
extent it is a Borrower and a Domestic Subsidiary and (B) 65% of the issued and
outstanding Capital Stock of each Material Foreign Subsidiary that is owned
directly by Aeroflex or a Domestic Subsidiary.
"Prime Rate" shall mean the variable per annum rate of interest so
designated from time to time by Fleet as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer.
"Pro Forma Effect" shall mean the effect(s) any action or other event
proposed by or on behalf of the Borrowers (if it were to happen as proposed)
could have on (a) the assets, business, operations, properties or condition,
financial or otherwise, of the Borrowers taken as a whole, (b) the collective
ability of the Borrowers to make payment of, or to otherwise perform or satisfy,
all or any part of the Obligations as and when due, or (c) the Collateral,
including (without limitation) the effect(s) of including any proposed sale or
disposition, new or altered Indebtedness or other obligation (and the payments
required thereunder), payment or other action or event in a pro forma
recalculation of the
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various financial (among other things) measurements and covenants set forth in
this Agreement for or as at the end of the applicable computation or reporting
period then most recently ended (based on the then most recently required
compliance calculations and any and all subsequent pro forma calculations on a
cumulative basis with respect to other action(s) or event(s), if and to the
extent they occurred or continue to be proposed).
"Pro Rata Share" shall have the meaning assigned to it in Section
9.02(c) hereof.
"real estate" shall include (without limitation) (a) all land,
leasehold interests, easements, licenses, rights-of-way or use, appurtenances
and other rights and interests in real property, (b) all buildings and other
structures and improvements, (c) all fixtures, furnishings, equipment and other
personal property (including, without limitation, leasehold interests in such
personal property and mobile homes of the type usually installed on a developed
site) located on or used in connection therewith, whether or not affixed
thereto, (d) all leases and subleases thereof, and (e) all rents, profits and
other income, payments and proceeds with respect to any and all of the
foregoing.
"Released Collateral" shall mean all Existing Collateral that does
not, on the Effective Date, constitute Collateral hereunder.
"Representative" and "Representatives" shall respectively mean any or
all of: (a) in the case of any referenced person (including, without limitation,
the Administrative Agent and the Banks), such referenced person's affiliates,
directors, officers, employees, attorneys, agents and other representatives; and
(b) in addition in the case of the Administrative Agent, any Bank, any issuer or
any other financial institution, such referenced person's participants,
correspondents, confirming banks, custodians and designees and their respective
affiliates, directors, officers, employees, attorneys, agents and other
representatives.
"Requisite Bank" shall mean such number of Banks (if any) as may have
the aggregate applicable shares required for a particular action by any term or
provision of this Agreement or any other Loan Instrument (including without
limitation Section 9.06).
"Reserve Percentage" for any Interest Period for the corresponding
portion of the Loans shall mean the percentage established from time to time by
the Board of Governors of the Federal Reserve System (or any successor) and then
in effect for determining the maximum reserve requirement (including, but not
limited to, any marginal reserve requirement) for a member bank of the Federal
Reserve System in New York City with deposits exceeding one billion dollars (or
any higher threshold) with respect to liabilities consisting of or including
(among other liabilities) eurocurrency liabilities or liabilities respecting
United States Dollar non-personal time deposits in the United States (whichever
may be relevant to the particular Fixed Rate) with maturities equal or
comparable to such Interest Period. The Borrowers acknowledge and agree that:
(a) any portion of the Loans bearing interest at the Applicable Euro Rate shall
be deemed to constitute a "eurocurrency liability" as defined in Regulation D of
said Board of Governors and to be subject to the reserve requirements of such
Regulation; and (b) the Reserve Percentage shall be calculated without any
regard to or benefit of any credit, proration, deduction, offset or other
reduction that otherwise may be available from time to time under such
Regulation.
"Revolving Credit Loans" shall have the meaning assigned to it in
Section 2.01(a) hereof.
"Revolving Credit Note" and "Revolving Credit Notes" shall
respectively mean any one or more of the Sixth Amended and Restated Revolving
Promissory Notes issued by the Borrowers to each of the Banks to evidence each
Bank's Pro Rata Share of the Revolving Credit Loans (as referenced in
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Section 2.03(a) hereof), as each may be modified, amended, restated or replaced
from time to time in the manner provided therein.
"Revolving Credit Period" shall mean that period commencing on the
Effective Date and ending February 14, 2007, or such earlier date as the
Commitment shall terminate as provided herein.
"Rights Agreement" shall mean Rights Agreement between Aeroflex and
American Stock Transfer and Trust Company dated as of August 13, 1998, together
with all schedules and exhibits thereto, as the same may be supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.
"SEC" shall mean the Securities Exchange Commission of the United
States.
"securities" of any person shall mean any and all equity securities
and debt securities, general or limited partnership interests, limited liability
company membership interests, investment contracts and any other instrument or
interest commonly understood to be a security issued by that person.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any corresponding provisions of any Applicable Law in any state or foreign
jurisdiction, and as the same may be supplemented, modified, amended, restated
or replaced from time to time, and the rules and regulations promulgated
thereunder, or any corresponding or succeeding provisions of Applicable Law.
"Springing Collateral" shall mean, with respect to each Borrower, all
of the following assets and properties of such Borrower:
(i) any and all Accounts Receivable of such Borrower, and any and all
Contracts or other orders, agreements or arrangements from or with any
other person to purchase or procure Inventory, goods or services from
such Borrower;
(ii) any and all Inventory of such Borrower, wherever located, including
any and all raw materials, work-in-progress and finished goods;
(iii) any and all instruments, chattel paper, documents of title and trust
receipts (and the goods covered thereby, wherever located), contract
rights, warranties, casualty and other insurance policies and rights,
litigation claims and rights, tradenames and other general intangibles
of such Borrower and any and all computer programming data and other
books and records of such Borrower, in each case solely to the extent
arising from or with respect to all or any part of any of the items in
the foregoing subsections (i) and/or (ii);
(iv) any and all cash; cash equivalents and other instruments in the
possession or under the control of a Bank;
(v) any and all (A) advances, loans and other Indebtedness and other
amounts (including interest) directly or indirectly owed to such
Borrower by any other Borrower, any Subsidiary of any Borrower or any
other co-obligor, surety or pledgor, (B) Subordinated Rights, whether
resulting from any payment made by such Borrower or any Subsidiary of
any Borrower or otherwise, and (C) Liens or Credit Support securing
any such advances, loans, Indebtedness, amounts or rights;
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(vi) any and all deposits of such Borrower (whether general or special,
time or demand, provisional or final, or individual or joint)
maintained with any Bank or any of its affiliates, custodians,
participants or designees; any and all Indebtedness and other amounts
and obligations at any time owing by any Bank or any of its affiliates
or participants to or for the credit, account or benefit of such
Borrower; and any and all assets and properties of such Borrower in
the possession, custody or control of any Bank or any of the
affiliates, custodians, participants or designees of any Bank,
including (without limitation) other monies, certificates of deposit,
securities, instruments of debt or credit, documents of title and
trust receipts (and the goods covered thereby, wherever located), and
other instruments and documents; and
(vii) any and all security entitlements and other rights, powers,
privileges, remedies and interests of the referenced person in, to and
under any and all of the items described above and any and all
Corporate Documents pertaining thereto.
"Springing Release Event" shall mean any time that both of the
following conditions shall have simultaneously been satisfied for two
consecutive fiscal quarters (i) the Consolidated Funded Debt Ratio is less than
2.0 to 1.0 and (ii) no Event of Default exists; it being expressly acknowledged
and agreed that there may be more than one Springing Release Event while this
Agreement remains in effect and the provisions of Section 7.01(b) and the other
applicable terms and conditions of this Agreement shall apply to each such
Springing Release Event.
"Subordinated Debt Document" and "Subordinated Debt Documents" shall
respectively mean (a) any debentures and indentures respecting Permitted
Subordinated Debt and (b) any and all waivers, consents, agreements, instruments
and other documents executed by the requisite person(s) pursuant to or in
connection with any of the foregoing, in each case whether now or hereafter
existing, and as each may be supplemented, modified, amended, restated or
replaced from time to time, all in form and substance reasonably satisfactory to
the Majority Banks.
"Subordinated Right" and "Subordinated Rights" of any Borrower shall
respectively mean any and all subrogation, contribution and other similar rights
of such Borrower against or in respect of (a) any other Borrower, (b) any of the
assets and properties of any other Borrower or any Subsidiary of any Borrower,
or (c) any other co-obligor or indemnitor of any of such Borrower's payments or
obligations under any of the Loan Instruments, whether now existing or hereafter
acquired or created, and whether resulting from any payment made by such
Borrower or otherwise (other than as waived in Section 2.14 hereof).
"Subsidiary" shall mean any corporation or other entity in respect of
which a person at the time shall own directly or indirectly (through one or more
corporations, nominees or other Persons or otherwise) at least one-half of the
aggregate voting interests of such corporation or other entity, whether owned or
held (a) of record or beneficially or (b) individually, jointly or otherwise.
"Systems" shall have the meaning assigned to it in the Introduction.
"Taxes" shall have the meaning assigned to it in Section 2.09 hereof.
"Trigger Event" shall mean any time that either of the following
events shall occur (i) an Event of Default shall have occurred, or (ii) the
Consolidated Funded Debt Ratio is greater than or equal to 2.0 to 1.0; it being
expressly acknowledged and agreed that there may be more than one Trigger Event
while this Agreement remains in effect and the provisions of Section 7.01(b) and
the other applicable terms and conditions of this Agreement shall apply to each
such Trigger Event.
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"Trigger Period" shall mean each period beginning on the date a
Trigger Event occurs and ending on the first date thereafter that a Springing
Release Event shall have occurred.
"UTMC" shall have the meaning assigned to it in the Introduction.
"Vibrations" shall have the meaning assigned to it in the
Introduction.
"Voting Shares" shall mean all outstanding shares of any class or
classes (however designated) of Capital Stock of Aeroflex or any Borrower (as
the case may be) entitled to vote generally in the election of members of the
Board of Directors (or similar governing body) thereof.
Section 1.02. Certain Definitions in Other Loan Instruments.
Capitalized terms used and not otherwise defined herein shall have the meanings
respectively assigned to them in the other applicable Loan Instruments.
Section 1.03. Pronouns. Each use in this Agreement of a neuter pronoun
shall be deemed to include references to the masculine and feminine variations
thereof, and vice versa, and a singular pronoun shall be deemed to include a
reference to the plural variation thereof, and vice versa, in each case as the
context may permit or require.
ARTICLE II
Amounts and Terms of the Obligations
Section 2.01. The Revolving Credit Loans.
(a) Upon the terms and provisions and subject to the conditions
contained in this Agreement, each Bank shall make revolving credit loans (with
all such loans by the Banks being referred to collectively as the "Revolving
Credit Loans") from time to time during the Revolving Credit Period to the
Borrowers at their request (as provided in subsection (b), below); provided that
no Bank shall be required to make any Revolving Credit Loan if, (i) after giving
effect to the Revolving Credit Loan to be made the aggregate then outstanding
Extensions of Credit owing to such Bank (including such Bank's Pro Rata Share of
the Letter of Credit Amount, but excluding such Bank's Mortgage Loans) would
exceed such Bank's Committed Share of the Commitment, or (ii) the sum of (A) the
face amount of the Revolving Credit Loan to be made, plus (B) the Letter of
Credit Amount, plus (C) the outstanding principal balance of the Revolving
Credit Loans, would exceed the Commitment. Subject to the terms and provisions
of this Agreement, during the Revolving Credit Period the Borrowers may reborrow
Advances previously repaid by them.
(b) Aeroflex (without notice to or the consent of any other Borrower)
from time to time may request an advance of Revolving Credit Loans from all of
the Banks pursuant to subsection (a) of this Section (as made by the Banks, an
"Advance") by giving the Banks a signed notice of its request, or by giving the
Banks notice of its request both by telephone and telecopy of a signed notice
and promptly confirming its request by delivery to each Bank of an original copy
of the signed notice. The notice requesting an Advance (i) may be combined with
a request under Section 2.01(b) hereof that all or a portion of the Advance bear
interest at a Fixed Rate when made, (ii) shall be delivered to the Banks no
later than 11:00 A.M. (New York city time) on the requested Advance Date in the
case of requests for Base Rate Loans and at least three Business Day prior to
the requested Advance Date in the case of requests for Fixed Rate Loans (as more
fully provided in the case of Fixed Rate Loans under Section 2.04(c) hereof),
(iii) shall be deemed to have been delivered on the following Business Day
unless actually received by each of the Banks prior to 11:00 A.M. (New York City
time) on a Business Day, (iv)
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shall be irrevocable once given, and (v) shall specify (A) the requested Advance
Date, (B) the principal amount of the requested Advance and (C) the amount to be
advanced by each Bank in accordance with its Committed Share. Each requested
Advance shall be for an integral multiple of $50,000 in an amount that is not
less than $250,000 in the case of Base Rate Loans or such larger multiple and
minimum amounts as is required under Section 2.04(b) hereof if the Advance is to
bear interest at a Fixed Rate. Subject to compliance with the terms and
provisions of Article IV of this Agreement, each Bank shall make its Committed
Share of the requested Advance on the proposed Advance Date by crediting the
demand deposit account maintained by Aeroflex with such Bank at its office at
the address set forth in the Introduction.
(c) Aeroflex (without notice to or the consent of any other Borrower)
may voluntarily elect to permanently reduce the Commitment in whole at any time,
or in part from time to time in integral multiples of $1,000,000 in an amount
that is not less than $5,000,000, by giving the Banks a signed notice of its
election, or by giving the Banks notice of its election both by telephone and
telecopy of a signed notice and promptly confirming its election by delivery to
each Bank of an original copy of the signed notice; provided however that no
such reduction shall be made that would result in the payment or prepayment of
any portion of any Fixed Rate Loan unless the Borrowers repay such Fixed Rate
Loan in full and concurrently pay all amounts (if any) required under Section
2.04(i) hereof. Notice of such reduction election (i) shall be delivered to the
Banks at least five Business Days prior to the requested reduction date, (ii)
shall be deemed to have been delivered on the following Business Day unless
actually received by each of the Banks prior to 11:00 A.M. (New York City time)
on a Business Day and (iii) shall be irrevocable once given. The Borrowers
shall, prior to 11:00 a.m. on the requested reduction date, make a prepayment of
the Revolving Credit Loans in the amount, if any, necessary to make the
aggregate outstanding principal balance of the Revolving Credit Loans, after
giving effect to the prepayment, not more than the Commitment (as so reduced).
Section 2.02. Mortgage Loans.
The Borrowers hereby acknowledge, certify and agree that: (i) pursuant
to the Existing Loan Agreement, the Banks have made mortgage loans to the
Borrowers that are outstanding as of February 1, 2003 in the aggregate principal
amount of $3,225,333.33 (the "Mortgage Loans"); (ii) the obligations of the
Borrowers to repay the Mortgage Loans (with interest) to the Banks and to
perform or otherwise satisfy their other obligations under the Existing Loan
Agreement and other Existing Loan Instruments are not subject as of the date of
this Agreement to any defense, counterclaim, setoff, right of recoupment,
abatement, reduction or other claim or determination; and (iii) upon the terms
and provisions and subject to the conditions contained in this Agreement, the
Mortgage Loans shall continue and be subject to the terms and provisions of this
Agreement, which agreement, upon the Effective Date, has amended, restated and
completely replaced the Existing Loan Agreement. Each Bank shall continue to
share in the Mortgage Loans in accordance with its Committed Share.
Section 2.03. The Notes.
(a) The obligation of the Borrowers to repay the Revolving Credit
Loans, together with interest thereon, shall be evidenced by a Sixth Amended and
Restated Revolving Promissory Note issued by the Borrowers to each Bank in the
form of Exhibit A hereto in the amount of such Bank's Committed Share of the
Commitment and dated as of the date hereof. The Revolving Credit Notes have been
issued to amend, extend, restate and completely replace the Existing Notes, to
evidence all amounts outstanding under the Existing Notes and to evidence any
further advances or readvances of the Revolving Credit Loans. Although issued in
substitution for and restatement and replacement of the Existing Notes, the
Notes shall not be deemed to have been issued in payment, satisfaction,
cancellation or novation of the Existing Notes. The Banks shall be entitled to
retain the Existing Notes until all of the
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Obligations have been fully paid and satisfied, after which time the Existing
Notes shall be returned to the Borrowers at the same time as the Notes, unless
some other time or manner of delivery shall be provided by any other written
agreement between the Borrowers and the Banks.
(b) The obligation of the Borrowers to repay the Mortgage Loans,
together with interest thereon, shall continue to be evidenced by the Mortgage
Note issued by the Borrowers to each Bank pursuant to the Existing Loan
Agreement, a copy of one or more of which is attached hereto as Exhibit B.
Section 2.04. Interest; Optional Fixed Rates; Additional Required
Payments.
(a) Except as otherwise provided in this Section, the Loans shall bear
interest (computed on the basis of the actual number of days elapsed and a year
of 360 days) on the unpaid principal balance of those Loans outstanding from
time to time, from and including the date of Advance until such principal
balance of such Loans is repaid in full (including, without limitation, any and
all interest and other amounts accrued during the pendency of any bankruptcy,
insolvency, receivership or other similar proceedings, irrespective of whether
such interest and other amounts are allowed or allowable as claims in such
proceedings), at a fluctuating annual rate that for the Pro Rata Share of the
Loans of each Bank shall be equal to the Base Rate, which fluctuating rate shall
change from time to time simultaneously with each corresponding change in the
Base Rate. Interest on those Loans shall be payable by the Borrowers in arrears:
(i) prior to the relevant Maturity Date, on each Interest Payment Date; (ii) in
full on the relevant Maturity Date; and (iii) on demand after the relevant
Maturity Date.
(b) The Borrowers from time to time may request that a portion of the
Loans outstanding bear interest at the Applicable Euro Rate for an Interest
Period of one, two, three or six months, which portion must be in an integral
multiple of $100,000 in an amount that is not less than $2,500,000. Any portion
or portions of the Loans for which a Fixed Rate is in effect shall bear interest
for the applicable Interest Period (computed on the basis of the actual number
of days elapsed and a year of 360 days) at an annual rate equal to the
corresponding Fixed Rate(s). Interest on the Fixed Rate Loans shall be payable
by the Borrowers in arrears: (i) prior to the relevant Maturity Date, on each
Interest Payment Date; (ii) in full on the relevant Maturity Date; and (iii) on
demand after the relevant Maturity Date.
(c) The Borrowers may elect to have a Fixed Rate apply by giving the
Banks a signed notice of their election, or by giving the Banks notice of their
election both by telephone and telecopy of a signed notice and promptly
confirming their election by delivery to each Bank of an original copy of the
signed notice. The notice electing a Fixed Rate (i) may be combined with a
request under Section 2.01(b) hereof for an Advance, (ii) shall be delivered to
the Banks no less than three Business Days prior to commencement of a designated
Interest Period at the Applicable Euro Rate, (iii) shall be deemed to have been
delivered on the following Business Day unless actually received by each of the
Banks prior to 11:00 A.M. (New York City time) on a Business Day, (iv) shall be
irrevocable once given, and (v) shall specify the requested Fixed Rate, date of
commencement, duration of Interest Period and portion of the Loans to which the
Fixed Rate is to apply. The election by the Borrowers of a Fixed Rate is
conditioned upon each of the following:
(A) no more than six (6) Interest Periods shall be in effect at any one
time unless the Administrative Agent (with the consent of the Banks
participating in such Loans) in its discretion shall consent
otherwise;
(B) the portion(s) of the Loans subject to a Fixed Rate(s) shall not
exceed an amount equal to the remainder of (1) the principal balance
of the Loans outstanding on the date such
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Fixed Rate(s) would commence (including any concurrent Advance), minus
(2) those portions thereof that are scheduled to be paid as set forth
in Section 2.05 hereof within the requested Interest Period(s);
(C) no Event of Default or Default shall have occurred and be then
continuing; and
(D) no adverse determination shall have been made by any Bank pursuant to
subsection (e) of this Section.
From and after the last day of any Interest Period, interest shall accrue at the
rate based upon the Base Rate (as provided in subsection (a) of this Section)
until that portion of the principal balance is repaid or a new Fixed Rate with
respect thereto is adopted hereunder. If any Interest Period ends on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding day that is a Business Day unless (in the case of a Loan bearing
interest at the Applicable Euro Rate) such succeeding day would fall in the next
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day.
(d) In addition to the payment of interest as stated above, (i) in the
event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (ii) in the event of any conversion of any Fixed Rate
Loan prior to the end of the current Interest Period therefor, or in the event
of the conversion of any Base Rate Loan into a Fixed Rate Loan, accrued interest
on each such Loan shall be payable on the effective date of such conversion, and
(iii) if there shall be any increase in the direct or indirect costs to any one
or more of the Banks of lending, funding or maintaining any Fixed Rate Loan, or
any reduction in any amount received or to be received by any one or more of the
Banks hereunder, due to:
(A) the introduction of or any change in any Applicable Law or the
interpretation or administration thereof, including (without
limitation) the imposition, modification or application of, or
increase in, (1) any reserve, capital adequacy, special deposit,
assessment or similar requirements, (2) any requirement to withhold or
deduct from any amount payable to any one or more of the Banks any
taxes, levies, imposts, duties, fees, deductions, withholdings or
charges of a similar nature (other than federal, state and local
income and franchise taxes imposed upon any Bank), or any interest
thereon or any penalties with respect thereto, imposed, levied,
collected, assessed, withheld or deducted by any Authority, including
subdivisions and taxing authorities thereof, or (3) any other
restriction or condition affecting a Fixed Rate or this Agreement;
(B) the compliance by any one or more of the Banks with any regulation,
guideline or request from any central bank or other Authority (whether
or not having the force of law);
then the Borrowers from time to time, upon demand by the Administrative Agent,
shall pay to the Administrative Agent (for the benefit of each affected Bank)
additional amounts sufficient to indemnify each such Bank against and reimburse
each such Bank for such increased costs and reduced receipts (but only to the
extent each such increased cost or reduced receipt has not already been included
in the calculation of any interest rate or fee or otherwise reimbursed under any
other section of this Agreement), including (without limitation) amounts
sufficient to compensate each affected Bank for any breakage or other costs and
any decrease in margin or other return incurred in connection with the
repayment, prepayment or other reduction of any Fixed Rate Loan and the
liquidation or redeployment of the affected deposits or other funding
arrangements. A certificate as to the amount of such increased costs and reduced
receipts submitted to the Borrowers by the Administrative Agent (which may be
the certificate of each relevant Bank) shall be conclusive as to the existence
and amount thereof absent manifest error. If
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the Administrative Agent has not received payment for such amounts within five
(5) Business Days of the date of such certificate, the Administrative Agent
(with the consent of the Majority Banks) may direct the application of all or a
portion of the next succeeding payment or prepayment made by the Borrowers,
whether intended by the Borrowers to be interest, principal or otherwise, first
to the reduction of the amounts of such increased costs and reduced receipts.
(e) If, on or before the date of commencement of any Interest Period,
any one or more of the Banks shall have determined (which determination shall be
final, conclusive and binding on the Borrowers) that (i) it is impermissible for
such Bank to make any Fixed Rate Loan due to any of the circumstances described
in clauses (A) and (B) of subsection (d) of this Section, (ii) deposits in
United States Dollars in amounts equal to the portion of the Loans to be subject
to a Fixed Rate for that Interest Period are not being offered to such Banks in
the applicable market, (iii) by reason of changes affecting the applicable
market, the Fixed Rate to be in effect for that period will not adequately and
fairly reflect the cost to such Banks of maintaining for that period the portion
of the Loans for which the Fixed Rate was requested, or (iv) the Fixed Rate or
requested Interest Period is otherwise unavailable, then the portion of the
Loans so affected shall bear interest based upon the Base Rate as provided in
subsection (a) of this Section. Furthermore, if any one or more of the Banks
shall have determined (which determination shall be final, conclusive and
binding upon the Borrowers) that it is impermissible for such Bank(s) to
continue any Fixed Rate Loan during the relevant Interest Period due to any of
the circumstances described in clauses (A) and (B) of subsection (d) of this
Section, then (A) that Interest Period shall be deemed to have been terminated
as of the date specified in that determination, (B) the Borrowers shall
indemnify each such Bank against and reimburse each such Bank for any increased
costs or reduced receipts relating to that termination as provided in
subsections (d) and (f) of this Section as if there had been a voluntary
prepayment of that Fixed Rate Loan by the Borrowers, and (C) after the date
specified in that determination, the portion of the Loans so affected shall bear
interest based upon the Base Rate as provided in subsection (a) of this Section.
The Administrative Agent shall notify the Borrowers in the event any Bank makes
such a determination; provided, however, that the failure to give such notice
shall not affect the validity of that determination or the continued accrual of
interest based upon the Base Rate on the applicable portion of the Loans.
(f) In addition to the payment of interest or fees under this
Agreement, if one or more of the Banks or any of their respective affiliates
determines or has determined that (i) compliance with any existing or future
Applicable Law, including (without limitation) any regulation, guideline or
request from any central bank or other Authority (whether or not having the
force of law), or any change therein or in the interpretation or administration
thereof, affects or would affect the amount of capital required or expected to
be maintained by such Bank(s) or affiliate(s) (taking into account its policies
with respect to capital adequacy and desired rate of return on capital), and
(ii) the amount of such capital is increased by or based upon any commitment or
funding to the Borrowers or any other obligation of such Bank or affiliate(s)
under or related to this Agreement or any other Loan Instrument (using such
averaging, attribution and allocation methods as each affected Bank may
reasonably deem appropriate), then the Borrowers from time to time, upon demand
by the affected Bank(s), shall pay to the affected Bank(s) additional amounts
sufficient to compensate the affected Bank(s) for those circumstances (without,
however, duplicating any amount paid by the Borrowers pursuant to subsection (d)
of this Section). A certificate as to the amount of such compensation submitted
to the Borrowers by the affected Bank(s) or affiliate shall be conclusive as to
the existence and amount thereof absent manifest error. If the Administrative
Agent has not received payment for such amounts within five (5) Business Days of
the date of such certificate, the Administrative Agent (with the consent of the
Majority Banks) may direct the application of all or a portion of the next
succeeding payment or prepayment made by the Borrowers, whether intended by the
Borrowers to be interest, principal or otherwise, first to the reduction of such
billed amount.
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(g) Upon and following an Event of Default, all Loans, any and all
accrued and unpaid interest, fee or amount due hereunder and all other
Obligations, to the extent permitted by Applicable Law, shall bear interest
(payable on demand, and in any event on the last day of each month, and computed
daily on the basis of a 360-day year for actual days elapsed) at the Default
Rate until paid. In no event, however, shall interest payable hereunder be in
excess of the maximum rate of interest permitted under applicable law. The
obligation to so pay interest upon any obligation of any Borrower to the
Administrative Agent, the Fronting Bank and/or the Banks shall not be construed
so as to waive the requirement for payment on the same date that payment is to
be made to the Administrative Agent, the Fronting Bank and/or the Banks as set
forth in this Agreement.
(h) [Intentionally Omitted.]
(i) The Borrowers shall pay to each Bank, upon request of a Bank, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost, or expense incurred as a result of:
(i) any payment of a Fixed Rate Loan on a date other than the last day of the
Interest Period for such Fixed Rate Loan; (ii) any failure by a Borrower to
borrow a Fixed Rate Loan on the date specified by the Borrowers' written notice
for the Interest Period therein specified, other than as a result of a Bank's
determination not to make such Fixed Rate Loan; (iii) any failure of a Borrower
to pay a Fixed Rate Loan on the date for payment specified in Borrowers' written
notice (each of the events set forth in (i) through (iii) above is referred to
as a "Breakage Event" and each Loan affected by any of the events specified in
(i) through (iii) above is referred to as an "Affected Loan"). Without limiting
the foregoing, the Borrowers shall pay to such Bank a "yield maintenance fee" in
an amount computed as follows: The current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the Interest Period of the Affected Loan, shall
be subtracted from the Fixed Rate in effect at the time of the Breakage Event.
If the result is zero or a negative number, there shall be no yield maintenance
fee. If the result is a positive number, then the resulting percentage shall be
multiplied by the amount of the principal balance of the Affected Loan. The
resulting amount shall be divided by 360 and multiplied by the number of days
remaining in the Interest Period of the Affected Loan. Said amount shall be
reduced to present value calculated by using the above referenced United States
Treasury securities rate and the number of days remaining in the Interest Period
of the Affected Loan. The resulting amount shall be the yield maintenance fee
due to such Bank upon the occurrence of a Breakage Event. If by reason of an
Event of Default, the Administrative Agent declares the Loans and/or the Notes
to be immediately due and payable, then any yield maintenance fee with respect
to a Fixed Rate Loan shall become due and payable in the same manner as though
the Borrowers have prepaid a Fixed Rate Loan on the date of such declaration.
Section 2.05. Voluntary and Mandatory Payments.
(a) The Borrowers may voluntarily elect to prepay the Loans in full at
any time, or in part from time to time in integral multiples of (x) $500,000 in
an amount that is not less than $500,000 in the case of Base Rate Loans and (y)
$1,000,000 in an amount that is not less than $1,000,000 in the case of Fixed
Rate Loans, in either case without premium or penalty or reduction of the
Commitment, by giving the Banks a signed notice of their election, or by giving
the Banks notice of their election both by telephone and telecopy of a signed
notice and promptly confirming their election by delivery to each Bank of an
original copy of the signed notice; provided that (1) the Borrowers shall not in
any event prepay any portion of any Fixed Rate Loan unless the Borrowers prepay
such Fixed Rate Loan in full and concurrently pay all amounts (if any) required
under Section 2.04(i) hereof and (2) the Borrowers may not voluntarily prepay
any portion of the Mortgage Loans prior to the relevant Maturity Date so long as
any principal balance remains outstanding under the Revolving Credit Loans.
Notice of such prepayment election (i) shall be delivered to the Banks at least
three Business Days prior to the requested prepayment
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date of a Fixed Rate Loans and up to 11:00 A.M. (New York City time) on the same
Business Day of the requested prepayment date of a Base Rate Loan, (ii) shall be
deemed to have been delivered on the following Business Day unless actually
received by each of the Banks prior to 11:00 A.M. (New York City time) on a
Business Day, and (iii) shall be irrevocable once given. The Borrowers shall
repay the Loans on the date and in the amount specified in such notice of
prepayment election. Except as otherwise provided in this Section, and except as
the Borrowers may otherwise request with respect to any voluntary prepayment,
each voluntary or mandatory prepayment shall be applied first to the outstanding
balance of the Revolving Credit Loans, with any excess then applied to the
Mortgage Loans. So long as any principal balance remains outstanding under the
Revolving Credit Loans, any attempted prepayment of the Mortgage Loans (A) shall
be applied to and deemed and construed to have reduced the Revolving Credit
Loans and (B) shall not be applied against or deemed or construed to have
reduced the Mortgage Loans.
(b) The Borrowers shall repay the Revolving Credit Loans immediately
at any time and from time to time in an amount equal to the excess (if any) of
(i) the sum of (A) the outstanding principal balance of the Revolving Credit
Loans, plus (B) the Letter of Credit Amount, over (ii) the Commitment. In the
event the Letter of Credit Amount alone exceeds the Commitment, then the
Borrowers immediately shall repay the Revolving Credit Loans in full and deposit
cash collateral with the Administrative Agent or its designee in an amount equal
to the remaining deficiency (which collateral shall be deposited and
administered in the manner contemplated in Section 8.02(d) hereof).
(c) The Borrowers shall repay the principal balances then outstanding
under the Revolving Credit Loans in full on the relevant Maturity Date.
(d) The Borrowers shall continue to repay the Mortgage Loans, in
monthly installments of $26,222.22 each on the last Business Day of each
calendar month (which payments commenced as provided in the Existing Loan
Agreement) until the relevant Maturity Date. The Borrowers shall repay the
principal balance then outstanding under the Mortgage Loans in full on the
relevant Maturity Date.
(e) [Intentionally Omitted.]
(f) Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Instrument, and without in any way limiting the
applicability of the terms and provisions of this Agreement and the other Loan
Instruments in respect of any Collateral or any of the other Loans or other
Obligations of the Borrowers, the Borrowers acknowledge and agree that: (i) any
Letter of Credit Advance, if not paid on the date specified in Section 2.07(d)
(as a result of which non-payment it is deemed converted into a Revolving Credit
Loan), or any reimbursable amount or expense or other advance that is not
described elsewhere in this Section and for which no due date or time period for
payment is specified in this Agreement or any other Loan Instrument, together
with interest thereon as provided in Section 2.04, shall be due (or in the case
of an unreimbursed Letter of Credit Advance, overdue) and payable on demand; and
(ii) the representations, warranties, covenants and other terms and provisions
set forth in this Agreement and in the other Loan Instruments are not intended
and shall not be deemed or construed to limit the demand nature of the
Obligations of the Borrowers in respect of any Letter of Credit Advance or any
reimbursable amount, expense or other advance hereunder and thereunder.
(g) Nothing contained in this Section shall be deemed or construed to
be a waiver of any term or provision of this Agreement respecting the
reimbursement of any increased costs or reduced receipts of any Bank in the
event of any prepayment or repayment (whether mandatory or otherwise) of any
portion of any of the Fixed Rate Loans.
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(h) The Obligations then outstanding shall be due and payable in full
on the relevant Maturity Date, and to the extent arising thereafter shall be due
and payable on demand, in either event notwithstanding anything in this Article
to the contrary.
Section 2.06. Commitment Fee; Restructure Fee; Administration Fee;
Etc.
(a) The Borrowers shall pay to the Banks sharing in the Revolving
Credit Loans on the last Business Day of each March, June, September and
December of each year during the Revolving Credit Period, and on the last day of
the Revolving Credit Period, in arrears, a fee (computed on the basis of the
actual number of days elapsed and a year of 360 days) respecting the
availability of the Commitment (the "Commitment Fee") equal to the Applicable
Percentage per annum of the average daily unadvanced portion of the Commitment
during the then most recently concluded calendar quarter or portion thereof
(with the Letter of Credit Amount being considered an advance under the
Commitment). It is expressly agreed that regardless of when the Effective Date
occurs, the Commitment Fee shall begin to accrue on the earlier of the Effective
Date and March 1, 2003.
(b) The Borrowers shall pay to the Banks a nonrefundable fee
respecting the restructuring of the current loan facilities of the Borrowers
equal to $125,000 (the "Facility Fee") payable at execution of this Agreement to
the Administrative Agent for the ratable benefit of the Banks.
Section 2.07. Letters of Credit.
(a) Upon the terms and provisions and subject to the conditions
contained in this Agreement, in lieu of a cash advance under the Commitment the
Fronting Bank shall issue or cause the issuance of Letters of Credit from time
to time upon the request of the Borrowers up to a cumulative maximum face amount
(whether or not advanced) not to exceed $10,000,000 in order to secure the debts
or obligations of the Borrowers; provided that (i) the Fronting Bank shall not
be required to issue any Letter of Credit if the requested Letter of Credit or
the issuance thereof would not reasonably be in accordance with the Fronting
Bank's standard guidelines and procedures, (ii) the Fronting Bank's agreement to
issue Letters of Credit shall terminate on the first to occur of the relevant
Maturity Date and the expiration of the Revolving Credit Period; and (iii) the
Fronting Bank shall not issue any Letter of Credit if (to the actual knowledge
of the Fronting Bank) (A) after giving effect to the Letter of Credit to be
issued the aggregate then outstanding Extensions of Credit owing to any Bank
(including each Bank's Pro Rata Share of the Letter of Credit Amount, but
excluding each Bank's Mortgage Loans) would exceed any Bank's Committed Share of
the Commitment, or (B) the sum of (x) the face amount of the Letter of Credit to
be issued, plus (y) the Letter of Credit Amount, plus (z) the outstanding
principal balance of the Revolving Credit Loans, would exceed the Commitment.
Letters of Credit may be issued for purposes consistent with the historical
practices of the Borrowers in the ordinary course of their respective
businesses.
(b) The Borrowers may request that a Letter of Credit be issued
pursuant to subsection (a) of this Section by giving the Fronting Bank (with a
copy to the Administrative Agent if not the Fronting Bank) a signed notice of
their request, or by giving the Fronting Bank notice of their request both by
telephone and telecopy of a signed notice and promptly confirming their request
by delivery to the Fronting Bank of an original copy of the signed notice (with
copies of such telecopy and notice to the Administrative Agent if not the
Fronting Bank). The notice requesting a Letter of Credit (i) shall be delivered
to the Fronting Bank (with a copy to the Administrative Agent if not the
Fronting Bank) at least three Business Days prior to the requested Issuance
Date, (ii) shall be deemed to have been delivered on the following Business Day
unless actually received by the Fronting Bank prior to 11:00 A.M. (New York City
time) on a Business Day, (iii) shall be irrevocable once given, and (iv) shall
specify (A) the requested Issuance Date, face amount and expiration date of the
desired Letter of Credit, (B) the
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beneficiary to whom it is to be issued (each, a "Letter of Credit Beneficiary"),
and (C) the purpose for which the Letter of Credit is being requested. On or
before the requested Issuance Date, the Borrowers also must complete and deliver
to the Fronting Bank an application for each requested Letter of Credit in form
and substance acceptable to the Fronting Bank and issuer and pay the issuer's
normal application and issuance fees for each requested Letter of Credit. Each
requested Letter of Credit shall be in a face amount of not less than $10,000
and shall terminate no later than the scheduled expiration of the Revolving
Credit Period. The issuance of each Letter of Credit is subject to compliance on
the Issuance Date with the conditions precedent to obtaining an Advance under
this Agreement and subject always to the sole and absolute discretion of the
Fronting Bank. Each Letter of Credit will be issued on a standard form of the
issuing bank then in effect. Each Letter of Credit shall be governed by and
construed in accordance with: (i) the International Standby Practice; and (ii)
to the extent the International Standby Practice is not dispositive, the
Applicable Laws pertaining in the State of New York (including the Uniform
Commercial Code). The requested Letter of Credit may be delivered by the
Fronting Bank to the Letter of Credit Beneficiary, to the Borrowers or to such
other person as the Borrowers reasonably may request. The Letters of Credit may
not be transferred or assigned without (i) the prior written consent of the
Fronting Bank and issuer, (ii) submission to the Fronting Bank of a notice of
transfer in the form annexed to the Letter of Credit, and (iii) the payment of
the issuer's normal transfer fee.
(c) Each of the Letters of Credit may be drawn upon by presentment to
the Fronting Bank, at its office at ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Global Trade Operations Standby Unit (or such other office as may be
specified therein), of the original Letter of Credit, duly endorsed by the
Letter of Credit Beneficiary (which presentment may be waived by the Fronting
Bank with respect to Letters of Credit permitting multiple drawings), together
with a sight draft payable to the Letter of Credit Beneficiary or its order and
the Letter of Credit Beneficiary's certificate that it is entitled to the amount
of the sight draft as a result of nonpayment of the obligations thereby secured,
each substantially in the form annexed to the relevant Letter of Credit. The
promissory note or other instrument evidencing the obligation thereby secured,
duly endorsed to the Fronting Bank, also shall be presented with the Letter of
Credit if that obligation will be paid in full as a result of the payment in
accordance with the Letter of Credit. If the relevant note or other instrument w
ill not be so paid in full, the Fronting Bank (in its sole and absolute
discretion) may require that the person presenting the Letter of Credit present
it to the Fronting Bank for copying and return. The Fronting Bank and/or issuer
may accept any draft, certificate or other document reasonably conforming in
form and substance to the requirements described in the Letter of Credit and the
forms annexed thereto, and may afford the Letter of Credit Beneficiary notice of
and an opportunity to correct nonconforming items capable of cure, each in the
sole and absolute discretion of the Fronting Bank and/or issuer and without any
notice to or assent from any Borrower. The Fronting Bank, any other issuer and
their respective Representatives may in good faith (without inquiry) with
respect to a particular Letter of Credit: (i) act in reliance upon any written,
telegraphic, facsimile, electronic, telephonic, oral or other request, notice or
communication reasonably believed to be from, by, on behalf of or authorized by
any Borrower, the Beneficiary or their respective Representatives, successors or
assigns, whether or not from or signed by an authorized person; (ii) accept or
pay as complying with the terms of the relevant Letter of Credit any drafts or
other documents that appear on their face (A) to be reasonably conforming to the
required forms or (B) to be issued or signed by the Beneficiary or other proper
party or their respective Representatives, successors or assigns (including,
without limitation, any bankruptcy trustee or similar official); (iii) reject
any presentment, draft or other document that it determines (in its sole and
absolute discretion) to not conform to the requirements of the Letter of Credit
or this Agreement; or (iv) act or refrain from acting in reliance upon or in
accordance with the International Standby Practice, Applicable Law or customary
practices in effect in the place of issuance, confirmation, presentment,
negotiation or payment of the Letter of Credit.
(d) Each amount paid by the Fronting Bank or its designee pursuant to
a Letter of Credit or otherwise in respect of the obligation thereby secured (a
"Letter of Credit Advance") shall be
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repaid by the Borrowers to the Fronting Bank on the same day payment is made by
the Fronting Bank or its designee. If a Letter of Credit Advance is not so
repaid (without, however, in any way consenting to such non-payment), (i) such
Letter of Credit Advance shall be deemed to be an Advance of a Revolving Credit
Loan (as provided in Section 9.03 hereof) and shall be repayable ON DEMAND,
together with interest thereon at the rate specified in this Article for overdue
payments of the Loans, pursuant to the terms and provisions of this Agreement
notwithstanding any term or provision contained in any Letter of Credit
application to the contrary, and (ii) the resulting default shall not be deemed
or construed to have been cured until payment has been duly made. Nothing in
this subsection, however, is intended to limit the ability of the Borrowers to
request an Advance prior to an anticipated Letter of Credit payment date or
(assuming satisfaction of the requisite conditions) to apply the proceeds
thereof to the payment of a Letter of Credit Advance.
(e) The Borrowers shall pay to the Administrative Agent (for the
benefit of all of the Banks) a fee respecting each Letter of Credit (the "Letter
of Credit Fee") for the year commencing with that date at a per annum rate
(computed on the basis of the actual number of days in such year and a year of
360 days) equal to the Applicable Euro Margin Rate for Revolving Credit Loans of
the unadvanced face amount thereof. The Letter of Credit Fee shall be payable on
the last Business Day of each March, June, September and December of each year
during the Revolving Credit Period, and on the last day of the Revolving Credit
Period, in each case in arrears; provided that the minimum fee for any Letter of
Credit shall be the greater of (i) one-half percent (0.50%) of the face amount
or (ii) $1,000, irrespective of any smaller face amount or shorter expiry. The
Borrowers also shall pay to the Fronting Bank for its own account any and all
customary fees (without duplication of the Letter of Credit Fee), commissions
and/or charges of the Fronting Bank for any issuance, payment, acceptance,
processing, increase, extension, renewal, amendment and/or transfer of the
Letter of Credit, all in accordance with the Fronting Bank's customary
practices, as established by the Fronting Bank in its sole discretion from time
to time. The Borrowers also shall pay to the Fronting Bank for its own account
any fees or other charges of any other issuer or any participant, correspondent,
confirming bank, custodian or designee of the Fronting Bank or other issuer
involved with the Letter of Credit.
(f) In addition to the payments of principal, interest and fees as
stated above, if there shall be any increase in the direct or indirect costs to
any one or more of the Banks of issuing, causing the issuance of or maintaining
a Letter of Credit, or any reduction in any amount received or to be received
with respect to a Letter of Credit by any one or more of the Banks hereunder,
due to:
(i) the introduction of or any change in any Applicable Law or the
interpretation or administration thereof, including (without limitation)
the imposition, modification or application of (A) any reserve, capital
adequacy, special deposit, assessment or similar requirement respecting
Letters of Credit issued by, assets held by, or deposits in or for the
account of any one or more of the Banks or other issuer(s) of a Letter of
Credit, (B) any requirement to withhold or deduct from any amount payable
to any one or more of the Banks hereunder, or payable directly or
indirectly to the issuer of a Letter of Credit, any taxes, levies, imposts,
duties, fees, deductions, withholdings or charges of a similar nature
(other than federal, state and local income and franchise taxes imposed
upon any Bank), or any interest thereon or any penalties with respect
thereto, imposed, levied, collected, assessed, withheld or deducted by any
governmental Authority, including subdivisions and taxing authorities
thereof, or (C) any other restriction or condition affecting a Letter of
Credit or this Agreement; or
(ii) the compliance by any one of more of the Banks or other issuer(s)
of a Letter of Credit with any regulation, guideline or request from any
central bank or other Authority (whether or not having the force of law);
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then the Borrowers from time to time, upon demand by the Administrative Agent,
shall pay to the Administrative Agent (for the benefit of each affected Bank or
other issuer) additional amounts sufficient to indemnify each such Bank or other
issuer against and reimburse each such Bank or other issuer for such increased
costs and reduced receipts (but only to the extent each such increased cost or
reduced receipt has not already been included in the calculation of any interest
rate or fee or otherwise reimbursed under any other section of this Agreement).
A certificate as to the amount of such increased costs and reduced receipts
submitted to the Borrowers by the Administrative Agent (which may be the
certificate of each affected Bank or other issuer) shall be conclusive as to the
existence and amount thereof absent manifest error. If the Administrative Agent
has not received payment for such amounts by the time it receives from the
Borrowers the next succeeding payment or prepayment of a portion of the
Obligations, whether intended by the Borrowers to be interest, principal or
otherwise, the Administrative Agent (with the consent of the Majority Banks) may
apply such payment or prepayment first to the reduction of the amounts of such
costs and receipts.
(g) The Obligations shall not otherwise be deemed to have been fully
paid or satisfied until all of the Letters of Credit have been paid (and the
corresponding Letter of Credit Advances repaid by the Borrowers) or have been
surrendered to the Fronting Bank or the Administrative Agent for return to and
cancellation by the issuer(s) thereof; provided that any Letter of Credit that
has not been presented for payment shall be deemed for this purpose to have been
canceled on the thirtieth day following the stated expiry date, without,
however, relieving the Borrowers of any of the Obligations with respect to any
such Letter of Credit that is in the process of payment.
(h) In addition to the payment of fees and other amounts as stated
above, after notice from the Administrative Agent during the continuance of any
Event of Default prior to maturity, and at all times on and after the Maturity
Date, the Borrowers shall pay to the Administrative Agent (for the benefit of
all of the Banks) interest in respect of the Letters of Credit outstanding from
time to time during such period(s) at the Default Rate, which amounts shall be
payable by the Borrowers at the same times as the regular interest payments on
the Loans required by Section 2.04 of this Agreement, subject, however, to the
maximum rate permitted by Applicable Law as provided in Section 2.11 hereof.
Each of the payment obligations, covenants and other obligations and agreements
of the Borrowers contained in this Agreement and the other Loan Instruments
shall be paid and satisfied by the Borrowers strictly in accordance with their
terms in each case without regard to any of the following: none of the Fronting
Bank, any other issuer, the Administrative Agent, any Bank and their respective
Representatives shall have any liability or responsibility for any of the
following; and each Borrower hereby expressly waives any claim or defense
against or in respect of each such person with respect to any and all of the
following: (i) any payment or other action or inaction under or with respect to
any Letter of Credit in accordance with the terms and provisions of the relevant
Letter of Credit, this Agreement or any other Loan Instrument; (ii) any payment
against presentation of any required draft or other document that does not
reference, or incompletely or incorrectly references, the existence, amount,
date, number or other aspect of the relevant Letter of Credit; (iii) any
presentment or payment under or with respect to any Letter of Credit after the
expiry thereof in reliance upon or in accordance with the International Standby
Practice, Applicable Law or customary practices in effect in the place of
issuance, confirmation, presentment, negotiation or payment of the Letter of
Credit; (iv) the form, validity, sufficiency, completeness, accuracy,
genuineness or legal effect of (A) any Letter of Credit, (B) any draft or other
document required or permitted under the relevant Letter of Credit, this
Agreement or any other Loan instrument, or (C) any instrument or document
transferring or assigning the Letter of Credit, any rights or benefits
thereunder or any proceeds thereof (in whole or in part), or purporting to do
so, even if any of them should in fact prove to be in any or all respects
invalid, insufficient, ineffective, incomplete, inaccurate, fraudulent or
forged; (v) the failure of any person to surrender, obtain, forward or otherwise
deal with the Letter of Credit or any other document other than the surrender
and obtaining of any drafts
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or other documents specifically required by the terms of the Letter of Credit;
(vi) any failure to note the amount of any draft on the reverse of the Letter of
Credit; (vii) any and all errors, omissions, interruptions or delays in
transmission or delivery of any notice, request, demand or other communication
permitted or required to be given under this Agreement or any other Loan
Instrument, whether by mail, cable, telegraph, telex, telecopy or otherwise,
whether or not an error in processing, cipher, translation or otherwise or an
error in interpretation (of technical terms or otherwise); (viii) any loss or
delay in the delivery of any draft, document or proceeds; (ix) the existence,
character, quality, quantity, condition, packing, value, or delivery of any
goods or other property relating to any Letter of Credit, the time, place,
manner or order in which shipment may have been made, the existence, form,
validity, sufficiency or legal effect of any insurance covering or purporting or
required to cover any such goods, or any act or omission of any insurer,
shipper, warehouseman, carrier, correspondent or other person, or (x) without
limiting the foregoing, any consequences arising from causes beyond the control
of the Administrative Agent, any other issuer or any other Bank or any of their
respective Representatives or any act or omission of any of them not done or
omitted in bad faith (each of which provision, if contained in the Letter of
Credit itself, may be waived by the Fronting Bank or other issuer in its sole
and absolute discretion). If the Letter of Credit provides that payment is to be
made by a designated Representative of the Fronting Bank or other issuer, none
of the Fronting Bank, any other issuer, the Administrative Agent, any Bank and
their respective Representatives (other than such designated Representative)
shall be responsible or otherwise liable for the failure of any document
specified in the Letter of Credit to come into the Fronting Bank's hands or for
any delay in connection therewith, and the obligation of the Borrowers to
reimburse the Fronting Bank, any other issuer, the Administrative Agent or any
other Bank for payments made or obligations incurred shall not be affected by
such failure or delay in the receipt by the Fronting Bank or other issuer of any
or all of such documents whether sent to the Fronting Bank or other issuer in
one or multiple mailings. In any event, neither the Fronting Bank, the
Administrative Agent nor any other issuer shall be responsible for any error,
neglect, suspension or insolvency of any of the Representatives of the
Administrative Agent or other issuer designated to confirm or pay with respect
to any Letter of Credit. Each Borrower acknowledges and agrees that this
Agreement has been entered into and all Letters of Credit have been and shall be
obtained by the Borrowers for commercial purposes. Each Borrower agrees that it
will not raise (as a defense or otherwise), and each Borrower hereby expressly
waives, any immunity or exemption from liability, jurisdiction, forum or service
that may now or hereafter be accorded to any Borrower, its Representatives or
any of their respective assets and properties. The preceding agreements and
waivers are not intended (and shall not be deemed or construed) to in any way
qualify, condition, diminish, restrict, limit or otherwise affect any (and is in
addition to each) other release, waiver, consent, waiver, exculpation,
indemnification, permitted action or other similar term or provision of this
Agreement or any other Loan Instrument.
Section 2.08. Payments and Applications.
(a) Until such time as either (i) the Borrowers have defaulted in any
payment to any Bank for more than five Business Days, (ii) a Default Declaration
has been issued, or (iii) any Bank is in any continuing default under Article IX
hereof, whichever occurs first, all payments of principal, interest, fees and
other amounts due the Banks or the Administrative Agent pursuant to this
Agreement and the other Loan Instruments shall be made in United States Dollars
in immediately available funds by 12:30 P.M. (New York City time) on the date
payment is due directly to each Bank at its offices at the appropriate address
set forth in the Introduction or as otherwise instructed by each Bank. During
the continuance of any Event of Default prior to maturity, and at any time after
the Maturity Date, the Administrative Agent may direct the Borrowers to make all
payments covered by this subsection directly to the Administrative Agent
pursuant to subsection (c) below.
(b) The parties intend that payments of the Obligations that may be
directly billed by each Bank under subsection (a) of this Section may be made
through the deposit of sufficient amounts by
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the Borrowers into specified accounts maintained with each Bank or any
designated affiliate(s) as and when such Obligations become due, and the
debiting of such account by or at the direction of the relevant Bank.
Accordingly, each Borrower hereby authorizes each Bank (or such affiliate) from
time to time to apply or direct the application of all or any portion of the
funds in any such account to the payment of principal and interest on Loans and
to all other Obligations of the Borrowers hereunder at each time such payment
becomes due and payable under subsection (a) above. In debiting such accounts,
the Obligations shall be deemed to have been paid or repaid only to the extent
of the immediately available funds actually available in and debited from that
account and applied to the Obligations, notwithstanding any internal procedure
of the relevant Bank (or such debiting affiliate) to the contrary.
(c) All payments of principal, fees and amounts not directly payable
under subsections (a) and (b), above (including all payments of interest, fees
and other amounts no longer directly payable under such subsections) due the
Banks pursuant to this Agreement and the other Loan Instruments shall be made in
United States Dollars in immediately available funds by 11:00 A.M. (New York
City time) on the date payment is due to the Administrative Agent at its offices
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or as otherwise instructed
by the Administrative Agent. All advances and payments made pursuant to this
Agreement and the other Loan Instruments shall be recorded by each Bank on its
books and records, and such books and records shall, absent manifest error, be
conclusive as to the existence and amounts thereof.
(d) Should any payment become due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and, in the case of any payment of principal, interest shall be
payable thereon at the rate per annum specified in this Agreement during such
extension.
(e) Except as otherwise provided in this Agreement, so long as no
Event of Default is then continuing, any funds received by any of the Banks from
or on behalf of any Borrower (whether pursuant to any of the terms and
provisions of this Agreement or any other Loan Instrument) shall be applied to
the following items in the manner and order reasonably designated by the
Borrowers to the extent permitted by Applicable Law; provided however, that
absent such designation or during the continuance of any such event, those funds
(including the net proceeds from any Collateral) instead shall be applied to the
following items in the following order and manner to the extent permitted by
Applicable Law:
(i) the payment to or reimbursement of the Administrative Agent or any
other Bank for any expenses actually incurred for which any of them is
entitled to be paid or reimbursed pursuant to any of the provisions of
this Agreement and the other Loan Instruments;
(ii) the payment of interest, fees and commissions then due hereunder,
ratably among the parties entitled thereto in accordance with the
amounts of interest, fees and commissions then due to such parties;
(iii) the payment of principal of Loans and Letter of Credit Advances then
due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal of Loans and Letter of Credit
Advances then due to such parties;
(iv) the establishment or maintenance of any cash collateral required or
permitted under any Loan Instrument; and
(v) the payment in full of all other Obligations under this Agreement and
the other Loan Instruments;
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provided, however, that after the occurrence of an Event of Default, payments
will be applied to the obligations of the Borrowers to the Banks, the Fronting
Bank and the Administrative Agent as each Bank, the Fronting Bank and the
Administrative Agent determines in its sole discretion with respect to the
Obligations owing to it.
Section 2.09. Taxes. Any and all payments made by the Borrowers under
this Agreement or any other Loan Instrument shall be made free and clear of and
without any reduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect
thereto, excluding, however, such taxes as are imposed on a Bank (a) by the
jurisdiction of its organization or its lending office engaged in the Loans (or
any political subdivision thereof) with respect to the income or franchise of
such Bank, or (b) by reason of such Bank's failure to comply with the
requirements of Section 10.13(d) hereof (all such non-excluded taxes, levies,
imposts, deductions, charges or withholdings being hereinafter collectively
referred to as the "Taxes"). In addition, the Borrowers shall pay, as and when
due, any and all present or future stamp or documentary taxes or other excise or
property taxes, charges or similar levies that may arise from any execution,
delivery, performance, existence or registration of this Agreement or any other
Loan Instrument or any payment made hereunder or thereunder (collectively,
"Other Taxes"). If any Borrower shall be required by Applicable Law to deduct
any Taxes or Other Taxes from or in respect of any sum payable to the Banks
under this Agreement or any other Loan Instrument, (x) the sum payable shall be
increased as may be necessary so that, after making all required deductions, the
Banks receive an amount equal to the sum they would have received if no such
deductions had been made, (y) such Borrower shall make such deductions, and (z)
such Borrower shall pay the full amount deducted to the relevant taxation
Authority or other Authority in accordance with Applicable Law. Within 30 days
after the date of any payment of Taxes or Other Taxes by the Borrowers, the
Borrowers will furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment or other documentation reasonably
satisfactory to the Administrative Agent evidencing payment. The Borrowers will
furnish to the Administrative Agent, upon the Administrative Agent's request
from time to time, an officer's certificate stating that, to the knowledge of
the signer, all Taxes and Other Taxes that are or have become due have been
paid. The Borrowers shall indemnify and reimburse (on a joint and several basis)
each Bank and the Administrative Agent on demand (payable within 30 days of
written demand) for the full amount of Taxes or Other Taxes paid by such Bank(s)
or the Administrative Agent (as the case may be) and any and all claims,
liabilities, losses and expenses actually incurred (including, without
limitation, penalties, interest, and reasonable attorneys and other professional
fees, disbursements and expenses) of such Bank(s) or the Administrative Agent
arising therefrom or related directly or indirectly thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted.
Section 2.10. Lost or Damaged Notes. In the event of the loss, theft
or destruction of a Note, the Borrowers shall execute and deliver an identical
new Note to the affected Bank in substitution therefor upon the receipt by the
Borrowers of (a) notice from the affected Bank confirming such event and (b) if
requested by the Borrowers, an indemnity agreement from the affected Bank in
such form and substance as may be reasonably acceptable to the affected Bank. In
the event of the mutilation of or other damage to a Note, the Borrowers shall
execute and deliver an identical new Note to the affected Bank in substitution
therefor, following which the affected Bank will return the mutilated or damaged
Note to the Borrowers.
Section 2.11. Maximum Interest Rate. It is the intention of the Banks
and the Borrowers that the interest (as defined under Applicable Law) on the
Loans that may be charged to, collected from or received from the Borrowers
shall not exceed the maximum rate permissible under Applicable Law. Accordingly,
anything in this Agreement, any Note or any other Loan Instrument to the
contrary notwithstanding, in the event any interest (as so defined) is charged
to, collected from or received from the Borrowers by the Banks pursuant hereto
or thereto in excess of such maximum lawful
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rate, then the excess of such payment over that maximum shall be applied to the
reduction of the outstanding principal balance of the Loans and the other
Obligations (without any prepayment premium or penalty) and any portion of such
excess payment remaining after payment and satisfaction in full of the
Obligations shall be returned by the Banks to the Borrowers.
Section 2.12. Obligations and Communications of the Borrowers.
(a) All of the obligations, liabilities, representations, warranties,
covenants and other agreements of any one or more of the Borrowers under or in
any way connected with this Agreement and the other Loan Instruments, including
without limitation the Obligations, shall be joint and several and each Borrower
shall be jointly and severally liable for all such obligations, liabilities and
Obligations. Each Borrower shall be liable for all amounts due to the
Administrative Agent, the Fronting Bank and/or any Bank under this Agreement,
regardless of which Borrower actually receives Extensions of Credit or the
amount of such Extensions of Credit received or the manner in which the
Administrative Agent and/or such Bank accounts for such Extensions of Credit on
its books and records. Each Borrower's Obligations with respect to Extensions of
Credit made to it, and each Borrower's Obligations arising as a result of the
joint and several liability of the Borrowers hereunder, with respect to
Extensions of Credit made to the other Borrowers hereunder, shall be separate
and distinct obligations, but all such Obligations shall be primary obligations
of each such Borrower. Any knowledge held by or imputed to any Borrower shall be
deemed to be within the knowledge of all of the Borrowers. Any certificate,
notice, request, statement or other document or communication signed or made on
behalf or in the name of any one or more of the Borrowers shall be deemed to
have been signed or made by all of the Borrowers unless expressly disclaimed in
a particular document or communication.
(b) Each Borrower agrees that neither the Administrative Agent nor any
Bank shall have any responsibility to inquire into the apportionment, allocation
or disposition of any Extensions of Credit as among the Borrowers.
(c) Without limiting the generality of the joint and several nature of
the Obligations and the other obligations, representations, warranties,
covenants and other agreements of the Borrowers under this Agreement and the
other Loan Instruments, each Borrower hereby makes, constitutes and appoints
Aeroflex and each of its executive officers (Treasurer or Vice President and
above), and each of them with full power of substitution, as such Borrower's
true and lawful attorney-in-fact with full power and authority from time to time
in such Borrower's name, place and stead to (i) make requests for, or
conversions or continuations of, Extensions of Credit, the execution and
delivery of certificates and the receipt and allocation of disbursements from
the Banks, (ii) pay or otherwise perform any of the other Obligations, (iii)
mortgage or grant security interests in any of the assets and properties of such
Borrower to secure any of the Obligations, (iv) give notices and other
communications under this Agreement and the other Loan Instruments, (v) agree to
waivers, supplements, modifications, amendments, restatements and replacements
of and additions to this Agreement and the other Loan Instruments, (vi) take or
authorize any other action contemplated by this Agreement and the other Loan
Instruments, and (vii) sign, execute, acknowledge, swear to, verify, deliver,
file, record and publish any one or more of the foregoing. Aeroflex hereby
accepts such appointment. This Power of Attorney is hereby declared to be
revocable only with the prior written consent of the Administrative Agent, which
will not be withheld unreasonably, with full power of substitution and coupled
with an interest. This Power of Attorney shall survive the dissolution,
reorganization or bankruptcy of any Borrower and shall extend to and be binding
upon each Borrower's successors and assigns. This Power of Attorney may be
exercised, among other ways, (i) by any one of the above-named
attorneys-in-fact, or by any substitute designated by any of those
attorneys-in-fact, and (ii) by signing for the Borrowers individually on any
document or instrument or by listing two or more of the persons, including the
Borrowers, for whom any document or instrument is being signed
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and signing once, with a single signature by the attorney-in-fact or substitute
being effective to exercise the Powers of Attorney of all persons so listed. A
facsimile signature shall be effective if so affixed.
(d) Any certificate, notice, communication, election, representation
and warranty, covenant, agreement, undertaking, request, statement or other
document or communication made by any of the above-named attorneys-in-fact shall
be deemed to have been signed or made by all of the Borrowers pursuant to this
Power of Attorney and any certificate, notice, communication, election,
representation and warranty, covenant, agreement, undertaking request, statement
or other document or communication required or permitted to be given to any
Borrower or Borrowers hereunder that is given to any of the above-named
attorneys-in-fact shall be deemed to have been given to all of the Borrowers
pursuant to this Power of Attorney and shall be binding upon and enforceable
against such Borrowers to the same extent as if the same had been given directly
to such Borrowers, in each case irrespective of whether any reference to this
power or to one or more of the other Borrowers is made therein, unless such
exercise expressly disclaimed in a particular document or communication. In the
event of any conflict between the exercise of this power and the one granted to
the Administrative Agent in Section 7.06 hereof, the one granted to the
Administrative Agent shall prevail.
(e) Each Borrower assumes all responsibility for being and keeping
itself informed of each other Borrower's and any guarantor's financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment
of the Obligations and the nature, scope and extent of the risks which such
Borrower or any guarantor assumes and incurs under any Loan Instrument, and
agrees that neither the Administrative Agent nor any Bank shall have any duty to
advise such Borrower, any other Borrower or any guarantor of information known
to the Administrative Agent or any Bank regarding such circumstances or risks.
(f) Each Borrower hereby waives, with respect to itself and its
obligations hereunder, any right (except as shall be required by applicable
statute and cannot be waived) to require the Administrative Agent or any Bank to
(i) proceed against any other Borrower, any guarantor or any other Person, (ii)
proceed against or exhaust any security held from any other Borrower, any
guarantor or any other Person or (iii) pursue any other remedy in the
Administrative Agent or any Bank's power whatsoever. Each Borrower hereby waives
any defense based on or arising out of any defense of any other Borrower, any
guarantor or any other Person other than payment in full of the Obligations,
including any defense based on or arising out of the disability of any other
Borrower, any guarantor or any other Person, or the enforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Borrower other than payment in full of the Obligations.
Subject to the terms of this Agreement, the Administrative Agent or any Bank
may, at its election, foreclose on any security held by the Administrative Agent
or any Bank by one or more judicial or non-judicial sales, provided that any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative Agent
or any Bank may have against any other Borrower, any guarantor or any other
Person, or any security, without affecting or impairing in any way the liability
of any Borrower hereunder except to the extent the Obligations have been paid in
full. With respect to each Borrower's Obligations arising as a result of the
joint and several liability of the Borrowers hereunder with respect to
Extensions of Credit made to the other Borrowers hereunder, each Borrower
waives, until the Obligations shall have been paid in full and this Agreement
shall have been terminated, any right to enforce any right of subrogation or any
remedy which the Administrative Agent and/or any Bank now has or may hereafter
have against the Borrowers, any endorser or any guarantor of all or any part of
the Obligations, and any benefit of, and any right to participate in, any
security or collateral given to the Administrative Agent and/or any Bank to
secure payment of the Obligations or any other liability of the Borrower to the
Administrative Agent and/or any Bank. Each Borrower waives all rights and
defenses arising out of any such election of remedies by the Administrative
Agent or any Bank, even though that election of remedies, such as a nonjudicial
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foreclosure with respect to security for a guaranteed obligation, has destroyed
any of such Borrower's, any other Borrower's or any guarantor's rights of
subrogation and reimbursement against any other Borrower or any guarantor by the
operation of applicable law or otherwise.
(g) Each Borrower's Obligations arising as a result of the joint and
several liability of the Borrowers hereunder with respect to Extensions of
Credit made to the other Borrowers hereunder shall, to the fullest extent
permitted by law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrowers or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrowers, (ii) the absence of any attempt to
collect the Obligations from the other Borrowers, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance or granting of any indulgence
by the Administrative Agent and/or any Bank with respect to any provision of any
instrument evidencing the Obligations of the other Borrowers, or any part
thereof, or any other agreement now or hereafter executed by the other Borrowers
and delivered to the Administrative Agent and/or any Bank, (iv) the failure by
the Administrative Agent and/or any Bank to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of the other Borrowers, (v) the Administrative
Agent's and/or any Bank's election, in any proceeding instituted under the
Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, (vi) any borrowing or grant of a security interest by the other Borrowers,
as debtors-in-possession under Section 364 of the Bankruptcy Code, (vii) the
disallowance of all or any portion of the Administrative Agent's and/or any
Bank's claim(s) for the repayment of the Obligations of the other Borrowers
under Section 502 of the Bankruptcy Code, or (viii) any other circumstances
which might constitute a legal or equitable discharge or defense of a guarantor
or of the other Borrowers.
(h) Upon any Event of Default, the Administrative Agent may proceed
directly and at once, without notice, against any or all of Borrower to collect
and recover the full amount, or any portion of the Obligations, without first
proceeding against the other Borrowers or any other Person, or against any
security or Collateral for the Obligations. Each Borrower consents and agrees
that the Administrative Agent shall not be under any obligation to marshal any
assets in favor of the Borrowers or against or in payment of any or all of the
Obligations.
(i) Reference to a single specific Borrower or group of Borrowers,
whether by name, officers title, letterhead or otherwise, shall not constitute
an express disclaimer of any of the foregoing.
Section 2.13. Subrogation and Contribution. Each Borrower covenants
and agrees that until the Obligations of the Borrowers under this Agreement and
the other Loan Instruments have been fully paid, performed and satisfied, any
and all Subordinated Rights shall be subordinate and inferior in priority and
dignity to the Obligations and shall not be entitled to any payment or
satisfaction (in whole or in part) until all of the Obligations have been fully
paid and satisfied. Until such time (if ever) as the Obligations have been fully
paid and satisfied: (x) the Borrowers shall not seek any payment or exercise or
enforce any right, power, privilege, remedy or interest that any Borrower may
have with respect to any Subordinated Right except with the prior written
consent of the Administrative Agent (with the consent of the Requisite Banks, as
and if required) and for the benefit of all of the Banks; and (y) any payment,
asset or property delivered to or for the benefit of any Borrower in respect of
any Subordinated Right shall be accepted in trust for the benefit of all of the
Banks and shall be promptly paid or delivered to the Administrative Agent (for
the benefit of all of the Banks) to be credited and applied to the payment and
satisfaction of the Obligations, whether contingent, matured or unmatured, or to
be held by the Administrative Agent (for the benefit of all of the Banks) as
additional Collateral, as the Administrative Agent (with the consent of the
Requisite Banks, as and if required) may elect in its sole and absolute
discretion.
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Section 2.14. Waiver of Impairment of Contribution and Other Rights.
Each Borrower acknowledges and agrees that: (a) the amounts (if any) that
potentially could be realized by such Borrower, as well as the enforceability,
practicality or value of any right, power, privilege, remedy or interest of such
Borrower, under or in respect of any Subordinated Right may be substantially
reduced or limited or completely eliminated by any one or more of the following
(either individually or in the aggregate): (i) the delay inherent in the
subordination of those rights under this Agreement, (ii) payments by any other
Borrower or others to the Administrative Agent, any Bank or any other person,
(iii) any foreclosure, sale, lease or other disposition or realization
respecting any Collateral, (iv) any action or inaction by the Administrative
Agent, any Bank or any other person authorized or waived by or on behalf of such
Borrower, whether under this Agreement or otherwise, or contemplated, permitted
or provided for under this Agreement, any other Loan Instrument or Applicable
Law, (v) the exercise or enforcement by the Administrative Agent or any other
Bank of any one or more of its rights, powers privileges, remedies and interests
of the Administrative Agent or any other Bank under any Loan Instrument or
Applicable Law, or (vi) any adverse change (however material) in the assets,
business, operations, properties, or condition (financial or otherwise) of any
other Borrower or any other person arising out of or related directly or
indirectly to any of the foregoing; (b) neither the Administrative Agent nor any
Bank is acting as an agent, trustee or other representative (regarding
collateral or otherwise) with respect to any Subordinated Right; (c) the
Administrative Agent or any other Bank may exercise or enforce any of its
rights, powers, privileges, remedies or interests under the Loan Instruments and
Applicable Law without any consideration of or regard to any Subordinated Right
or any direct or indirect adverse effect thereupon (however material); (d) such
Borrower shall not be entitled to any payment or other asset or property (or any
part thereof) delivered to or otherwise realized by the Administrative Agent or
another Bank on account of any of the Obligations or to any accounting thereof;
(e) none of the foregoing (whether individually or in the aggregate) shall (i)
release, limit or otherwise affect the liability of such Borrower to the
Administrative Agent or any other Bank under this Agreement or any other Loan
Instrument, or (ii) give rise to any action, claim, counterclaim, right of
setoff or recoupment, defense, or other remedy on the part of such Borrower
irrespective of frequency, direct or indirect effect, materiality, or direct or
indirect consequences; and (f) such Borrower shall not raise any, and hereby
expressly waives and releases each and every, such action, claim, counterclaim,
right of setoff, or recoupment, defense, or other remedy.
Section 2.15. Guaranty of Payment and Expenses. Each Borrower
unconditionally and irrevocably guaranties to the Administrative Agent, the
Fronting Bank and each Bank the full and punctual payment and satisfaction of
the Obligations of each and every other Borrower as and when due, whether at
stated maturity, by acceleration or otherwise, and agrees to pay and satisfy in
full any and all reasonable expenses that are paid or incurred by the
Administrative Agent, the Fronting Bank or any other Bank in the collection of
all or any portion of the Obligations of any Borrower or the exercise or
enforcement of any one or more of the other rights, powers, privileges, remedies
and interests of the Administrative Agent, the Fronting Bank and the Banks under
this Agreement and the other Loan Instruments, irrespective of the manner or
success of any such collection, exercise or enforcement, and whether or not such
expenses constitute part of the Obligations (collectively, the "Guaranty").
Section 2.16. Continuing Guaranty, Payment in Accordance with Terms,
Etc. Each Borrower covenants and agrees that: (a) the Guaranty is a continuing
guaranty of payment and satisfaction, and not collectability only, whether the
Obligations are now or hereafter existing, acquired or created, and irrespective
of the fact that from time to time under the terms and provisions of the Loan
Instruments monies may be advanced, repaid and readvanced and the outstanding
balance of the Loans may be zero; (b) the Guaranty may not be revoked or
terminated until such time as all of the Obligations shall have been fully paid
and satisfied; (c) the Obligations shall not be deemed to have been otherwise
fully paid and satisfied so long as any Loan Instrument shall have any
continuing force or effect; and (d) the Borrowers' guaranty of those Obligations
will be paid and satisfied in full in accordance with the
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terms and provisions of the Loan Instruments without regard to any Applicable
Law now or hereafter in effect in any jurisdiction, including (without
limitation) any Applicable Law that might in any manner affect any of those
terms and provisions or any of the rights, powers, privileges; remedies and
interests of the Administrative Agent, the Fronting Bank or any other Bank with
respect thereto, or that might cause or permit to be invoked any alteration in
the time. amount or manner of payment of any of the Obligations by any Borrower
or any other person (other than any Bank).
Section 2.17. Waivers of Notice, Etc. Except for notices expressly
required under this Agreement or any other Loan Instrument to the Borrowers,
each Borrower hereby expressly waives: (a) notice of acceptance of this
Agreement; (b) notice of any action taken or omitted in reliance hereon; (c)
presentment; (d) demand for payment; (c) protest or notice of protest; (f)
notice of any nonpayment or other Event of Default or the occurrence or
continuance of any other default, or any other event that (with the giving of
notice or the passage of time or both) could constitute an Event of Default or a
default, under any Loan Instrument; (g) notice of any material and adverse
effect, whether individually or in the aggregate, upon the assets, business,
operations, properties or condition (financial or otherwise) of any Borrower or
any other person, or upon any part of any Collateral securing the obligations of
any Borrower or any other person; (h) any statute of limitations or similar time
constraint under any Applicable Law, whether with respect to the Obligations; or
(i) any other proof, notice or demand of any kind whatsoever with respect to any
or all of the Obligations or promptness in making any claim or demand under this
Agreement or any other Loan Instrument. No act or omission of any kind in
connection with any of the foregoing shall in any way impair or otherwise affect
the legality, validity, binding effect or enforceability of any term or
provision of this Agreement or any other Loan Instrument or any of the
Borrowers' Obligations under the Guaranty.
Section 2.18. Agreement Not Affected. Without limiting the generality
of the foregoing Sections or any other term or provision of this Agreement, each
Borrower (in its capacity as a guarantor under the Guaranty) covenants, agrees
and consents that, at any time, and from time to time: (a) the Loans may be
advanced, repaid and readvanced from time to time, or the amount of the Loans,
the rate of interest thereon, any other Obligation or the credit availability
may be increased or otherwise changed; (b) the time, manner, place and other
terms and provisions of payment or performance of any one or more of the
Obligations may be extended, modified, amended, restated or otherwise changed;
(c) any partial or late payment or any payment during the continuance of any
Default under any Loan Instrument may be accepted in whole or in part or
rejected; (d) any Collateral securing or intending to secure anyone's
obligations under any Loan Instrument may be surrendered, repossessed,
sequestered, judicially or nonjudicially foreclosed, conveyed or assigned (by
deed in lieu of foreclosure or otherwise), sold, leased or otherwise realized
upon, dealt with or disposed of, in whole or in part, whether to the
Administrative Agent, the Fronting Bank or any other Bank, its designee or
otherwise; (e) any mortgage or other security interest in any such Collateral
may be held without due recordation or other perfection (whether intentionally
or otherwise), may be recorded or otherwise perfected, or may be assigned,
released, subordinated or otherwise impaired, dealt with or disposed of in whole
or in part; (f) any one or more payments, distributions and proceeds received
from or in respect of such Borrower, any other Borrower or any other Person or
any Collateral, if not expressly designated for or otherwise restricted to a
particular obligation, may be applied in the discretion of the Administrative
Agent, the Fronting Bank or any other Bank to the Obligations or to other
Indebtedness or obligations (including interest) of such Borrower, any other
Borrower or any such other Person owed to the Administrative Agent, the Fronting
Bank or any other Bank or any of its Affiliates; (g) the liability of such
Borrower, any other Borrower or any other Person to pay any and all of the
Obligations may be settled, compromised, adjusted, forgiven, released or
affected by any other accommodation, in whole or in part, and payment of any and
all of the Obligations of any Borrower may be subordinated to the prior payment
of any other debts or claims of that or any other person; (h) the respective
rights of setoff of the Administrative Agent, the Fronting Bank, any Bank and
their respective Representatives may be exercised as provided under this
Agreement,
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any other Loan Instrument or Applicable Law against any of the deposits, assets,
properties and Indebtedness subject thereto, without any demand on or notice to
any Borrower, without regard to the frequency of exercise thereof, and whether
or not the relevant obligations shall then be matured; (i) any representation,
warranty, covenant or other term or provision of any Loan Instrument, in whole
or in part, may be the subject of one or more waivers of applicability or
consents to nonperformance, noncompliance or nonobservance, whether or not
constituting defaults, or may be otherwise not exercised or enforced (whether
intentionally or otherwise); (j) any Loan Instrument, or any term or provision
thereof, in whole or in part, may be renewed, extended, supplemented, modified,
amended, restated or otherwise changed in any respect by the respective parties
thereto in the manner provided therein; (k) any one or more of this Agreement
and the other Loan Instruments, or any one or more of the rights, powers,
privileges, remedies and interests of the Administrative Agent, the Fronting
Bank or any other Bank herein or therein, may be sold, conveyed, assigned or
otherwise transferred in whole or part (including participations or other
undivided interests) to any other Person; or (1) any other right, power,
privilege, remedy or interest of the Administrative Agent, the Fronting Bank or
any other Bank under this Agreement, any other Loan Instrument or Applicable Law
may be exercised or enforced by the Administrative Agent, the Fronting Bank or
any other Bank, or its designee, which exercise or enforcement may be delayed,
discontinued or otherwise not pursued or exhausted for any or no reason
whatsoever, or any such right, power, privilege, remedy or interest may be
waived, omitted or otherwise not exercised or enforced (whether intentionally or
otherwise); all in such manner and order, upon such terms and provisions and
subject to such conditions as the Administrative Agent, the Fronting Bank or any
other Bank may deem necessary or desirable in its sole and absolute discretion,
in each case subject to any limitations imposed by the terms of this Agreement,
including Section 7.01 hereof, all without notice to or further assent from such
Borrower, and all without affecting this Agreement or any other Loan Instrument
or any of such Borrower's Obligations under the Guaranty, which obligations
shall continue in full force and effect until such time as all of the
Obligations shall have been fully paid and satisfied.
Section 2.19. Bankruptcy, Reinstatement. In the event the
Administrative Agent, the Fronting Bank or any other Bank is not permitted or is
otherwise unable (because of the pendency of any bankruptcy, insolvency,
receivership or other proceeding) to accelerate the Obligations, but otherwise
would have been permitted to do so at such time pursuant to any Loan Instrument,
the Administrative Agent, the Fronting Bank or such Bank may demand payment in
full under the Guaranty and may exercise and enforce the other rights, powers,
privileges, remedies and interests of the Administrative Agent, the Fronting
Bank or any other Bank under this Agreement or any other Loan Instrument to
which the guarantying Borrower is a party as if the Obligations had been duly
accelerated, and each guarantying Borrower will not raise, and each hereby
expressly waives and releases, any claim or defense with respect to such deemed
acceleration. In the event any payment of or any application of any amount,
asset or property to any of the Obligations, or any part thereof, at any time is
rescinded or must otherwise be restored or returned by the Administrative Agent,
the Fronting Bank or any other Bank upon the insolvency, bankruptcy or
reorganization of any Borrower or any other Person, whether by order of any
court, by any settlement approved by any court, or otherwise, then the terms and
provisions of this Guaranty shall continue to apply, or shall be reinstated if
not then in effect, as the case may be, with respect to the Obligations so
rescinded, restored or returned, all as though such payment or application had
never been made.
Section 2.20. Transitional Matters. On the Effective Date this
Agreement shall have amended, restated and completely replaced the Existing Loan
Agreement and the Notes shall have amended, restated and completely replaced the
Existing Notes (as more fully described in Sections 2.01, 2.02 and 2.03 hereof);
but no such action shall be deemed a repayment, satisfaction, cancellation or
novation of the Existing Obligations, which shall continue and constitute
Obligations of the Borrowers under and subject to the terms and provisions of
this Agreement and the other Loan Instruments. The Loan Instruments are
intended, and shall be deemed and construed, to be a continuation (without
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interruption or recommencement) of the various terms and provisions of the
Existing Loan Instruments and the obligations arising or accruing thereunder
prior to the Effective Date, subject to any modifications made by the Loan
Instruments. For example (and without limitation); (a) all principal, interest,
fees, reimbursements and other amounts heretofore owed or accruing under the
Existing Loan Instruments will continue to be owed, to accrue and to be payable
under the Loan Instruments, subject to any modifications made by the Loan
Instruments; (b) the Borrowers shall deliver all financial statements and
reports required under the Existing Loan Instruments respecting periods ending
on or before the Effective Date, and not yet delivered, which shall be deemed to
be statements and reports delivered pursuant to this Agreement; (c) any term or
provision of any Loan Instrument relating to the 2002 calendar year or the
fiscal years ending June 30, 2002 or June 30, 2003, shall include all of the
year or fiscal year (even though portions may predate the Effective Date); and
(d) any misrepresentation or default by the Borrowers under the Existing Loan
Instruments continuing as of the Effective Date shall continue and constitute a
corresponding continuing misrepresentation or default by the Borrowers under the
Loan Instruments, with any time periods for notice, grace or the like under the
Loan Instruments having commenced to run at their inception under the Existing
Loan Instruments, subject to any modifications made by the Loan Instruments.
ARTICLE III
Representations and Warranties
To induce the Banks to enter into this Agreement and the other Loan
Instruments to which each is a party and to make and continue the Loans to the
Borrowers, the Borrowers jointly and severally represent and warrant to the
Banks that:
Section 3.01. Organization, Powers, Etc. Each Borrower: (a) is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (b) has the power and authority to carry on its
business as now conducted and to own or hold under lease the assets and
properties it purports to own or hold under lease, (c) is duly qualified,
licensed or registered to transact its business and in good standing in every
jurisdiction in which failure to be so qualified, licensed or registered has had
or would be reasonably likely to have a Material Adverse Effect and Schedule
3.01(c) hereto contains a complete and accurate list of all jurisdictions in
which such Borrower is so qualified, licensed or registered, (d) has the power
and authority to execute and deliver this Agreement and each of the other Loan
Instruments to which it is or will be a party and to perform all of its
obligations hereunder and thereunder; and (e) has its executive office and
principal place of business at the address(es) set forth in the Introduction.
Section 3.02. Authorization, Conflicts and Validity. The execution and
delivery by each Borrower of this Agreement and each of the other Loan
Instruments to which it is or will be a party and the performance by each
Borrower of all of its obligations hereunder and thereunder: (a) have been duly
authorized by all requisite corporate action; (b) will not violate or be in
conflict with any term or provision of (i) any Applicable Law (including,
without limitation, any applicable usury or similar law, but excluding those
that have not had or would not be reasonably likely to have a Material Adverse
Effect), (ii) any judgment, order, Writ, injunction, decree or consent of any
court or other judicial Authority, or (iii) any organizational document; (c)
will not violate, be in conflict with, result in a breach of or constitute a
default (with or without the giving of notice or the passage of time or both)
under any term or provision of any Material Document, other than any such
violation, conflict, breach or default that has not had or would not be
reasonably likely to have a Material Adverse Effect; and (d) except as
specifically contemplated by this Agreement or any other Loan Instrument, will
not result in the creation or imposition of any Lien of any nature upon any of
its assets and properties. This Agreement and each Note are, and the other Loan
Instruments to which any Borrower is or will be a part (when executed and
delivered) will be legal, valid and binding obligations of each signing
Borrower, enforceable in
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accordance with their respective terms and provisions, except as enforceability
may be limited by (1) applicable bankruptcy, insolvency, reorganization and
other laws affecting the rights or remedies of creditors generally and (2) rules
of equity affecting the enforcement of obligations generally (whether at law or
in equity).
Section 3.03. Consents, Etc. No consent, approval or authorization of,
or registration, declaration or filing with, any governmental Authority or other
person (including, without limitation, the shareholders of any Borrower) is
required as a condition precedent, concurrent or subsequent to or in connection
with the due and valid execution, delivery and performance by any Borrower of
this Agreement or any other Loan Instrument to which any Borrower is or will be
a party or the legality, validity, binding effect or enforceability of any of
their respective representations, warranties, covenants and other terms and
provisions, except (i) as listed on Schedule 3.03 hereto, (ii) the filing of the
Uniform Commercial Code financing statements determined by the Administrative
Agent to be required in connection herewith, and (iii) the compliance under any
applicable assignment of claims statute with respect to any Contract made
directly with any governmental Authority. Each franchise, license, certificate,
authorization, approval or consent from any governmental Authority material to
the present conduct of the business or operations of each Borrower or any of its
Subsidiaries, or required for the acquisition, ownership, improvement, operation
or maintenance by any Borrower of any material portion of the assets and
properties it now owns, operates or maintains, has been obtained and is validly
granted, is in full force and effect and constitutes valid and sufficient
authorization therefore, other than where the failure to so obtain or maintain
any such franchise, license, certificate, authorization, approval or consent
from any governmental Authority has not had or would not be reasonably likely to
have a Material Adverse Effect.
Section 3.04. Litigation. Except as set forth in Schedule 3.04 hereto,
there are no actions, suits, investigations or proceedings (whether or not
purportedly on behalf of any one or more of the Borrowers) pending or, to the
best knowledge of the Borrowers, threatened or contemplated at law, in equity,
in arbitration or by or before any other Authority involving or affecting: (a)
any Borrower that, if adversely determined, would be reasonably likely to have a
Material Adverse Effect; (b) any alleged criminal act or activity (other than a
misdemeanor) on the part of any Borrower or any of its representatives; (c) the
Obligations; or (d) any of the transactions contemplated in this Agreement
and/or the other Loan Instruments; nor to the best knowledge of the Borrowers,
is there any basis for the institution of any such action, suit, investigation
or proceeding. None of the Borrowers is in default with respect to any judgment,
order, writ, injunction, decree or consent of any court or other judicial
Authority, which default has had or would be reasonably likely to have a
Material Adverse Effect.
Section 3.05. Financial Statements.
(a) The Borrowers heretofore have provided to the Banks the
consolidated balance sheet of the Borrowers as at June 30, 2002, and the related
consolidated statements of earnings, shareholders' equity, and cash flow for the
fiscal year ended on that date, audited and reported upon by KPMG LLP,
independent certified public accountants. Those financial statements and reports
and the related notes and schedules, as well as those related to later periods
(whenever delivered), (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) are complete, accurate and a fair presentation of the
financial condition of the Borrowers as of the date thereof and the results of
their operations for the period covered thereby (subject in the case of interim
statements to normal year-end audit adjustments).
(b) Since June 30, 2002, other than the December Restructuring Charge,
no event or events have occurred that individually or in the aggregate has had
or would be reasonably likely to have a Material Adverse Effect.
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Section 3.06. Absence of Defaults and Certain Agreements.
Except as set forth in Schedule 3.06 hereto, no act or event has
occurred and is continuing that violates, is in conflict with, results in a
breach of or constitutes a default (with or without the giving of notice or the
passage of time or both) under any term or provision of (a) this Agreement or
any other Loan Instrument, or (b) any Corporate Document. None of the Borrowers
is a party to any instrument, indenture, agreement, document, arrangement or
other obligation, or subject to any charter or other restriction, that has had
or would be reasonably likely to have a Material Adverse Effect.
Section 3.07. Compliance with Applicable Laws. Except as otherwise set
forth in Schedule 3.07 hereto, each Borrower is in compliance with and conforms
to all Applicable Laws, other than to the extent that the noncompliance
therewith or violation thereof has not had and could not have a Material Adverse
Effect.
Section 3.08. Payment of Debts and Taxes.
(a) Each Borrower: (i) has filed all required tax returns with the
appropriate taxing authorities respecting its operations, assets and properties;
and (ii) has paid or caused to be paid all taxes shown on those returns to the
extent due; except in either case to the extent that (A) extensions of time to
make such filing have been duly granted by the appropriate taxing authorities
and those extensions have not expired, or (B) payment is not yet required
pursuant to Section 5.06 hereof.
(b) Each Borrower is current in its payment of debts and performance
of obligations (other than taxes) except to the extent payment or performance is
not yet required pursuant to Section 5.06 hereof
Section 3.09. Indebtedness, Credit Support, ERISA Plans, Etc.
(a) Schedule 3.09(a) hereto (as and if updated pursuant to Section
5.02 hereof) contains a complete and accurate list of all (i) direct and
indirect Indebtedness of each Borrower (whether individual, joint, several or
otherwise), (ii) all Credit Support of each Borrower with respect to any such
Indebtedness and (iii) other Credit Support of each Borrower, in each case
including commitments, lines of credit and other credit availabilities,
identifying with respect to each the respective parties (and whether the
Borrower is a borrower or guarantor), amounts and maturities, excluding however,
the Loans, all intercompany Indebtedness among the Borrowers and negotiable
instruments endorsed for collection or deposit in the ordinary course of
business and Credit Support pursuant to the Guaranty.
(b) [Intentionally Omitted.]
(c) Except as set forth in Schedule 3.09(c): (i) each "employee
pension benefit plans" (as defined in ERISA) established, funded or maintained
by any Borrower or any ERISA Affiliate or to which any Borrower or any ERISA
Affiliate is required to contribute (as each may be supplemented, modified,
amended, restated or replaced from time to time pursuant to ERISA or the Code,
as applicable, a "Plan", and collectively, the "Plans") is in full force and
effect and has been (or is expected to be) determined to be duly qualified under
ERISA and the Code, as applicable; (ii) no ERISA Event is currently continuing,
and none has occurred within the past five years, in any material respect; (iii)
each material report, statement or other document has been timely prepared and
delivered in accordance with, and conforms in form and substance to the
requirements of, ERISA and the Code; (iv) each Plan complies with ERISA, the
Code and all other Applicable Laws in all other material respects, (v) the
present value of all accrued benefits under each Plan subject to Title IV of
ERISA does not, and did not as of the last annual valuation date, exceed the
value of the assets of such Plan allocable to such accrued benefits
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(which benefit value shall be determined either on an ongoing basis, using the
Plans reasonable actuarial assumptions, or on a termination basis, using the
assumptions employed by the Pension Benefit Guaranty Corporation in connection
with plan terminations, as applicable); (vi) there are no actions, suits,
investigations or proceedings (whether or not purportedly on behalf of any
fiduciary, sponsor, participant or beneficiary) pending, or to the best
knowledge of the Borrowers, threatened or contemplated at law, in equity, in
arbitration or by or before any Authority involving or affecting any Plan or any
assets and properties of a Plan that, if adversely determined, would be
reasonably likely to have an ERISA Effect, (vii) to the best knowledge of the
Borrowers, there are no facts or circumstances that might give rise to any
material liability of or material claim against any Borrower, any of its
Subsidiaries or the Collateral under Title IV of ERISA; and (viii) none of the
Plans is, and no Borrower or ERISA Affiliate in the past established, funded,
maintained, contributed or was required to contribute to, any "multiemployer
plan" (as defined in ERISA); provided, however, that the provisions of this
sentence shall be to the best knowledge of the Borrowers with respect to any
multiemployer plan administered by a person other than any Borrower or any ERISA
Affiliate. The present value of all accrued post-retirement benefits under each
"employee welfare benefit plan" (as defined in ERISA) to which one or more of
the Borrowers and their ERISA Affiliates is required to contribute does not in
the aggregate exceed the assets of such plan allocable to such benefits by more
than $50,000 (determined using the actuarial and other assumptions required
under FAS 106).
(d) After giving effect to the direct and indirect Indebtedness and
other liabilities and obligations of each Borrower and its Subsidiaries arising
under this Agreement and the other Loan Instruments, whether absolute or
contingent, Aeroflex on a consolidated basis (i) is solvent (i.e., the aggregate
fair value of its assets exceeds the sum of its liabilities); (ii) has adequate
working capital; and (iii) is able to pay its debts as they mature. No Borrower
is currently considering or planning, and has ever considered or planned, to
take any of the actions specified in Section 8.01(h) hereof, and to the
knowledge of each Borrower no other person is currently considering or planning,
or has ever considered or planned, to take any of the actions specified in
Section 8.01(i) hereof.
Section 3.10. Assets and Collateral.
(a) The Borrowers are the holders and severally are the legal and
beneficial owners of, and have good title to: (i) the Collateral; and (ii) all
of the other assets and properties of the Borrowers (A) that are owned by such
Borrowers and are reflected on the most recent report or financial statement
furnished to the Banks or (B) subsequently acquired, excluding, however, such
assets and properties as may have been sold or otherwise disposed of (1) in the
ordinary course of business prior to the date of this Agreement or (2) as
permitted by this Agreement after the date hereof. Each Borrower has full
corporate power and authority and the unconditional right to grant to the
Administrative Agent (for the benefit of all of the Banks) the security
interests respecting the Collateral contemplated in this Agreement and the other
Loan Instruments. The Administrative Agent (for the benefit of all of the Banks)
has received legal, valid, binding and enforceable security interests in and to
the Collateral pursuant to this Agreement and the other Loan Instruments which
security interests shall be perfected upon the delivery of the certificated
Pledged Securities and the filing of any requisite Uniform Commercial Code
financing statements. No property of any Borrower is subject to any Lien or any
adverse claim (other than any claim of any party to a Contract made thereunder)
of any kind whatsoever, except (x) those in favor of the Administrative Agent
(for the benefit of all of the Banks) under the Loan Instruments, (y) those
permitted by Section 6.04 hereof (if any), and (z) those described in Schedule
3.10(a) annexed hereto.
(b) To the best knowledge of each Borrower, there are no claims (other
than any claim of any party to a Contract made thereunder) of third parties that
would prevent any assignee or purchaser of all or any portion of the Collateral
from receiving any payments, distributions and proceeds
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with respect thereto, if any, without any, defense, counterclaim, setoff, right
of recoupment, abatement or other claim or determination whatsoever.
(c) All of the Collateral and the other material assets and properties
of each Borrower (if any) have been and currently are operated, maintained and
insured as respectively required by Sections 5.05, 5.07(a) and 5.07(b) hereof.
Each Borrower and each of its Subsidiaries currently is, and since the Effective
Date has been, insured as required by Section 5.07(b) hereof, and for at least
the five-year period ending with the Effective Date or, with respect to any
Subsidiary or Collateral owned by any Borrower for less than five years, since
the date of ownership of such Subsidiary or Collateral, was insured in a
comparable manner. To the best knowledge of each Borrower, no fact, circumstance
or other event currently exists or has occurred that (i) has violated or could
violate any term or provision of any insurance policy in any material respect,
(ii) has been or could be reasonably likely to permit any insurer to cancel or
refuse to renew (upon similar terms) any such insurance policy, or (iii) has
been or could be reasonable likely to prevent any Borrower from obtaining a
similar insurance police on similar terms.
(d) The Borrowers have full possession and control of the Collateral
and their other material assets and properties (if any), and all of the
Collateral and their other material assets and properties (if any) are located
(or in the case of accounts and general intangibles are deemed to be located) at
the addresses of the Borrowers set forth in the Introduction.
(e) Each Account Receivable of each Borrower arose in the ordinary
course of business in a bona fide arm's length transaction, has been reflected
on its books and records in accordance with GAAP consistently applied, and is
represented by a written invoice or other written document that: (i) was duly
executed and delivered and to the best knowledge of the Borrowers contains no
forgeries or unauthorized signatures; (ii) is legal, valid, binding and
enforceable against the customer in accordance with its terms and provisions,
except as enforceability may be limited by (A) applicable bankruptcy,
insolvency, reorganization and other laws affecting the rights or remedies of
creditors generally and (B) rules of equity affecting the enforcement of
obligations generally (whether at law or in equity); (iii) does not violate or
conflict with any provision of Applicable Law (except where any such violation
or conflict does not have and is not reasonably likely to have a Material
Adverse Effect); (iv) has not been amended or modified in any material respect;
(v) except as set forth in Schedule 3.10(e) hereto, fully reflects all
agreements and understandings with the customer with respect thereto; (vi) is
assignable to the Administrative Agent (for the benefit of all of the Banks) in
accordance with the terms and provisions hereof and thereof subject to the
receipt of requisite consents for government contracts, and (viii) is maintained
at the office(s) of the relevant Borrower (or at such other office as may have
been specified in a notice to the Administrative Agent) in a file and location
that would be readily identifiable by anyone examining the Accounts Receivable
of the Borrowers. The reserves for uncollectible accounts established by the
Borrowers are adequate in the judgment of the Borrowers to fully cover current
and future uncollectible Accounts Receivable.
(f) Schedule 3.10(f) hereto contains a complete and accurate list of
(i) all Pledged Securities currently owned of record and/or beneficially by the
Borrowers (whether individually, jointly or otherwise), identifying with respect
to each the owner(s), issuer, type, amount(s) and certificate or other
identifying number(s), or account number(s) and name(s) and address(s) of the
relevant office(s) if held by a clearing corporation, custodian or other
financial intermediary and (ii) all of the Capital Stock issued by each Borrower
(other than Aeroflex) is listed on that schedule. There are no other outstanding
securities issued by any Borrower (other than Aeroflex) or any outstanding
warrants, options or other rights to acquire any securities issued by any
Borrower (other than Aeroflex), whether from the issuer or anyone else. Each
Pledged Security is owned beneficially and of record by the Borrower indicated
on that schedule, is assignable, and has been duly assigned and transferred as
collateral to the Administrative Agent (for the benefit of all of the Banks).
Each of the Pledged Securities was duly authorized and
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validly issued, is fully paid and non-assessable and was acquired from the
issuer in a transaction in compliance with and exempt from registration under
the Securities Act. None of the Pledged Securities: (i) is subject to any
warrant, option, put, call or other right to acquire, redeem, sell, transfer or
encumber it (other than such call and redemption rights as may be intrinsic to
such securities where issued by a person not affiliated with the Borrowers);
(ii) is governed by or otherwise subject to any shareholders agreement, voting
trust or similar agreement or arrangement (other than such call and redemption
rights as may be intrinsic to such securities where issued by a person not
affiliated with the Borrowers); and (iii) is limited or otherwise restricted in
any way respecting assignability, transferability or any voting, dividend,
distribution or other ownership right (whether or not reflected on the face of
the certificate, in any Corporate Document, in any instruction or other
communication to or agreement or arrangement with any transfer agent, clearing
corporation, custodial bank or other financial intermediary, or otherwise). Each
of the Pledged Securities is not and will not be subject to any preemptive or
similar right or restriction. The Borrowers have delivered stock certificates to
the Administrative Agent (for the benefit of all of the Banks) representing all
of the Pledged Securities, together with stock powers duly endorsed in blank
representing those certificates.
(g) Each Material Contract Schedule (to the extent required to be
delivered under this Agreement and so delivered), (i) contains a complete and
accurate list of each Material Contract as of the date of such Schedule and (ii)
with respect to each such Contract accurately states the purchaser, the date of
the Contract and the Contract amount. Each Contract, each other note, stock
certificate or other instrument included in the Collateral, and each other
material Account Receivable, agreement, document or intangible included in the
Collateral: (i) was duly executed and delivered in a written instrument or
document and to the best knowledge of the Borrowers contains no forgeries or
unauthorized signatures; (ii) is legal, valid, binding and enforceable against
the signer in accordance with its terms and provisions, except as enforceability
may be limited by (A) applicable bankruptcy, insolvency, reorganization and
other laws affecting the rights or remedies of creditors generally and (B) rules
of equity affecting the enforcement of obligations generally (whether at law or
in equity); (iii) does not violate or conflict with any provision of Applicable
Law in any material respect; (iv) fully reflects all amendments and material
agreements and understandings with the signer with respect thereto; (v) is
assignable, and has been duly assigned to the Administrative Agent (for the
benefit of all of the Banks) pursuant to Section 7.01 hereof, in accordance with
the terms and provisions hereof and thereof subject to receipt of requisite
consents for government contracts; and (vi) is maintained at the relevant office
of the relevant Borrower (or at such other office as may have been specified in
a notice to the Banks) in a file and location that would be readily identifiable
by anyone examining the books and records of the Borrowers, except (A) that
certain items may be physically located at the other locations listed in such
Material Contract Schedule, which schedule contains a complete and accurate
description of each other location and the items located there, and (B) for
items physically held by the Administrative Agent or its designee (for the
benefit of all of the Banks).
(h) The machinery, equipment and other fixed assets owned or leased by
each Borrower that are necessary for the current conduct of its business are in
good working order and condition (ordinary wear and tear and retirement
excepted), all of the machinery, equipment and other fixed assets owned or
leased by each Borrower that are necessary for the current conduct of its
business are used or usable in the current conduct of its business, and each
Borrower has all of the machinery, equipment and other fixed assets necessary
for the current conduct of its business.
(i) Except as set forth in Schedule 3.10(i) hereto, to the best
knowledge of the Borrowers, the procurement, storage, containment, presence,
manufacture, distribution, removal and disposition of all Inventory and
Environmental Substances by or on behalf of the Borrowers and the use and
operation of all assets and properties owned, leased or used by or on behalf of
the Borrowers (including, without limitation, machinery, equipment, real estate
and improvements), as now or
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previously existing (whenever created), as conducted by or for any Borrower, or
as contemplated, are in compliance with and conform to all Environmental Laws
and other Applicable Laws in all material respects. Without limiting the
generality of the foregoing, except as set forth in Schedule 3.10(i) hereto: (i)
all material permits, licenses, authorizations, consents or approvals of
authorities necessary for such activities have been obtained and they are in
full force and effect; (ii) no part of those activities, the Collateral or the
other assets or properties of any Borrower is in violation of any Environmental
Law or other Applicable Law in any material respect; and (iii) no notice has
been served upon any Borrower (other than a notice subsequently withdrawn or
with regard to a violation subsequently cured) from any governmental Authority
or other person claiming, nor does there currently exist, any violation of any
Environmental Law or other Applicable Law in any material respect in connection
with any of those activities, the Collateral or the other assets or properties
of any Borrower.
(j) Each Borrower has all of the patents, trademarks, tradenames and
other intellectual property rights necessary for the current conduct of its
business and each such patent, trademark, tradename and other intellectual
property right necessary for the current conduct of its business: (i) is
subsisting and has not been determined to be invalid or unenforceable by any
Authority; (ii) to the best knowledge of the Borrowers is valid, binding and
enforceable; (iii) is not and has not been the subject of any claim of
infringement or other material adverse claim; and (iv) has been maintained and
used in accordance with all Applicable Laws.
(k) [Intentionally Omitted.]
(l) To the best knowledge of the Borrowers, there is no existing,
proposed or contemplated plan, study or effort by any governmental Authority or
other person that in any way has affected or could affect the continued
authorization of the present or contemplated ownership, financing, construction,
use or operation of any part of the Collateral or the other material assets or
properties of any Borrower, or that has resulted or could result in any tax or
other charge being levied or assessed against, or in the creation of any Lien
upon, any part of the Collateral or the other material assets or properties of
any Borrower.
Section 3.11. Subsidiaries, Other Ventures, Loans and Other
Investments. Schedule 3.11 hereto contains a complete and accurate list of: (a)
all of the direct and indirect Subsidiaries of the Borrowers, including with
respect to each Subsidiary (i) its jurisdiction of incorporation, (ii) all
jurisdictions (if any) in which such Subsidiary is qualified to do business as a
foreign corporation, (iii) the name of the owner and the number of shares of
Capital Stock of such Subsidiary owned, specifying whether owned beneficially
and/or of record, and if that is less than all of the outstanding shares issued
by the Subsidiary, stating the total outstandings, and (iv) all obligations of
any Borrower and/or any Subsidiary of any Borrower to contribute capital or
other funds to such Subsidiary; (b) all partnerships and other ventures in which
any Borrower or any Subsidiary of any Borrower is a member or venturer,
including with respect to each such partnership or venture (i) its jurisdiction
of organization and any other jurisdiction in which it is qualified to do
business as a foreign entity, (ii) the name of the owner and the percentage and
type of interest in such partnership or venture owned, specifying whether owned
beneficially and/or of record, (iii) all obligations of any Borrower and/or any
Subsidiary of any Borrower to contribute capital or other funds to such venture,
and the names and addresses of the other members or venturers; (c) any and all
loans or advances from the Borrowers to any of the affiliates of the Borrowers,
identifying with respect to each of the respective parties, amounts and
maturities; and (d) all other Investments of the Borrowers other than Permitted
Investments; excluding, however, (i) all loans and advances by any Borrower to
any other Borrower and (ii) all loans or advances of salary to any officer or
employee of any Borrower in the ordinary course of business that in the
aggregate for any such officer or employee does not exceed $250,000.
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Section 3.12. Relationship of the Borrowers. Aeroflex and the other
Borrowers (which are Subsidiaries of Aeroflex) are engaged in the business of,
among other things, developing, manufacturing and selling mechanical and
electronic components and systems and services to government and industry and of
providing the required services and other facilities for those integrated
operations. The Borrowers are seeking to continue the existing facilities from
the Banks in order that funds may continue to be made available from time to
time for working capital and other purposes. Each Borrower expects to derive
financial and other benefit, directly or indirectly, in return for undertaking
its respective obligations under this Agreement and the other Loan Instruments,
both individually and as a member of the integrated group.
Section 3.13. [Intentionally Omitted.]
Section 3.14. Federal Reserve Regulations, No Restriction on
Borrowing, Etc.
(a) Except as expressly permitted by Section 6.09 hereof, no part of
the proceeds of the Loans will be used to purchase or carry any Margin Stock or
to extend credit to any other person for the purpose of purchasing or carrying
any Margin Stock or in any way or for any purpose that otherwise violates or is
inconsistent with any applicable Margin Stock Regulations. No Borrower is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
(b) No Borrower is an "investment company", an "affiliated person",
"promoter" or "principal underwriter" of an "investment company", or
"controlled" by an "investment company" (as such terms are defined in the
Investment Company Act). None of the transactions contemplated by this Agreement
and the other Loan Instruments (including the making of the Loans and the
permitted use of the proceeds thereof) will violate any provision of the
Investment Company Act.
(c) No Borrower is a "holding company" or an "affiliate" or a
"Subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any corresponding provisions
of any Applicable Law in any foreign jurisdiction, and as the same may be
supplemented, modified, amended or restated from time to time, and the rules and
regulations promulgated thereunder, or any corresponding or succeeding
provisions of Applicable Law.
(d) No Borrower is an "employee benefit plan" governed by (and as
defined in) ERISA, and none of the assets or properties of any Borrower
constitutes or will constitute "plan assets" governed by (and as defined in)
ERISA.
(e) No Borrower is a "foreign person" under (and as defined in)
'SS' 1455(f)(3) of the Code or any successor provision.
(f) No Borrower is regulated by or otherwise subject to any Applicable
Law that directly or indirectly limits or otherwise restricts its ability to
incur, continue or repay Indebtedness, to provide Credit Support or to grant
Liens in or to any of its assets and properties as security for the Indebtedness
of itself or its Credit Support for others.
Section 3.15. No Misrepresentation by the Borrowers. No representation
or warranty of any Borrower made or contained in this Agreement or any other
Loan Instrument (whether with respect to such Borrower or otherwise) and no
report, statement, certificate, schedule or other document or information
furnished or to be furnished by or on behalf of any Borrower in connection with
the transactions contemplated by this Agreement and the other Loan Instruments
(whether with respect to
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such Borrower or otherwise) contains or will contain a misstatement of a
material fact or omits or will omit to state a material fact required to be
stated therein in order to make it, in the light of the circumstances under
which made, not misleading.
ARTICLE IV
Conditions to Lending
The obligation of the Banks to make any Loan and consider the issuance
of any requested Letter of Credit hereunder is subject to the satisfaction in
full of all of the conditions precedent set forth in and the other terms and
provisions of each of the Sections of this Article, unless the Administrative
Agent (with the consent of the Requisite Banks, as and if required) shall
consent otherwise in writing (as provided in Section 10.16 hereof):
Section 4.01. Representations and Warranties.
(a) On the Effective Date and the first Advance Date, both prior to
and after giving effect to any requested Advance or Letter of Credit issuance,
the representations and warranties of each of the Borrowers set forth in this
Agreement and the other Loan Instruments shall be true and correct in all
respects on and as of that date with the same effect as though those
representations and warranties had been made on and as of the first Advance
Date.
(b) On each Advance Date and Issuance Date after the first Advance
Date, both prior to and after giving effect to any requested Advance or Letter
of Credit issuance, the representations and warranties of each of the Borrowers
set forth in this Agreement and the other Loan Instruments shall be true and
correct in all material respects on and as of that Advance Date or Issuance Date
with the same effect as though those representations and warranties had been
made on and as of that date, subject, however, in the case of the
representations and warranties set forth in Sections 3.04, 3.06(b), 3.06(c),
3.07, 3.09(a), 3.10(f), 3.10(i) and 3.11 hereof, to any updated information
respecting any event(s) occurring after the first Advance Date respectively
affecting any of the representations contained in such Sections to the extent
theretofore disclosed to the Administrative Agent or each Bank on or prior to
such Advance Date or Issuance Date and accepted in writing by the Administrative
Agent (with the consent of the Majority Banks), which disclosure may be
telecopied to the Administrative Agent and/or each Bank if promptly confirmed by
delivery of the signed original, provided that neither such delivery nor such
acceptance shall constitute a waiver of or consent to any event so disclosed.
Section 4.02. No Default. On the Effective Date, and on each Advance
Date and Issuance Date after the Effective Date, both prior to and after giving
effect to any requested Advance or Letter of Credit issuance, no Event of
Default or Default shall have occurred and be continuing.
Section 4.03. Borrowers' Bringdown Certificate. On the Effective Date
and the first Advance Date, the Borrowers shall have delivered to the Banks a
bringdown certificate substantially in the form of Exhibit C hereto, dated that
date and signed by an executive officer of the Borrowers, and by each request
for an Advance or Letter of Credit issuance, the Borrowers shall be deemed to
have delivered to the Banks such a certificate dated the Advance Date or
Issuance Date. A Bank in its discretion may accept the certificate of an officer
of a Borrower delivered (or deemed to be delivered) pursuant to this Section as
evidence of the satisfaction of the conditions precedent specified in Sections
4.01 and 4.02 hereof without in any way waiving or limiting any of the Banks'
rights, powers, privileges, remedies and interests under any term or provision
of this Agreement or any other Loan Instrument.
Section 4.04. Delivery of the Loan Instruments and Collateral. On or
before the date of this Agreement, the Administrative Agent or its designee (for
the benefit of all of the Banks) shall have
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received payment of the Facility Fee and on or before the Effective Date, the
Administrative Agent or its designee (for the benefit of all of the Banks) shall
have received delivery of: (a) the Notes provided for in Section 2.03 hereof,
duly executed by the Borrowers; (b) certificates evidencing the insurance
policies required by Section 5.07(b) hereof; (c) the other instruments and
documents required by this Agreement or any other Loan Instrument or listed in
the final version of the Checklist of Closing Documents delivered to the
Borrowers on or before the Effective Date, which instruments and documents shall
have been duly executed by the appropriate parties and (d) one or more share
certificates, representing all of the issued and outstanding Pledged Securities,
together with an undated stock power, executed in blank by an authorized
signatory of the owner of such Capital Stock and, if requested by the
Administrative Agent, bearing a signature guarantee in all respects satisfactory
to the Administrative Agent, in respect of each such certificate and such other
documents as the Administrative Agent may reasonably require in connection with
the Perfection of its security interests therein. Each of the foregoing
instruments and documents shall be in such form and substance as may be
acceptable to the Banks and a copy of each shall have been delivered to each
Bank.
Section 4.05. Opinion of Counsel to the Borrowers, Etc. On the
Effective Date, the Banks shall have received the favorable written opinion of
counsel to the Borrowers, dated the Effective Date, addressed to the Banks and
in such form and substance as may be reasonably acceptable to the Banks relating
to such matters as the Administrative Agent and the other Banks may reasonably
deem necessary or appropriate, which also shall provide that it may be relied
upon by the successors, assigns, participants of each Bank and by counsel to the
Administrative Agent in rendering any opinion or advice requested from them.
Section 4.06. Supporting Documents. On or before the Effective Date,
the Borrowers shall have furnished to the Banks the following certificates and
other documents with respect to each Borrower: (a) a copy of its certificate of
incorporation and all modifications, amendments and restatements thereof,
certified as of a recent date by the Secretary of State or comparable official
of its jurisdiction of incorporation; (b) a copy of its by-laws, together with
all modifications, amendments and restatements thereof, certified as of a recent
date by its Secretary; (c) a certificate of the Secretary of State or comparable
official of its jurisdiction of incorporation, dated as of a recent date, as to
its existence and good standing; (d) a certificate of its Secretary or an
Assistant Secretary, dated the Effective Date, as to the due authorization of
the negotiation, execution, delivery and performance by it of this Agreement and
each of the other Loan Instruments to which it is or becomes a party (with the
appropriate resolutions attached) and the incumbency and signatures of its
officers and directors who are authorized to execute any instrument, agreement
or other document in connection with the transactions contemplated by this
Agreement and the other Loan Instruments; (e) copies of all shareholders'
agreements and trusts respecting securities of its issue or related rights,
together with all modifications, amendments and restatements thereof, certified
as of a recent date by its Secretary or Assistant Secretary; and (f) such
additional supporting documents and other information with respect to the
Collateral, the other assets or properties of each Borrower, or the
organization, operations and affairs of each of the Borrowers and those of their
respective Subsidiaries, partnerships and other ventures as any Bank may
reasonably request. All certificates and other documents provided to the
Administrative Agent or any other Bank pursuant to this Article shall be in such
form and substance as may be acceptable to the Administrative Agent and the
Majority Banks.
ARTICLE V
Affirmative Covenants
The Borrowers jointly and severally covenant and agree that they will
comply in all respects on a timely basis (except as otherwise expressly
provided) and at their expense with each, and will not cause, suffer or permit
any violation of any, of the terms and provisions of each section in this
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Article, from the date hereof and until the Obligations have been fully paid and
satisfied, unless the Administrative Agent (with the consent of the Requisite
Banks, as and if required) shall consent otherwise in writing (as provided in
Section 10.16 hereof):
Section 5.01.Required Notices. The Borrowers shall give, or cause to
be given, immediate written notice to each of the Banks of:
(a) any change in the name or the location of the executive office or
principal place of business of any Borrower;
(b) the institution or, to the best knowledge of the Borrowers, the threat
or contemplation of, or any material adverse determination or change
in, any action, suit, investigation or proceeding (whether or not
purportedly on behalf of any Borrower) at law, in equity, in
arbitration or by or before any other Authority involving or affecting
any Collateral or that has had or will likely have a Material Adverse
Effect involving or affecting (i) any Borrower, (ii) any alleged
criminal act or activity (other than a misdemeanor) on the part of any
Borrower or any of its representatives, (iii) during each Trigger
Period, any Material Document (other than Collateral), (iv) any
Environmental Claim, (v) any Plan or any assets and properties of a
Plan that, if adversely determined, would be reasonably likely to have
an ERISA Effect, (vi) during each Trigger Period, any Material
Contract or any material part of any other assets or properties of any
Borrower (if any), (vii) any of the Obligations, or (viii) any of the
transactions contemplated in this Agreement and the other Loan
Instruments;
(c) the occurrence of any material ERISA Event;
(d) the occurrence of any act or event that violates, is in conflict with,
results in a breach of or constitutes a default (with or without the
giving of notice or the passage of time or both) under any term or
provision of this Agreement or any other Loan Instrument.
(e) any material labor dispute to which any of the Borrowers may become a
party, any strikes or walkouts relating to any of their respective
offices, plants or other facilities, or the expiration of any labor
contract;
(f) any change in location or material change in the status of the
Collateral other than as expressly permitted in Section 7.03 or 7.04
hereof;
(g) any attachment, confiscation, detention, levy, requisition, seizure or
other taking of any part of the Collateral or any material part of the
other assets or properties of any Borrower (if any), whether through
process of law or otherwise, the filing or other imposition of any
Lien known to the Borrowers against any part of the Collateral or any
material part of the other assets or properties of any Borrower (if
any) (other than as expressly permitted by Section 6.04 hereof), or
any destruction or other loss of or any material damage to any part of
the Collateral or any material part of any other assets or properties
of any Borrower (if any); or
(h) to the extent not otherwise enumerated in this Section, the occurrence
of any other act or event that (i) has resulted or could result in any
Default or Event of Default, or (ii) has had or would be reasonably
likely to have a Material Adverse Effect.
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Section 5.02. Information. The Borrowers shall maintain a standard
system of accounting in accordance with GAAP consistently applied, and the
Borrowers shall provide to each of the Banks the following:
(a) as soon as available and in any event within 90 days after the end of
each fiscal year of Aeroflex, a consolidated balance sheet of Aeroflex
and its Subsidiaries as at the end of that fiscal year and the related
consolidated statements of earnings, shareholders' equity and cash
flow for such fiscal year, all with accompanying notes, in reasonable
detail and stating in comparative form the figures as at the end of
and for the previous fiscal year, prepared in accordance with GAAP
consistently applied, and audited and reported upon by KPMG LLP, or
other independent certified public accountants of recognized standing
regularly retained by Aeroflex and its Subsidiaries to audit their
books, provided that such financial statements may be delivered within
105 days after the end of any fiscal year in which a 15-day extension
has been obtained for the filing thereof pursuant to the Exchange Act;
(b) concurrently with the delivery of the financial statements described
in subsection (a) above, the annual auditors report prepared by those
independent certified public accountants and a letter to the Banks
signed by those accountants to the effect that, having read this
Agreement, nothing came to their attention during the course of their
regular examination that caused them to believe any Event of Default
or Default had occurred and had not theretofore been reported and
remedied, or if any such Event of Default or other event had occurred
and was continuing or was not previously reported, specifying the
facts with respect thereto;
(c) as soon as available, and in any event within 90 days after the end of
each fiscal year of Aeroflex, a consolidating balance sheet of
Aeroflex and its Subsidiaries as at the end of that fiscal year and
the corresponding consolidating statements of earnings for such year,
all in reasonable detail, unaudited but certified by the President,
chief financial officer or Treasurer of Aeroflex (i) to have been
prepared in accordance with GAAP consistently applied, and (ii) as
complete, accurate and a fair presentation of the financial condition
of Aeroflex and its Subsidiaries as of such date and the results of
operations for the period covered thereby, provided that such
financial statements may be delivered within 105 days after the end of
any fiscal year if a 15-day extension has been obtained as provided in
Section 5.02(a);
(d) as soon as available, and in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of
Aeroflex, a consolidated and consolidating balance sheet of Aeroflex
and its Subsidiaries as at the end of such quarter, and the related
consolidated and consolidating statements of earnings and consolidated
statements of shareholders' equity and cash flow for the period from
the beginning of such fiscal year to the end of such quarter,
unaudited but certified by the President, chief financial officer or
Treasurer of Aeroflex (x) to have been prepared in accordance with
GAAP consistently applied, and (y) as complete, accurate and a fair
presentation of the financial condition of Aeroflex and its
Subsidiaries as of such date and the results of operations for the
period covered thereby, subject to normal year-end audit adjustments,
provided that such financial statements may be delivered within 50
days after the end of any quarter in which a 5-day extension has been
obtained for the filing thereof pursuant to the Exchange Act;
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(e) concurrently with the delivery of the documents described in
subsections (a) and (d), above; (i) a bringdown certificate
substantially in the form of Exhibit C hereto, and (ii) a certificate
substantially in the form of Exhibit D hereto setting forth the
calculations of and establishing (among other things) the compliance
by the Borrowers with the financial covenants set forth in Section
6.01 and 6.02 of this Agreement, with each such certificate being
dated as of the last day of the relevant reporting period and signed
by the President, chief financial officer or Treasurer of Aeroflex
(who shall have read this Agreement and made an examination sufficient
in the opinion of the signer(s) to make informed statements therein);
(f) as soon as available, and in any event within 25 days after the end of
each calendar quarter in which the Consolidated Funded Debt Ratio
equals or exceeds 1.50 to 1.00, an Accounts Receivable aging report
(in form and substance reasonably acceptable to the Administrative
Agent and Majority Banks) separately for each Borrower with respect to
the quarter just ended certified by the President, chief financial
officer or Treasurer of Aeroflex (who shall have read this Agreement
and made an examination sufficient in the opinion of the signers to
make informed statements therein);
(g) as soon as available, and in any event within 25 days after the end of
each calendar quarter during each Trigger Period, a Material Contact
Schedule (separately identifying each new Material Government Contract
not identified on the most recently furnished Material Contract
Schedule and in form and substance reasonably acceptable to the
Administrative Agent and Majority Banks) with respect to the quarter
just ended certified by the President, chief financial officer or
Treasurer of Aeroflex (who shall have read this Agreement and made an
examination sufficient in the opinion of the signers to make informed
statements therein);
(h) as soon as available, and in any event within 90 days after the
commencement of each fiscal year of the Borrowers, a consolidated and
consolidating annual budget and projections for the Borrowers for the
forthcoming fiscal year (projected quarterly and in form and substance
reasonably acceptable to the Administrative Agent and Majority Banks),
including consolidated and consolidating cash flows of the Borrowers
projected quarterly, certified by the President, chief financial
officer or Treasurer of Aeroflex;
(i) as soon as available, a copy of any annual management letter issued by
any accountant or auditor to Aeroflex or any of its Subsidiaries;
(j) on or before each anniversary of the date of this Agreement, an
independent insurance broker's certificate stating (i) that the
insurance required by this Agreement full force and effect, (ii) that
all premiums under those policies have been paid to the extent due
through the date of the certificate, and (iii) the amounts and due
dates of premiums due within the following 12-month period; and, as
soon as received, copies of all insurance policies, endorsements and
certificates received from time to time by any Borrower;
(k) promptly upon request by any Bank, copies of all loan, security and
other instruments, agreements and documents respecting Indebtedness of
any Borrower in excess of $250,000, including commitments, lines of
credit and other credit availabilities, and of all Credit Support by
any Borrower respecting any Indebtedness or other obligation of any
other person in excess of $250,000, except those to which the
Administrative Agent (for the benefit of all of the Banks) or all of
the Banks also are a party;
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(l) as soon as available, copy of any notice or other communication
alleging any nonpayment or other material breach or default, or any
foreclosure or other action respecting any material part of its assets
and properties, received respecting any of the Indebtedness of any
Borrower (other than the Obligations), or any demand or other request
for payment under any Credit Support by any Borrower respecting any
Indebtedness or other obligation of any other person in an amount in
excess of $250,000, including any received from any person acting on
behalf of the holder or beneficiary thereof, provided that the
Borrowers shall not wait for such copies to become available to give
any notice required under the circumstances by Section 5.01 hereof;
(m) as soon as available, and in any event not more than five Business
Days after receipt, a copy of any summons or complaint, or any other
notice of any action, suit, investigation or proceeding, involving or
affecting any Borrower or any Subsidiary of any Borrower where the
damages sought exceed, or if unspecified reasonably could exceed,
$500,000;
(n) during each Trigger Period, as soon as available, a copy of any notice
or other communication alleging the invalidity, nonbinding effect or
unenforceability of, any material error or other material defect in,
any material omission from, or any nonpayment or other material breach
or default under any note, instrument or stock certificate included in
the Collateral or under any material Account Receivable, contract or
other intangible included in the Collateral, provided that the
Borrowers shall not wait for such copies to become available to give
any notice required under the circumstances by Section 3.01 hereof;
(o) during each Trigger Period, as soon as available, and in any event not
less than 15 days prior to execution, copies of each proposed
modification, waiver, amendment or termination of any of the terms and
provisions of any note, instrument or stock certificate included in
the Collateral or under any material Account Receivable (except in the
ordinary course of business), contract or other intangible included in
the Collateral that would be reasonably likely to conflict with or
prejudice the continued perfection of any security interest of the
Administrative Agent or any other Bank or materially diminish any of
the rights, powers, privileges, remedies or interests of any Borrower
in any such item; and promptly following execution, copies of each of
the foregoing certified as to the accuracy thereof by the Secretary or
Assistant Secretary of the relevant Borrower;
(p) as soon as available, and in any event not less than 30 days prior to
adoption, copies of each proposed modification, waiver, amendment or
termination of any of the terms and provisions of any (i) Corporate
Document of Aeroflex (A) requiring the approval of its shareholders or
(B) designating preferred stock constituting Indebtedness, (ii)
Corporate Document of any other Borrower or (iii) agreement among the
shareholders of any Borrower; and promptly following adoption, copies
of each of the foregoing certified as to the accuracy thereof by the
Secretary of State or comparable official of its jurisdiction of
incorporation or the Assistant Secretary of the relevant Borrower, as
applicable; and such other supporting documents of the kind specified
in Section 4.06 hereof as the Administrative Agent from time to time
may request;
(q) as soon as possible, if and to the extent requested by any Bank,
copies of all tax returns, informational statements and reports filed
by any Borrower with the Internal Revenue Service of the United States
of America.
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(r) promptly upon the request of any Bank, copies of each notice, report,
statement or other document or communication, whether periodic or
otherwise, concerning the occurrence, existence or correction of any
ERISA Event in any material respect, any responsive communication on
the part of any Borrower or any of its ERISA Affiliates, or any
preliminary or final determination of any Authority in respect
thereof, provided that the Borrowers shall not wait for such request
or copies to become available to give any notice required under the
circumstances by Section 5.01 hereof;
(s) contemporaneously with each submission or filing, a copy of any
report, registration statement, proxy statement, financial statement,
notice or other document, whether periodic or otherwise: (i) submitted
to the shareholders of Aeroflex in their capacities as shareholders;
or (ii) submitted to or filed by any Borrower with any governmental or
self-regulatory Authority (other than those items referenced in
subsection (r) above) involving or affecting (A) any securities
registration of any Borrower or its securities, (B) any Borrower that
has had or would be reasonably likely to have a Material Adverse
Effect, (C) the Obligations, (D) any part of the Collateral or any of
the other material assets and properties of any Borrower or (E) any of
the transactions contemplated in this Agreement or the other Loan
Instruments, provided that the Borrowers shall not wait for such
copies to become available to give any notice required under the
circumstances by any other subsection of this Section or Section 5.01
hereof; and
(t) together with such supplements to the aforementioned documents as any
Bank from time to time reasonably may request, each in such form and
substance as may be reasonably acceptable to the Administrative Agent
and the Majority Banks;
together with such additional accounts, reports, certificates, statements,
documents and information as any Bank from time to time reasonably may request,
each in such form and substance as may be reasonably acceptable to the
Administrative Agent and the Majority Banks.
Section 5.03. Access to Premises, Records and Collateral. At all
reasonable times and as often as the Administrative Agent or any other Bank
reasonably may request, each Borrower shall permit representatives designated by
the requesting Bank to (a) have complete and unrestricted access to the premises
of each Borrower, the books and records of each Borrower and the Collateral,
except to the extent such access may be limited by Applicable Laws pertaining to
United States defense matters, (b) make copies of, or excerpts from, those books
and records and (c) discuss the Collateral or the accounts, assets, business,
operations, properties or condition, financial or otherwise, of each Borrower
with their respective officers, directors, employees, accountants and agents.
Section 5.04. Existence, Corporate Documents, Powers, Etc. (a) Each
Borrower shall do or cause to be done all things, or proceed with due diligence
with any actions or courses of action, that may be necessary (i) to maintain its
due organization, valid existence and good standing under the laws of its
jurisdiction of incorporation, and (ii) to preserve and keep in full force and
effect all qualifications, licenses and registrations in those jurisdictions in
which the failure to do so would be reasonably likely to have a Material Adverse
Effect; (b) no Borrower shall cause, suffer or permit any supplement,
modification or amendment to, or any waiver of, any term or provision of any of
its Corporate Documents, except that any Borrower may merge with any one or more
of the other Borrowers, provided that in the event of any merger with Aeroflex,
(i) Aeroflex shall be the surviving corporation and (ii) the Capital Stock and
Corporate Documents of the surviving corporation shall be those of Aeroflex
prior to any such merger; and (c) no Borrower shall do, or cause, suffer or
permit to be done (by itself or otherwise), any act impairing its power or
authority (i) to carry on its business as now conducted, or (ii) to
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execute or deliver this Agreement or any other Loan Instrument to which it is or
will be a party, or to perform any of its obligations hereunder or thereunder.
Section 5.05. Compliance with Applicable Laws, Operations. Each
Borrower shall promptly and fully comply with, conform to and obey any and all
Applicable Laws now or hereafter in effect, other than to the extent the
noncompliance therewith or violation thereof could not be reasonably likely to
have a Material Adverse Effect. In any event, each Borrower shall procure,
store, contain, manufacture, distribute, remove and dispose of all Inventory and
Environmental Substances and use and operate all assets and properties
(including, without limitation, machinery, equipment, real estate and
improvements) in compliance with and conformity to all Environmental Laws and
other Applicable Laws in all material respects, including (without limitation)
all applicable permits, license, and other authorizations, consents or approvals
of authorities.
Section 5.06. Payment of Debts, Taxes, Etc. Each Borrower shall (a)
pay, or cause to be paid, all of its Indebtedness and other liabilities and
lawful claims (whether for services, labor, materials, supplies or otherwise) as
and when due, (b) perform, or cause to be performed, all of its obligations
promptly and in accordance with the respective terms and provisions thereof, and
(c) promptly pay and discharge, or cause to be paid and discharged, all taxes,
assessments and other governmental charges and levies imposed upon any of the
Borrowers, upon their respective income or receipts or upon any of their
respective assets and properties on or before the last day on which the same may
be paid without penalty; provided however that it shall not constitute a breach
of this Section if any Borrower fails to perform any such obligation or to pay
any such Indebtedness or other liability (except for the Obligations), tax,
assessment, or governmental or other charge, levy or claim (i) that is being (A)
delayed, in the case of trade payables (but not other obligations), in
accordance with the normal payment practices of such Borrower, but not beyond
any demand in payment therefore; or (B) contested in good faith and by proper
proceedings diligently pursued, (ii) if the effect of such failure to pay or
perform will not (A) cause or permit the acceleration of the maturity of any
other Indebtedness or obligation of any Borrower (other than the one being
contested) or (B) subject any part of the assets and properties of any Borrower
to attachment, levy or forfeiture, (iii) for which such Borrower or such
Subsidiary has obtained a bond or insurance, or established a reserve, in an
amount that in the judgment of the Banks is adequate and satisfactory, and (iv)
so long as the aggregate amount of such unpaid overdue items for all of the
Borrowers does not at any time exceed $500,000.
Section 5.07. Maintenance and Insurance.
(a) Each Borrower shall maintain or cause to be maintained, at its own
expense, all of its assets and properties in good working order and condition
(ordinary wear and tear and retirement excepted), making all necessary repairs
thereto and renewals and replacements thereof. Each Borrower shall perform all
servicing, repairs, overhauls, replacements, modifications, improvements and
tests, or shall cause them to be performed, (i) with personnel duly qualified
for the applicable task, (ii) substantially in accordance and compliance with
the manuals and service bulletins of the applicable manufacturer(s) and (iii)
with suitable replacement, substitute or additional parts or components (A) in
good operating condition, (B) reasonably anticipated to be of equivalent or
better performance, durability, utility and value than the item replaced, (C)
owned solely by such Borrower, and (D) free of any Lien other than any Permitted
Lien.
(b) Each Borrower shall maintain or cause to be maintained, at its own
expense, insurance (to the extent available) in form, substance and amounts
(including deductibles) reasonably acceptable to the Majority Banks (i) adequate
to insure all assets and properties of the Borrowers, which assets and
properties are of a character usually insured by persons engaged in the same or
similar business, against loss or damage resulting from fire, flood, hurricanes
or other risks included in an
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extended coverage policy, (ii) against public liability and other tort claims
that may be incurred by or asserted against such Borrower, (iii) as may be
required by the other Loan Instruments or Applicable Law and (iv) as may be
reasonably requested by the Banks, all with adequate, financially sound and
reputable insurers, and, upon Inventory being included in Collateral, all naming
the Banks as additional insureds and the Administrative Agent (for the benefit
of all of the Banks) as loss payee under a standard mortgagee's endorsement as
their respective interests may appear. In the event the Administrative Agent
receives any insurance proceeds respecting any loss, damage or destruction of
any insured Collateral, the Administrative Agent at its option may (1) hold and
disburse the proceeds (or a portion thereof) in accordance with Section 7.03(b)
hereof or (2) apply the proceeds (or any remaining balance) to reduce the Loans
as required by Sections 2.05(b) and 7.03(b) hereof. In the event any Borrower
receives any such insurance proceeds (other than disbursements from the
Administrative Agent), such Borrower shall accept and hold those funds in trust
for the benefit of the Banks and shall promptly pay or deliver those proceeds to
the Administrative Agent (for the benefit of all of the Banks) for application
as provided above.
(c) Each Borrower shall maintain or cause to be maintained, at its own
expense, all of its patent, trademark and trade name rights and applications,
including (without limitation) the diligent pursuit of all applications, the
payment of all maintenance, license or other fees and expenses, and the vigorous
prosecution of suits and proceedings to enforce those rights and applications
and to object or oppose the conflicting rights or applications of any other
person, except in each case where such Borrower decides in good faith that a
particular trademark or tradename is of negligible economic value to the
business of such Borrower. Each Borrower (i) shall continue to use each
trademark and tradename of such Borrower in its business and on its goods, (ii)
shall use the appropriate symbol of registration with each use of a trademark or
tradename by such Borrower, (iii) shall not reduce the quality of existing goods
or services bearing a trademark or tradename or use any existing trademark or
tradename with any other goods or services of less than comparable quality, and
(iv) shall not take, or cause, suffer or permit anyone else to take, any action
that may invalidate the registration of any trademark or tradename, except in
each case where such Borrower decides in good faith that a particular trademark
or tradename is of negligible economic value to the business of such Borrower.
Each Borrower shall seek or cause to be sought, at its own expense, (A) patent
applications and patents respecting all unpatented but patentable inventions
made or obtained by such Borrower, (B) trademark applications and registered
trademarks on registrable but unregistered trademarks developed, used or
obtained by such Borrower, and (C) tradename applications and registered trade
names on registrable but unregistered tradenames developed, used or obtained by
such Borrower, except in each case where such Borrower decides in good faith
that such pursuit would not be useful to its business.
Section 5.08. Contracts and Other Collateral. Each Borrower shall in
good faith maintain, enforce, preserve and defend any and all of its rights,
powers, privileges, remedies and interests under or with respect to each note,
stock certificate and other instrument, as well as each other material account,
agreement, document and intangible of such Borrower included in the Collateral
to the full extent permitted by Applicable Law, except as otherwise provided in
Section 7.03(a) hereof and except where the failure to do so would not (i)
materially adversely affect the Administrative Agent's or any Bank's rights with
respect to Collateral or (ii) have a Material Adverse Effect.
Section 5.09. Defense of Collateral, Etc. Each Borrower shall enforce,
preserve and defend all of its right, title and interest in and to each and
every part of (a) the Collateral, and (b) the other material assets or
properties of such Borrower (if any), and the Borrowers shall defend all of the
right, title and interest of each Bank in and to each and every part of the
Collateral, each against all manner of claims and demands on a timely basis to
the full extent permitted by Applicable Law. In the event any of the Collateral
or any of the other material assets or properties of any Borrower (if any) is
attached or levied or any Lien is imposed on any of the Collateral or such other
assets or properties (other than as permitted by Section 6.04 hereof), then
(without limiting the generality of the preceding sentence) the
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Borrowers shall pay, discharge or bond the underlying obligation and cause the
release of such Collateral or such other assets or properties therefrom within
five days of any attachment or levy or thirty days of the imposition of any
Lien, but in any case before the claimant may defeat the right of the relevant
Borrower to bond, contest or redeem.
Section 5.10. Primary Operating Accounts. Cause Aeroflex and each
Material Domestic Subsidiary to maintain primary operating accounts with one or
more of the Banks.
Section 5.11. Additional Subsidiaries.
(a) As soon as practicable, and in any event within thirty days
following the request of the Majority Banks, the Borrowers shall cause each
Material Domestic Subsidiary that is not a Borrower and each newly formed or
acquired corporation, venture or other Person meeting the definition of
"Material Domestic Subsidiary", to execute and deliver to the Banks an
agreement, in form and substance acceptable to the Majority Banks, in which such
person agrees to (i) become, and assumes all of the Obligations of, a Borrower
under this Agreement and the other Loan Instruments and (ii) provide and execute
all documents reasonably requested by the Administrative Agent to perfect a Lien
in Collateral granted hereunder. The Borrowers shall give the Banks prompt
notice of (x) any such formation or acquisition or (y) any change in status of
any inactive Subsidiary or any acquisition by it of any asset or property.
(b) With respect to each existing Material Domestic Subsidiary and to
the extent any Person shall have become a Material Domestic Subsidiary, as soon
as practicable, and in any event within thirty days following the request of the
Majority Banks, the Borrowers shall have delivered to the Administrative Agent
(i) copies of the resolutions of the Board of Directors (or comparable governing
body) of such Subsidiary authorizing the execution, delivery and performance of
the Loan Instruments to which it is a party, certified respectively by an
authorized officer of such Subsidiary, (ii) a certificate of an authorized
officer of such Subsidiary certifying the names and true signatures of the
officers of Subsidiary authorized to sign any and all documents to be delivered
by Subsidiary or as required or contemplated hereunder, which shall be in form
and substance reasonably satisfactory to the Administrative Agent, (iii) the
Corporate Documents of such Subsidiary, which shall be certified as true and
correct by an authorized officer of such Subsidiary, (iv) good standing
certificates as of a date not more than twenty (20) days prior to the date of
delivery thereof to the Administrative Agent from the Secretary of State of the
respective state of organization of such Subsidiary and each state in which it
is qualified to do business (except where the failure to so qualify would not
have a Material Adverse Effect) and (v) an opinion of counsel in form and
substance reasonably satisfactory to the Banks with respect to the execution and
delivery of the documents required pursuant to this Section 5.11 and the
granting and perfection of a Lien on all Collateral, if any, owned by the
applicable Subsidiary (such opinion to cover matters typical of opinions in
matters such as those described in the Loan Instruments).
(c) With respect to each existing Subsidiary of Aeroflex and to the
extent any Person shall have become a Subsidiary of Aeroflex, as soon as
practicable, and in any event within thirty days following the request of the
Majority Banks, the Borrowers shall have delivered or shall deliver to the
Administrative Agent (i) 100% of the issued and outstanding Capital Stock of
such Subsidiary to the extent it is a Domestic Subsidiary, (ii) 65% of the
issued and outstanding Capital Stock of such Subsidiary to the extent it is a
Material Foreign Subsidiary that is owned directly by Aeroflex or a Domestic
Subsidiary, (iii) satisfactory undated stock powers with respect to the
foregoing Capital Stock executed in blank and, if requested by the
Administrative Agent, containing a signature guarantee, (iv) good standing
certificates as of a date not more than twenty (20) days prior to the date of
delivery thereof to the Administrative Agent from the Secretary of State of the
respective state of organization of such Subsidiary and each state in which it
is qualified to do business (except where the failure to so qualify
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would not have a Material Adverse Effect) and (v) an opinion of counsel in form
and substance reasonably satisfactory to the Banks with respect to the execution
and delivery of the documents required pursuant to this Section 5.11 and the
granting and perfection of a Lien on the applicable Pledged Securities (such
opinion to cover matters typical of opinions in matters such as those described
in the Loan Instruments).
ARTICLE VI
Negative Covenants
The Borrowers jointly and severally covenant and agree that they will
comply (and where applicable will cause each of their Subsidiaries to comply) in
all respects with each, and will not cause, suffer or permit any violation of
any, of the terms and provisions of each Section in this Article, from the date
hereof until the Obligations have been fully paid and satisfied, unless the
Administrative Agent (with the consent of the Requisite Banks, as and if
required) shall consent otherwise in writing (as provided in Section 10.16
hereof):
Section 6.01. Certain Financial Requirements. The financial
measurements used in the following covenants: (i) shall be determined in
accordance with GAAP (as of the date of calculation) consistently applied except
to the extent otherwise specified in a particular definition or provision; (ii)
shall be computed for the Borrowers and all of the respective Subsidiaries (if
any) on a consolidated basis in accordance with GAAP except to the extent
otherwise specified by a particular definition or provision; and (iii) shall
refer to the corresponding items in the financial statements of the Borrowers
and all of their respective Subsidiaries (if any) for the relevant periods
except to the extent otherwise specified or defined herein. (The Borrowers and
the Banks covenant and agree to reset in good faith the financial covenants set
forth in this Section, as well as the corresponding provisions of the financial
covenants compliance certificate required by Section 5.02(e) hereof, from time
to time with each material change in GAAP so as to maintain the integrity and
intent of such covenants.)
(a) The Borrowers shall not permit their Consolidated Effective Net
Worth to be less than (i) at all times until June 29, 2003, the Beginning
Effective Net Worth Amount and (ii) beginning June 30, 2003 and at all times
during each Net Worth Period thereafter, the sum of the Beginning Effective Net
Worth Amount and the Net Worth Adjustment Amount to be maintained for such Net
Worth Period, calculated on a cumulative basis for all such Net Worth Periods.
(b) The Borrowers shall not permit their Consolidated Funded Debt
Ratio to be more than 2.75 to 1.00 as at the last day of any fiscal year or as
at the last day of any fiscal quarter, in each case calculated for the four
consecutive fiscal quarters then ending.
(c) The Borrowers shall not permit their Consolidated Quick Ratio to
be less than (i) 1.00 to 1.00 at any time the Obligations are not secured by the
Springing Collateral or (ii) 0.85 to 1.00 at any time the Obligations are
secured by, or are required to be secured by, among other things, the Springing
Collateral.
(d) The Borrowers shall not permit their Consolidated Fixed Charge
Coverage Ratio to be less than 1.50 to 1.00 as at the last day of any fiscal
year or as at the last day of any fiscal quarter, in each case calculated for
the four consecutive fiscal quarters then ending.
(e) The Borrowers shall not permit their Consolidated EBT to be less
than (i) $0 with respect to any two consecutive fiscal quarters, or (ii)
negative $2,000,000 with respect to any one fiscal quarter.
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(f) No Borrower shall cause or permit any change of its fiscal year
from June 30 of each year without the prior written consent of the Banks, which
will not be withheld unreasonably.
Section 6.02. Indebtedness.
(a) Neither the Borrowers nor any of their Subsidiaries shall directly
or indirectly create, incur, assume, permit to exist, increase, renew or extend
any Indebtedness on their respective parts, including commitments, lines of
credit and other credit availabilities, or apply for, offer, commit or agree to
do any of the foregoing, excluding, however: (i) Indebtedness owed to the
Administrative Agent or any other Bank under any of the Loan Instruments; (ii)
Indebtedness incurred as permitted as Other Debt under subsection (b) of this
Section, provided that the Borrowers and their Subsidiaries may continue such
Indebtedness, but without any increase, once incurred as so permitted; (iii)
loans or advances from one Borrower to another Borrower; (iv) the Current
Indebtedness, including any renewal or extension thereof, but excluding any
increase therein or the continuation of any Indebtedness being retired with the
proceeds of the Loans; (v) any new Permitted Subordinated Debt, (vi) other
unsecured Indebtedness in an aggregate amount at any one time outstanding not in
excess of $500,000, (vii) Indebtedness in connection with Permitted Non-Borrower
Subsidiary Transfers, (viii) the IFR Debt and (ix) indebtedness assumed by a
Borrower pursuant to a Permitted Acquisition.
(b) Neither the Borrowers nor any of their Subsidiaries shall directly
or indirectly create, incur, assume, permit to exist, increase, renew or extend
any Other Debt, except for: (i) Other Debt so long as no Event of Default or
Default then exists or would result therefrom (whether through any Pro Forma
Effect or otherwise), and so long as the aggregate amount of all such Other Debt
(with the amount of each item equal to the principal amount of any Indebtedness,
the imputed principal amount of any lease treated as Indebtedness under GAAP or
the aggregate rental payments for the initial term of any other lease
(discounted to present value), as applicable) incurred during any fiscal year
does not exceed $7,500,000, provided the Borrowers and their Subsidiaries may
continue such obligations within those limits, but without any increase, once
incurred as so permitted; (ii) leases of assets or properties from one Borrower
to another Borrower and (iii) the leases under the Current Indebtedness, the
leases under the Other Debt and the existing operating leases listed in Schedule
6.02(b) hereto, including any renewal or extension thereof, but excluding any
increase therein or the continuation of any Indebtedness or obligation being
retired or extinguished with the proceeds of the Loans.
(c) Neither the Borrowers nor any of their Subsidiaries shall prepay,
acquire or otherwise satisfy, in whole or in part, any of its Indebtedness,
except (i) Indebtedness owed to the Administrative Agent or any other Bank under
any of the Loan Instruments, (ii) loans or advances owed by one Borrower to
another Borrower, (iii) leases (provided if such prepayment occurs when a
Trigger Period is in effect, such prepayment may only be allowed from the
exercise of an early purchase option), (iv) regularly scheduled payments of
principal and interest as such payment schedules are in effect as of the date
hereof or as hereafter amended with the consent of the Majority Banks, (v)
payment or prepayment of the IFR Debt, as long as no Default or Event of Default
exists at the time of such payment or prepayment or (vi) as permitted by
agreement or consent of the Majority Banks.
Section 6.03. Credit Support. Neither the Borrowers nor any of their
Subsidiaries shall directly or indirectly make, create, incur, assume, permit to
exist, increase, renew or extend any Credit Support on their respective parts of
any Indebtedness or other obligation of any other person, or offer, commit or
agree to do so, excluding, however: (a) any Credit Support relating to
Indebtedness or other obligations owed to the Administrative Agent or any other
Bank under any of the Loan Instruments; (b) the Credit Support under the Current
Indebtedness as reflected on Schedule 3.09(a), including any renewal or
extension thereof, but excluding any increase in the guarantied obligations; (c)
the endorsement of negotiable instruments for collection or deposit in the
ordinary course of the business of
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any Borrower or any of their Subsidiaries; or (d) any Credit Support of
Indebtedness permitted by Section 6.02 hereof.
Section 6.04. Liens. The Borrowers shall not directly or indirectly
make, create, incur, assume or permit to exist any Lien of any nature in any
asset or property of the Borrowers (if any) or offer, commit or agree to or
cause or assist the inception or continuation of any such Lien, excluding,
however, any Permitted Lien.
Section 6.05. Sale or Disposition of Assets, Etc. The Borrowers shall
not directly or indirectly: (a) make any Disposition other than pursuant to a
Permitted Disposition, (b) cause, suffer or permit any supplement, modification
or amendment to, or any waiver of any term or provision or any termination of,
any Contract, any other note, stock certificate, instrument or other material
account, agreement, document or intangible of the Borrowers included in the
Collateral, other than as expressly permitted by Sections 7.03 and 7.04 hereof
unless the same would not have a Material Adverse Effect, (c) enter into any
shareholders agreement, voting trust or similar agreement or arrangement or any
other restriction or limitation in any way respecting assignability,
transferability or any voting, dividend, distribution or other ownership right
with respect to any of the Pledged Securities (whether on the face of any
certificate, in any Corporate Document, in any instruction or other
communication to or agreement or arrangement with any transfer agent, clearing
corporation, custodial bank or other financial intermediary, or otherwise), or
cause, suffer or permit any such restriction or limitation to be imposed upon or
continue with respect to any of the Pledged Securities, or (d) offer or agree to
or cause or assist the inception or continuation of any of the foregoing.
Section 6.06. Investments, Loans, Advances, Etc. The Borrowers shall
not directly or indirectly purchase or otherwise acquire or hold any Investment
or make any Investment in or for the benefit of any other person, or offer,
commit or agree to do so, except for: (a) securities received in connection with
past contributions to or Investments in the Subsidiaries and ventures listed in
Schedule 3.11 hereto, and loans and advances (and any repayment thereof) by a
Borrower to any other Borrower; (b) the continuation of the existing Investments
listed on Schedule 6.06(b) hereto; (c) the Permitted Investments, provided that
the aggregate deposits and other Investments with banks and other financial
institutions other than the Banks do not at any time exceed the amounts
permitted by subsection (g) or (i) of this Section; (d) Permitted Acquisitions,
provided that no more than three Permitted Acquisitions with an individual
Acquisition Cost in excess of $5,000,000 shall be made by the Borrowers in any
twelve month period; (e) any Credit Support permitted under Section 6.03 hereof;
(f) any collateral account established under this Agreement or any other Loan
Instrument; (g) loans or advances of salary to any officer or employee of any
Borrower in the ordinary course of its business that in the aggregate for all
employees does not at any time exceed $250,000, (h) normal business banking
accounts, (i) Permitted Non-Borrower Subsidiary Transfers and (j) an earn-out
payment to the former owners of Erfatec SA in an aggregate amount not in excess
of 1,130,000 French francs.
Section 6.07. Certain Fundamental Changes. The Borrowers shall not,
and the Borrowers shall not cause, suffer or permit any of their Subsidiaries
to, directly or indirectly effect, enter into or offer, commit or agree to: (a)
any issuance, sale, transfer, pledge or other disposition or encumbrance of any
Capital Stock, partnership or membership interests or other securities issued by
any of the Borrowers or any of their Subsidiaries or the issuance of any option,
warrant or other right to acquire any such securities, except for Liens in favor
of the Administrative Agent, except in connection with a Permitted Acquisition
and except that Aeroflex may, (i) issue Capital Stock (A) pursuant to the Plans
and (B) in any public offering registered, or any arm's-length private placement
exempt from registration, under the Securities Act and (ii) issue common stock
and options, warrants and other rights to acquire common stock; (b) any capital
reorganization or reclassification of the Capital Stock, partnership or
membership interests or other equity securities issued by any of the Borrowers
or any of
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their Subsidiaries; (c) except in connection with a Permitted Acquisition, any
transaction in which the Capital Stock, partnership or membership interests or
other equity securities issued by any of the Borrowers or any of their
Subsidiaries prior to the transaction would be changed into or exchanged for
different securities, whether of that or any other person, or for any other
assets or properties; (d) any sale, lease, assignment, conveyance, spin-off or
other transfer or disposition of all or any material part of the business or
assets and properties of any of the Borrowers or any of their Subsidiaries,
except for sales, leases, assignments, conveyances, spin-offs or other transfers
or dispositions from one Borrower to another Borrower; (e) except in connection
with a Permitted Acquisition, any merger, consolidation, dissolution,
liquidation or winding up of any of the Borrowers or any of their Subsidiaries,
except that (i) any Borrower may merge with any one or more of the other
Borrowers, provided that in the event of any merger with Aeroflex, (A) Aeroflex
shall be the surviving corporation and (B) the Capital Stock and Corporate
Documents of the surviving corporation shall be those of Aeroflex prior to any
such merger, and (ii) any Subsidiary that is not a Material Domestic Subsidiary
or a Material Foreign Subsidiary may be dissolved; (f) except in connection with
a Permitted Acquisition, the acquisition or establishment of any new Subsidiary
or joint venture by any of the Borrowers or any of their Subsidiaries; (g)
except in connection with a Permitted Acquisition, the acquisition by any of the
Borrowers or any of their Subsidiaries of all or substantially all of the assets
and properties of any other person or any discrete division or other business
unit thereof, whether by any of the Borrowers or any of their Subsidiaries; (h)
any material change in the character of the business of any of the Borrowers or
any of their Subsidiaries as conducted on the date of this Agreement or any
adverse change in the method by which that business is conducted, (i) any
material change in the Borrowers' accounting treatment or financial reporting
practices except as required or permitted by GAAP in effect from time to time,
or (j) any change to any of the certificate of incorporation, by-laws or other
governing documents of any Borrower which would have or is likely to have a
Material Adverse Effect.
Section 6.08. Distributions to Shareholders. The Borrowers shall not
directly or indirectly: (a) declare or make any dividend, payment or other
distribution of cash, assets or property with respect to any equity securities
issued by any of the Borrowers, whether now or hereafter outstanding, other than
such payments or other distributions as may be made to a Borrower from any of
its Subsidiaries, except that Aeroflex may declare or make any dividend or other
distribution with respect to its common stock payable in common stock, preferred
stock (other than preferred stock that would be considered Indebtedness
hereunder) or any option, warrant or other right to acquire such securities; (b)
redeem, purchase or otherwise acquire any securities issued by any of the
Borrowers or any option or other right to acquire any such securities; (c)
covenant or otherwise arrange with any person (other than with the Banks in any
Loan Instrument) to directly or indirectly limit or otherwise restrict any
dividend, advance or other payment on distribution (whether of cash or
otherwise); or (d) offer or agree to do any of the foregoing; provided however
that so long as no Event of Default or Default then exists or would result
therefrom (whether through any Pro Forma Effect or otherwise), Aeroflex may
comply with the provisions of the Rights Agreement and Aeroflex may redeem
fractional shares in connection with any Permitted Acquisition.
Section 6.09. Use of Loans.
(a) The Borrowers shall not directly or indirectly use any portion of
the Loans, or cause, assist, suffer or permit the use of any portion of the
Loans, in whole or in part, other than use of the Loans for the continuation of
the Current Indebtedness that arose under the Existing Loan Instruments and use
of the Revolving Credit Loans for the funding of the working capital needs and
other general corporate purposes of the Borrowers, including Permitted
Acquisitions.
(b) No part of the proceeds of the Loans shall be used directly or
indirectly to finance any hostile acquisition.
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(c) No part of the proceeds of the Loans or other credit from the
Banks shall be used at any time directly or indirectly to purchase or carry any
Margin Stock or otherwise in any way or for any purpose that violates, or is
inconsistent with, any applicable Margin Stock Regulations.
Section 6.10. ERISA Plans. Except for the Plans, the Borrowers shall
not, and the Borrowers shall not cause, suffer or permit any of their ERISA
Affiliates to, directly or indirectly establish, maintain, participate in,
contribute to or permit to exist any "employee pension benefit plan" (as defined
in ERISA) for any employees of any Borrower or any ERISA Affiliate; provided,
however, that any Borrower or any ERISA Affiliate from time to time may
establish any such plan in accordance with Applicable Law (including ERISA and
the Code). The Borrowers shall use their best efforts to obtain or continue the
qualification of each Plan under ERISA and the Code, as applicable, shall
prepare and deliver each material report, statement or other document required
by ERISA and the Code within the periods specified therein and conforming in
form and substance to the provisions thereof, and shall administer each Plan in
all material respects in accordance with ERISA, the Code and all other
Applicable Laws, as applicable; and shall use their best efforts to cause their
respective ERISA Affiliates to do each of the foregoing. In any event, no
Borrower shall, and no Borrower shall cause, suffer or permit any of its ERISA
Affiliates to: (i) incur, continue or fail to correct any ERISA Event in any
material respect; (ii) fail to file with the appropriate Authority any required
notice or report respecting any Plan as and when due; (iii) fail to respond in a
timely fashion to any notice or other communication respecting any Plan from any
Authority; (iv) materially increase or materially and adversely modify any
funding obligation or other liability of any one or more of the Borrowers or any
ERISA Affiliate (individually or in the aggregate) under any Plan (whether
through amendment or termination) without the prior written consent of the
Administrative Agent (which will not be withheld unreasonably); (v) permit the
present value of all accrued benefits under each Plan subject to Title IV of
ERISA to exceed the value of the assets of such Plan allocable to such accrued
benefits (which benefit value shall be determined either on an ongoing basis,
using the Plan's reasonable actuarial assumptions, or on a termination basis,
using the assumptions employed by the Pension Benefit Guaranty Corporation in
connection with plan terminations, as applicable); or (vi) permit the present
value of all accrued post-retirement benefits under each "employee welfare
benefit plan" (as defined in ERISA) to which one or more of the Borrowers and
their ERISA Affiliates is required to contribute in the aggregate to exceed the
assets of such plan allocable to such benefits by more than $50,000 (determined
by using the actuarial and other assumptions required under FAS 106).
Section 6.11. Transactions with Affiliates. The Borrowers shall not
directly or indirectly enter into any transaction (including, without
limitation, the lease, purchase, sale or exchange of any asset or property, the
making of any advance or loan or the entering into of any agreement or
arrangement for any payment in respect of any fee, charge or other expense for
the provision of any services or any allocation of administrative salaries,
expenses and other general overhead) with any affiliate (other than a Borrower)
of any Borrower other than in the ordinary course and pursuant to the reasonable
requirements of the business of the transacting party and upon fair and
reasonable terms and provisions no less favorable to the transacting party than
it would have been reasonably likely to have obtained in a comparable arm's
length transaction with a person who is not an affiliate (other than a Borrower)
of any Borrower; provided that the foregoing restriction shall not apply to (i)
the payment of reasonable and customary regular fees to directors of any of the
Borrowers who are not employees of any of the Borrowers, (ii) loans and advances
to officers of the Borrowers approved by the Boards of Directors of the relevant
Borrowers and permitted by Section 6.06 hereof, (iii) reasonable employment
arrangements and benefit programs for employees of the Borrowers approved by the
Boards of Directors of the relevant Borrowers, (iv) the grant of reasonable
stock options or similar rights to employees and directors of any of the
Borrowers pursuant to plans approved by the Boards of Directors of the relevant
Borrowers, (v) any intercompany Indebtedness permitted by Sections 6.02 and 6.06
hereof, (vi) any, transfer of assets to another Borrower permitted by Section
6.05 or 6.07 hereof, (vii) transactions that
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would not individually or in the aggregate be reasonably deemed material, (viii)
Permitted Non-Borrower Subsidiary Transfers, (ix) the IFR Debt and the repayment
thereof (as long as no Default or Event of Default exists at the time thereof or
would occur as a result thereof) and (x) any merger, consolidation or
liquidation permitted by Section 6.07 hereof.
Section 6.12. Modification of the Subordinated Debt Documents, Etc.
The Borrowers shall not directly or indirectly agree to, enter into or cause,
suffer or permit, any supplement to or any waiver (of their rights),
modification, amendment, restatement or replacement of any Subordinated Debt
Document existing on the date hereof or with respect to any Permitted
Subordinated Debt hereafter incurred, or offer, commit or agree to do any of the
foregoing, without the prior written consent of the Majority Banks; provided
that the Majority Banks shall not unreasonably withhold their consent respecting
any new Subordinated Debt Documents for new Permitted Subordinated Debt. The
inclusion of supplements, modifications, amendments, restatements, replacements
and the like in the various definitions of the Subordinated Debt Documents is
not intended and shall not be deemed or construed to be permission for or
acceptance of any of the foregoing by the Majority Banks. In any event, no
Borrower shall cause, suffer or permit: (a) any of the obligations of any
Borrower under any Subordinated Debt Document to be (i) secured by any asset or
property of any Borrower or (ii) less than fully subordinated (in the judgment
of the Majority Banks) to the prior payment and satisfaction of the Obligations;
or (b) any payment to be made or action to be taken under any Subordinated Debt
Document without notice of any proposed action, suit or proceeding to the Banks.
Section 6.13. Modification of the Material Documents. The Borrowers
shall not directly or indirectly agree to, enter into or cause, suffer or
permit, any supplement to or any waiver (of their rights), modification,
amendment, restatement or replacement of any Material Document existing on the
date hereof or hereafter approved by the Banks (other than any renewal or
extension thereof permitted under Section 6.02(a)(iv) hereof), which would have,
or is reasonably likely to have, a Material Adverse Effect. The inclusion of
supplements, modifications, amendments, restatements, replacements and the like
in the various definitions of the Material Documents is not intended and shall
not be deemed or construed to be permission for or acceptance of any of the
foregoing by the Majority Banks.
Section 6.14. [Intentionally Omitted].
Section 6.15. [Intentionally Omitted].
Section 6.16. [Intentionally Omitted].
Section 6.17. Limitation on Negative Pledges. The Borrowers shall not
enter into any agreement which prohibits or limits the ability of any Borrower
to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired.
Section 6.18. Limitation on Foreign Assets. The net book value of all
tangible assets of the Borrowers located outside of the United States of America
shall not at any time exceed 33% of the net book value of all of the tangible
assets of the Borrowers.
ARTICLE VII.
Collateral
Section 7.01. Continuation and Grant of Security Interests.
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(a) Each Borrower hereby pledges, assigns, conveys, mortgages,
transfers and delivers to the Administrative Agent (for the benefit of the
Administrative Agent, the Fronting Bank and all of the Banks), and grants to the
Administrative Agent (for the benefit of the Administrative Agent, the Fronting
Bank and all of the Banks) a continuing security interest in and to, all of the
following assets and properties of such Borrower:
(i) any and all Pledged Securities; and
(ii) any and all Springing Collateral (subject to the first proviso set
forth below);
in each case whether now existing or hereafter acquired or created, whether
owned beneficially or of record and whether owned individually, jointly, as a
security entitlement or otherwise, together with all products and proceeds
thereof, all collections, payments and other distributions and realizations with
respect thereto, any and all other rights, powers, privileges, remedies and
interests of such Borrower therein, thereto or thereunder, and any and all
renewals, substitutions, modifications and extensions of any and all of the
items in the foregoing subsections (the foregoing items will be referred to
collectively, together with the Plainview Property (and any and all of the real
property described in any Mortgage, any and all fixtures and improvements
thereto, and any and all interests therein), as the "Collateral"), as security
for the timely and full payment and satisfaction of the Obligations as and when
due; provided however that (i) notwithstanding anything to the contrary
contained in this Agreement, unless and until a Trigger Event shall have
occurred, the Springing Collateral shall not be considered to be "Collateral"
hereunder and unless and until such Trigger Event shall have occurred, the
Springing Collateral shall not be subject to any of the terms, limitations or
conditions of this Agreement that specifically relate to "Collateral" and (ii)
the Plainview Property by its terms serves as Collateral for the Mortgage Loans,
interest thereon and the other related Obligations as provided in the Plainview
Mortgage; provided, however, items released from time to time from the Lien of
this Agreement and the other Loan Instruments pursuant to Section 7.04 hereof or
in writing by the Administrative Agent (with the consent of the Requisite Banks,
as and if required) shall no longer be considered to be "Collateral" hereunder.
(b) Upon the occurrence of each Trigger Event and at all times
thereafter unless and until a Springing Release Event shall occur (i) the
Springing Collateral shall automatically, without any further action on the part
of any other Person, be deemed "Collateral" for all purposes hereunder (and each
Borrower agrees to execute any and all documentation reasonably requested by the
Administrative Agent in connection therewith), (ii) the Administrative Agent
shall be authorized to file Uniform Commercial Code financing statements with
respect to such Springing Collateral, (iii) each Borrower irrevocably authorizes
and instructs the Administrative Agent to, and agrees that the Administrative
Agent may, take any and all steps and actions as necessary or appropriate in the
discretion of the Administrative Agent to Perfect its Liens in the Springing
Collateral, (iv) each Borrower shall be deemed to have made all representations
and warranties contained herein on and as of the date thereof (except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct as of such earlier date) and (v)
each Borrower shall promptly execute and deliver, or cause to be executed and
delivered, such documents and agreements, including reasonably satisfactory
opinions of counsel, and perform or cause to be performed such other acts, as
may be desirable in the reasonable discretion of the Administration Agent to
better ensure the Perfection and enforceability of the Liens in such Springing
Collateral under applicable law, all such matters to be completed to the
reasonable satisfaction of the Administrative Agent by no later than 30 days
after the date of such Trigger Event. Upon the occurrence of each Springing
Release Event and at all times thereafter unless and until a Trigger Event shall
occur (A) the Springing Collateral shall automatically, without any further
action on the part of any other Person, no longer be deemed "Collateral" for any
purpose hereunder (and the Administrative Agent and each Bank agrees to execute
any and all documentation reasonably requested by the Borrowers in connection
therewith), (B) the Borrowers shall be authorized to file Uniform
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Commercial Code partial release statements with respect to the release of such
Springing Collateral, (C) each Bank and the Administrative Agent irrevocably
authorizes and instructs the Borrowers to, and agrees that the Borrowers may,
take any and all steps and actions as necessary or appropriate in the discretion
of the Borrowers to release the Lien in the Springing Collateral, and (D) the
Administrative Agent and each Bank shall promptly execute and deliver, or cause
to be executed and delivered, such documents and agreements and perform or cause
to be performed such other acts, as may be desirable in the reasonable
discretion of the Borrowers to better ensure the release of the Administrative
Agent's Lien on such Springing Collateral under applicable law, all such matters
to be completed to the reasonable satisfaction of the Borrowers by no later than
30 days after the date of any such request by the Borrowers. IT IS EXPRESSLY
UNDERSTOOD AND AGREED THAT NOTWITHSTANDING THAT THE ADMINISTRATIVE AGENT MAY
HAVE TAKEN ACTION TO OBTAIN A PERFECTED LIEN IN THE SPRINGING COLLATERAL UPON
THE OCCURRENCE OF A TRIGGER EVENT RELATING TO AN EVENT OF DEFAULT, NEITHER THE
ADMINISTRATIVE AGENT, THE FRONTING BANK NOR ANY BANK SHALL BE DEEMED TO HAVE
WAIVED ANY OF THEIR RIGHTS AND REMEDIES AS A RESULT OF SUCH EVENT OF DEFAULT BY
TAKING ANY SUCH ACTION AND THE ADMINISTRATIVE AGENT, THE FRONTING BANK AND EACH
BANK EACH EXPRESSLY RESERVES ALL OF ITS RIGHTS AND REMEDIES THAT MAY EXIST AS A
RESULT OF ANY SUCH EVENT OF DEFAULT.
Section 7.02. Collateral Documentation.
(a) Each Borrower shall deliver to the Administrative Agent or its
designee (for the benefit of all of the Banks) on or before the Effective Date,
and thereafter concurrently with any asset or property becoming Collateral, such
assignments, pledges, deeds, mortgages, financing statements, attornments,
estoppels, waivers, consents, recognitions, bailments and other instruments,
documents and agreements as the Administrative Agent from time to time may deem
necessary or appropriate to evidence, confirm, effect or perfect any mortgage or
other security interest granted or required to be granted under this Agreement
or any other Loan Instrument, each in such form and substance as may be
acceptable to the Administrative Agent and the Majority Banks; and, at the
request of the Administrative Agent, an accompanying opinion of counsel
respecting the Borrowers and such additional Collateral to the same effect as
the opinion required by Section 4.05 of this Agreement, in such form and
substance and from such counsel as may be reasonably acceptable to the Banks
(b) Each Borrower hereby irrevocably authorizes the Administrative
Agent in its discretion: (i) to file without the signature of such Borrower any
and all financing statements, modifications and continuations in respect of the
Collateral and the transactions contemplated by this Agreement and the other
Loan Instruments; (ii) to sign any such statement, modification or continuation
on behalf of such Borrower if the Administrative Agent deems such signature
necessary or desirable under Applicable Law; and (iii) to file a carbon,
photographic or other reproduction of any financing statement or modification if
the Administrative Agent deems such filing necessary or desirable under
Applicable Law; provided that unless such filing is permitted as a result of a
Trigger Event, so long as no Event of Default is then continuing, the
Administrative Agent shall accord each Borrower an opportunity to review any
proposed financing statement or modification (but not continuation) to be filed
against it; and provided further that the failure to send any such copy for
review shall not affect the validity or enforceability of any such signature and
filing by the Administrative Agent. The Borrowers shall promptly reimburse the
Administrative Agent for all costs and expenses incurred in connection with the
preparation and filing of any such document. The Administrative Agent shall send
a copy of any such filing to the Borrowers; provided, however, that the failure
to send that copy shall not affect the validity or enforceability, of any such
filing. The Administrative Agent shall not be liable for any mistake in or
failure to file any financing statement, modification or continuation.
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(c) The Administrative Agent may request that material items of
Collateral be legended or otherwise marked from time to time to reflect the
Administrative Agent's security interests therein (for the benefit of all of the
Banks), and the Borrowers shall promptly ▇▇▇▇ each requested item in a prominent
location with such legend as the Administrative Agent may direct, which may be
affixed directly or on a permanently attached plaque of customary size. The
Borrowers shall not, and shall not cause, suffer or permit anyone else to,
alter, cover, deface or remove any such legend without the prior written consent
of the Administrative Agent, except that such legend may be removed from items
released in writing by the Administrative Agent (with the consent of the
Requisite Banks, as and if required) from time to time from the security
interests created under this Agreement and the other Loan Instruments as
provided herein or therein.
(d) [Intentionally Omitted.]
(e) Subject to the immediately following proviso, the Administrative
Agent, or its designee, at any time and from time to time may conduct an audit
or field examination of or otherwise verify or examine the sales and Accounts
Receivable, Inventory, equipment and books and records of the Borrowers in any
manner the Administrative Agent may reasonably deem necessary or desirable;
provided, however, that (i) absent the continuance of any Default or Event of
Default the Administrative Agent will limit its audits and examinations to one
per calendar year, (ii) if the costs and expenses of such audit or field
examination are predominately incurred (rather than when actually paid or
reimbursed and subject in each case to minor fluctuations in timing) during a
Trigger Period, the Borrowers shall be obligated to pay or reimburse the
Administrative Agent for all such costs and expenses and (iii) during the
continuance of any Default or Event of Default the Administrative Agent shall
not in any way be limited by the number of audits and examinations it may
conduct in any calendar year and the costs of all such audits and examinations
shall be borne by the Borrowers. In connection with an audit or examination
being made pursuant to the authorizations in this Section 7.02(e), if requested
by the Administrative Agent, the Borrowers promptly shall deliver to the
Administrative Agent or its designee any and all sales slips, orders, invoices
and other documents evidencing the Accounts Receivable, and shall make
deliveries of subsequent materials at least as frequently as requested, however,
irrespective of any examination by or pledge or delivery to the Administrative
Agent or any Bank, neither the Administrative Agent nor any Bank shall have any
obligation or liability with respect to any Account Receivable of any Borrower,
including (without limitation) any obligation or liability (A) to perform any
obligation of any Borrower, (B) for the enforceability or collectibility of the
Account Receivable or the existence or sufficiency of any documentation, (C) for
the creditworthiness of any account party, (D) for the sufficiency or
reconciliation of any payment received, or (E) to make any inquiry or demand,
make or file any claim, or take any other action to collect or otherwise enforce
any Account Receivable.
(f) [Intentionally Omitted].
(g) Promptly following and during the continuance of any Trigger
Event, upon each specific written request of the Banks hereunder, the indicated
Borrower shall execute and deliver assignments of its claims under any requested
Material Government Contracts in form and substance suitable for submission to
the appropriate federal Authority and acceptable to the Banks, assigning all or
such portion of the payments under such Material Government Contract(s) as the
Banks specified in such request.
Section 7.03. Rights of the Borrowers to the Collateral, Etc. Subject
to the terms and provisions of this Agreement and until such time as the
Administrative Agent (with the consent of the Requisite Banks, as and if
required) shall give notice to the Borrowers to the contrary during the
continuance of any Event of Default and after (or in combination with) any
Default Declaration, without regard to whether any other action has been taken
by the Administrative Agent or any other Bank under
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this Agreement or any other Loan Instrument, the Borrowers shall have the right
to do the things expressly permitted by any subsection of this Section
notwithstanding the restrictions contained in Section 6.05 hereof (but shall not
have such right after such notice has been given to the extent specified in such
notice):
(a) The Borrowers shall have the full power and authority in the
ordinary course of business (i) to use in their business any item of Collateral
(other than instruments, securities and other general intangibles in the
possession of the Administrative Agent or its designee for the benefit of all of
the Banks), (ii) to maintain, repair, replace and retire equipment in accordance
with Section 5.07(a) hereof, (iii) to temporarily deliver work-in-progress to
one or more subcontractors for processing, and to relocate finished goods
Inventory to one or more public warehouses from which any Borrower has obtained
recognition and access agreements in form and substance reasonably acceptable to
the Banks, (iv) to modify or amend any Contract or other agreement or document
included in the Collateral, (v) to reduce any payment or otherwise settle any,
dispute under any Contract or other material Account Receivable or other
account, note, stock certificate, instrument, agreement, document or intangible
included in the Collateral if such action will not have a Material Adverse
Effect and the Borrowers determine in good faith that it is in their best
interest to do so, (vi) to diligently service and collect the proceeds of any
Accounts Receivable, which may include such discounts and reductions as may be
usual and customary, (vii) to use in their business the cash proceeds from such
Inventory and Accounts Receivable, and (viii) to deposit, withdraw and use in
their business funds and other cash equivalents constituting Collateral under
this Agreement, provided, however, that such power shall not be exercised to the
extent (A) such exercise could conflict with or prejudice the continued
perfection of any security interest in any item of the Collateral (other than
through such sales, use of cash proceeds or withdrawals or use of funds) or (B)
any Event of Default or Default could result therefrom (whether through any Pro
Forma Effect or otherwise).
(b) In the event of any damage, destruction or other loss, or
condemnation of any Collateral or other asset or property of any Borrower so
long as it does not constitute a default under Section 8.01(l) of this
Agreement, in each case whether in whole or in part, the affected Borrower shall
have the right to apply the amounts received therefrom (whether payments,
proceeds or otherwise) to the repair, rebuilding or replacement of those assets
if, and only if: (A) the affected Borrower in its discretion has elected to
repair, rebuild or replace those assets of at least equivalent value and
business utility; (B) the affected Borrower has sufficient additional funds with
which to do so (if the amounts received and to be received are not sufficient to
do so); and (C) if the affected Borrower does so, (1) those assets would
constitute (or continue to constitute) Collateral (unless repairing, rebuilding
or replacing any asset or property not constituting Collateral), (2) the
representations and warranties of the Borrowers pertaining to that Collateral or
other asset or property in this Agreement and the other Loan Instruments would
(upon completion) be true and correct, and (3) no Event of Default or Default
could result therefrom (whether through any Pro Forma Effect or otherwise). If
those amounts are to be applied to such repair, rebuilding, replacement and are
received by any Bank, then the receiving Bank shall promptly remit those amounts
to the affected Borrower for such use; provided that if such amounts exceed
$1,000,000, the Administrative Agent (at the request of any Bank in its
discretion) shall hold such proceeds as received and disburse them to the
affected Borrower for such purposes upon delivery to the Banks of satisfactory
evidence of (x) full payment to the requisite third parties, (y) good title and
the absence of competing security interests and other encumbrances and adverse
claims, and (z) the satisfaction of such other conditions as may be required by
the Loan Instruments or reasonably requested by the Banks. In the event any
Borrower receives any such payments or proceeds (other than disbursements from
the Administrative Agent or remittances from any such receiving Bank), such
Borrower shall accept and hold those funds in trust for the benefit of the Banks
and shall promptly pay or deliver those proceeds to the Administrative Agent for
application as provided above.
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(c) [Intentionally Omitted].
(d) [Intentionally Omitted].
(e) In instances not involving a Permitted Disposition, the Borrowers
shall have the full power and authority to relocate any item of Collateral,
except for Collateral held by the Administrative Agent or its designee (for the
benefit of all of the Banks), so long as (i) the new location is within the
continental United States or Puerto Rico, (ii) the relocation will be made at
the sole cost and expense of the Borrowers, which shall bear all risk of loss
and any and all other liabilities related thereto, (iii) the Borrowers give the
Banks at least thirty (30) days' prior written notice of any proposed
relocation, (iv) prior to relocation the Borrowers execute and deliver to the
Administrative Agent such instruments and documents as the Administrative Agent
may deem necessary or desirable, (y) prior to relocation the Borrowers provide
evidence satisfactory to the Banks that all insurance will be applicable in the
new location to the extent required by this Agreement and the other Loan
Instruments, and (vi) immediately following the relocation as proposed, the
representations and warranties set forth in this Agreement (as and if updated by
way of supplements to the schedules, statements, reports, certificates or
notices required hereunder and previously delivered to and accepted by the
Administrative Agent) shall be true and correct in all material respects on and
as of that date with the same effect as though those representations and
warranties had been made on and as of that date, provided, however, that the
Borrowers will not make any relocation to which the Banks give written notice of
their objection.
(f) The Borrowers shall be entitled to exercise in good faith any and
all voting, waiver or consensual rights and powers relating or pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement; provided however, that the Borrowers shall not be permitted
to exercise or refrain from exercising any such right or power to the extent
such exercise or nonexercise could (i) have a material and adverse effect on the
value of the Collateral or any part thereof or (ii) result in any Default or
Event of Default.
(g) [Intentionally Omitted].
Section 7.04. Partial Releases. The Administrative Agent from time to
time shall release portions of the Collateral from the Liens granted under this
Agreement and the other Loan Instruments qualifying for release under and
subject to the terms and conditions of subsection (a) or (b) of this Section,
shall execute and deliver the documentation reasonably required to effect each
such release (in such form and substance as may be acceptable to the
Administrative Agent and the Majority Banks), and shall return the applicable
instruments and other documents to the Borrowers or their designee, in each case
subject to receipt of evidence and documentation in such form and substance as
may be acceptable to the Administrative Agent and the Majority Banks, that those
terms and conditions have been satisfied; provided that no Event of Default or
Default then exists or could result therefrom (whether through any Pro Forma
Effect or otherwise). Any and all actions under this Section shall be without
any recourse to or representation or warranty by the Administrative Agent or any
other Bank and shall be at the sole cost and expense of the Borrowers.
(a) In the event of any sale or other disposition of any Collateral
expressly permitted under Section 7.03(a) hereof or any other term or provision
of this Agreement or any other Loan Instrument, the Administrative Agent will
release that item, subject to receipt by the Administrative Agent of any payment
or prepayment from the Borrowers required by this Agreement or any other Loan
Instrument.
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(b) In the event any debtor under any indenture, agreement, note,
instrument or Account Receivable pledged to the Administrative Agent (for the
benefit of all of the Banks) pursuant to this Agreement shall have paid all
amounts due thereunder in full and shall have complied with all other terms and
conditions thereof, then, subject to receipt by the Administrative Agent of any
payment or prepayment from the Borrowers required by this Agreement or any other
Loan Instrument, those items shall be deemed to have been automatically released
as Collateral from the security interests created by this Agreement, and if
requested the Administrative Agent will return the applicable instruments and
other documents to the Borrowers or their designee.
Section 7.05. Litigation Respecting Collateral.
(a) In the event that any action, suit or other proceeding (whether or
not purportedly on behalf of any Borrower) at law, in equity, in arbitration or
before any other Authority involving or affecting the Collateral (a
"Proceeding") is contemplated by any Borrower or is otherwise commenced by or
against any party hereto, the Borrowers shall give the Banks immediate notice
thereof. Within twenty (20) Business Days after its receipt of such notice, the
Administrative Agent (with the consent of the Majority Banks) shall notify the
Borrowers that either (i) the Administrative Agent will join in the Proceeding,
(ii) a specified designee of the Administrative Agent or any other Bank will
join in the Proceeding, or (iii) the Borrowers may prosecute the Proceeding
without the participation of any Bank or its designee, which Proceeding in any
event shall be conducted in accordance with the provisions of subsection (b) of
this Section. In the event the Administrative Agent fails to respond to such
notice of the Proceeding within that period, the Banks shall be deemed to have
elected alternative (iii) above, without, however, waiving any other right,
power, privilege, remedy or interest of the Banks under this Agreement, the
other Loan Instruments and Applicable Law.
(b) If any Borrower elects to commence a Proceeding, or a Proceeding
has otherwise been commenced by or against any party hereto, the Borrowers shall
cause the same to be prosecuted (i) in such a manner that all the rights of the
Banks are preserved and protected to the fullest extent reasonably possible and
(ii) with counsel to such Borrower that is reasonably acceptable to the
Administrative Agent and the Majority Banks and represents both such Borrower
and the Banks. Subject to compliance by the Borrowers with the foregoing: (A)
the Administrative Agent (if named as a party by someone other than any
Borrower) shall join in the Proceeding and take any other action reasonably
requested by counsel to such Borrower to facilitate the prosecution thereof, all
at the sole cost and expense of the Borrowers; and (B) the Proceeding may be
prosecuted by such Borrower in such manner as such Borrower and its counsel
reasonably deem appropriate. In any event, if the Administrative Agent or any
other Bank determines at any time during the pendency of a Proceeding (after
consultation with counsel to the Administrative Agent) that the interests of one
or more of the Banks are at variance with the interests of any Borrower, the
Administrative Agent (with the consent of the Majority Banks) may appoint its
own counsel (at the reasonable expense of the Borrowers) to represent the Banks
in the Proceeding, and the Borrowers and their counsel shall cooperate with the
Banks and their counsel to the fullest extent possible in that Proceeding.
Section 7.06. Power of Attorney. With respect to the various assets
and properties included or required to be included in the Collateral hereunder,
each Borrower hereby irrevocably makes, constitutes and appoints the
Administrative Agent and the Administrative Agents' executive officers (Vice
President or above), and each of them, with full power of substitution, as the
true and lawful attorney-in-fact of such Borrower, with full power and authority
from time to time in the name, place and stead of such Borrower to: (a) take
possession of and execute or endorse (to any Bank or otherwise) any one or more
contracts, mortgages, deeds, pledges, assignments, instruments and other
documents, and any one or more notes, checks, drafts, bills of exchange, money
orders or other documents received in payment for or on account of those assets
and properties; (b) receive, open and dispose of the mail and
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other deliveries of such Borrower respecting the Collateral and request postal
authorities and others to change the delivery address(es) for such Borrower to
such address(es) as the Administrative Agent may deem necessary or desirable;
(c) demand, collect and receive any monies due on account of those assets and
properties and give receipts and acquittances in connection therewith; (d)
negotiate and compromise any claim, and commence, prosecute, defend, settle or
withdraw any claims, suits or proceedings, pertaining to or arising out of those
assets and properties; (e) pay any Indebtedness or other liability or perform
any other obligation required to be paid or performed under this Agreement or
any other Loan Instrument by the Borrowers or any other person (other than the
Administrative Agent); (f) prepare and execute on behalf of the Borrowers any
mortgage, financing statement or other evidence of a security interest
contemplated by this Agreement, or any modification, refiling, continuation or
extension thereof; (g) take any other action contemplated by this Agreement or
any other Loan Instrument; and (h) sign, execute, acknowledge, swear to, verify,
deliver, file, record and publish any one or more of the foregoing; provided,
however, that the above-named attorneys-in-fact may exercise the powers set
forth in this Section only following the written notice of the Administrative
Agent or any other Bank pursuant to Section 7.07(a) of this Agreement and during
the continuance of the subject Event of Default, whether or not any reference to
this Power of Attorney is made in that notice, and without regard to whether any
other action has been taken by the Administrative Agent or any other Bank under
this agreement or any other Loan Instrument. This Power of Attorney is hereby
declared to be irrevocable, with full power of substitution and coupled with an
interest. This Power of Attorney shall survive the dissolution, reorganization
or bankruptcy of any Borrower and shall extend to and be binding upon the
successors, assigns, heirs and legal representatives of each Borrower. This
Power of Attorney may be exercised (i) by any one of the above-named
attorneys-in-fact, or by any substitute designated by any of those
attorneys-in-fact, and (ii) by signing for any Borrower individually on any
document or instrument, or by listing two or more of the persons (including the
Borrowers) for whom any document or instrument is being signed and signing once,
with a single signature by the attorney-in-fact or substitute being effective to
exercise the Powers of Attorney of all persons so listed. A facsimile signature
shall be effective if so affixed. The Administrative Agent shall not be liable
for any failure to collect or enforce the payment of any of those assets and
properties.
Section 7.07. Rights of the Banks to the Collateral, Deficiencies,
Etc.
(a) If any Event of Default shall have occurred and is then continuing
and a Default Declaration has been issued, the Administrative Agent (with the
consent of the Requisite Banks, as and if required) may take (and/or may cause
one or more of its designees to take) any or all of the following actions, after
giving the Borrowers prior written notice, or in the case of clauses (vi) or
(ix) after giving the Borrowers at least ten (10) days' prior written notice
(which notice period each Borrower acknowledges and agrees to be adequate and
reasonable, and which notice may be combined with a Default Declaration) to the
Borrowers, with a single such notice being sufficient to entitle the
Administrative Agent from time to time thereafter to take any one or more of the
actions described below):
(i) prohibit any Borrower from taking any action with respect to the
Collateral otherwise permitted by this Agreement and the other Loan
Instruments;
(ii) notify each of the mortgagors, obligors, lessees, issuers, custodians
and other parties with respect to or interested in any item of the
Collateral of the interest of the Administrative Agent or Banks
therein or of any action proposed to be taken with respect thereto,
and direct one or more of those parties to make all payments,
distributions and proceeds otherwise payable to any Borrower with
respect thereto directly to the Administrative Agent (for the benefit
of all of the Banks) or its order until notified by the Administrative
Agent that all the Obligations have been fully paid and satisfied;
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(iii) receive and retain all payments, distributions and proceeds of any
kind with respect to any and all of the Collateral;
(iv) direct the Borrowers or any other holder of Collateral to assemble and
deliver such Collateral to the Administrative Agent or its designee at
such time(s) and place(s) as the Administrative Agent from time to
time may specify, all without any risk or expense to the
Administrative Agent or any other Bank; or enter any premises where
any item of Collateral may be located (to the extent permitted by
Applicable Law with respect to classified areas), with or without
permission or process of law but without breach of the peace, and
seize and remove such Collateral or remain upon such premises and use
or dispose of such Collateral as contemplated under this Agreement and
the other Loan Instruments;
(v) request the judicial appointment of a receiver respecting the
Collateral (excluding funds in the possession of any Bank or its
designee and such other Collateral as the Administrative Agent (with
the consent of the Requisite Banks, as and if required) may specify in
its request) in any action, suit or proceeding in which claims are
asserted against the Collateral by the Administrative Agent or its
designee, irrespective of the solvency of any Borrower or any other
person or the adequacy of any collateral, and without notice to or the
approval of any Borrower, which receiver shall have the power to
manufacture, operate, sell, lease or rent such items of Collateral
pending the sale of all of the Collateral and to collect the rent,
issues and profits therefrom, together with such other powers as may
have been requested by the Administrative Agent (with the consent of
the Requisite Banks, as and if required), and shall apply the amounts
received (net of all proper charges and expenses) to the Obligations
as provided in this Agreement;
(vi) except to the extent provided otherwise by the New York Real Estate
Law, with respect to Collateral that is not subject to foreclosure and
the like, take any action with respect to the offer, sale, lease or
other disposition, and delivery of the whole of, or from time to time
any one or more items of, the Collateral, including, without
limitation: (A) to sell, commit, assign, lease or otherwise dispose of
the whole of, or from time to time any part of, the Collateral, or
offer, commit or agree to do so, in any established market or at any
broker's board, private sale or public auction or sale (with or
without demand on any Borrower or any advertisement or other notice of
the time, place or terms of sale) for cash, credit or any other asset
or property, for immediate or future deliver, and for such
consideration and upon such terms and subject to such conditions as
the Administrative Agent (with the consent of the Requisite Banks as
and if required) in its sole and absolute discretion may determine in
a commercially reasonable manner, and any Bank (with the consent of
the Majority Banks) may purchase (the consideration for which may
consist in whole or in part of cancellation of Indebtedness) or any
other person may purchase the whole or any one or more items of the
Collateral, and all items purchased shall be free and clear of any and
all rights, powers, privileges, remedies and interests of the
Borrowers (whether individual, joint, several or otherwise), which
each Borrower has expressly waived pursuant to Section 7.09 hereof (B)
to postpone or adjourn any such auction, sale or other disposition, to
cause the same to be postponed or adjourned from time to time to a
subsequent time and place, or to abandon or cause the abandonment of
the same, all without any advertisement or other notice thereof, and
(C) to carry out any agreement to sell any item or items of the
Collateral in accordance with the terms and provisions of such
agreement, notwithstanding that, after the Administrative Agent shall
have entered into such an agreement, all the Obligations may have been
paid and satisfied in full;
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(vii) exercise any voting, consent, enforcement or other right, power,
privilege, remedy or interest of any Borrower pertaining to any item
of Collateral to the same extent as if the Administrative Agent were
the outright owner thereof (for the benefit of all of the Banks),
provided that the Administrative Agent shall not be entitled to
exercise any of the voting rights of any Borrower pertaining to any
equity interest in another person unless and until the Administrative
Agent has given specific written notice to the Borrowers, apart from
the notice first referred to in this subsection of the Administrative
Agent's election to exercise one or more or all, such voting rights;
(viii) take possession of and thereafter deal with or use from time to time
all or any part of the Collateral in all respects as if the
Administrative Agent were the outright owner thereof (for the benefit
of all the Banks), which shall include (without limitation) the right
to manufacture, operate, sell, lease or rent items of Collateral as
well as to sell parts of the Collateral pending the sale of all of the
Collateral, and to collect the rent, issues and profits therefrom;
(ix) transfer or cause the transfer of the ownership of all or any part of
the Collateral (with the consent of the Majority Banks) to its own
name, the name of any other Bank or any designee and have such
transfer recorded in any jurisdiction(s) and publicized in any manner
deemed appropriate by the Administrative Agent; and
(x) in addition to, and not by way of limitation of, any of the rights
specified above, exercise or enforce any and all rights powers
privileges, remedies and interests afforded to the Administrative
Agent or any other Bank under this Agreement, the other Loan
Instruments and any and all provisions of Applicable Law (including,
without limitation, the Uniform Commercial Code and the New York Real
Estate Law), whether as a secured party or mortgagee in possession of
collateral or otherwise.
(b) The Administrative Agent shall collect the cash proceeds received
from any sale or other disposition or from any other source contemplated by
subsection (a) above and/or the Plainview Mortgage, and, after deducting all
costs and expenses incurred by the Administrative Agent and any person
designated by the Administrative Agent to take any of the actions enumerated in
subsection (a) above in connection with such collection and sale or disposition
(including reasonable attorneys' disbursements, expenses and fees), the
Administrative Agent shall apply the same in accordance with the terms and
provisions of this Agreement unless the Administrative Agent (with the consent
of the Majority Banks) shall elect to retain the same as additional or
substitute Collateral to the extent such retention is permitted by this
Agreement or any other Loan Instrument. In the event any funds remain after
satisfaction in full of the Obligations, then the remainder shall be returned to
the Borrowers, subject, however, to any other rights or interests any one or
more of the Banks may have therein under any other instrument, agreement or
document or Applicable Law.
(c) If the amount of all proceeds received with respect to and in
liquidation of the Collateral that shall be applied to payment of the
Obligations shall be insufficient to pay and satisfy all of the Obligations in
full, the Borrowers acknowledge and agree that they shall remain jointly and
severally liable for any deficiency, together with interest thereon and costs of
collection thereof (including reasonable attorneys' disbursements, expenses and
fees), in accordance with the terms and provisions of this Agreement and the
other Loan Instruments.
Section 7.08. Performance by the Administrative Agent. In the event
any Borrower fails to pay or otherwise perform or satisfy any of its obligations
to others or under or in respect of any of the Collateral or any other material
asset or property of such Borrower as required by this Agreement or
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any other Loan Instrument, the Administrative Agent (with the consent of the
Majority Banks, time permitting) shall have the right in its sole and absolute
discretion (but shall be under no duty or obligation) to make any such payment
or cause the performance or satisfaction of any other such obligation, including
(without limitation) the payment of any tax, claim or insurance premium, the
maintenance or defense of any part of the Collateral or the purchase or
discharge of any Lien on any part of the Collateral. The Administrative Agent
will endeavor to give the Borrowers prior notice (which may be by telephone or
telecopy) of any such payment or action; provided, however, that the failure to
give such notice shall not affect the validity of the payment or action or the
reimbursement obligations of the Borrowers with respect thereto. The Borrowers
shall pay or reimburse on demand any and all amounts advanced or expenses
incurred by the Administrative Agent or its designee under this subsection,
which shall constitute additional Loans under (and secured by) this Agreement
and shall bear interest at the rate applicable to the Loans. No payment made or
action taken by the Administrative Agent, any other Bank or its designee shall
be deemed or construed to be a waiver, cure or satisfaction of the underlying
default, which default shall be deemed to be continuing until such time (if
ever) as the Borrowers have, prior to the Maturity Date, (i) resumed the
payment, performance and satisfaction required by this Agreement and the other
Loan Instruments and (ii) repaid all Loans advanced for such payments and
actions, together with interest thereon, and paid all others to whom the
Administrative Agent has requested direct payment respecting such payments and
actions.
Section 7.09. Certain Acknowledgments and Waivers by the Borrowers.
(a) Each Borrower acknowledges and agrees that the rights, powers,
privileges, remedies and interests granted to or conferred upon the
Administrative Agent or any other Bank in respect of any of the Collateral by
this Agreement, the other Loan Instruments and Applicable Law are purely
discretionary and shall not, and shall not be deemed or construed to, impose
upon the Administrative Agent or any other Bank any duty or other obligation (A)
to sell, foreclose or otherwise realize upon any of the Collateral, (B) to
protect or preserve any of the Collateral, (C) to perform or satisfy any
obligation under or respecting any of the Collateral or any Borrower, (D) to
mitigate or otherwise reduce any damage or other loss, or (E) to otherwise
exercise or enforce any such right, power, privilege, remedy or interest. Any
sale, foreclosure or other realization upon any of the Collateral, or any other
exercise or enforcement of any such right, power, privilege, remedy or interest,
if undertaken by the Administrative Agent or any other Bank in its discretion
(with the consent of the Requisite Banks as and if required), may be delayed,
discontinued or otherwise not pursued or exhausted for any reason whatsoever
(whether intentionally or otherwise). Without limiting the generality of the
foregoing, to the extent waiver is not limited under Applicable Law, each
Borrower hereby expressly waives each and every claim or defense and agrees that
it will not assert or pursue (by action, suit, counterclaim or otherwise) any
claim or defense, respecting (i) any settlement or compromise with any obligor
or other third party under any Account Receivable, account, note, instrument,
agreement, document or general intangible included in the Collateral,
irrespective of any reduction in the potential proceeds therefrom, (ii) the
selection or order of disposition of any of the Collateral (which may be at
random or in any order(s) the Administrative Agent (with the consent of the
Requisite Banks as and if required) may select in its sole and absolute
discretion), (iii) any private sale of any of the Collateral, whether or not any
public market exists, (iv) the choice or timing of any sale date (which the
Administrative Agent (with the consent of the Requisite Banks, as and if
required) may select in its sole and absolute discretion), irrespective of
whether greater sale proceeds would be realizable on a different sale date, (v)
the adequacy of the sale price of any of the Collateral, (vi) any insufficiency
of the proceeds to fully satisfy the Obligations, (vii) any sale of any of the
Collateral to the first person to receive an offer or make a bid, (viii) the
selection of any purchaser of any of the Collateral, or (ix) any default by any
purchaser of any of the Collateral. Neither the Administrative Agent, nor any
other Bank nor any of their respective representatives shall incur any liability
in connection with any sale of or other action taken respecting any of the
Collateral in accordance with the provisions of this Agreement, any other Loan
Instrument or Applicable Law.
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(b) Each Borrower hereby expressly waives the applicability of any and
all Applicable Laws respecting collateral or its disposition that are or may be
in conflict with the terms and provisions of this Agreement and the other Loan
Instruments now or at any time in the future to the extent waiver is not limited
under Applicable Law, including (without limitation) those pertaining to notice
(other than notices required by this Agreement or any other Loan Instrument),
appraisal, valuation, stay, extension, moratorium, marshaling of assets,
exemption and equity of redemption; provided, however, that the preceding
provision is not intended to confer upon any Bank any right, power, privilege,
remedy or interest not permissible under Applicable Law notwithstanding the
foregoing waivers.
Section 7.10. Termination of Certain Existing Security Interests. With
respect to all Released Collateral, upon the Effective Date the Borrowers are
authorized to prepare for filing by the Administrative Agent Uniform Commercial
Code partial release statements identifying such Released Collateral, but only
such Released Collateral, and, to the extent same is at any time provided to the
Administrative Agent prior to the Trigger Event and is in form and substance
reasonably satisfactory to the Administrative Agent, same shall be filed by the
Administrative Agent promptly after its receipt thereof. Any and all actions
under this Section shall be without any recourse to or representation or
warranty by any Bank (including the Administrative Agent) and shall be at the
sole cost and expense of the Borrowers. IT IS EXPRESSLY AGREED THAT REGARDLESS
OF WHETHER OR NOT ANY SUCH PARTIAL RELEASE STATEMENTS ARE FILED BY THE
ADMINISTRATIVE AGENT, ON THE EFFECTIVE DATE THE ADMINISTRATIVE AGENT'S LIEN IN
SUCH RELEASED COLLATERAL SHALL AUTOMATICALLY BE TERMINATED AND OF NO FURTHER
FORCE OR EFFECT, SUBJECT, HOWEVER, UPON THE OCCURRENCE OF A TRIGGER EVENT, TO
BEING REINSTATED WITH RESPECT TO THAT PORTION OF THE RELEASED COLLATERAL THAT
CONSTITUTES SPRINGING COLLATERAL.
Section 7.11. Termination of Security Interests. The security
interests granted to the Administrative Agent (for the benefit of all of the
Banks) hereunder shall terminate when the Commitments shall have terminated and
the Obligations shall have been fully paid and satisfied. Upon such termination
of the Commitments and such complete payment and satisfaction the shall
reassign, release and/or deliver to the Borrowers all Collateral then held by or
at the direction of the Administrative Agent (for the benefit of all of the
Banks) under the Loan Instruments and the Administrative Agent shall execute and
deliver to the Borrowers for filing in each office in which any financing
statement, mortgage, or lease, or assignment thereof, relating to the
Collateral, or any part thereof, shall have been filed, a termination statement
under the Uniform Commercial Code or an appropriate satisfaction, release,
reconveyance or reassignment releasing the Administrative Agent's interest
therein, and any other instrument or document that the Borrowers deem reasonably
necessary to evidence the termination of the Administrative Agent's security
interest, each in such form and substance as may be acceptable to the
Administrative Agent. Any and all actions under this Section shall be without
any recourse to or representation or warranty by any Bank (including the
Administrative Agent) and shall be at the sole cost and expense of the
Borrowers.
Section 7.12. Pearl River Collateral. Each Bank expressly agrees that,
notwithstanding any other term, condition or provision of this Agreement,
including without limitation the right of setoff by the Banks, Fleet's Lien on
the Pearl River Collateral, including its Lien on cash and cash equivalents,
shall be senior to the Lien of any Bank in such Pearl River Collateral and any
Lien granted to any Bank by any Borrower in any of the Pearl River Collateral as
collateral security for the Obligations is subordinate (the "Bank Subordinate
Interest") and subject to the security interest in the Pearl River Collateral
granted to Fleet. In this regard, in connection with the Obligations, no Bank
will enforce or apply the Bank Subordinate Interest or in any manner interfere
with Fleet's security interest in the Pearl River Collateral unless and until
the Pearl River Financing L/C shall have expired or been terminated and all
obligations owing to Fleet in connection therewith shall have been paid in full.
The provisions of this
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Section 7.12 are only for the benefit of the Banks and Fleet and may not be
relied on or enforced by any Borrower or any other Person.
ARTICLE VIII
Defaults and Remedies
Section 8.01. Events of Default. Each of the following events shall
constitute a default under this Agreement (each an "Event of Default"):
(a) any representation or warranty made in this Agreement or any other
Loan Instrument shall prove to have been false or misleading in any
material respect when made (or deemed made);
(b) any report, statement, certificate, schedule or other document or
information furnished (whether prior to, on or after the Effective
Date) in connection with this Agreement or any of the other Loan
Instruments shall prove to have been false or misleading in any
material respect when furnished (or deemed furnished);
(c) any default, whether in whole or in part, shall occur in the payment
of (i) the principal of, the interest on or any other amount
respecting the Loans, (ii) amounts necessary to reimburse the Fronting
Bank for a draw under a Letter of Credit or (iii) any of the other
Obligations and in the case of subpart (iii) only, same shall remain
unpaid for a period of five (5) Business Days;
(d) any "Event of Default" shall occur under (and as defined in) any
Mortgage, whether in whole or in part, or any principal payment
thereunder (in whole or in part) shall be accelerated or otherwise
become due or payable prior to the scheduled payment date; or an
"Event of Default" (or similarly defined term) shall occur under (and
as defined in) any Pearl River Financing Document, whether in whole or
in part, or any principal payment thereunder (in whole or in part)
shall be accelerated or otherwise become due or payable prior to the
scheduled payment date;
(e) any default, whether in whole or in part, shall occur in the due
observance or performance of any other covenant, term or provision to
be performed under this Agreement and/or any of the other Loan
Instruments by any Borrower or any other party thereto (other than any
Bank), which default is not described in any other subsection of this
Section, and such default shall continue for a period of ten (10) days
after the earlier of notice thereof to or knowledge thereof by any
Borrower; provided however, that if such default is capable of being
cured and if such Borrower or such other party shall have commenced to
cure such default within such period and shall proceed continuously in
good faith and with due diligence to cure such default then such
period instead shall be thirty (30) days;
(f) (i) any default, whether in whole or in part, shall occur in the
payment of any Other Bank Debt or in the payment of any Credit Support
of any Other Bank Debt, or (ii) any Borrower shall default in the
observance or performance of any term, condition, agreement or
covenant contained in any Other Bank Debt Document or otherwise
relating to any Other Bank Debt, in each case in this subclause (ii)
the effect of which default or other event or condition is to cause or
permit the holder or holders of such Other Bank
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Debt (or a trustee or agent on behalf of such holder or holders) to
cause such Other Bank Debt to become due prior to its stated maturity.
(g) any default, whether in whole or in part, shall occur in the due
observance or performance of any term or provision of any
instrument(s) or agreement(s) (other than a Loan Instrument or an
Other Bank Debt Document) respecting any Indebtedness of any one or
more of the Borrowers if such Indebtedness is in excess of $1,000,000
in the aggregate or arises under any Credit Support by any one or more
of the Borrowers of the Indebtedness or other obligations of any other
Person(s) if such Indebtedness is in excess of $1,000,000 in the
aggregate, that shall cause or permit acceleration of any such
Indebtedness or demand for payment under any such Indebtedness or
Credit Support, which default is not described in any other subsection
of this Section, unless payment shall be made or action shall be taken
in an amount or manner sufficient to cure it within ten (10) days
after the earlier of notice of such default to or knowledge thereof by
any Borrower, or such lesser period as may be provided thereunder,
provided that such payment or action would not result in a breach of
any term or provision of this Agreement and the other Loan
Instruments, provided, however, that if such default is capable of
being cured and if the relevant Borrower shall have commenced to cure
such default within such period and shall proceed continuously in good
faith and with due diligence to cure such default, then such period
instead shall be thirty (30) days or such lesser period as may be
provided thereunder;
(h) any Borrower shall (i) fail or be unable to pay its debts generally as
they become due, (ii) conceal, remove or transfer any of its assets
and properties in violation or evasion of any bankruptcy, fraudulent
conveyance or similar Applicable Law, (iii) make a general assignment
for the benefit of its creditors, (iv) apply for or consent to the
appointment of a receiver, trustee, assignee, custodian, sequestrator
liquidator or similar official for itself or any of its assets and
properties, (v) commence a voluntary, case for relief as a debtor
under the United States Bankruptcy Code, (vi) file with or otherwise
submit to any governmental authority any petition answer or other
document seeking (A) reorganization, (B) an arrangement with creditors
or (C) to take advantage of any other present or future Applicable Law
respecting bankruptcy, reorganization, insolvency, readjustment of
debts, relief of debtors, dissolution or liquidation, (vii), file or
otherwise submit any answer or other document admitting or failing to
contest the material allegations of a petition or other document filed
or otherwise submitted against it in any proceeding under any such
Applicable Law, (viii) be adjudicated a bankrupt or insolvent, or (ix)
take any action for the purpose of effecting any of the foregoing;
(i) any case proceeding or other action shall be commenced against any
Borrower for the purpose of effecting, or an order judgment or decree
shall entered by any court of competent jurisdiction approving (in
whole or in part), anything specified in subsection (h) of this
Section, or any receiver, trustee, assignee, custodian, sequestrator,
liquidator or other official shall be appointed with respect to any
Borrower, or shall be appointed to take or shall otherwise acquire
possession or control of all or a substantial part of the assets and
properties of any Borrower, and any of the foregoing shall continue
unstayed and in effect for any period of 30 days;
(j) one or more final judgments for the payment of money in excess of an
aggregate of $1,000,000 shall be rendered against any Borrower and the
same shall remain undischarged for a period of 30 days during which
levy and execution shall not be effectively stayed or contested in
good faith;
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(k) any action, suit, investigation or proceeding involving or affecting
any Plan or any assets of properties of any Plan shall be adversely
determined; any fiduciary or sponsor of, or participant in, any Plan
shall take or commit any of the actions specified in subsection (h) of
this Section in respect of the Plan or all or substantially all of its
assets and properties, or any action, suit or proceeding shall
otherwise be commenced against any Plan or an of its fiduciaries,
sponsors or participants for the purpose of effecting, or any order,
judgment or decree shall be entered by any court of competent
jurisdiction approving (in whole or in part), anything specified in
subsection (h) of this Section in respect of any Plan or all or
substantially all of its assets and properties, or any receiver,
trustee, assignor, custodian, sequestrator, liquidator or other
official shall be appointed with respect to any Plan or all or a
substantial part of its assets and properties, or shall be appointed
to take or shall otherwise acquire possession or control of all or a
substantial part of the assets and properties of any Plan, and any of
the foregoing shall continue unstayed and in effect for any period of
30 days; provided that any such event (individually or in the
aggregate with any other such event(s)) has had or could have (in the
reasonable judgment of the Administrative Agent and the Majority
Banks) an ERISA Effect;
(l) any loss, damage, destruction or other material impairment,
deterioration or diminution, or any termination, foreclosure,
condemnation or other involuntary disposition, in whole or in part,
shall occur with respect to all or any material part of the Collateral
taken as a whole (other than fully insured casualty losses to the
extent the Administrative Agent has a perfected first priority
security interest in and actually receives all insurance proceeds with
respect thereto to the extent required by this Agreement and the other
Loan Instruments), or the Administrative Agent's perfected security
interest therein, or any Borrower shall do or fail to do or resist, or
cause, suffer or permit anyone else to do, anything that would so
affect any such Collateral or security interest;
(m) any Loan Instrument (in whole or in part) at any time and for any
reason whatsoever (i) shall cease to be in full force and effect, (ii)
shall be declared null and void, (iii) shall be contested or otherwise
challenged as to its validity or enforceability by any of the
Borrowers, or (iv) shall be the subject of any denial by any of the
Borrowers of any, liability or obligation of such party thereunder;
(n) any of the Borrowers shall be or become the subject of or a party to
any criminal conviction in any material respect (other than a
misdemeanor); or
(o) the occurrence of a Change of Control.
Section 8.02. Remedies upon Default. Upon the occurrence or at any
time thereafter during the continuance of any Event of Default and after the
issuance of a Default Declaration, the Administrative Agent (with the consent of
the Requisite Banks, as and if required), upon notice to the Borrowers (which
may be combined with the Default Declaration), shall be entitled, without
limiting the ability to do so at other times (each Borrower hereby acknowledging
that all Letter of Credit Advances and interest thereon and certain other
Obligations are payable on demand as provided in Article II hereof
notwithstanding anything in this Section or in Section 8.01 to the contrary):
(a) to terminate the Commitment (b) to declare the Loans and all other
Obligations to be immediately due and payable, whether principal, interest or
otherwise, without presentment, demand, protest or other notice of an kind (all
of which are hereby expressly waived by each Borrower), notwithstanding anything
contained in this Agreement, any Note or any of the other Loan Instruments to
the contrary; (c) to exercise or enforce any one or more of the rights, powers,
privileges, remedies and interests of the Administrative Agent or any
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other Bank under this Agreement, each Note, the other Loan Instruments and
Applicable Law; and (d) to demand the immediate deposit by any Borrower of cash
Collateral in a non-interest-bearing demand deposit account with the
Administrative Agent or such other institution as the Administrative Agent may
designate in an amount equal to the aggregate unadvanced face amounts of the
Letters of Credit then outstanding in order to further secure repayment of all
advances under the Letters of Credit, together with interest thereon, and all of
the other Obligations in full, which deposits shall remain Collateral until all
of the Letters of Credit have been paid (and the corresponding Letter of Credit
Advances repaid by the Borrowers) or surrendered to the Fronting Bank or the
Administrative Agent for return to and cancellation by the issuers thereof
(provided that any Letter of Credit that has not been presented for payment
shall be deemed for this purpose to have been canceled on the thirtieth day
following the stated expiry date, without, however, relieving the Borrowers of
any of the Obligations with respect to any such Letter of Credit that is in the
process of payment) and all of the other Obligations have been fully paid and
satisfied, and which obligation to deposit is itself secured by the Collateral
pursuant to this Agreement and the other Loan Instruments; provided, however,
that in the event of the occurrence of any of the Events of Default respecting
any Borrower set forth in subsections (h) and (l) of Section 8.01, then
simultaneously with that event, and without the necessity of any notice or other
action by the Administrative Agent or the other Banks, (i) the Commitment shall
be terminated, (ii) the Loans and all of the other Obligations shall be
accelerated and immediately due and payable as stated above, and (iii) the
Borrowers shall be required to make the deposit of the additional cash
Collateral further securing the Letters of Credit and the other Obligations as
provided above. If the Borrowers have not delivered the cash Collateral
specified above within five (5) Business Days after it was due, at any time and
from time to time thereafter the Banks in their sole and absolute discretion may
(but shall not be obligated to) advance to the Borrowers all or any portion of
the required cash Collateral, by credit to any accounts of the Borrowers with
the Administrative Agent or otherwise; and amounts advanced by the Banks
pursuant to this option and outstanding from time to time shall be due and
payable, together with interest and additional interest thereon at the rates
provided in Section 2.04 of this Agreement, ON DEMAND, and shall otherwise
constitute "Letter of Credit Advances" for all purposes under this Agreement and
the other Loan Instruments.
Section 8.03. Enforcement, Etc. The Administrative Agent (with the
consent of the Requisite Banks, as and if required), in its or their sole
discretion, may proceed to exercise or enforce any right, power, privilege,
remedy or interest that the Administrative Agent or any other Bank may have
under this Agreement, any other Loan Instrument or Applicable Law at law, in
equity, in rem or in any other forum available under Applicable Law; without
notice except as otherwise expressly provided herein; without pursuing,
exhausting or otherwise exercising or enforcing any other right, power,
privilege, remedy or interest that the Administrative Agent or any other Bank
may have against or in respect of any Borrower, the Collateral, or any other
co-obligor, guarantor, sum, pledgor, collateral or other person or thing;
without regard to any act or omission of the Administrative Agent, any other
Bank or any other person, and without delivery to any Borrower or any other
person or production in any action, suit or proceeding of any consent or
approval of one or more of the Banks required under this Agreement or any other
Loan Instrument (without, however, in any way limiting the rights and remedies
of any Bank thereunder against the Administrative Agent or any other Bank), and
no Borrower will raise, and each Borrower hereby waives, any objection or
defense respecting the need for any such delivery or production. The
Administrative Agent (with the consent of the Requisite Banks, as and if
required) may institute one or more proceedings (which may be separate
proceedings) with respect to this Agreement and each of the other Loan
Instruments in such order and at such times as may be selected in its or their
sole and absolute discretion. This Agreement and the other Loan Instruments may
be enforced without possession of any Note or its production in any action, suit
or proceeding. This Agreement and the other Loan Instruments may be enforced
with respect to any Borrower without the presence or participation of any other
Borrower, or any other co-obligor (joint or several), guarantor, pledgor or
surety, whether through lack of jurisdiction, venue or service or otherwise, and
no Borrower will raise, and each Borrower
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hereby expressly waives, any objection or defense respecting the need for any,
such presence or participation.
Section 8.04. Equitable Relief. Each Borrower acknowledges and agrees
that it may be impossible to measure in money the damage to the Banks in the
event of a breach of or default under any of the terms and provisions of
Sections 6.04, 6.05. 6.07, 6.08, 6.09, 7.03, 7.05, 7.07(a) and 8.02(d) of this
Agreement, and that, in the event of any such breach or default, the
Administrative Agent, in addition to all other rights, powers, privileges and
remedies that the Administrative Agent or any other Bank may have, shall be
entitled to injunctive relief, specific performance or such other equitable
relief as the Administrative Agent (with the consent of the Requisite Banks, as
and if required), may request to exercise or otherwise enforce any of the terms
and provisions of those Sections and to enjoin or otherwise restrain any act
prohibited thereby, and no Borrower will raise, and each Borrower hereby
expressly waives, any objection or defense that there is an adequate remedy
available at law.
Section 8.05. Consent to Jurisdiction Waiver of Personal Service, Etc.
Each Borrower hereby consents and agrees that the Supreme Court of the State of
New York for the County of Nassau and the United States District Court for the
Eastern District of New York each shall have personal jurisdiction and proper
venue with respect to any dispute between the Administrative Agent (or any other
Bank) and any Borrower under any Loan Instrument; provided that the foregoing
consent shall not deprive the Administrative Agent (on behalf of the Banks) of
the right in its sole discretion to voluntarily commence or participate in any
action, suit or proceeding in any other court having jurisdiction and venue over
any Borrower. In any dispute with the Administrative Agent or any other Bank, no
Borrower will raise, and each Borrower hereby expressly waives, any objection or
defense to any such jurisdiction as an inconvenient forum. Without in any way
limiting the preceding consents to jurisdiction and venue, the parties intend
(among other things) to thereby avail themselves of the benefit of Section
5-1402 of the General Obligations Law of the State of New York. Each Borrower
hereby expressly waives personal service of any summons, complaint or other
process, which may be delivered by any of the means permitted for notices under
Section 10.01 hereof. In addition (and without limitation of any such delivery
or any other delivery permitted under Applicable Law), each Borrower has
executed and delivered to the Administrative Agent a Designation of
Administrative Agent for Service appointing Kramer, Coleman, Wactlar &
▇▇▇▇▇▇▇▇▇, P.C., as the agent of such Borrower for service in the State of New
York, which each Borrower hereby irrevocably authorizes the Administrative Agent
to date with such date (if undated) and file with the appropriate Authority at
such time as the Administrative Agent in its discretion (with the consent of the
Requisite Banks, as and if required) may elect. Within thirty (30) days after
service of process, each Borrower agrees to appear or answer any summons or
complaint of the Banks, or the Administrative Agent (on behalf of the Banks),
and should such Borrower fail to appear or answer within said thirty-day period,
such Borrower shall be deemed in default under that action and judgment may be
requested by the Administrative Agent and entered in favor of the Banks against
such Borrower for the relief demanded in any complaint so served. Each Borrower
acknowledges and agrees that a final judgment in any such action, suit or
proceeding shall be conclusive and binding upon such Borrower and may be
enforced against such Borrower or any of its assets or properties in any other
appropriate jurisdiction selected by the Administrative Agent in its discretion
(with the consent of the Requisite Banks, as and if required) by an action, suit
or proceeding in such other jurisdiction. To the extent that any Borrower may be
entitled to immunity (whether by reason of sovereigns or otherwise) from suit in
any jurisdiction, from the jurisdiction of any court or from any other legal
process, each Borrower hereby expressly and irrevocably waives such immunity.
Section 8.06. WAIVER OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE
AGENT, THE FRONTING BANK AND EACH BANK MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY, IN EACH CASE IN RESPECT OF
ANY CLAIM BASED HEREON, OR ARISING OUT OF,
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UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES AND/OR ANY OTHER LOAN
INSTRUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, THOSE OF THE ADMINISTRATIVE AGENT,
THE FRONTING BANK AND/OR ANY BANK RELATING TO THE ADMINISTRATION OF THE
EXTENSIONS OF CREDIT OR ENFORCEMENT OF THE LOAN INSTRUMENTS AND AGREE THAT NO
PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH BORROWER CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT, THE FRONTING BANK
OR ANY BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PERSON WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, THE FRONTING
BANK AND EACH BANK TO ENTER INTO THIS AGREEMENT, ACCEPT THE NOTES AND MAKE THE
EXTENSIONS OF CREDIT.
Section 8.07. Waiver of Setoff, Special Damages, Etc.
(a) Each Borrower hereby expressly waives, and agrees that it will not
exercise, any and all rights of setoff, recoupment, abatement or reduction
respecting any payment due (whether as scheduled or required, upon acceleration
or as sought in any action, suit or proceeding by any Bank) under this
Agreement, any other Loan Instrument or any other agreement, facility or
relationship with the Administrative Agent or any other Bank that may now or
hereafter be accorded to such Borrower under Applicable Law or otherwise. To the
extent not required as a compulsory counterclaim in any related ongoing
proceeding, each Borrower (i) shall pursue separate exercise and enforcement of
any right, power, privilege, remedy or interest retained (and not waived) by
such Borrower under this Agreement, the other Loan Instruments, any other
agreement, facility or relationship with the Administrative Agent or any other
Bank and Applicable Law, and (ii) shall not seek to exercise or enforce any such
right, power, privilege, remedy or interest in any proceeding instituted by the
Administrative Agent or any of the other Banks under or in respect of any Loan
Instrument, whether through joinder, consolidation, setoff, recoupment,
abatement, reduction, counterclaim, defense or otherwise.
(b) In any dispute with the Administrative Agent or any other Bank,
each Borrower covenants and agrees that it will not seek, recover or retain any,
and each Borrower each hereby expressly waives any and all, special, exemplary,
punitive and/or consequential damages (whether through action, suit,
counterclaim or otherwise) to the extent waiver is not limited under Applicable
Law.
Section 8.08. No Fiduciary Relationship, Etc. Each Borrower
acknowledges and agrees that its sole relationship with the Administrative
Agent, the Fronting Bank and Banks is that of debtor and creditor, respectively,
and that no term or provision of this Agreement or any other Loan Instrument is
intended to create, nor shall any such term or provision be deemed or construed
to have created, any joint venture, partnership, trust, agency or other
fiduciary relationship with any Borrower or any Subsidiary of any Borrower. Each
Borrower acknowledges and agrees that the Borrowers have independently and fully
reviewed and evaluated the Loan Instruments, the transactions contemplated
thereunder and the potential effects of such transactions on the assets,
business, operations, properties and condition (financial or otherwise) of each
of the Borrowers and their Subsidiaries, which review and evaluation was made
(i) together with counsel and (to the extent deemed prudent by the Borrowers)
financial and other advisors to the Borrowers and their Subsidiaries, and (ii)
without any reliance upon any oral or written advice, analysis or assurance of
any kind whatsoever from the Administrative Agent or any other Bank.
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Section 8.09. Banks' Right of Setoff, Etc. Upon the occurrence and
during the continuance of any Event of Default, each Bank hereby is authorized
at any time and from time to time, without notice to the Borrowers (any such
notice being hereby expressly waived by each Borrower), to setoff upon and
against all deposits, credits, collateral and property of any Borrower, now or
hereafter in the possession, custody, safekeeping or control of such Bank or any
entity under the control of any Person that owns the Capital Stock of such Bank
and its successors or assigns, or in transit to any of them, or any part thereof
and any Indebtedness or other amount or obligation (including, without
limitation, any obligation under any interest rate protection, foreign currency
exchange or other interest rate or exchange rate swap or hedging agreement or
arrangement) and apply the same to any of the Obligations even though unmatured
and regardless of the adequacy of any other collateral securing the Obligations.
ANY AND ALL RIGHTS TO REQUIRE A BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED. The foregoing rights shall apply whether or not the Administrative Agent
or any other Bank shall have declared a default, accelerated the obligations or
made any demand or taken any other action under this Agreement or any other Loan
Instrument, and although such obligations may be contingent or unmatured. Each
Borrower acknowledges that pursuant to Section 7.01 hereof it granted to the
Administrative Agent (for the benefit of all of the Banks) a senior security
interest in and to, among other things, all such deposits, assets, properties
and Indebtedness in the possession of each of the affiliates, custodians,
participants and designees of each Bank, and each Borrower hereby authorizes
each such person to so set off and apply such amounts at such times and in such
manner as the Administrative Agent may direct pursuant to this Section, in each
case to the fullest extent possible as if the person making the setoff were a
direct creditor of such Borrower in the full amount of the Obligations. The
debiting Bank shall notify the Borrowers after any such setoff and application;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. In debiting any such account, the
Obligations shall be deemed to have been paid or repaid only to the extent of
the funds actually available in that account notwithstanding any internal
procedure of the debiting Bank or any of its affiliates, custodians,
participants and designees to the contrary. The rights of the Administrative
Agent and the other Banks under this Section are in addition to and without
limitation of any other rights, powers, privileges, remedies and other interests
(including, without limitation, other rights of setoff and security interests)
that the Administrative Agent or the other Banks may have under this Agreement,
the other Loan Instruments and Applicable Law. IT IS EXPRESSLY UNDERSTOOD AND
AGREED THAT NOTWITHSTANDING THAT CERTAIN OF THE PROPERTY DESCRIBED IN THIS
SECTION 8.09 IS ALSO SPRINGING COLLATERAL, THE RIGHTS GRANTED TO EACH BANK UNDER
THIS SECTION 8.09 SHALL NOT BE DEPENDENT ON THE OCCURRENCE OF A TRIGGER EVENT
AND, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT,
EACH BANK SHALL HAVE ALL OF THE RIGHTS GRANTED UNDER THIS SECTION 8.09 WHETHER
OR NOT ANY TRIGGER EVENT SHALL HAVE OCCURRED AND WHETHER OR NOT SAME ARE BEING
EXERCISED DURING ANY TRIGGER PERIOD.
ARTICLE IX
The Administrative Agent and the Banks
Section 9.01. Appointment of Administrative Agent. Upon the terms and
provisions and subject to the conditions contained in this Agreement, the Banks
hereby appoint Fleet to act as Administrative Agent under this Agreement and the
other Loan Instruments, and Fleet hereby accepts such appointment.
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Section 9.02. Undivided Interest and Committed Share, Etc.
(a) Upon the terms and provisions and subject to the conditions
contained in this Article, the Banks agree that each has an undivided interest
in the Loans and other Obligations under this Agreement and the obligations of
the Borrowers and the other parties (other than the Banks) under the other Loan
Instruments (collectively, the "Loan Obligations"), any asset or property
securing the Loan Obligations, whether through pledge, attachment, mortgage or
otherwise (the "Loan Collateral"), and the rights, powers, privileges, remedies
and interests of the Banks in and to this Agreement and other Loan Instruments,
as well as the risks, liabilities and expenses related thereto, such that each
Bank shall have and be committed to an undivided fractional interest therein and
in the Commitment, Revolving Credit Loans and related items equal to the
respective maximum principal amounts and percentages set forth on Exhibit E
hereto, as the same may be recomputed from time to time to reflect departing or
additional Banks pursuant to this Agreement (which undivided fractional interest
will be referred to as such Bank's "Committed Share" of the Commitment, or the
Mortgage Loans, as applicable).
(b) With respect to payments made to the Administrative Agent
(generally following the circumstances described in Section 2.07(a) herein) the
Administrative Agent will ▇▇▇▇ its books and records to reflect the respective
interests of the Banks, all payments received from and made to each Bank from
time to time pursuant to this Agreement may be recorded by the Administrative
Agent, and such records shall be presumptively correct as to the existence and
amounts thereof absent manifest error.
(c) "Pro Rata Share" at a particular time for a particular Bank shall
mean a share of the referenced item proportional to the percentage obtained by
dividing (A) that portion of the principal balance then outstanding under the
referenced Loans attributable to principal amounts received by one or more of
the Borrowers from such Bank (or its predecessor) under this Agreement or any
other Loan Instrument (including those made under the Existing Loan Agreement
and other Existing Loan Instruments) and not theretofore repaid, by (B) the
aggregate principal balance then outstanding under the referenced Loans;
provided that if there is no principal balance then outstanding under the
referenced Loans (or deemed outstanding as provided in this subsection) and with
respect to each outstanding Letter of Credit, a Bank's Pro Rata Share shall be
equal to (1) its Committed Share of the Mortgage Loans with respect to the
Mortgage Loans, and (2) its Committed Share of the Commitment (i.e., the
Revolving Credit Loans) with respect to the Revolving Credit Loans and the
Letters of Credit.
(d) "Majority Banks" at a particular time shall mean the Banks (which
may include the Administrative Agent) then having an aggregate Pro Rata Share of
at least 61%.
Section 9.03. Notice of Intent Not to Advance, Letters of Credit.
(a) In the event a Bank determines that it will not make its Committed
Share of any Advance requested by the Borrowers, such Bank shall immediately
notify the other Banks by telephone and telecopy of a signed notice, and shall
promptly confirm such notice by delivery to each of the other Banks of an
original copy of such signed notice, which notice shall specify the Bank's
reasons (if any) for such decision. No Bank, however, may refuse to make any
payment under its Letter of Credit Participation (as hereinafter defined), which
each Bank acknowledges and agrees will result in additional Advances of
Revolving Credit Loans.
(b) By the issuance or extension of any Letter of Credit, the Fronting
Bank hereby sells and grants (and continues, in the case of each existing Letter
of Credit) to each Bank, and each Bank hereby unconditionally purchases and
acquires (and continues, in the case of each existing Letter of Credit) from the
Fronting Bank, without any further action on the part of the Fronting Bank or
acquiring
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Bank, a participation in such Letter of Credit equal to such Bank's Committed
Share of the face amount of such Letter of Credit (each a "Letter of Credit
Participation"), effective upon the issuance or extension of such Letter of
Credit (or on the Effective Date in the case of each existing Letter of Credit).
In consideration and in furtherance of the foregoing, each Bank hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, on
behalf of each Fronting Bank, in accordance with subsection (c) below, such
Bank's Pro Rata Share of each unreimbursed Letter of Credit Advance made by the
Fronting Bank; provided however, that the Banks shall not be obligated to make
any such payment with respect to any wrongful payment or disbursement made under
any Letter of Credit as a result of the gross negligence or willful misconduct
of the Fronting Bank.
(c) If the Fronting Bank (other than the Administrative Agent) has
directly billed the Borrowers for a Letter of Credit Advance as permitted by
Section 9.05(a) hereof and has not received from the Borrowers the payment
required by Section 2.07(d) hereof by 11:00 A.M. (New York City time) on the day
such payment is due, the Fronting Bank will promptly notify the Administrative
Agent of the Letter of Credit Advance and such non-receipt of payment. If the
Borrowers have not previously requested an Advance and complied with the related
conditions in order to fund such payment, the Administrative Agent will promptly
notify each Bank of such Letter of Credit Advance and its Pro Rata Share
thereof. Each such unreimbursed payment made in accordance with Section 2.07(d)
hereof shall for all purposes hereunder be deemed to be an Advance of a
Revolving Credit Loan. Each Bank will pay to the Administrative Agent, by not
later than 4:00 P.M. (New York City time) on such date (or, if the Banks shall
have received such notice later than 2:00 P.M. (New York City time) on such
date, then by not later than 10:00 A.M. (New York City time) on the immediately
following Business Day), an amount equal to such Bank's Pro Rata Share of such
Letter of Credit Advance (it being understood and agreed that such amount shall
constitute funding of an Advance of a Revolving Credit Loan by each such Bank),
and the Administrative Agent will promptly pay such amount to the Fronting Bank.
If any Bank shall not have made its Pro Rata Share of such Letter of Credit
Advance available to the Fronting Bank as provided above, such Bank agrees to
pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with this subsection to but
excluding the date an amount equal to such amount is paid to the Administrative
Agent for prompt payment to the Fronting Bank at the Federal Funds Rate for the
first such day and at the rate applicable to Loans under Section 2.04(a) hereof
for each day thereafter.
(d) Each Bank acknowledges and agrees that each Letter of Credit
Participation and its payment and other obligations with respect thereto: (i) is
absolute and unconditional; (ii) shall remain and continue in full force and
effect without regard (A) to any waiver, modification, extension, renewal,
amendment or restatement of any other term or provision of any Letter of Credit,
(B) to any act or circumstance respecting any Letter of Credit consented to or
waived by any Borrower under Section 2.07 hereto, (C) to any full, partial or
non-exercise of any of the rights, powers, privileges, remedies and interests of
the Fronting Bank respecting any Letter of Credit or under any related
application, any Loan Instrument or Applicable Law, against any person or with
respect to any Collateral, (D) to any release or subordination of any
Obligations or Collateral, (E) to any statute of limitations or similar time
constraint under any Applicable Law, (F) to any investigation, analysis or
evaluation by any Bank or its designees of the assets, business, operations,
properties or condition (financial or otherwise) of any Borrower (whether in its
capacity as a Borrower or a guarantor) or any other Person, (G) to any Default
or Event of Default, whenever occurring or continuing, (H) to any act or
omission on the part of the Fronting Bank, the Administrative Agent, any Bank or
any other person, or (I) to any other event that otherwise might constitute a
legal or equitable counterclaim, defense or discharge of a participant or
surety; (iii) shall not be subject to any defense, counterclaim, set off, right
of recoupment, abatement, reduction or other claim or determination that such
Bank may have against the Administrative Agent, the Fronting Bank, any other
Bank, any Borrower or any other Person; (iv) shall not be diminished or
qualified by the death, disability, dissolution, reorganization, insolvency,
bankruptcy, custodianship or receivership of the Fronting Bank,
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the participating Bank, any Borrower, any other co-obligor, guarantor, surety or
pledgor or any other Person, or the inability of any of them to pay its debts or
perform or otherwise satisfy its obligations as they become due for any reason
whatsoever; and (v) shall not be affected by any other circumstance whatsoever.
Section 9.04. Collection and Distribution.
(a) Except as otherwise provided in this Article, each Bank shall be
entitled from time to time to a share of all payments of principal, interest,
commitment and other fees and other amounts received in respect of the Loan
Obligations, as well as the net proceeds from all Loan Collateral, which share
for a particular Bank at any particular time shall be: (i) its Pro Rata Share of
all principal payments on the Revolving Credit Loans, Mortgage Loans or other
Loans to which any voluntary or mandatory payments or prepayments are to be
applied; (ii) its Pro Rata Share of interest paid on the Revolving Credit Loans,
Mortgage Loans or other Loans to which the payments relate, which shall be
adjusted to reflect any rate differentials among the Banks so as to approximate
the amounts that would have resulted from direct ▇▇▇▇▇▇▇▇; (iii) its Committed
Share of the Commitment Fee and other fees respecting Loans in which it shares;
(iv) its Pro Rata Share of all net proceeds and other amounts received from the
Loan Collateral following acceleration of the Loans and (v) its Pro Rata Share
of all other amounts received in respect of the Loan Obligations.
(b) Notwithstanding the provisions of subsection (a) above, no other
Bank shall be entitled to any share of: (i) any amount that may be directly
billed in accordance with Section 9.05 hereof, subject to the terms and
provisions of such Section; (ii) any payment, reimbursement or other indemnity
to the Administrative Agent or any other indemnified person under this Agreement
or any other Loan Instrument with respect to any claims, liabilities, losses or
expenses not theretofore funded by the claiming Bank(s); (iii) any
administrative or other fees payable to the Administrative Agent in accordance
with Section 2.06 or 10.13(b) of this Agreement or pursuant to a separate
writing agreement between the Administrative Agent and the Borrowers; (iv) any
payment under or other right respecting any Independent Transaction (as defined
in Section 9.17(b) hereof); (v) any payment to any Fronting Bank of any and all
customary fees (other than the Letter of Credit Fee), commissions and/or charges
of the Fronting Bank for any increase, extension, renewal, amendment or transfer
of any, of its Letter of Credit and any fees or other charges of any other
issuer or any participant, correspondent, confirming bank, custodian or designee
of the Fronting Bank or other issuer involved with the Letter of Credit; or (vi)
any exercise by a Bank or its affiliates of their respective rights of setoff or
banker's Lien with respect to an Independent Transaction against any general
deposits, assets and properties (other than Loan Collateral) of any Borrower or
any other Person. Furthermore, except as otherwise provided in this Article, any
payment received in respect of the obligation (if any) of the Borrowers to
reimburse the Banks for certain increased costs and reduced receipts under
Section 2.04 of this Agreement, as well as any net proceeds from Loan Collateral
to be applied to such Loan Obligations, shall be shared by the Banks in
proportion to their respective increased costs and reduced receipts.
(c) Except as otherwise provided in this Article, the Administrative
Agent shall receive all payments of principal and other distributable amounts in
respect of the Loan Obligations, all net proceeds realized from the Loan
Collateral and all amounts received by the Banks and delivered to the
Administrative Agent pursuant to the provisions of this Article, and the
Administrative Agent shall hold each such amount in an account for the benefit
of all of the Banks until distributed as hereinafter provided. As soon as
practicable after each such receipt, the Administrative Agent shall determine
the respective amounts to be distributed and promptly thereafter shall credit to
itself the amount to which it is entitled and wire the amounts to which the
other Banks are entitled to them in accordance with the instructions annexed as
Exhibit F hereto, or in accordance with such subsequent written instruction (in
substantially the same form) as a Bank from time to time may deliver to the
Administrative Agent.
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(d) Unless the Administrative Agent shall have received notice from
the Borrowers prior to the date on which any payment is due to the Banks
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date, and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the extent
the Borrowers shall not have so made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Administrative Agent, at the Federal Funds Rate.
(e) Each Bank agrees that if it shall receive or otherwise obtain any
Excess Amount in any Payment Event (as such terms are hereinafter defined), such
Bank (the "Receiving Bank"): (i) shall (except as otherwise permitted by this
Article) receive and hold such Excess Amount in trust for the benefit of all of
the Banks and promptly deliver such Excess Amount to the Administrative Agent;
and (ii) shall in all other cases be deemed (simultaneously with such Payment
Event) to have purchased from each other Bank (a "Selling Bank") at face value,
and shall promptly pay to each Selling Bank the purchase price for, a
participation in the Revolving Credit Loans, Mortgage Loans or Letter of Credit,
as applicable, in the amount(s) necessary so that the Pro Rata Shares of the
Receiving Bank and each Selling Bank with respect thereto (taking into account
such participations as if they were assignments) are maintained at the same
percentage after such Payment Event as they were before such Payment Event. If
any such participation shall be purchased pursuant to this subsection by a
Receiving Bank and a Selling Bank shall thereafter recover, receive or otherwise
obtain from or in respect of any Borrower any Excess Amount when compared to the
Receiving Bank, such participation shall be deemed to have been repurchased by
the Selling Bank at face value to the extent of such later Excess Amount
allocable to the Receiving Bank, without interest, and if the Excess Amount so
recovered, received or otherwise obtained by such Selling Bank exceeds the
amount necessary to restore the Banks' respective Pro Rata Shares then such
excess itself shall be treated as an Excess Amount under this subsection. Each
Borrower expressly consents to the foregoing arrangements and agrees that any
Bank holding a participation in a Revolving Credit Loan, Mortgage Loans or
Letter of Credit deemed to have been so purchased may exercise any and all
rights of banker's Lien, set off or counterclaim with respect to any and all
moneys owing by such Borrower to such Bank by reason thereof as fully as if such
Bank had made a Revolving Credit Loan or Mortgage Loans or issued a Letter of
Credit as applicable, directly to such Borrower in the amount of such
participation. "Excess Amount" shall mean the amount by which: (A) any payment
or amount received or otherwise obtained by any Bank in respect of any Revolving
Credit Loans, Mortgage Loans or Letter of Credit, whether voluntary,
involuntary, through the exercise of any right of setoff, banker's Lien,
counterclaim or otherwise, or pursuant to any secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising from,
or in lieu of, such secured claim received by such Bank under any applicable
bankruptcy, insolvency or other similar law or otherwise (any of which may be
referred to as a "Payment Event"), exceeds (B) the portion of such payment or
amount that would have maintained such Bank's Pro Rata Share of the Revolving
Credit Loans, Mortgage Loans or Letters of Credit at the same percentage after
such Payment Event as it was before such Payment Event; provided, however that
Excess Amount shall not include any amount that a Bank (l) is expressly
permitted to receive and retain hereunder, (2) receives from the assignment of
or sale of a participation in any Revolving Credit Loans, Mortgage Loans or
Letter of Credit to anyone other than any Borrower or its affiliates, or (3)
receives or otherwise obtains in any Independent Transaction.
Section 9.05. Direct Billing, Fixed Rates, Additional Interest, Etc.
(a) Except as otherwise provided herein, so long as it has not
received notice from the Administrative Agent to the contrary (as contemplated
in Section 2.07(a) hereof or in the proviso
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below), each Bank may directly ▇▇▇▇, receive and retain payment of: (i) the
interest due it under Sections 2.04(a), (b) and (c) hereof with respect to its
Pro Rata Share of the Loans (based upon the Base Rate or Fixed Rate); (ii) any
compensation due it respecting increased costs, reduced receipts and capital
adequacy under Sections 2.04(d), (f) and (i) hereof, (iii) any principal amount
due it as a Fronting Bank respecting any Letter of Credit Advance (other than to
the extent converted into an actual or deemed Revolving Credit Loan), and any
and all customary fees (other than the Letter of Credit Fee), commissions and/or
charges of the Fronting Bank for any increase, extension, renewal, amendment or
transfer of the Letter of Credit and any fees or other charges of any other
issuer or any participant, correspondent, confirming bank, custodian or designee
of the Fronting Bank or other issuer involved with the Letter of Credit; and
(iv) any expense reimbursement due it under Section 10.03 hereof; provided,
however, that the Administrative Agent shall also have the right in its
discretion from time to time to elect (by written notice) to ▇▇▇▇ and receive
any one or more of the foregoing items on behalf of any Bank other than Chase or
Fleet. If a Bank has not received payment of any amount billed directly under
this provision as and when due under the Loan Agreement, such Bank shall give
prompt notice thereof to the other Banks, as well as prompt notice of any
payment subsequently received.
(b) If any Bank receives less than full payment of any directly billed
amount, and after communication with the Borrowers any amount remains unpaid,
such Bank shall promptly notify the Administrative Agent and the other Banks. If
the Banks did not suffer such payment shortfalls ratably, the Administrative
Agent shall immediately give notice to the Banks to cease direct billing and
collection (as contemplated in Section 2.07(a) hereof and subsection (c) below),
and the Banks shall deliver all such disproportionate payments to the
Administrative Agent for redistribution to the Banks in accordance with the
sharing provisions of this Agreement.
(c) If any Bank has received notice from the Administrative Agent that
it may no longer receive and retain direct payments from the Borrowers as
contemplated in subsection (a) of this Section, such Bank thereafter shall (i)
direct the Borrowers to make all payments to the Administrative Agent, (ii)
receive and hold any payment or other amount received from or for the benefit of
the Borrowers (whether as a result of past bills or otherwise) in trust for the
benefit of all of the Banks and (iii) promptly deliver all such amounts to the
Administrative Agent. Unless the Administrative Agent directs otherwise, the
Banks shall continue to render bills and statements to the Borrowers as
contemplated in subsection (a) of this Section, which shall contain the
direction to make all payments to the Administrative Agent; and shall
concurrently send a copy of such bills to the Administrative Agent. If any Bank
has been receiving payments from the Borrowers through account debits, then
unless the Administrative Agent directs otherwise, such Bank shall continue to
debit the accounts of the Borrowers for such payments but shall hold in trust
and promptly deliver the proceeds to the Administrative Agent as provided above.
(d) Any Bank in its discretion may elect to impose or waive the
additional interest due to it on any late payment as provided in Section 2.04(c)
hereof.
(e) No Bank may unilaterally impose the additional interest during a
default as provided by Section 2.04(d) of this Agreement. The Administrative
Agent shall be responsible for the imposition and billing of such additional
interest, which imposition prior to the Maturity Date shall require the prior
written consent (which may be sent by telecopy) of the Majority Banks. The
imposition of such additional interest may be rescinded or waived with the
approval (which may be sent by telecopy) of the Majority Banks. The
Administrative Agent also may rescind or waive any such additional interest if
the underlying default is cured within ten Business Days of the date it became a
default (after the expiration of all applicable grace periods).
Section 9.06. Voting Rights, Etc.
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(a) Except as otherwise provided in this Agreement or any, other Loan
Instrument, the prior written consent of each affected Bank shall be required
for any action that would (i) modify the calculation, decrease the amount,
extend the Revolving Credit Period, extend the due date or waive any nonpayment
of any payment of principal, interest or fees under any Loan Instrument, (ii)
release or subordinate any interest under any Loan Instrument in any material
part of the Loan Collateral other than (A) in accordance with Section 9.07(b) of
this Agreement, (B) in connection with any disposition pursuant to Section 9.09
of this Agreement, or (C) as otherwise required, contemplated or permitted by
this Agreement or any other Loan Instrument, (iii) release any Borrower or any
guarantor, surety or pledgor from personal liability under any Loan Instrument,
(iv) waive any conditions precedent to an Advance under Article IV of this
Agreement (without, however, in any way limiting the ability of the Majority
Banks to waive or consent to any matter within their power or the ability of the
Administrative Agent in its discretion to waive any of the technical conditions
precedent imposed by Article II of this Agreement), or (v) alter any Bank's
Committed Share or the manner of determining any Bank's Pro Rata Share.
(b) Except as otherwise provided in this Agreement or any other Loan
Instrument, the prior written consent of the Majority Banks shall be required
for any action that would (A) waive any Event of Default, (B) waive or consent
to any departure from any other term or provision of this Agreement, any Note or
any other Loan Instrument signed by the Banks, or (C) otherwise amend or restate
this Agreement, any Note or any other Loan Instrument signed by the Banks;
provided that the Administrative Agent in its discretion nevertheless from time
to time (i) may waive (in whole or in part) any of the technical conditions
precedent to any Advance or Fixed Rate election imposed by Article II hereof and
(ii) may grant temporary waivers or consents respecting the late delivery of
notices, financial statements and similar documents and consent to
non-substantive changes in the form thereof.
(c) Except as otherwise provided in this Agreement or any other Loan
Instrument, the Administrative Agent shall have the right (but shall be under no
duty or obligation) to make any and all decisions with respect to the terms and
provisions of the Loan Instruments other than those requiring the approval of
the affected Banks or the Majority Banks, including (without limitation) the
right to give any notice, to otherwise communicate with any Borrower or any
guarantor, surety or pledgor under any Loan Instrument and to waive or consent
to any departure from any of those terms or provisions, all without notice to or
consent from any Bank.
(d) Each Bank shall be bound by such notices, consents, waivers,
releases, supplements, modifications, amendments, restatements and other
agreements and communications as so made by the Administrative Agent or the
Majority Banks, or by the Administrative Agent with the consent of the Requisite
Banks, as and if required to the same extent as if each Bank had been a party
thereto. A separate consent from a Bank shall not be required for any document
signed by it.
Section 9.07. Powers and Duties of the Administrative Agent, Etc.
(a) With the consent of the Requisite Banks (if any) specified in this
Agreement or any other Loan Instrument, the Administrative Agent from time to
time in its discretion may exercise or otherwise enforce any right, power,
privilege, remedy or interest under this Agreement and the other Loan
Instruments and Applicable Law, and shall perform all duties specifically
required of it by the terms of this Article, in all cases together with such
rights, powers, privileges and remedies as are incidental thereto, and all in
accordance with the usual practices employed by the Administrative Agent in the
servicing of loans of a similar nature for its own account. The other Loan
Instruments may be executed and delivered by the Administrative Agent in the
name of the Banks, the Administrative Agent or a nominee, each Note may be made
payable severally to the Banks or solely to the order of the Administrative
Agent or its nominee, and the originals (or original counterparts) of each Note,
one set of
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this Agreement and the other Loan Instruments, and all other documents, reports
and communications respecting the Loan Instruments delivered to or from any
Borrower or any other guarantor, surety or pledgor shall be held by the
Administrative Agent for the benefit of all of the Banks in accordance with the
terms and provisions of this Article, which items may be held by the
Administrative Agent or its designee and from time to time warehoused or
disposed of in accordance with the usual practices employed by the
Administrative Agent.
(b) To the extent possession of the Loan Collateral may be required or
permitted under any of the Loan Instruments, the Administrative Agent shall hold
such Loan Collateral as collateral agent for the other Banks, including (without
limitation) any deposits with the Administrative Agent of the Borrowers, any of
their respective Subsidiaries, or any other guarantor, surety or pledgor under
any Loan Instrument, or in instances where a Bank (other than the Administrative
Agent) holds funds constituting Loan Collateral in local operating or other
accounts of any such person(s), such Bank shall act as collateral agent for any
other Bank; provided that the deposits and other accounts of any such person(s)
need not be blocked or otherwise restricted as to access unless (i) specifically
required with respect to a specified account by this Agreement or any other Loan
Instrument, or (ii) directed by the Majority Banks. The Administrative Agent
also may be designated as the secured party for the purpose of any Uniform
Commercial Code, mortgage or other filing. Each such collateral agency shall be
for the limited purpose of perfecting the Banks' security interest in the Loan
Collateral for the benefit of the Banks and shall be subject to the rights of
the Banks and the pledgors under the relevant Loan Instruments. Except as
otherwise provided in this Agreement or any other Loan Instrument, the
Administrative Agent shall have the right (but shall be under no duty or
obligation) to administer the Loan Collateral and the security interests with
respect thereto in such manner as the Administrative Agent may deem necessary or
desirable. The Administrative Agent, without notice to or consent from any Bank,
from time to time may execute and deliver releases, subordinations,
satisfactions, assignments, reassignments and similar instruments and documents
in respect of any Loan Collateral and take any other action that may be
necessary or desirable in connection therewith so long as such instruments,
documents or actions are require, contemplated or permitted by the terms and
provisions of the relevant Loan Instrument(s).
(c) Without limiting its right to do so in its discretion, the
Administrative Agent shall be fully justified in failing or refusing to take or
continue any action under this Agreement or any other Loan Instrument unless the
Administrative Agent first shall be reimbursed or otherwise indemnified to its
reasonable satisfaction (which may include the deposit of funds) by the Banks
(other than itself) in accordance with their respective Committed Shares against
any and all liabilities and expenses that the Administrative Agent reasonably
estimates may be incurred by the Administrative Agent by reason of taking or
continuing to take any such action.
Section 9.08. Notices and Knowledge of Events of Default, Etc.
(a) Each Bank shall give prompt notice to the other Banks of the
occurrence and continuance of any Event of Default, unless it reasonably
believes that notice was sent directly to the other Banks, to the extent any
officer of such Bank active with respect to any Borrower's account: (i) obtains
actual knowledge of any such event; or (ii) receives specific notice of any such
event from any Borrower or any other person. Each Bank shall be entitled to
assume that no Event of Default or other event that, with or without the giving
of notice or the passage of time or both, would constitute an Event of Default
has occurred and is continuing, unless: (A) the officers of such Bank active
with respect to any Borrower's account have obtained actual knowledge of such an
event, or (B) notice has been given to such Bank by any Borrower or another Bank
specifically stating its belief that such an event has occurred and is
continuing and specifying the nature thereof.
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(b) At any time after the occurrence and during the continuance of any
Event of Default, the Administrative Agent may (but shall be under no duty or
obligation to), or upon the written consent or direction of the Majority Banks
the Administrative Agent shall, give the Borrowers a written Default Declaration
expressly declaring that an Event of Default has occurred and is continuing,
giving a copy of such notice to the other Banks; provided that the failure to
send such copy to any Bank shall not affect the validity of any such notice of
declaration of an Event of Default. The Administrative Agent and each of the
other Banks (individually or collectively) also may communicate with the
Borrowers and the other Banks respecting any Event of Default or potential
resolution, which shall not be deemed or construed to be a Default Declaration
(which may only be made by Default Declaration respecting an Event of Default).
If any Event of Default shall have occurred and continued after notice to the
Administrative Agent for more than three (3) Business Days respecting any
payment default or for more than ten (10) Business Days respecting any other
default requiring the approval of the Majority Banks or all of the Banks for
waiver, then the Majority Banks may direct the Administrative Agent to send the
Default Declaration to the Borrowers by giving the Administrative Agent a signed
notice of their request, or by giving the Administrative Agent notice of their
request by telecopy of a signed notice and promptly confirming their request by
delivery to the Administrative Agent of the original signed notice (which may be
in counterparts).
(c) At any time during the continuance of any Event of Default
declared pursuant to subsection (b), above, whether or not the Administrative
Agent or the Majority Banks shall have declared a default, accelerated the
maturity of any of the Loan Obligations or taken any other action with respect
thereto, all amounts received by a Bank from or with respect to the Loan
Obligations, whether through payment, the exercise of any right of setoff in
respect of any Loan Obligation or Loan Collateral, or otherwise, shall be
received in trust by such Bank for the benefit of all of the Banks and promptly
delivered to the Administrative Agent.
(d) At any time during the continuance of any Event of Default
declared in any Default Declaration, any Bank shall have the absolute and
unconditional right (but shall be under no duty or obligation) to purchase at
any time the entire interest of any or more of the other Banks in the Loan
Obligations, Loan Collateral and Loan Instruments and under this Agreement and
the other Loan Instruments, exercisable by written notice to the other Bank(s),
and effective upon payment to each such Bank of its Pro Rata Share of the Loans,
together with interest thereon, following which such Bank(s) shall have no
further right, interest or obligation in the Loan Obligations, Loan Collateral
and Loan Instruments. The Committed Share and Pro Rata Share of the purchasing
Bank shall be adjusted to reflect any such repurchase. No Bank shall have any
liability or obligation to indemnify or reimburse the Administrative Agent for
any such purchase or any part thereof.
Section 9.09. Administration During Certain Events of Default.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall consult with the Banks to determine a
course of action with respect to that Event of Default acceptable to the
Majority Banks. Once determined, the Administrative Agent shall use reasonable
efforts to pursue that course of action in a manner consistent with and
otherwise permissible tinder this Agreement, the other Loan Instruments and
Applicable Law, subject, however, to the limitations imposed hereunder and
thereunder and the other terms and provisions of this Agreement.
(b) Subject to the foregoing and the other terms and provisions of
this Agreement and the other Loan Instruments, the Administrative Agent in its
discretion from time to time may (but shall be under no duty or obligation to),
or at the written direction of the Majority Banks the Administrative Agent
shall, use reasonable efforts to effect the offer, sale, lease or other
disposition and delivery of the whole or any part of the Loan Collateral,
whether as a secured party in possession of
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collateral or otherwise, and may otherwise exercise and enforce any and all
rights, powers, privileges, remedies and interests afforded to it under this
Agreement, the other Loan Instruments and any and all provisions of Applicable
Law.
(c) The Administrative Agent shall receive the proceeds or other
amounts realized from any judgment or other judicial award, any settlement (with
the consent of the Requisite Banks, as and if required), or any sale or other
disposition of any Loan Collateral and, after deducting all costs and expenses
incurred in connection therewith (including attorneys' disbursements, expenses
and fees), the Administrative Agent shall distribute the remainder in accordance
with Section 9.04 of this Agreement.
Section 9.10. Reports and Information. Each Bank shall send to the
other Banks copies of any correspondence sent or received to or from the
Borrowers with respect to any Event of Default (other than items that would have
or appear to have been sent directly to the other Banks). At the request of the
Administrative Agent, each Bank promptly shall send to the Administrative Agent
copies of all notices of debiting any accounts and other correspondence
delivered by a Bank to any Borrower or any guarantor, surety or pledgor under
this Agreement or any other Loan Instrument. Upon the specific request and at
the expense of a Bank, the Administrative Agent shall furnish to such Bank
copies of any report or other documents received by the Administrative Agent and
not separately delivered by the Borrowers to such Bank. Each Bank acknowledges
and agrees that: (a) any report or other information that the Administrative
Agent in its sole discretion elects to prepare will be prepared by the personnel
of the Administrative Agent from information made available by the Borrowers,
which personnel are not acting as auditors and who are not verifying the
information so supplied; (b) any report, document or other information provided
by the Administrative Agent to any Bank, whether in writing or orally, and
whether pursuant to this Article or otherwise, shall be without representation
or warranty by or any recourse whatsoever to the Administrative Agent with
respect to its authenticity, validity, accuracy, completeness, contents or
conformity to any requirements of this Agreement and the other Loan Instruments;
and (c) all reports, documents and other information shall be provided and
received strictly on a confidential basis for the exclusive use of each Bank,
and no Bank shall make any such information available to any other person,
except (i) in connection with any assignment or participation permitted under
Section 10.14 hereof, (ii) for bank auditors and bank regulatory authorities,
(iii) the accountants, attorneys and other professionals of the disclosing Bank,
or (iv) as otherwise required by Applicable Law.
Section 9.11. Bank's Representations, Warranties and Covenants. Each
Bank hereby represents, warrants and covenants to the other Banks, solely for
their benefit, that such Bank: (a) has the power and authority to execute,
deliver and perform, and has duly authorized the execution, delivery and
performance, of this Agreement and the other Loan Instruments to which it is a
party, and will not restrict or otherwise impair that power, authority or
authorization; (b) is a sophisticated and knowledgeable institution, both
generally and with respect to transactions of this type; (c) has received, (i)
copies of this Agreement, the Notes and such other Loan Instruments as such Bank
deemed necessary or prudent, and (ii) such financial and other information from
the Borrowers relating to the Borrowers and each guarantor, surety or pledgor
(if any) as it deemed necessary or prudent, has had an opportunity to review and
evaluate, and in fact has independently reviewed and evaluated such documents
and information, and will continue to independently review and evaluate such of
the foregoing as it deems necessary or prudent, all in order to make its own
credit determination and other decisions; (d) has made, and will continue to
make that independent review, evaluation and credit determination and other
decisions under this Agreement and the other Loan Instruments (i) without any
reliance upon any oral or written representation, warranty, advice or analysis
of any kind whatsoever from the Administrative Agent or any other person (other
than the Borrowers), however obtained, and (ii) without any regard to any
decision or adverse circumstance or change respecting any other banking, trust,
lending or other relationship that it may have with any Borrower or any of their
respective affiliates; (e) has made its loans and acquired its interests, and
will continue to make its loans and hold its interests, under this Agreement and
the other
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Loan Instruments for its own account; (f) has no present intent to, and will not
at any time in whole or in part, sell, convey, assign, transfer, further
participate or otherwise dispose of those loans or interests or any part
thereof, other than assignments and participations expressly permitted by
Section 10.13 hereof, and (g) has executed and delivered this Agreement and the
other Loan Instruments to which it is a party, has made its loans, acquired its
interests and made its commitments and other agreements under this Agreement and
the other Loan Instruments, and will continue to hold those interests and
perform those commitments and agreements in accordance with all Applicable Laws,
including (without limitation) any legal lending limits applicable to it.
Section 9.12. Credit Waivers and Exculpations. None of the
Administrative Agent and the other Banks has, and none of them shall be deemed
or construed to have, made any representation or warranty, offered any advice or
analysis, made any assumption of any liability or responsibility or made any
guaranty, whether orally or otherwise, and whether express or implied, to any
other Bank with respect to: (a) any recital, statement, representation or
warranty made by any Borrower, any of their respective Affiliates or any
guarantor, surety or pledgor under any Loan Instrument, any certificate
delivered by any officer of any such person(s), or any report, document or other
information delivered from time to time by any such person(s) or furnished on
their behalf; (b) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other Loan
Instrument; (c) the existing or future financial condition of any Borrower, any
of their respective Affiliates or any guarantor, surety or pledgor under any
Loan Instrument; (d) the existence or value of any Loan Collateral, or the
validity, sufficiency, priority or effectiveness of any Lien intended to be
created under or by any Loan Instrument; (e) the performance by any Borrower or
any of their respective Affiliates, or by any guarantor, surety or pledgor, of,
or the willingness, ability or likelihood of any of them to perform, their
respective obligations under this Agreement or any other Loan Instrument; or (f)
the validity, enforceability or collectibility of any of the Loan Obligations.
Section 9.13. Reliance on Documents and Experts. The Administrative
Agent shall be entitled to rely upon any notice, consent, certificate,
affidavit, statement, paper, document, writing or other communication (which may
be by telegram, cable, telex, telecopier or telephone) reasonably believed by it
to be genuine and to have been signed sent or made by the proper person or
persons, and upon opinions and advice of legal counsel (including counsel for
any Borrower), independent public accountants and other experts selected by the
Administrative Agent or any other Bank.
Section 9.14. Status and Liability of the Administrative Agent, Etc.
The Administrative Agent shall be considered an independent contractor with
respect to the Banks, and no term or provision of this Agreement or any other
Loan Instrument is intended to create, nor shall any such term or provision be
deemed or construed to have created, any general common law agency, joint
venture, partnership or debtor-creditor relationship between or among the
Administrative Agent and the Banks or any investment contract or other security.
The Administrative Agent may exercise or otherwise enforce any of its rights,
powers, privileges, remedies and interests under this Agreement, the other Loan
Instruments and Applicable Law or perform any of its duties under this Agreement
and the other Loan Instruments by or through its directors, officers, employees,
attorneys, agents or designees. The Administrative Agent and its designees, and
their respective directors, officers, employees, attorneys and agents, shall not
incur any liability (other than for a person's own acts or omissions breaching a
duty owed to the injured Bank and amounting to gross negligence or willful
misconduct as finally determined pursuant to Applicable Law by a governmental
Authority having jurisdiction) for acts and omissions arising out of or related
directly or indirectly to this Agreement, any Note, any other Loan Instrument,
any part of the Loan Collateral, any of the Loans or the application of any
proceeds thereof, or any Environmental Claim, and each Bank hereby expressly
waives any and all claims and actions (other than to the extent occasioned by a
person's own acts or omissions breaching a duty owed to the injured Bank and
amounting to gross negligence or willful misconduct as finally determined
pursuant to Applicable
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Law by a governmental Authority having jurisdiction) against the Administrative
Agent or its designees, and their respective directors, officers, employees,
attorneys and agents, arising out of or related directly or indirectly to any
and all of the foregoing acts, omissions and circumstances.
Section 9.15. Bank's Risk of Loss; Expenses; Indemnification.
(a) Each Bank hereby acknowledges and agrees that it has assumed all
risk of loss to the extent of its Pro Rata Share of the Loans and all risk of
further expense and liability ratably in accordance with its Committed Share of
the Loans as of the date of the expense or the date on which the event giving
rise to the liability occurred, as the case may be.
(b) The Banks shall use reasonable efforts to obtain prompt
reimbursement from the Borrowers, or from the proceeds of the Loan Collateral,
if any, realized in connection with any sale or other disposition, to the extent
such reimbursement is required by this Agreement and the other Loan Instruments,
for all reasonable costs and expenses incurred by the Administrative Agent in
connection with the preparation, execution and closing of this Agreement and the
other Loan Instruments, all waivers, releases, discharges, satisfactions,
modifications and amendments thereof and consents with respect thereto, all
payments made and actions taken thereunder in the name or on behalf of any
Borrower, any of their respective affiliates or any guarantor, surety or pledgor
under any Loan Instrument, all periodic collateral audits and other evaluations
and any ongoing monitoring of the Accounts Receivable, Inventory and other Loan
Collateral (including, without limitation, the per diem fees and expenses of the
Administrative Agent and its designees in performing such audits and other
evaluations), all annual and other appraisals of the real estate included in the
Loan Collateral, and the administration, enforcement, protection and
adjudication of this Agreement and the other Loan Instruments and the rights,
powers, privileges, remedies and other interests of the Banks thereunder and
under Applicable Law, and the acquisition, operation, development, improvement
or disposition of any Loan Collateral, including (without limitation) insurance
premiums, mortgage recording, documentary, transfer, intangible, note or other
similar taxes or revenue stamps, filing and recording expenses, and the
disbursements, expenses and reasonable fees of counsel to the Administrative
Agent and the other Banks, including ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP and the
disbursements, expenses and fees of any local or special counsel retained by any
of them. In the event such reimbursement is not obtained by the Administrative
Agent within a reasonable time after demand for such reimbursement from the
Borrowers, each Bank promptly upon demand shall pay to the Administrative Agent
a portion of such unreimbursed fees, costs and expenses proportional to its
Committed Share(s) of the Loans. The Banks, or the Administrative Agent, as the
case may be, promptly shall distribute to each Bank a reimbursement proportional
to such payments received from such Bank in respect of any such fee, cost and
expense subsequently reimbursed by the Borrowers.
(c) To the extent not promptly reimbursed or otherwise indemnified by
the Borrowers, the Administrative Agent and its designees, and their respective
directors, officers, employees, attorneys and agents, shall be indemnified,
reimbursed and held harmless by the Banks, and (at the request of the
Administrative Agent) defended at the expense of the Banks with counsel selected
by the Administrative Agent, promptly upon request and ratably in accordance
with their respective Committed Shares of the Loans as of the date of the event
giving rise to the claim occurred, from and against any and all claims,
liabilities, losses and expenses of any kind or nature whatsoever that may be
imposed on, incurred by or asserted against any of them, or any of their
respective directors, officers, employees, attorneys and agents, arising out of
or related directly or indirectly to this Agreement, any Note, any of the other
Loan Instruments, any part of the Loan Collateral, any part of the Loans or the
application of any proceeds thereof, or any Environmental Claim, except such as
are occasioned by the indemnified person's own acts or omissions breaching a
duty owed to a Bank and amounting to gross negligence or willful misconduct as
finally determined pursuant to Applicable Law by a governmental
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Authority having jurisdiction; provided, however, that nothing herein shall be
deemed to relieve the Administrative Agent from bearing its Committed Share of
the Loans as a Bank of any of the foregoing liabilities.
Section 9.16. Invalidation of Distributions. In the event any amount
paid or otherwise distributed to or received by any of the Banks in respect of
the Obligations or otherwise (a) must be returned or refunded to any Borrower by
the Administrative Agent or any other Bank pursuant this Agreement or any other
Loan Instrument (including, without limitation, the return of any amount due to
miscalculation or other mistake or the return of any prepaid Letter of Credit
Fees upon the early termination of any Letter of Credit), or (b) is invalidated,
declared to be fraudulent or preferential or must otherwise be restored or
returned by the Administrative Agent or any other Bank upon the early
termination of any Letter of Credit) or upon the insolvency, bankruptcy or
reorganization of any Borrower, any of their respective affiliates, any
guarantor, surety or pledgor under any other Loan Instrument, or any other
person, whether by order of any court, by any settlement approved by any court,
or otherwise, each Bank shall contribute back to the Administrative Agent an
amount such that each Bank will be affected by that invalidation, declaration,
restoration, refund, or return ratably in accordance with its Pro Rata Share(s)
of the relevant Loans as of the date of the subject payment, distribution or
receipt.
Section 9.17. No Waiver of Rights, Independent Transactions, Etc.
(a) With respect to its Pro Rata Share of the Loans the Administrative
Agent shall have the same rights, powers, privileges, remedies and interests
under this Agreement and the other Loan Instruments as the other Banks, and may
exercise the same as though it were not the Administrative Agent. Accordingly,
the terms "Bank" or "Banks" as used in this Agreement or any other Loan
Instrument shall not be deemed to exclude any Bank because it is or may have
been the Administrative Agent hereunder.
(b) Except as any term or provision of this Agreement or any other
Loan Instrument may be breached thereby; each Bank also may accept deposits
from, lend money to (on a secured or unsecured basis) and generally engage in
any kind of banking, trust, lending or other business with any Borrower, any of
their respective Affiliates or any guarantor, surety or pledgor under any Loan
Instrument (each an "Independent Transaction"); and from time to time a Bank or
its affiliates may, accept and retain, without any obligation to report or
otherwise account to any other Bank, any and all payments and other amounts
received from or in respect of any such person(s) under any Independent
Transaction and any and all payments, distributions and proceeds received
respecting any collateral (other than Loan Collateral) securing or intending to
secure any of the obligations under any Independent Transaction. Any payment or
other amount received by the Administrative Agent from or to respect of any
Borrower, any of their respective Affiliates or any guarantor, surety or pledgor
under any Loan Instrument that is not designated or reasonably ascertainable
from the circumstances as being applicable to the Loan Obligations may be
arbitrarily applied by the Administrative Agent in its discretion to the Loan
Obligations or to any of the obligations of any such Person(s) under any
Independent Transaction with it. Neither the Administrative Agent nor any other
Bank shall be deemed by the execution of this Agreement or any other Loan
Instrument to have waived any right, power, privilege, remedy or interest under,
or other term or provision of, any Independent Transaction, except that to the
extent the execution, delivery or performance of this Agreement or any other
Loan Instrument by any party thereto may violate or constitute a default under
any term or provision of any Independent Transaction of any Bank, that violation
or default shall be deemed to have been permanently waived by such Bank's
execution of this Agreement.
Section 9.18. Communications with the Borrowers. Except as otherwise
provided in this Agreement or any other Loan Instrument, no Bank shall give any
notice or waiver to or otherwise
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communicate on behalf of all of the Banks directly with any Borrower, any of
their respective Affiliates, or any guarantor, surety or pledgor under any Loan
Instrument without the prior written consent of the Administrative Agent or the
Majority Banks, as the case may be. A Bank may request that a particular demand,
notice, waiver or other communication be given to any such persons as required
or permitted pursuant to this Agreement or any other Loan Instrument by giving
the Administrative Agent and the other Banks a signed notice of its request, or
by giving the Administrative Agent and the other Banks notice of its request
both by telephone and or telecopy of a signed notice and promptly confirming its
request by delivery to the Administrative Agent and each other Bank of an
original copy of the signed notice, which notice shall specify the desired
communication and contents and the reasons therefore. The Administrative Agent
in its discretion may, or at the request of the Majority Banks shall, give such
communication(s) to such person(s) (subject to the satisfaction of the
requirements of Section 9.06 hereof respecting certain waivers and other items);
provided however that if the Administrative Agent fails to give any such
communication(s) to any such person(s) within a reasonable period of time after
being so required by the requisite number of Banks, the Bank(s) so desiring such
communication(s) be given may give it directly to such person(s).
Section 9.19. Delinquent Banks. Any Bank that fails to deliver funds
to or reimburse or otherwise indemnify the Administrative Agent or other
indemnified person as, when, and to the full extent required under this Article
shall be deemed delinquent under this Article until such time as that obligation
is satisfied in full (a Bank that is so delinquent will be referred to in this
Section as a "Delinquent Bank"). A Delinquent Bank shall be deemed to have
assigned any and all payments thereafter due to it in respect of the Loan
Obligations, whether on account of principal, Interest, fees or otherwise as
well as the proceeds of all Loan Collateral, to the nondelinquent Banks, and the
Delinquent Bank hereby authorizes the Administrative Agent to distribute those
assigned amounts to the nondelinquent Banks in proportion to their respective
Pro Rata Shares, except that amounts assigned on account of a Delinquent Bank's
failure to reimburse or otherwise indemnify may instead, in the discretion of
the Administrative Agent, be allocated and distributed to the nondelinquent
Banks or directly to any other indemnified person in such amounts as the
Administrative Agent deems appropriate to reflect the respective assumptions of
liability of the Banks under this Article. A Delinquent Bank shall be deemed to
have satisfied in full any such delinquency when and if, as a result of the
distribution of the assigned amounts, the Banks' respective Pro Rata Shares
shall have returned to those in effect immediately prior to the delinquency, and
refunds and direct payments respecting reimbursements and indemnification shall
have been made in an amount equal to that not paid by the Delinquent Bank with
respect thereto. This assignment and authorization shall be deemed to be a power
coupled with an interest, shall be absolute and irrevocable and shall be
effective during any period of delinquency. A Delinquent Bank's approval shall
not be required for any reason whatsoever under this Agreement, any other Loan
Instrument or Applicable Law, including (without limitation) any required or
permitted approval, consent or vote, and any requirement for joint action,
unanimity or majority or other approval may be satisfied by the nondelinquent
Banks with their respective Pro Rata Shares recomputed by excluding the Pro Rata
Share of each Delinquent Bank. A Delinquent Bank may not make any assignment or
sell any participation pursuant to Section 10.13 hereof.
Section 9.20. No Third Party Rights. The representations, warranties
and other terms and provisions of Sections 9.02 to 9.20 of this Article are for
the exclusive benefit of the Banks. Accordingly, without limiting the generality
of the foregoing, no Borrower, Affiliate, other guarantor, surety or pledgor, or
other person shall be entitled to rely upon, or to raise as a defense, the
failure of the Administrative Agent or any other Bank to comply with those terms
and provisions, shall have any right or claim against the Administrative Agent
or any other Bank by reason of any of those terms and provisions or shall be
entitled to enforce any of those terms and provisions against the Administrative
Agent or any other Bank.
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Section 9.21. Resignation and Successor Administrative Agent.
(a) The Administrative Agent may resign at any time by giving written
notice to the Banks and the Borrowers. Upon such resignation, the Majority Banks
shall have the right to designate a successor Administrative Agent with the
consent of the Borrowers (which consent shall not be unreasonably withheld or
delayed). In the event no one has been approved (or accepted the appointment) as
successor Administrative Agent within thirty days of the Administrative Agent's
notice of resignation, the Administrative Agent in its discretion may (on behalf
of all of the Banks) appoint an Eligible Assignee (but only if organized under
the laws of the United States or any state thereof) as successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder,
the successor Administrative Agent shall thereupon succeed to and become vested
with all of the rights, powers, privileges, interest and duties of the resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its duties and obligations as "Administrative Agent" under this Agreement
and the other Loan Instruments. After resigning as Administrative Agent, the
terms and provisions of this Agreement and the other Loan Instruments shall
nevertheless inure to the resigned Administrative Agent's benefit as to any
actions taken or omitted while it was Administrative Agent.
(b) If the successor Administrative Agent is not otherwise a Bank at
the time it accepts appointment as successor Administrative Agent under this
Agreement, then contemporaneously with such appointment the successor
Administrative Agent shall purchase from the other Banks an aggregate interest
in the Loans equal to a Committed Share and Pro Rata Share of not less than
$5,000,000. Each Bank shall be obligated to sell a pro rata portion of such
Loans to the successor Administrative Agent (although two or more Banks by
mutual agreement may redistribute among themselves their collective pro rata
obligation). The successor Administrative Agent shall pay to each selling Bank
an acquisition price equal to the applicable percentage of the seller's Pro Rata
Share of (i) the principal balance of the Loans then outstanding under this
Agreement and other Loan Instruments and (ii) all shared interest, fees and
other amounts accrued but unpaid through the closing of the acquisition. A Bank
shall not be relieved of its pro rata obligation hereunder by virtue of having
sold all or any portion of its interest to one or more participants. The
purchase and sale required hereby shall be effected by an Assignment and
Assumption Agreement in the form of Exhibit G hereto.
Section 9.22. Delegation of Duties by Administrative Agent. The
Administrative Agent from time to time may delegate in whole or in part any one
or more of its rights, powers, privileges, remedies and duties under this
Agreement and the other Loan Instruments to another Bank, with its consent,
which delegation may be general or specific and may be subject to such
conditions and limitations as may be specified, and which delegation may be
terminated at any time by the Administrative Agent. Any such delegation or
termination shall be effective upon written notice from the Administrative Agent
to the parties hereto. Any Bank to whom such a delegation has been made may
elect at any time to terminate that delegation by written notice to the parties
hereto, effective upon their receipt of that notice. Any Bank to whom such a
delegation has been made shall be deemed to be the "Administrative Agent"
hereunder, and individually may exercise the Administrative Agent's rights,
powers, privileges and remedies and shall perform its duties tinder this
Agreement and the other Loan Instruments to the extent and for the duration of
that delegation with the same binding effect as exercise or performance by the
delegating Administrative Agent.
Section 9.23. Syndication Agent. Notwithstanding anything to the
contrary contained in this Agreement, the parties hereto hereby agree that the
Syndication Agent shall not have any rights, duties or responsibilities in its
capacity as Syndication Agent hereunder and that the Syndication Agent shall not
have the authority to take any action hereunder in its capacity as such.
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ARTICLE X
Miscellaneous
Section 10.01. Notice. Except as otherwise expressly provided, any
notice, request, demand or other communication permitted or required to be given
under this Agreement or any other Loan Instrument shall be in writing, shall be
sent by one of the following means to the addressee at the address set forth in
Exhibit H hereto (or at such other address as shall be designated hereunder by
notice to the other parties and persons receiving copies, effective upon actual
receipt) and shall be deemed conclusively to have been given: (i) on the first
Business Day following the day timely deposited with Federal Express (or other
equivalent national overnight courier) or United States Express Mail for
overnight delivery, with the cost of delivery prepaid or for the account of the
sender; (ii) on the fifth Business Day following the day duly sent by certified
or registered United States mail, postage prepaid and return receipt requested;
or (iii) when otherwise actually received by the addressee on a Business Day (or
on the next Business Day if received after the close of normal business hours or
on any non-Business Day). If a certificate, signed notice or other signed item
is expressly required by another provision of this Agreement or any other Loan
Instrument, a manually signed original must be delivered by the party giving it;
any other notice, request, demand or other communication instead may be sent by
telecopy, with the cost of transmission prepaid or for the account of the
sender, and shall (except as otherwise specified in this Agreement or any other
Loan Instrument) be deemed conclusively to have been given on the first Business
Day following the day duly sent. Copies of notices to the persons specified in
Exhibit H hereto (if any) may be sent by regular first-class mail, postage
prepaid to such persons, but any failure or delay in sending such copies shall
not affect the validity of any such notice, request, demand or other
communication so given to a party.
Section 10.02. Expenses of the Administrative Agent and the Banks. The
Borrowers shall pay or reimburse on demand any and all costs and expenses
incurred by the Administrative Agent, whether directly or indirectly, in
connection with the preparation, execution and delivery of the commitment, the
preparation, execution and closing of this Agreement and the other Loan
Instruments, all waivers, releases, discharges, satisfactions, modifications and
amendments thereof and consents with respect thereto, all payments made and
actions taken thereunder in the name or on behalf of any Borrower or any
guarantor, surety or pledgor under any Loan Instrument, subject to Section
7.02(e), all periodic collateral audits and other evaluations and the ongoing
monitoring of the Accounts Receivable, Inventory and Loan Collateral (including,
without limitation, the per diem fees and expenses of the Administrative Agent
and its designees in performing such audits and other evaluations), and the
administration, maintenance, enforcement and adjudication of this Agreement and
the other Loan Instruments and the rights, powers, privileges, remedies and
other interests of the Administrative Agent or any other Bank thereunder,
including in connection therewith (without limitation) insurance premiums with
respect to Collateral, searches respecting financing statements, unpaid taxes
and other Liens, appraisers' and surveyors' fees and expenses, title examination
and insurance premiums, surety bond premiums, mortgage recording, documentary,
transfer, intangible, note or other similar taxes and revenue stamps, filing and
recording expenses and charges, and the disbursements, expenses and reasonable
fees of counsel to the Administrative Agent or any other Bank, including
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP, and the disbursements, expenses and reasonable fees of
any local or special counsel retained by any of them.
Section 10.03. Further Assurances. Each Borrower agrees to do such
further acts and things and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the Majority Banks or the
Administrative Agent from time to time reasonably may request in connection with
the administration, maintenance, enforcement or adjudication of this Agreement
and the other Loan Instruments in order (a) to evidence, confirm, perfect or
protect any security interest or other Lien granted or required to have been
granted under this Agreement and the other Loan Instruments,
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(b) to give the Administrative Agent, the Banks or their respective designees
confirmation and assurance of their rights, powers, privileges, remedies and
interests under this Agreement, the other Loan Instruments and Applicable Law,
(c) to better enable the Administrative Agent, the Banks or their respective
designees to exercise any such privilege or remedy, or (d) to otherwise
effectuate the purpose and the terms and provisions of this Agreement and the
other Loan Instruments, each in such form and substance as may be acceptable to
the Administrative Agent and the Majority Banks.
Section 10.04. Reliance, Exculpation and Indemnification.
(a) The Administrative Agent and each of the other Banks shall be
entitled to rely upon any notice, consent, certificate, affidavit, statement,
paper, document, writing or other communication (which to the extent permitted
hereunder may be by telecopy or telephone) reasonably believed by such Bank to
be genuine and to have been signed, sent or made by the proper person or
persons, and upon opinions and advice of legal counsel (including counsel for
any Borrower), independent public accountants and other experts selected by the
Administrative Agent. Each Bank shall be entitled to rely, and in entering into
this Agreement and the other Loan Instruments in fact has relied, upon the
representations, warranties and other information respecting each Borrower
contained in this Agreement and the other Loan Instruments notwithstanding any
investigation, analysis or evaluation that may have been made or from time to
time may be made by any Bank or its designees of all or any part of the assets,
business, operations, properties or condition (financial or otherwise) of any
Borrower or any other person.
(b) The Administrative Agent and each of the other Banks and their
respective participants and designees, and their respective directors, officers,
employees, attorneys and agents, shall not incur any liability (other than to
the extent occasioned by a person's own acts or omissions breaching a duty owed
to the Borrowers and amounting to gross negligence or willful misconduct as
finally determined pursuant to Applicable Law by a governmental Authority having
jurisdiction) for acts and omissions arising out of or related directly or
indirectly to this Agreement, any other Loan Instrument, any part of Collateral,
any of the Loans or the application of any proceeds thereof, or any
Environmental Claim; and each Borrower hereby expressly waives any and all
claims and actions (other than to the extent occasioned by a person's own acts
or omissions breaching a duty owed to the Borrowers and amounting to gross
negligence or willful misconduct as finally determined pursuant to Applicable
Law by a governmental Authority having jurisdiction) against the Administrative
Agent and each of the other Banks and their respective participants and
designees, and their respective directors, officers, employees, attorneys and
agents, arising out of or related directly or indirectly to any and all of the
foregoing acts, omissions and circumstances.
(c) The Administrative Agent and each of the other Banks and their
respective participants and designees, and their respective directors, officers,
employees, attorneys and agents, each shall be indemnified, reimbursed and held
harmless by the Borrowers, and (at the request of such Bank) defended at the
expense of the Borrowers with counsel selected by such Bank, from and against
any and all claims, liabilities, losses and expenses (including, without
limitation, the disbursements, expenses and reasonable fees of their respective
attorneys) that may be imposed upon, incurred by, or asserted against any of
them, or any of their respective directors, officers, employees, attorneys and
agents, arising out of or related directly or indirectly to this Agreement, any
other Loan Instrument, any part of Collateral, any of the Loans or the
application of any proceeds thereof, or any Environmental Claim, except to the
extent occasioned by the indemnified person's own acts or omissions breaching a
duty owed to the Borrowers and amounting to gross negligence or willful
misconduct as finally determined pursuant to Applicable Law by a governmental
Authority having jurisdiction.
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Section 10.05. Interpretation. The parties acknowledge and agree that
each party and its counsel have reviewed and negotiated the terms and provisions
of this Agreement (excluding schedules) and have contributed to its revision;
the normal rule of construction, to the effect that any ambiguities are resolved
against the drafting party, shall not be employed in the interpretation of it;
and its terms and provisions shall be construed fairly as to all parties hereto
and not in favor of or against any party, regardless of which party was
generally responsible for the preparation of this Agreement.
Section 10.06. Section and Other Headings. The table of contents and
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
Section 10.07. Provisions of the Notes and Collateral Loan
Instruments. The Notes and the various Loan Instruments creating or evidencing
the Administrative Agent's interest in the Collateral (for the benefit of all of
the Banks) are each subject to the covenants and other terms and provisions
contained in this Agreement to the same extent and effect as if fully set forth
therein; and in the event that any term or provision of those instruments and
documents conflicts or is inconsistent with any term or provision of this
Agreement, the term or provision of this Agreement shall control and be given
effect.
Section 10.08. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT,
THE NOTES AND THE OTHER LOAN INSTRUMENTS AND THE RIGHTS AND DUTIES OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH BORROWER AGREES THAT ANY
SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN INSTRUMENTS
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON ANY BORROWER BY MAIL AT THE
ADDRESS SET FORTH IN THIS AGREEMENT. EACH BORROWER HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH
COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT FORUM. WITHOUT IN ANY WAY
LIMITING THE PRECEDING CHOICE OF LAW, THE PARTIES INTEND (AMONG OTHER THINGS) TO
THEREBY AVAIL THEMSELVES OF THE BENEFIT OF SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK.
Section 10.09. Severability. In the event that any term or provision
of this Agreement or any other Loan Instrument shall be finally determined to be
superseded, invalid, illegal or otherwise unenforceable pursuant to Applicable
Law by a governmental Authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability (a) by or before that Authority of the remaining terms and
provisions of this Agreement and the other Loan Instruments, which shall be
enforced as if the unenforceable term or provision were deleted, or (b) by or
before any other Authority of any of the terms and provisions of this Agreement
and the other Loan Instruments.
Section 10.10. Survival of Representations, Etc.
(a) Each of the representations, warranties, covenants, waivers and
other agreements of each Borrower contained in this Agreement and the other Loan
Instruments: (i) shall be absolute, irrevocable and unconditional; (ii) shall
survive the execution and delivery of this Agreement and the other Loan
Instruments, and the advance, repayment and readvance of any or all of the
monies to be lent hereunder and thereunder; (iii) shall remain and continue in
full force and effect without regard (A) to
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whether the Loans or other Obligations are now or hereafter existing, acquired
or created, and irrespective of the fact that from time to time under the terms
and provisions of the Loan Instruments monies may be advanced, repaid and
readvanced and the outstanding balance of the Loans may be zero, (B) to any
extension or change in the time, manner, place and other terms and provisions of
payment or performance of any one or more of the Loans or other Obligations, (C)
to any waiver, modification, extension, renewal, consolidation, spreading,
amendment or restatement of any other term or provision of any Loan Instrument,
(D) to any full, partial or non-exercise of any of the rights, powers,
privileges, remedies and interests of the Administrative Agent or any other Bank
under any Loan Instrument or Applicable Law against any Borrower or any other
person or with respect to any of the Obligations, any other obligations or any
collateral or security interest therein, which exercise or enforcement may be
delayed, discontinued or otherwise not pursued or exhausted for any or no reason
whatsoever, or which may be waived, omitted or otherwise not exercised or
enforced (whether intentionally or otherwise), (E) to any surrender,
repossession, sequestration, foreclosure, conveyance or assignment (by deed in
lieu or otherwise), sale, lease or other realization, dealing or disposition
respecting any collateral, (F) to any release, subordination or impairment of
all or any part of the Obligations, any other obligations or any collateral or
any security interest therein (whether intentionally or otherwise), (G) to any
statute of limitations or similar time constraint under any Applicable Law, (H)
to any investigation, analysis or evaluation by any Bank or its designees of the
assets, business, operations, properties or condition (financial or otherwise)
of any Borrower or any other person, (I) to any act or omission on the part of
the Administrative Agent, any Bank or any other person ,or (J) to any other
event that otherwise might constitute a legal or equitable counterclaim, defense
or discharge of a borrower, co-obligor, indemnitor, guarantor, surety or
pledgor; (iv) shall not be subject to any defense, counterclaim, setoff, right
of recoupment, abatement, reduction or other claim or determination that any
Borrower may have against any other Borrower, the Administrative Agent, any Bank
or any other person; (v) shall not the diminished or qualified by the death,
disability, dissolution, reorganization, insolvency, bankruptcy, custodianship
or receivership of any Borrower, any other co-obligor, guarantor, surety or
pledgor or any other person, or the inability of any of them to pay its debts or
perform or otherwise satisfy its obligations as they become due for any reason
whatsoever; and (vi) shall remain and continue in full force and effect until
all of the Obligations have been fully paid and satisfied and thereafter with
respect to events occurring prior to such payment and satisfaction.
(b) Without limiting the generality of subsection (a) of this Section
or any other term or provision of this Agreement, each Borrower covenants,
agrees and consents that at any time, and from time to time: (i) any Collateral
securing or intended to secure the Obligations under any Loan Instrument may be
surrendered, repossessed, sequestered, judicially or nonjudicially foreclosed,
sold, conveyed, assigned (by deed in lieu of foreclosure or otherwise), sold,
leased or otherwise realized upon, dealt with or disposed of in whole or in
part, whether to the Administrative Agent, its designee or otherwise as
respectively contemplated thereunder; (ii) any mortgage or other security
interest in any such Collateral may be held without due recordation or other
Perfection (whether intentionally or otherwise), may be recorded or otherwise
Perfected or may be assigned, released, subordinated or otherwise impaired,
dealt with or disposed of in whole or in part; (iii) the liability of any other
Borrower, any other co-obligor, guarantor, surety or pledgor or any other person
to pay any and all of the Obligations may be settled, compromised, adjusted,
forgiven, released or affected by any other accommodation or released, in whole
or in part, or subordinated to the prior payment of any other debts or claims of
that or any other person; (iv) any one or more of this Agreement and the other
Loan Instruments, or any one or more of the rights, powers, privileges, remedies
and interests of any Bank herein or therein, may be sold, conveyed, assigned or
otherwise transferred by such Bank in whole or in part (including participations
or other undivided interests) to any other person as provided in this Agreement
or any other Loan Instrument; or (v) any other right, power, privilege, remedy
or interest of the Administrative Agent or any other Bank under this Agreement,
any other Loan Instrument or Applicable Law may be exercised or enforced by the
Administrative Agent (with the consent of the Requisite Banks, as and if
required), the Banks or their respective designees, which exercise or
enforcement may be delayed, discontinued or otherwise not
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pursued or exhausted for any or no reason whatsoever, or any such right, power,
privilege, remedy or interest may be waived, omitted or otherwise not exercised
or enforced (whether intentionally or otherwise), all in such manner and order,
upon such terms and provisions and subject to such conditions as the
Administrative Agent (with the consent of the Requisite Banks, as and if
required) or any other Bank may deem necessary or desirable in its or their sole
and absolute discretion, all without notice to or further assent from any
Borrower except as otherwise expressly provided in this Agreement, and all
without affecting this Agreement and the other Loan Instruments or any of the
obligations hereunder or thereunder. As between the Administrative Agent and the
Banks however, the preceding provisions are not intended to and shall not be
deemed or construed as modifying the relative rights and obligations of the
Administrative Agent and the Banks under this Agreement or any other Loan
Instrument.
Section 10.11. Counterparts. This Agreement or any other Loan
Instrument may be executed in two or more counterpart copies of the entire
document or of signature pages to the document each of which may be executed by
one or more of the parties hereto or thereto, but all of which, when taken
together, shall constitute a single agreement binding upon all of the parties
hereto or thereto (as the case may be).
Section 10.12. Effective Date. This Agreement shall be effective on
the date (the "Effective Date") as of which (a) this Agreement shall be executed
by all the parties hereto and delivered to the Administrative Agent and (b) all
the conditions precedent required to have been satisfied on or before the
Effective Date pursuant to Article IV hereof shall have been satisfied or waived
(whether temporarily or otherwise) in writing by the Administrative Agent (with
the consent of the Requisite Banks as and if required). The Administrative Agent
shall notify the Borrowers of the Effective Date if other than the date of the
closing of this Agreement, provided, however, that the failure to give such
notice shall not alter the Effective Date.
Section 10.13. Successors and Assigns; Assignment.
(a) Whenever in this Agreement or any other Loan Instrument reference
is made to any party, such reference shall be deemed to include the successors,
assigns, heirs and legal representatives of such party, and, without limiting
the generality of the foregoing, all representations, warranties, covenants and
other agreements made by or on behalf of each Borrower in this Agreement and the
other Loan Instruments shall inure to the benefit of the successors and assigns
of the Banks; provided, however, that nothing herein shall be deemed to
authorize or permit any Borrower to assign any of its rights or obligations
under this Agreement or any other Loan Instrument to any other person (whether
or not an affiliate of such Borrower), and each Borrower covenants and agrees
that it shall not make any such assignment. Any Bank from time to time: (a) may
assign all or any portion(s) of the rights, powers, privileges, remedies and
interests of, and/or the Loans and other Obligations owed to such Bank under,
this Agreement or any other Loan Instrument (i) to any Affiliate of such Bank,
or in the manner provided in subparagraph (b) below, (b) may sell a
participation interest in all or any portion(s) of the rights, powers,
privileges, remedies and interests of, and/or the Loans and other Obligations
owed to such Bank under, this Agreement or any other Loan Instrument to any
Affiliate of such Bank, or in the manner provided in subparagraph (e) below, (c)
may furnish and disclose financial statements, documents and other information
pertaining to any Borrower or any Surety or to any potential assignee or
participant permitted hereunder and (d) may take any and all other actions that
such Bank may determine (in its sole and absolute discretion) to be necessary or
appropriate in connection with any such assignment, or participation; in each
case, unless otherwise required below, without notice to or consent of any
Borrower or any other Person.
(b) Any Bank may assign (each such assigning Bank is referred to
herein as an "Assignor") to one or more Eligible Assignee (each an "Assignee")
all or a portion of its rights and
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obligations under this Agreement and the other Loan Instruments (including all
or a portion of its Commitment and the Loans at the time owing to it), provided
that (i) except in the case of an assignment to a Bank or an Affiliate, each of
Aeroflex, the Fronting Bank and the Administrative Agent must give its prior
written consent to such assignment, (ii) the amount subject to such assignment
shall satisfy the provisions of subsection 10.13(c), (iii) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption Agreement (an "Assignment Agreement") in the form of Exhibit G
hereto together with, unless otherwise agreed by the Administrative Agent, a
processing and recordation fee of $3,500, and (iv) the Assignee, if it shall not
be a Bank, shall deliver to the Administrative Agent an administrative
questionnaire in form and substance satisfactory to the Administrative Agent,
and provided further, that any consent of Aeroflex otherwise required under this
paragraph shall not be required if a Default or Event of Default has occurred
and is continuing. Subject to acceptance and recording thereof by the
Administrative Agent and the execution and delivery of any tax forms required by
subsection (d) of this Section, from and after the effective date specified in
each Assignment Agreement, the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment Agreement, have the
rights and obligations of a Bank under the Loan Instruments, and the Assignor
thereunder shall, to the extent of the interest assigned by such Assignment
Agreement, be released from its obligations under the Loan Instruments,
including (without limitation) the assigned portion of the Commitment (and, in
the case of an Assignment Agreement covering all of the Assignor's rights and
obligations under the Loan Instruments, such Bank shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.04, 2.09
and 10.02). Any assignment or transfer by a Bank of rights or obligations under
the Loan Instruments that does not comply with this paragraph shall be treated
for purposes of the Loan Instruments as a sale by such Bank of a participation
in such rights and obligations in accordance with paragraph (e) of this Section.
Notwithstanding any such assignment, the Administrative Agent shall retain and
exercise various administrative functions and continue to hold the various
security interests granted under this Agreement and the other Loan Instruments
in the manner and to the extent contemplated by this Agreement and the other
Loan Instruments. Each Borrower agrees to execute and deliver such amendments to
or restatements of this Agreement and the other Loan Instruments as may be
reasonably required to reflect any such assignment. The Assignor shall give a
copy of any Assignment Agreement to the Borrowers, provided that any failure or
delay in giving any such copy shall not affect the validity of any such
assignment.
(c) Except for an assignment required to be effected under Section
9.21 hereof, no assignment described in subsection (b) of this Section shall be
effected: (i) for a Committed Share and Pro Rata Share of less than $5,000,000,
unless constituting the entire then remaining interest of the Assignor; or (ii)
if the Assignor is a Delinquent Bank.
(d) Any Eligible Assignee (other than one organized under the laws of
the United States or any state thereof) that is exempt from United States
federal withholding tax or subject to a reduced rate by treaty shall, on or
before the date it becomes a Bank hereunder, complete, execute and deliver to
the Administrative Agent and the Borrowers (one original to each) Internal
Revenue Service Form 1001 or 4224, as applicable, and Form W-8 or W-9, as
applicable, or any successor form, and such other forms), certificate(s) and
document(s) as may be required under the Code to establish such Eligible
Assignee's entitlement to such exemption or reduced rate. If any such Eligible
Assignee is not entitled to any such exemption or reduced rate, the Bank
proposing to assign to such Eligible Assignee shall give the Administrative
Agent and the Borrowers notice of that determination promptly but in any event
not less than three Business Days prior to the date it executes and delivers its
Assignment Agreement. Any such Eligible Assignee that becomes a Bank shall, from
time to time, complete, execute and deliver such updates or extensions to or
renewals or replacements of those forms, certificates and documents as may be
necessary to reflect any change in circumstance or Applicable Law or to continue
any such exemption or reduced rate.
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(e) Subject to the terms and provisions of this Agreement, each Bank
and its participants (other than a Delinquent Bank) shall have the unrestricted
right at any time and from time to time to grant to one or more banks or other
financial institutions a participation interest in all or an undivided portion
of its rights, powers, privileges, remedies and interests under this Agreement
and the other Loan Instruments, in any case without any notice to or consent of
any Borrower; provided that the selling Bank shall give the Administrative Agent
written notice of each such sale, specifying the purchaser and share purchased;
and provided further that no Bank shall permit its direct or indirect
participant to further assign or participate its interests hereunder without
prior written notice to the Administrative Agent. However, the sale or other
transfer of a participation shall not reduce, shift or otherwise affect any of
the agreements, duties, obligations or liabilities of the selling Bank under
this Agreement or any other Loan Instrument, which shall continue in full force
and effect and remain the sole responsibility of the selling Bank, and each such
selling Bank agrees that it will not raise (and hereby expressly waives) any
defense relating to any such participation. Furthermore, no Bank shall grant to
any participant the right to approve any supplement to, modification, amendment,
restatement or waiver of, or departure from this Agreement or any other Loan
Instrument other than with respect to (i) any reduction in the principal of the
Loans or in the calculation of interest thereon (other than default interest),
or any postponement of any date fixed for any payment of principal or interest
on the Loans (other than default interest), to the extent the participant has an
interest in such Loans, or (ii) the release of all or substantially all of the
Loan Collateral other than as contemplated by the terms and provisions of this
Agreement and other Loan Instruments. The Administrative Agent and other Banks
and parties may continue to deal directly and exclusively with any such selling
Bank.
(f) Each Bank and its participants from time to time may furnish and
disclose financial statements, documents and other information pertaining to the
Borrowers to any potential assignee or participant. Each Borrower covenants and
agrees to furnish copies of financial statements, reports and other documents
required under this Agreement directly to such potential assignees and
participants as any Bank from time to time may, request.
(g) Each Borrower acknowledges and agrees that any Bank's source of
funds may derive in part from its participants. Accordingly, references in
Sections 1.01 and 2.04 and the other terms and provisions of this Agreement and
the other Loan Instruments to rates, determinations, reserve and capital
adequacy requirements, expenses, increased costs, reduced receipts and the like
as they pertain to any Bank shall be deemed also to include those of each of its
participants (subject, in each case, to the maximum amount that would have been
incurred by or attributable to such Bank directly if such Bank, rather than the
participant, had held the interest participated).
(h) Notwithstanding anything to the contrary contained in any Loan
Instrument, any Bank may at any time pledge all or any portion of its rights
under the Loan Instruments including any portion of any Note held by it to any
of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341; provided, that, no such pledge or
enforcement thereof shall release such Bank from its obligations under any of
the Loan Instruments.
Section 10.14. Limits on the Administrative Agent's Ability to Act,
Etc. Notwithstanding anything in this Agreement or any other Loan Instrument to
the contrary, each Borrower acknowledges and agrees that Article IX hereof and
other terms and provisions of this Agreement and the other Loan Instruments
generally limit the authority of the Administrative Agent to act without the
consent of certain or all of the other Banks. Each Borrower acknowledges and
agrees that the Administrative Agent shall have no duty or obligation under this
Agreement any other Loan Instrument or Applicable Law to act in disregard or
contravention of those terms and provisions.
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Section 10.15. No Third Party Rights. The representations, warranties
and other terms and provisions of this Agreement and the other Loan Instruments
are for the exclusive benefit of the parties hereto, and, except as otherwise
expressly provided herein or therein, no other person, including creditors of
any party hereto, shall have any right or claim against any party by reason of
any of those terms and provisions or be entitled to enforce any of those terms
and provisions against any party.
Section 10.16. No Waiver by Action, Etc. Any waiver or consent
respecting any representation, warranty, covenant or other term or provision of
this Agreement or any other Loan Instrument shall be effective only in the
specific instance and for the specific purpose for which given and shall not be
deemed, regardless of frequency given, to be a further or continuing waiver or
consent. The failure or delay of a party at any time or times to require
performance of, or to exercise its rights with respect to, any representation,
warranty, covenant or other term or provision of this Agreement or other Loan
Instrument in no manner (except as otherwise expressly provided herein) shall
affect its right at a later time to enforce any such provision. No notice to or
demand on any Borrower in any case shall entitle such party to any other or
further notice or demand in the same, similar or other circumstances. The
acceptance by the Administrative Agent or any other Bank of (a) any partial or
late payment shall not constitute a satisfaction or waiver of the full amount
then due or the resulting Event of Default or (b) any payment during the
continuance of an Event of Default shall not constitute a waiver or cure
thereof; and the Administrative Agent or any other Bank may accept or reject any
such payment without affecting any of its rights, powers, privileges, remedies
and other interests under this Agreement, the other Loan Instruments and
Applicable Law. All rights, powers, privileges, remedies and other interests of
the Administrative Agent or any other Bank hereunder are cumulative and not
alternatives, and they are in addition to and shall not limit (except as
otherwise expressly provided herein) any other right, power, privilege, remedy
or other interest of the Administrative Agent or any other Bank under this
Agreement, any other Loan Instrument or Applicable Law.
Section 10.17. Modification, Amendment, Etc. Except to the extent that
the approval or signatures of all of the Banks is not required as provided below
or in any other term or provision of this Agreement or any other Loan
Instrument, each and every supplement or amendment to or modification or
restatement of this Agreement or any other Loan Instrument shall be in writing
and signed by the parties hereto or thereto, respectively, and each and every
waiver of, or consent to any departure from, any representation, warranty,
covenant or other term or provision of this Agreement or any other Loan
Instrument shall be in writing and signed by the affected parties hereto or
thereto, respectively; provided, however, that (a) the Administrative Agent
(with the consent of the Requisite Banks, as and if required) may sign all
waivers and consents on behalf of all of the Banks, and (b) the Requisite Banks
may approve and sign (or authorize the Administrative Agent to sign) on behalf
of all of the Banks certain waivers, supplements, modifications, amendments and
restatements of this Agreement and the other Loan Instruments in accordance with
Article IX hereof and the other applicable terms and provisions of this
Agreement and the other Loan Instruments.
Section 10.18. Entire Agreement. This Agreement and the other Loan
Instruments are intended by the parties as the final, complete and exclusive
statement of the transactions evidenced thereby. All prior or contemporaneous
promises, agreements and understandings, whether oral or written, are deemed to
be superceded by this Agreement and such other Loan Instruments, and no party is
relying on any promise, agreement or understanding not set forth in this
Agreement or such other Loan Instruments.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
AEROFLEX INCORPORATED, as a Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
AEROFLEX LABORATORIES INCORPORATED
AEROFLEX LINTEK CORP.
AEROFLEX SYSTEMS CORP.
AEROFLEX MIC TECHNOLOGY CORPORATION
VIBRATION MOUNTINGS AND CONTROLS, INC.
AEROFLEX UTMC MICROELECTRONIC SYSTEMS INC.
IFR AMERICAS, INC.,
IFR SYSTEMS, INC.,
as Borrowers
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary of each of the above entities
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK,
as a Bank and as Syndication Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------------------
Name:
Title:
FLEET NATIONAL BANK,
as a Bank and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
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STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 14 day of February in the year 2003, before me, the
undersigned, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity (i.e., as Treasurer) and that by his signature
on the instrument, the person upon behalf of which the individual acted (i.e.,
Aeroflex Incorporated) executed the instrument.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Notary Public, State of New York
My Commission Expires:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 14 day of February in the year 2003, before me, the
undersigned, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity (i.e., as Assistant Secretary), and that by
his signature on the instrument, the person upon behalf of which the individual
acted (i.e., Aeroflex Laboratories Incorporated, Aeroflex Lintek Corp., Aeroflex
Systems Corp., Aeroflex MIC Technology Corporation, Vibration Mountings And
Controls, Inc., Aeroflex UTMC Microelectronic Systems Inc., IFR Systems Ltd. and
IFR Systems, Inc.) executed the instrument.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Notary Public, State of New York
My Commission Expires:
-112-
STATE OF NEW YORK )
: ss.:
COUNTY OF SUFFOCK )
On the On the 14 day of February in the year 2003, before me, the
undersigned, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity (i.e., as a Vice President), and that by his
signature on the instrument, the person upon behalf of which the individual
acted (i.e., JPMorgan Chase Bank) executed they instrument.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Notary Public, State of New York
My Commission Expires:
-113-
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 14 day of February in the year 2003, before me, the
undersigned, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, personally known to
me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity (i.e., as a Senior Vice President), and that
by his signature on the instrument, the person upon behalf of which the
individual acted (i.e., Fleet National Bank) executed the instrument.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Notary Public, State of New York
My Commission Expires:
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