EXHIBIT 10.3.1
DETAILS CAPITAL CORP.
DETAILS, INC.
DYNAMIC CIRCUITS, INC.
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CREDIT AGREEMENT
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dated as of
July 23, 1998
and
as Amended and Restated as of August 28, 1998
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BANKERS TRUST COMPANY,
as Documentation and Co-Syndication Agent
THE CHASE MANHATTAN BANK,
as Collateral, Co-Syndication and Administrative Agent
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[LOGO] CHASE
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS ..................................................... 1
1.1 Defined Terms .................................................... 1
1.2 Other Definitional Provisions .................................... 22
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS ................................. 23
2.1 Term Loan Commitments ............................................ 23
2.2 Procedure for Term Loan Borrowing ................................ 23
2.3 Repayment of Term Loans .......................................... 23
2.4 Revolving Credit Commitments ..................................... 25
2.5 Procedure for Revolving Credit Borrowing ......................... 25
2.6 Swing Line Commitment ............................................ 26
2.7 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans ....................................................... 26
2.8 Commitment Fees, etc ............................................. 27
2.9 Termination or Reduction of Commitments .......................... 28
2.10 Optional Prepayments ............................................ 28
2.11 Mandatory Prepayments and Commitment Reductions ................. 28
2.12 Conversion and Continuation Options ............................. 30
2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches ....... 30
2.14 Interest Rates and Payment Dates ................................ 30
2.15 Computation of Interest and Fees ................................ 31
2.16 Inability to Determine Interest Rate ............................ 31
2.17 Pro Rata Treatment and Payments ................................. 32
2.18 Requirements of Law ............................................. 33
2.19 Taxes ........................................................... 34
2.20 Indemnity ....................................................... 36
2.21 Change of Lending Office ........................................ 36
2.22 Replacement of Lenders under Certain Circumstances .............. 37
SECTION 3. LETTERS OF CREDIT ............................................... 37
3.1 L/C Commitment ................................................... 37
3.2 Procedure for Issuance of Letter of Credit ....................... 37
3.3 Commissions, Fees and Other Charges .............................. 38
3.4 L/C Participations ............................................... 38
3.5 Reimbursement Obligation of the Borrowers ........................ 39
3.6 Obligations Absolute ............................................. 39
3.7 Letter of Credit Payments ........................................ 40
3.8 Applications ..................................................... 40
SECTION 4. REPRESENTATIONS AND WARRANTIES .................................. 40
4.1 Financial Condition .............................................. 40
4.2 No Change ........................................................ 41
4.3 Corporate Existence; Compliance with Law ......................... 41
4.4 Corporate Power; Authorization; Enforceable Obligations .......... 41
4.5 No Legal Bar ..................................................... 42
4.6 No Material Litigation ........................................... 42
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4.7 No Default ....................................................... 42
4.8 Ownership of Property; Liens ..................................... 42
4.9 Intellectual Property ............................................ 42
4.10 Taxes ........................................................... 43
4.11 Federal Regulations ............................................. 43
4.12 Labor Matters ................................................... 43
4.13 ERISA ........................................................... 43
4.14 Investment Company Act; Other Regulations ....................... 44
4.15 Subsidiaries .................................................... 44
4.16 Use of Proceeds ................................................. 44
4.17 Environmental Matters ........................................... 44
4.18 Accuracy of Information, etc .................................... 45
4.19 Security Documents .............................................. 45
4.20 Solvency ........................................................ 46
4.21 Senior Indebtedness ............................................. 46
4.22 Regulation H .................................................... 46
4.23 Year 2000 Matters ............................................... 46
4.24 Senior Indebtedness ............................................. 47
SECTION 5. CONDITIONS PRECEDENT ............................................ 47
5.1 Conditions to Initial Extension of Credit ........................ 47
5.2 Condition to Loans on the Second Closing Date .................... 50
5.3 Conditions to Each Extension of Credit ........................... 50
SECTION 6. AFFIRMATIVE COVENANTS ........................................... 50
6.1 Financial Statements ............................................. 51
6.2 Certificates; Other Information .................................. 51
6.3 Payment of Obligations ........................................... 53
6.4 Conduct of Business and Maintenance of Existence, etc ............ 53
6.5 Maintenance of Property; Insurance ............................... 53
6.6 Inspection of Property; Books and Records; Discussions ........... 53
6.7 Notices .......................................................... 53
6.8 Environmental Laws ............................................... 54
6.9 Interest Rate Protection ......................................... 54
6.10 Additional Collateral, etc ...................................... 54
6.11 DCI Drop Down ................................................... 56
SECTION 7. NEGATIVE COVENANTS .............................................. 57
7.1 Financial Condition Covenants .................................... 57
7.2 Limitation on Indebtedness ....................................... 58
7.3 Limitation on Liens .............................................. 59
7.4 Limitation on Fundamental Changes ................................ 60
7.5 Limitation on Sale of Assets ..................................... 61
7.6 Limitation on Dividends .......................................... 61
7.7 Limitation on Capital Expenditures ............................... 62
7.8 Limitation on Investments, Loans and Advances .................... 63
7.9 Limitation on Optional Payments and Modifications of Debt ........
Instruments, etc ................................................. 64
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7.10 Limitation on Transactions with Affiliates ...................... 65
7.11 Limitation on Sales and Leasebacks .............................. 65
7.12 Limitation on Changes in Fiscal Periods ......................... 65
7.13 Limitation on Negative Pledge Clauses ........................... 65
7.14 Limitation on Restrictions on Subsidiary Distributions .......... 66
7.15 Limitation on Lines of Business ................................. 66
7.16 Limitation on Amendments to Transaction Documents ............... 66
7.17 Limitation on Activities of the Company ......................... 66
SECTION 8. EVENTS OF DEFAULT ............................................... 66
SECTION 9. THE ADMINISTRATIVE AGENT ........................................ 70
9.1 Appointment ...................................................... 70
9.2 Delegation of Duties ............................................. 70
9.3 Exculpatory Provisions ........................................... 70
9.4 Reliance by Administrative Agent ................................. 71
9.5 Notice of Default ................................................ 71
9.6 Non-Reliance on Agents and Other Lenders ......................... 71
9.7 Indemnification .................................................. 72
9.8 Administrative Agent in Its Individual Capacity .................. 72
9.9 Successor Administrative Agent ................................... 73
9.10 Authorization to Release Liens .................................. 73
SECTION 10. GUARANTEE ...................................................... 73
10.1 Guarantee ....................................................... 73
10.2 No Subrogation, Contribution, Reimbursement or Indemnity ........ 74
10.3 Amendments, etc. with respect to the DCI Obligations ............ 74
10.4 Guarantee Absolute and Unconditional ............................ 75
10.5 Reinstatement ................................................... 75
10.6 Payments ........................................................ 75
SECTION 11. MISCELLANEOUS .................................................. 75
11.1 Amendments and Waivers .......................................... 75
11.2 Notices ......................................................... 76
11.3 No Waiver; Cumulative Remedies .................................. 77
11.4 Survival of Representations and Warranties ...................... 78
11.5 Payment of Expenses and Taxes ................................... 78
11.6 Successors and Assigns; Participations and Assignments .......... 78
11.7 Adjustments; Set-off ............................................ 81
11.8 Counterparts .................................................... 82
11.9 Severability .................................................... 82
11.10 Integration .................................................... 82
11.11 GOVERNING LAW .................................................. 82
11.12 Submission To Jurisdiction; Waivers ............................ 82
11.13 Acknowledgements ............................................... 83
11.14 WAIVERS OF JURY TRIAL .......................................... 83
11.15 Confidentiality ................................................ 83
(iii)
SCHEDULES
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Schedule 1.1A Commitments
Schedule 1.1B Mortgaged Property
Schedule 4.4 Consents, Authorizations, Filings and Notices
Schedule 4.10 Taxes
Schedule 4.15 Subsidiaries
Schedule 4.19(a) UCC Filing Jurisdictions
Schedule 4.19(b) Mortgage Filing Jurisdictions
Schedule 7.2(e) Existing Indebtedness
Schedule 7.3(e) Existing Liens
EXHIBITS
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Exhibit A Form of Guarantee and Collateral Agreement
Exhibit B Form of Compliance Certificate
Exhibit C Form of Closing Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Legal Opinion of Ropes & ▇▇▇▇
Exhibit F-1 Form of Term Note
Exhibit F-2 Form of Revolving Credit Note
Exhibit F-3 Form of Alternative Term Note
Exhibit F-4 Form of Alternative Revolving Credit Note
Exhibit F-5 Form of Swing Line Note
Exhibit G Form of Prepayment Option Notice
Exhibit H Form of Mortgage
(iv)
CREDIT AGREEMENT, dated as of July 23, 1998 (and as amended and
restated as of August 28, 1998), among DETAILS CAPITAL CORP., a California
corporation (the "Company"), DETAILS, INC., a California corporation
("Details"), DYNAMIC CIRCUITS, INC., a Delaware corporation ("DCI", and
collectively with Details, the "Borrowers", and individually, a "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), BANKERS TRUST COMPANY, as
documentation and co-syndication agent, and THE CHASE MANHATTAN BANK, as
collateral, co-syndication and administrative agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City (the Prime Rate
not being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to debtors); and
"Federal Funds Effective Rate" shall mean, for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it. Any
change in the ABR due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Accepting Lenders": as defined in Section 2.17(d).
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": The Chase Manhattan Bank, together with its
affiliates, as the arranger of the Commitments and as the collateral,
co-syndication and administrative agent for the Lenders under this Agreement and
the other Loan Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise. In
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addition, for the purpose of this Agreement, an Affiliate of ▇▇▇▇ Capital shall
include any Barn Investor or any investment fund under common control with the
Bain Investors. Notwithstanding the foregoing, none of the Lenders or any of
their respective affiliates shall be deemed to be Affiliates of the Company or
its Subsidiaries.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"AHYDO Payment": the payment of $427.16 for each $1,000 of accreted
principal amount of the New Intermediate Holdco Notes on December 31, 2003.
"Alternative Note": as defined in Section 11.6(f)(ii).
"Alternative Noteholder": as defined in Section 11.6(f)(ii).
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Eurodollar
ABR Loans Loans
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Revolving Credit Loans and
Swing Line Loans 1.25% 2.25%
Tranche A Term Loans 1.25% 2.25%
Tranche B Term Loans 1.50% 2.50%
; provided, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of Details after the Closing Date, the
Applicable Margin with respect to Revolving Credit Loans, the Swing Line Loans,
and Tranche A Term Loans will be determined pursuant to the Pricing Grid.
"Application": an application, in such form as the issuing Lender
may specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Approved Fund": with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (e) of Section 7.5) which yields gross proceeds to the
Company or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $500,000.
"Assignee": as defined in Section 11.6(c).
"Assignor": as defined in Section 11.6(c).
"Available Revolving Credit Commitment": as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Credit Commitment over (b) such Lender's Revolving Extensions of
Credit.
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"Bain Affiliates": any Bain Investor or Affiliate of Barn Capital,
provided that, for purposes of the definition of "Change of Control", the term
Bain Affiliate shall not include (x) any portfolio company of either ▇▇▇▇
Capital or any Affiliate of ▇▇▇▇ Capital or (y) any officer or director of the
Company or any of its Subsidiaries that is not also a partner, principal or
stockholder of ▇▇▇▇ Capital.
"▇▇▇▇ Capital": ▇▇▇▇ Capital, Inc., a Delaware corporation.
"Bain Investor": ▇▇▇▇ Capital Fund V, L.P., ▇▇▇▇ Capital Fund V-B,
L.P., BCIP Associates, BCIP Trust Associates, L.P and RGIP, LLC.
"Base CapEx Amount": as defined in Section 7.7.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower" or "Borrowers": as defined in the preamble.
"Borrowing Date": any Business Day specified by the relevant
Borrower as a date on which such Borrower requests the relevant Lenders to make
Loans hereunder.
"Business": as defined in Section 4.17.
"Business Day": (i) for all purposes other than as covered by cause
(ii) below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures (other than expenditures constituting an
investment described in Section 7.8(i)) by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of
such Person under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency
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thereof and backed by the full faith and credit of the United States, in each
case maturing within one year from the date of acquisition; (b) certificates of
deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of one year or less from the date of acquisition issued by any
Lender or by any commercial bank organized under the laws of the United States
of America or any state thereof having combined capital and surplus of not less
than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by
Standard & Poor's Ratings Services or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within one year from the date of acquisition;
(d) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, rated at least A-2 by Standard & Poor's
Ratings Services or P2 by ▇▇▇▇▇'▇ Investors Service, Inc.; and (e) investments
in money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (a) through (d) above.
"Change of Control": any of the following events:
(a) prior to the date of an initial registered public offering by Holdings of
its common stock, (i) ▇▇▇▇ Capital and Bain Affiliates shall cease to own
(on a fully diluted basis) at least 15% of the economic and voting
interests in the Capital Stock of Holdings or (ii) the Permitted Holders
shall cease to "control" (as such term is defined in Rule 405 promulgated
under the Securities Act of 1933, as amended) Holdings; or
(b) from and after the date of an initial registered public offering by
Holdings of its common stock, (i) any Person or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, as in effect on the Closing Date) shall own a greater percentage of
the voting and/or economic interest in the Capital Stock of Holdings than
that owned by ▇▇▇▇ Capital and/or the Barn Affiliates or (ii) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors.
"Closing Date": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date shall be no later than
August 20, 1998.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Colorado Springs Acquisition": the acquisition by Details of all of
the Capital Stock of Colorado Springs Circuits, Inc.
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
Commitment, the Tranche B Term Loan Commitment and the Revolving Credit
Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
after the first Adjustment Date occurring after the completion of two full
fiscal quarters of Details
5
after the Closing Date, the Commitment Fee Rate will be determined pursuant to
the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with Details within the meaning of
Section 4001 of ERISA or is part of a group which includes Details and which is
treated as a single employer under Section 414 of the Code.
"Company": as defined in the preamble.
"Company Indenture": the Indenture, dated as of November 18, 1997,
entered into by Holdings and subsequently assumed by the Company in connection
with the issuance of the Company Zeros, together with all instruments and other
agreements entered into by Holdings and subsequently contributed to the Company
or any of its Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
7.9.
"Company Zeros": the senior unsecured discount notes of the Company
issued pursuant to the Company Indenture.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated July 1998 prepared by Details with respect to the Facilities.
"Consolidated Current Assets": at a particular date, all amounts
(other than cash and Cash Equivalents) which would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of Details and its Subsidiaries at such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated balance
sheet of Details and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of Details and its Subsidiaries, (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Credit
Loans to the extent otherwise included therein and (c) the current portion of
the Deferred Payment Amounts.
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus (a) without duplication and to the extent reflected as a charge
in the statement of such Consolidated Net Income for such period, the sum of (i)
total income tax expense, (ii) total interest expense, amortization or writeoff
of debt discount and debt issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness (including the Loans), (iii)
depreciation and amortization expense, (iv) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (v) any
extraordinary or nonrecurring expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, losses on sales of assets outside of the ordinary
course of business), (vi) charges for the write-off of any step-up in basis in
inventory required in a transaction which is accounted for under the purchase
method of accounting, (vii) any other non-cash charges and (viii) all management
fees paid to
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▇▇▇▇ Capital and the Bain Affiliates permitted by Section 7.10, minus, (b) to
the extent included in the statement of such Consolidated Net Income for such
period, the sum of (i) interest income, (ii) any extraordinary or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, gains on
the sales of assets outside of the ordinary course of business) and (iii) any
other non-cash income (other than non-cash income resulting from Details'
accrual method of accounting in accordance with past practice); provided that,
for purposes of determining Consolidated EBITDA at a time when less than four
full fiscal quarters of Details have begun after and fully elapsed since the
Closing Date, Consolidated EBITDA for the relevant period shall be deemed to be
the sum of (x) the aggregate Consolidated EBITDA of Details for those fiscal
quarters which have begun after and fully elapsed since the Closing Date and (y)
the aggregate Consolidated EBITDA (determined on a pro forma basis, as if the
Four Transactions had occurred on the day immediately prior to the first day of
such period) of Details for the requisite number of consecutive fiscal quarters
commencing prior to the Closing Date. Notwithstanding the foregoing, there shall
be added to Consolidated EBITDA on a pro forma basis for purposes of computing
the financial covenants for any period set forth in Section 7.1 (i) the amount
of compensation and other payments paid to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (not to exceed
$2,400,000) which were deducted in computing Consolidated Net Income for such
period and (ii) the expenses deducted in computing Consolidated Net Income for
such period which were associated with the vesting and exercise by existing
management of Holdings of options on the Capital Stock of Holdings on or prior
to the Closing Date and the bonuses paid to such existing management pursuant to
Section 1.11 of the Recapitalization Agreement.
"Consolidated Fixed Charge Coverage Ratio": for any period, the
ratio of (a) the total of (i) Consolidated EBITDA for such period less (ii) the
aggregate amount actually paid by Details and its Subsidiaries in cash during
such period on account of Capital Expenditures (excluding the principal amount
of Indebtedness incurred in connection with such expenditures and any Capital
Expenditures financed with Reinvestment Deferred Amounts) less (iii) any
provision for cash income taxes made by Details and its Subsidiaries on a
consolidated basis in respect of such period to (b) Consolidated Fixed Charges
for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period and (b)
scheduled payments made during such period on account of principal of
Indebtedness of Details or any of its Subsidiaries (including the Term Loans).
"Consolidated Interest Coverage Ratio": for any period. the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Consolidated Interest Expense": for any period, a11 cash interest
expense (including that attributable to Capital Lease Obligations) of New
Intermediate Holdco and its Subsidiaries for such period with respect to all
outstanding Indebtedness of New Intermediate Holdco and its Subsidiaries
(including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Protection Agreements to the extent such net
costs are allocable to such period in accordance with GAAP) but shall exclude
the amount of the AHYDO Payment; provided that, for purposes of determining
Consolidated Interest Expense at a time when less than four full fiscal quarters
of New Intermediate Holdco have begun after and fully elapsed since the Closing
Date, Consolidated Interest
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Expense shall be determined by annualizing the Consolidated Interest Expense of
New Intermediate Holdco for those fiscal quarters which have begun after and
fully elapsed since the Closing Date.
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of Details and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded therefrom
(a) the income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of Details or is merged into or consolidated with Details or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of Details) in which Details or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by Details or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of Details to
the extent that the declaration or payment of dividends or similar distributions
by such Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of Details and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": the excess of Consolidated Current
Assets over Consolidated Current Liabilities.
"Continuing Directors": the directors of Holdings on the date of
Holdings' initial registered public offering of its common stock and each other
director if such director's nomination for the election to the Board of
Directors of Holdings is recommended by a majority of the then Continuing
Directors.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Cuplex Acquisition": the acquisition by DCI of all of the Capital
Stock of Cuplex, Inc.
"DCI": as defined in the preamble.
"DCI Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans made to DCI and the Reimbursement Obligations of DCI and interest accruing
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to DCI, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans made to DCI and all other obligations and liabilities of DCI to the
Administrative Agent or to any Lender (or, in the case of Interest Rate
Protection Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
any other Loan Document, the Letters of Credit, any
8
Interest Rate Protection Agreement entered into with any Lender or any affiliate
of any Lender or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without limitation,
all fees, charges and disbursements of counsel to the Administrative Agent or to
any Lender that are required to be paid by DCI pursuant hereto) or otherwise.
"DCI Preferred Stock": as defined in Section 5.1(b)(iv).
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Deferred Payment Amount": all amounts payable to holders of options
to purchase DCI stock under the employment agreements and option agreements
dated July 23, 1998 between Holdings, DCI and such option holders, not in excess
of $9,000,000 in the aggregate.
"Designated Equity Amounts": at any date, the amount equal to the
aggregate amount of Net Cash Proceeds received by Holdings and its Subsidiaries
from the issuance of Capital Stock which (a) have been contributed to a
Borrower, (b) have been designated in writing by the Borrower to the
Administrative Agent as "Permitted Expenditure Amounts" and (c) are utilized by
the Borrower and its Subsidiaries within 45 days after such receipt for an
Expenditure Use Amount.
"Details, Inc.": as defined in the preamble.
"Disposition": with respect to any Property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of' shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States
of America.
"Domestic Subsidiary": any Subsidiary of Details organized under the
laws of any jurisdiction within the United States of America.
"ECF Percentage": 75%; provided that, with respect to each fiscal
year of Details ending on or after December 31, 2000, the ECF Percentage shall
be reduced to 50% if the Consolidated Leverage Ratio as of the last day of such
fiscal year is not greater than 4.0 to 1.0.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal
9
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
by the Administrative Agent to be the offered rate for deposits in Dollars with
a term comparable to such Interest Period that appears on the applicable
Telerate Page at approximately 10:00 A.M., New York City time, two Business Days
prior to the beginning of such Interest Period; provided, however, that if at
any time for any reason such offered rate does not appear on the applicable
Telerate Page, "Eurodollar Base Rate" shall mean, with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which the Administrative Agent is offered Dollar deposits
at or about 10:00 AM., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Loans to be outstanding during such
Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of Details, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
deducted in arriving at such Consolidated Net Income, (iii) decreases in
Consolidated Working Capital for such fiscal year, (iv) an amount equal to the
aggregate net non-cash loss on the Disposition of Property by Details and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income, (v) the amount, if any, by which Consolidated Working
Capital was increased by changes in the current deferred income tax account and
(vi) the amount by which Consolidated Working Capital was increased as a result
of the payment in such fiscal year of items referred to in clause (b)(vii) below
over (b) the sum, without duplication, of (i) an amount equal to the
10
amount of all non-cash credits included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by Details and its Subsidiaries
in cash during such fiscal year on account of Capital Expenditures (excluding
the principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of any portion
of the Reinvestment Deferred Amount that exceeded any gain recognized as a
result of the event that gave rise to such Deferred Investment Amount), (iii)
the aggregate amount of all prepayments of Revolving Credit Loans and Swing Line
Loans during such fiscal year to the extent accompanying permanent optional
reductions of the Revolving Credit Commitments and all optional prepayments of
the Term Loans during such fiscal year, (iv) the aggregate amount of all
principal payments of Funded Debt (including, without limitation, the Term
Loans) of Details and its Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) increases in
Consolidated Working Capital for such fiscal year, (vi) an amount equal to the
aggregate net non-cash gain on the Disposition of Property by Details and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, (vii) the amount of non cash charges that decreased
Consolidated Working Capital during such fiscal year which resulted from items
that Details reasonably determines in good faith are expected to be paid in cash
in the immediately following fiscal year, (viii) any cash disbursement made
against non-current liabilities to the extent not deducted in determining
Consolidated Net Income, (ix) the amount, if any, by which Consolidated Working
Capital was decreased by changes in the current deferred income tax account, (x)
the amount of distributions permitted by Section 7.6 which were made in such
fiscal year, (xi) the amount of investments, advances, loans or extensions of
credit made pursuant to clauses (d), (e), (i) and (j) of Section 7.8, to the
extent not funded by the incurrence of Indebtedness or contributions to capital,
(xii) any payments made to the former shareholders of Holdings pursuant to
Section 1.11 of the Recapitalization Agreement and (xiii) any payments made
during such fiscal year in respect of Deferred Payment Amounts. As used in the
foregoing definition of "Excess Cash Flow", the term fiscal year shall be deemed
to include any other specified period for which Excess Cash Flow is being
measured.
"Excess Cash Flow Application Date": as defined in Section 2.11(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary the pledge
of all of whose Capital Stock as Collateral would, in the good faith judgment of
Details, result in adverse tax consequences to Details.
"Expenditure Use Amounts": at any date, the amount equal to the sum
of (a) all amounts utilized by Details and its Subsidiaries to finance Capital
Expenditures, other than Capital Expenditures which are (i) not in excess of the
Base CapEx Amount for the relevant fiscal year and any permitted rollovers to
such fiscal year of unused amounts from the prior fiscal year or (ii) financed
with Deferred Reinvestment Amounts, (b) all amounts utilized by Details and its
Subsidiaries to finance investments permitted pursuant to Section 7.8(i), except
to the extent that the consideration (determined in accordance with such Section
7.8(i)) for all such investments made since the Closing Date does not exceed
$30,000,000 in the aggregate, (c) all amounts utilized by Details and its
Subsidiaries to finance investments permitted pursuant to Section 7.8(j), except
to the extent that the aggregate amount of all such investments (valued at cost,
but net of returns of capital from such investments) made since the Closing Date
does not exceed $10,000,000 and (d) the amount of any dividends paid by Details
to finance the AHYDO Payment.
11
"Facility": each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility"), (b)
the Tranche B Term Loan Commitments and the Tranche B Term Loans made thereunder
(the "Tranche B Term Loan Facility") and (c) the Revolving Credit Commitments
and the extensions of credit made thereunder (the "Revolving Credit Facility").
"Foreign Subsidiary": any Subsidiary of Details that is not a
Domestic Subsidiary.
"Four Transactions": the collective reference to the Transaction,
the merger of Details Inc and DI Acquisition Corp. consummated on or about
October 28, 1997 and the other transactions in connection therewith, the
Colorado Springs Acquisition and the Cuplex Acquisition.
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures within
one year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including, without
limitation, all current maturities and current sinking fund payments in respect
of such Indebtedness whether or not required to be paid within one year from the
date of its creation and, in the case of the Borrowers, Indebtedness in respect
of the Loans.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board and the rules and regulations of the
Securities and Exchange Commission, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances of Details as of the date
of determination, except that for purposes of Section 7.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 4.1(b). In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then Details and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
Details, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial,
12
regulatory or administrative functions of or pertaining to government
(including, without limitation, the National Association of Insurance
Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by New Intermediate Holdco, the Company,
the Borrowers and each Subsidiary Guarantor, substantially in the form of
Exhibit A, as the same may be amended, supplemented or otherwise modified from
time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (ill) to purchase Property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided however that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by Details in good faith.
"Guarantors": the collective reference to the Subsidiary Guarantors,
the Company and Details, in its capacity as a guarantor of the obligations of
Details and DCI hereunder.
"Holdings": Details Holdings Corp., a California corporation.
"Incur": as defined in Section 7.2.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business which are
current liabilities and other than Deferred Payment Amounts), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in
13
the event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party under bankers' acceptance,
letter of credit or similar facilities, (g) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire for
value any Capital Stock (other than common stock) of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above; (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on Property (including, without limitation, accounts and contract
rights) owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation; and (j) for the purposes of Section
8(e) only, the net exposure of such Person in respect of Interest Rate
Protection Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to ▇▇▇ at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan (other than any Revolving Credit Loan that is an ABR Loan
and any Swing Line Loan), the date of any repayment or prepayment made in
respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one, two, three or
six months thereafter, as selected by the relevant Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that, all of the foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
14
(ii) any Interest Period that would otherwise extend beyond
the Scheduled Revolving Credit Termination Date or beyond the date final
payment is due on the Tranche A Term Loans or the Tranche B Term Loans, as
the case may be, shall end on the Scheduled Revolving Credit Termination
Date or such due date, as applicable;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrowers shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
"Interest Rate Protection Agreement": any interest rate protection
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement, to or under which Details or any
of its Subsidiaries is a party or a beneficiary on the date hereof or becomes a
party or a beneficiary after the date hereof.
"Issuing Lender": The Chase Manhattan Bank or any of its Affiliates,
in its capacity as issuer of any Letter of Credit
"L/C Commitment": $5,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Credit Lenders other than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents and the
Notes.
"Loan Parties": the Company, the Borrowers and each other Subsidiary
of Details which is a party to a Loan Document.
15
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments.
"Majority Revolving Credit Facility Lenders": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"Mandatory Prepayment Date": as defined in Section 2.17(d).
"Material Adverse Effect": a material adverse effect on (a) the
Transaction, (b) the business, operations, property or condition (financial or
otherwise) of Details and its Subsidiaries taken as a whole or (c) the validity
or enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount payable by Details and/or
its Subsidiaries in excess of $1,500,000 for remedial costs, compliance costs,
compensatory damages, punitive damages, fines, penalties or any combination
thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Material Subsidiary": any Subsidiary of the Company which has
assets (valued at their fair market value) or annual revenues which are in
excess of $2,500,000 (and which shall in any event include Details and DCI).
"Mortgaged Properties": the real properties listed on Schedule 1.1B,
as to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit H (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded), as the same may be amended,
supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of reasonable attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of
16
Indebtedness secured by a Lien expressly permitted hereunder on any asset which
is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other customary and reasonable fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of reasonable
attorneys' fees, investment banking fees, accountants' fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.
"New Intermediate Holdco": Details Intermediate Holding Corp., a
California corporation.
"New Intermediate Holdco Note Purchase Agreement": the Note Purchase
Agreement entered into by New Intermediate Holdco in connection with the
issuance of the New Intermediate Holdco Notes, together with all instruments and
other agreements entered into by New Intermediate Holdco in connection therewith
and any indenture entered into pursuant thereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
7.9.
"New Intermediate Holdco Notes": the unsecured discount notes of New
Intermediate Holdco issued pursuant to the New Intermediate Holdco Note Purchase
Agreement
"Non-Excluded Taxes": as defined in Section 2.19(a).
"Non-U.S. Lender": as defined in Section 2.19(b).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to either of the Borrowers, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans
and all other obligations and liabilities of the Borrowers to the Administrative
Agent or to any Lender (or, in the case of Interest Rate Protection Agreements,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Interest Rate Protection Agreement entered
into with any Lender or any affiliate of any Lender or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrowers pursuant hereto) or otherwise.
"Participant": as defined in Section 11.6(b).
17
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Expenditure Amounts": at any date, the amount equal to
(a) the sum of (i) all Designated Equity Amounts as of such date and (ii) any
portion of the Excess Cash Flow of the Company for fiscal years completed since
the Closing Date which was not required to be applied pursuant to the provisions
of Section 2.11(c) minus (b) the aggregate amount of Expenditure Use Amounts as
of such date.
"Permitted Holders": any of (a) ▇▇▇▇ Capital and the Bain
Affiliates, (b) each other holder of common stock of Holdings on the Closing
Date and (c) senior management employees of the Borrowers and Holdings.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which Details or a Commonly Controlled Entity
is (or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Preferred Stock": any Capital Stock entitled by its terms to a
preference (a) as to dividends or (b) upon a distribution of assets.
"Prepayment Option Notice": as defined in Section 2.17(b).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheets": as defined in Section 4.1(a).
"Projections": as defined in Section 6.2(c).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Real Properties": as defined in Section 4.17.
"Recapitalization Agreement": the Amended and Restated
Recapitalization Agreement, dated as of October 4, 1997, by and among DI
Acquisition Corp., Holdings and certain shareholders of Holdings, as amended,
supplemented or otherwise modified in accordance with the terms hereof and
thereof.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Company or any of its Subsidiaries.
"Refunded Swing Line Loans": as defined in Section 2.7.
"Refunding Date": as defined in Section 2.7.
18
"Register": as defined in Section 11.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": the obligation of the relevant Borrower
to reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Company or any of its
Subsidiaries in connection therewith which are not applied to prepay the Term
Loans or reduce the Revolving Credit Commitments pursuant to Section 2.11(b) as
a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which Details has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
Details (directly or indirectly through a Subsidiary) intends and expects to use
all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery
Event to acquire assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended or then committed to be expended prior to the relevant Reinvestment
Prepayment Date to acquire assets useful in Details' business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months (or, in the case of any
reinvestment to be made by Details or any of its Subsidiaries from the proceeds
of any property or casualty insurance claim, twelve months) after such
Reinvestment Event and (b) the date on which Details shall have determined not
to, or shall have otherwise ceased to, acquire assets useful in Details'
business with all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16. .18, .19 or .20 of PBGC Reg. ss. 2615.
"Required Lenders": the holders of more than 50% of (a) until the
Closing Date, the Commitments and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of the Term Loans and (ii) the Total Revolving Credit
Commitments or, if the Revolving Credit Commitments have been terminated, the
Total Revolving Extensions of Credit.
"Required Prepayment Lenders": the Majority Facility Lenders in
respect of each Facility.
19
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Responsible Officer": the chief executive officer, president or
chief financial officer of Details, but in any event, with respect to financial
matters, the chief financial officer of Details.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans and participate in Swing
Line Loans and Letters of Credit, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule 1.1A, as the same may be
changed from time to time pursuant to the terms hereof.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to the Scheduled Revolving Credit Termination Date or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"Revolving Credit Lender": each Lender which has a Revolving Credit
Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Percentage": as to any Revolving Credit Lender at
any time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after the
Revolving Credit Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Revolving Credit Loans
then outstanding constitutes of the aggregate principal amount of the Revolving
Credit Loans then outstanding).
"Revolving Extensions of Credit": as to any Revolving Credit Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender's Revolving Credit Percentage of the aggregate principal amount of Swing
Line Loans then outstanding and (c) such Lender's Revolving Credit Percentage of
the L/C Obligations then outstanding.
"Scheduled Revolving Credit Termination Date": July 22, 2004.
"Second Closing Date": the Business Day immediately following the
Closing Date.
"Securities Act": the Securities Act of 1933, as amended from time
to time, and the rules and regulations.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
20
"Senior Subordinated Note Indenture": the Indenture, dated as of
November 18, 1997, entered into by Details and certain of its Subsidiaries in
connection with the issuance of the Senior Subordinated Notes, together with all
instruments and other agreements entered into by Details or such Subsidiaries in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of Details
issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in
any of the Senior Subordinated Note Indenture, the Company Indenture or the New
Intermediate Holdco Note Purchase Agreement.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of Details and unless otherwise specified, DCI
shall be treated as a Subsidiary of Details.
"Subsidiary Guarantor": each Subsidiary of Details other than any
Excluded Foreign Subsidiary.
"Swing Line Commitment": the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000.
21
"Swing Line Lender": The Chase Manhattan Bank, in its capacity as
the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
"Swing Line Participation Amount": as defined in Section 2.7.
"Tax Benefit": as defined in Section 2.19(c).
"Telerate Page" means the display designated as Page 3750 on the Dow
▇▇▇▇▇ Markets System (or such other page as may replace such page on such
service for the purpose of displaying the rates at which Dollar deposits are
offered by leading banks in the London interbank deposit market).
"Term Loan Lenders": the collective reference to the Tranche A Term
Loan Lenders and the Tranche B Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans
and the Tranche B Term Loans.
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit Lenders at
such time.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the obligation
of such Lender, if any, to make Tranche A Term Loans to the Borrowers hereunder
in an aggregate principal amount not to exceed the amount set forth under the
heading "Tranche A Term Loan Commitment" opposite such Lender's name on Schedule
1.1A.
"Tranche A Term Loan Lender": each Lender which has a Tranche A Term
Loan Commitment or which has made Tranche A Term Loans.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan Lender
at any time, the percentage which such Lender's Tranche A Term Loan Commitment
then constitutes of the aggregate Tranche A Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal amount
of such Lender's Tranche A Term Loans then outstanding constitutes of the
aggregate principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Repayment Amount": as defined in Section 2.17(d).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to Tranche B Term Loan Lender,
the obligation of such Lender, if any, to make Tranche B Term Loans to the
Borrowers hereunder in an aggregate principal amount not to exceed the amount
set forth under the heading "Tranche B Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A.
22
"Tranche B Term Loan Lender": each Lender which has a Tranche B Term
Loan Commitment or which has made Tranche B Term Loans.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Tranche B Term Loan Commitment then constitutes
of the aggregate Tranche B Term Loan Commitments (or, at any time after the
Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"Transaction": as defined in Section 5.1(b).
"Transaction Agreement": the Stock Contribution and Merger
Agreement, dated as of July 23, 1998, by and among DCI, Holdings and the
shareholders of DCI, as amended, supplemented or otherwise modified in
accordance with the terms hereof and thereof.
"Transaction Documents": the collective reference to the Transaction
Agreement and all other agreements, documents and instruments executed or filed
by or on behalf of DCI or Holdings or any of its Subsidiaries or any of their
Affiliates with any Governmental Authority in connection with the Transaction.
"Transferee": as defined in Section 11.15.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"U.S. Taxes": as defined in Section 11.6(f)(ii).
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that
is a Wholly Owned Subsidiary of Details.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Company and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
23
(c) The words "hereof', "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
hereof, (a) each Tranche A Term Loan Lender severally agrees to make term loans
to the Borrowers on the Closing Date and to DCI on the Second Closing Date (the
"Tranche A Term Loans") in an aggregate amount not to exceed the amount of the
Tranche A Term Loan Commitment of such Lender and (b) each Tranche B Term Loan
Lender severally agrees to make term loans (the "Tranche B Term Loans") to the
Borrowers on the Closing Date and on the Second Closing Date in an aggregate
amount not to exceed the amount of the Tranche B Term Loan Commitment of such
Lender; provided that the aggregate amount of Term Loans which may be borrowed
by DCI on the Closing Date shall not exceed $129,000,000. The Term Loans may
from time to time be Eurodollar Loans or ABR Loans, as determined by the
relevant Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. The Borrowers shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 2:00 P.M., New York City time, one Business Day
prior to the requested Borrowing Date) requesting that the Tranche A Term Loan
Lenders and the Tranche B Term Loan Lenders make such Term Loans on the
requested Borrowing Date (which must be a Business Day) and specifying the
amount to be borrowed. All Tranche A Term Loans and Tranche B Term Loans
initially shall be made as ABR Loans and shall be in an amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof. Any Term Loans
which are made on the Closing Date may not be converted into or continued as a
Eurodollar Loan having an Interest Period in excess of one month prior to the
earlier of (a) the date which is 60 days after the Closing Date and (b) the date
upon which the Administrative Agent determines (in good faith) that the
syndication of the Commitments is complete. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Term Loan Lender thereof. Not
later than 12:00 Noon, New York City time, on the requested Borrowing Date each
Term Loan Lender shall make available to the Administrative Agent at its office
specified in Section 11.2 an amount in immediately available funds equal to the
Term Loan or Term Loans to be made by such Lender. The Administrative Agent
shall credit the account of the relevant Borrower on the books of such office of
the Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders in immediately available funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loans of each
Tranche A Term Loan Lender shall mature in quarterly installments (other than
with respect to the last installment, which shall be due on July 22, 2004),
commencing on June 30, 1999, in an amount equal to such Lender's Tranche A Term
Loan Percentage of the amount set forth opposite the date on which such
installment is due:
24
Installment Percentage
----------- ----------
June 30, 1999 $787,500
September 30, 1999 $787,500
December 31, 1999 $787,500
March 31, 2000 $787,500
June 30, 2000 $1,312,500
September 30, 2000 $1,312,500
December 31, 2000 $1,312,500
March 31, 2001 $1,312,500
June 30, 2001 $5,775,000
September 30, 2001 $5,775,000
December 31, 2001 $5,775,000
March 31, 2002 $5,775,000
June 30, 2002 $5,775,000
September 30, 2002 $5,775,000
December 31, 2002 $7,350,000
March 31, 2003 $7,350,000
June 30, 2003 $7,875,000
September 30, 2003 $7,875,000
December 31, 2003 $7,875,000
March 31, 2004 $7,875,000
June 30, 2004 $7,875,000
July 22, 2004 $7,875,000
Any Tranche A Term Loans outstanding on July 22, 2004 shall be due and payable
on such date.
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in
quarterly installments (other than with respect to the last installment, which
shall be due on April 22, 2005), commencing on June 30, 1999, each of which
shall be in an amount equal to such Lender's Tranche B Term Loan Percentage of
the amount set forth opposite the date on which such installment is due:
Installment Percentage
----------- ----------
June 30, 1999 $300,000
September 30, 1999 $300,000
December 31, 1999 $300,000
March 31, 2000 $300,000
June 30, 2000 $300,000
September 30, 2000 $300,000
December 31, 2000 $300,000
March 31, 2001 $300,000
June 30, 2001 $300,000
September 30, 2001 $300,000
December 31, 2001 $300,000
March 31, 2002 $300,000
June 30, 2002 $300,000
September 30, 2002 $300,000
December 31, 2002 $300,000
March 31, 2003 $300,000
June 30, 2003 $300,000
25
September 30, 2003 $300,000
December 31, 2003 $300,000
March 31, 2004 $300,000
June 30, 2004 $300,000
September 30, 2004 $300,000
December 31, 2004 $47,700,000
March 31, 2005 $47,700,000
April 22, 2005 $48,000,000
Any Tranche B Term Loans outstanding on April 22, 2005 shall be due and payable
on such date.
2.4 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrowers from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the aggregate principal amount of the Swing
Line Loans then outstanding and (ii) the aggregate amount of the L/C Obligations
then outstanding, does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrowers may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrowers and notified to
the Administrative Agent in accordance with Sections 2.5 and 2.12, provided that
no Revolving Credit Loan shall be made as a Eurodollar Loan after the day that
is one month prior to the Scheduled Revolving Credit Termination Date.
(b) The Borrowers shall repay all outstanding Revolving Credit Loans
on the Scheduled Revolving Credit Termination Date (or such earlier date as all
amounts owing hereunder shall become due and payable).
2.5 Procedure for Revolving Credit Borrowing. The Borrowers may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrowers shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to (a) 3:00 P.M., New York City time, three
Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) 11:00 A.M., New York City time, on the requested Borrowing Date,
in the case of ABR Loans), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Period therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided that
the Swing Line Lender may, on behalf of the Borrowers, request borrowings of ABR
Loans under the Revolving Credit Commitments in amounts other than those
specified above to the extent necessary to repay Refunded Swing Line Loans. Upon
receipt of any such notice from either Borrower, the Administrative Agent shall
promptly notify each Revolving Credit Lender thereof. Each Revolving Credit
Lender will make the amount of its pro rata
26
share of each borrowing available to the Administrative Agent for the account of
the relevant Borrower at the office of the Administrative Agent specified in
Section 11.2 prior to 12:00 Noon, New York City time, on the Borrowing Date
requested by such Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to such Borrower by the
Administrative Agent crediting the account of such Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Revolving Credit Lenders and in like funds as received by the
Administrative Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make a portion of the credit otherwise
available to the Borrowers under the Revolving Credit Commitments from time to
time during the Revolving Credit Commitment Period by making swing line loans
("Swing Line Loans") to the Borrowers; provided that (i) the aggregate principal
amount of Swing Line Loans outstanding at any time shall not exceed the Swing
Line Commitment then in effect (notwithstanding that the Swing Line Loans
outstanding at any time, when aggregated with the Swing Line Lender's other
outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrowers shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrowers may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be made as ABR Loans only and shall
not be entitled to be converted into Eurodollar Loans.
(b) The Borrowers shall repay all outstanding Swing Line Loans on
the Scheduled Revolving Credit Termination Date or such earlier date on which
the Revolving Credit Commitments shall terminate as provided herein.
2.7 Procedure for Swing Line Borrowing: Refunding of Swing Line
Loans. (a) Whenever either Borrower desires that the Swing Line Lender make
Swing Line Loans it shall give the Swing Line Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swing Line Lender not later than 2:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Credit Commitment Period). Each borrowing under the Swing Line Commitment shall
be in an amount equal to $500,000 or a whole multiple of $100,000 in excess
thereof. Not later than 4:00 P.M., New York City time, on the Borrowing Date
specified in a notice in respect of Swing Line Loans, the Swing Line Lender
shall make available to the Administrative Agent at its office specified in
Section 11.2 an amount in immediately available funds equal to the amount of the
Swing Line Loan to be made by the Swing Line Lender. The Administrative Agent
shall make the proceeds of such Swing Line Loan available to the relevant
Borrower on such Borrowing Date by depositing such proceeds in the account of
such Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrowers (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on notice given
by the Swing Line Lender no later than 2:00 P.M., New York City time, on the
requested Borrowing Date, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make,
27
a Revolving Credit Loan, in an amount equal to such Revolving Credit Lender's
Revolving Credit Percentage of the aggregate amount of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date of such notice, to repay
the Swing Line Lender. Each Revolving Credit Lender shall make the amount of
such Revolving Credit Loan available to the Administrative Agent at its office
set forth in Section 11.2 in immediately available funds, not later than 4:00
P.M., New York City time, on the date of such notice. The proceeds of such
Revolving Credit Loans shall be immediately applied by the Swing Line Lender to
repay the Refunded Swing Line Loans. The Borrowers irrevocably authorize the
Swing Line Lender to charge the Borrowers' accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swing Line Loans to the extent amounts received
from the Revolving Credit Lenders are not sufficient to repay in full such
Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to either
Borrower or if for any other reason, as determined by the Swing Line Lender in
its sole discretion, Revolving Credit Loans may not be made as contemplated by
Section 2.7(b), each Revolving Credit Lender shall, on the date such Revolving
Credit Loan was to have been made pursuant to the notice referred to in Section
2.7(b) (the "Refunding Date"), purchase for cash an undivided participating
interest in an amount equal to (i) its Revolving Credit Percentage times (ii)
the aggregate principal amount of Swing Line Loans then outstanding which were
to have been repaid with such Revolving Credit Loans (the "Swing Line
Participation Amount").
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or either Borrower may have against the Swing Line Lender, either
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise) of either Borrower; (iv) any breach of this
Agreement or any other Loan Document by either Borrower, any other Loan Party or
any other Revolving Credit Lender; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
2.8 Commitment Fees, etc. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit
28
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the Available Revolving Credit Commitment (without giving effect to
any Swing Line Loans which are then outstanding) of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Scheduled Revolving
Credit Termination Date or such earlier date on which the Revolving Credit
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof.
(b) Details agrees to pay to the Administrative Agent the fees in
the amounts and on the dates previously agreed to in writing by Details and the
Administrative Agent.
2.9 Termination or Reduction of Commitments. The Borrowers shall
have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect.
2.10 Optional Prepayments. The Borrowers may at any tune and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided that if a Eurodollar Loan is prepaid on any day
earlier than the last day of the Interest Period applicable thereto, the
Borrowers shall also pay any amounts owing pursuant to Section 2.20. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Credit Loans which are ABR Loans and any
Swing Line Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Credit Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof. Partial Prepayments
of Swing Line Loans shall be in an aggregate principal amount of $100,000 or a
whole multiple thereof. Amounts to be applied in connection with optional
prepayments of the Term Loans shall be applied pro rata among the Tranche A Term
Loans and the Tranche B Term Loans based upon the outstanding principal amount
thereof.
2.11 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Prepayment Lenders shall otherwise agree, if any Capital Stock or
Indebtedness shall be issued or Incurred by Holdings or any of its Subsidiaries,
an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the
date of such issuance or Incurrence toward the prepayment of the Term Loans and
the reduction of the Revolving Credit Commitments as set forth in Section
2.11(d); provided that no such prepayment and reduction shall be required
pursuant to this Section 2.11(a) with respect to (i) Designated Equity Amounts,
(ii) any such Net Cash Proceeds from the issuance of Capital Stock which is
applied within five Business Days after the receipt thereof by the Company and
its Subsidiaries to repay Indebtedness Incurred in reliance upon the provisions
of Section 7.2(i)
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or (j) hereof, (iii) other than to the extent set forth therein, Indebtedness
Incurred in accordance with Section 7.2, (iv) any Net Cash Proceeds from the
issuance of Capital Stock by Holdings or the Incurrence of Indebtedness by
Holdings or New Intermediate Holdco which are used to finance the AHYDO Payment
and (v) up to $20,000,000 in aggregate Net Cash Proceeds from the issuance of
Capital Stock by Holdings after the Closing Date.
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date Holdings or any of its Subsidiaries shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall
be delivered in respect thereof, such Net Cash Proceeds shall be applied on such
date toward the prepayment of the Term Loans and the reduction of the Revolving
Credit Commitments as set forth in Section 2.11(d); ~ that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales that may be
excluded from the foregoing requirement pursuant to a Reinvestment Notice shall
not exceed $4,000,000 in any fiscal year of Details and (ii) on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.11(d).
(c) Unless the Required Prepayment Lenders shall otherwise agree,
if, for the period beginning on the Closing Date and ending on December 31, 1999
and for each fiscal year of Details thereafter, there shall be Excess Cash Flow,
the Borrowers shall, on the relevant Excess Cash Flow Application Date, apply
the ECF Percentage of such Excess Cash Flow toward the prepayment of the Term
Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.11(d). Each such prepayment and commitment reduction shall be made on
a date (an "Excess Cash Flow Application Date") no later than five days after
the earlier of (i) the date on which the financial statements of Details
referred to in Section 6.1(a), for the fiscal year with respect to which such
prepayment is made, are required to be delivered to the Lenders and (ii) the
date such financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 2.11 shall be applied, first to
the prepayment of the Term Loans (pro rata among the Tranche A Term Loans and
the Tranche B Term Loans, based upon the outstanding principal amount thereof)
and, ~ to reduce permanently the Revolving Credit Commitments. Any such
reduction of the Revolving Credit Commitments shall be accompanied by prepayment
of the Revolving Credit Loans and/or Swing Line Loans to the extent, if any,
that the Total Revolving Extensions of Credit exceed the amount of the Total
Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans and Swing Line Loans then outstanding
is less than the amount of such excess (because L/C Obligations constitute a
portion thereof), the Borrowers shall, to the extent of the balance of such
excess, replace outstanding Letters of Credit and/or deposit an amount in cash
in a cash collateral account established with the Administrative Agent for the
benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent. Subject to the immediately preceding sentence, the
application of any prepayment pursuant to Section 2.11 shall be made first to
ABR Loans and second to Eurodollar Loans. Each prepayment of the Loans under
Section 2.11 (except in the case of Revolving Credit Loans that are ABR Loans
and Swing Line Loans) shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
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(e) All unpaid amounts owing hereunder shall be due and payable on
April 22, 2005.
2.12 Conversion and Continuation Options. (a) The Borrowers may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrowers
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan (i) when any Event of Default has occurred and
is continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrowers giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, and provided, further, that if the Borrowers
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by
31
acceleration or otherwise), all outstanding Loans and Reimbursement Obligations
(whether or not overdue) shall bear interest at a rate per annum which is equal
to (x) in the case of the Loans, the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this Section 2.14 plus 2% or (y)
in the case of Reimbursement Obligations, the rate applicable to ABR Loans under
the Revolving Credit Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate applicable to ABR Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the ABR plus 3.25%), in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
2.14 shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR Loans
the rate of interest on which is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrowers and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrowers and the relevant Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrowers, deliver to the
Borrowers a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.14(a).
2.16 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
32
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
that were to have been continued as such on such first day shall be converted on
such day to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the relevant Facility
shall be made or continued as such, nor shall the Borrowers have the right to
convert Loans under the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrowers from the Lenders hereunder, each payment by the Borrowers on account
of any commitment fee and any reduction of the Commitments of the Lenders shall
be made pro rata according to the respective Tranche A Term Loan Percentages,
Tranche B Term Loan Percentages or Revolving Credit Percentages, as the case may
be, of the relevant Lenders.
(b) Each payment (including each prepayment) by a Borrower on
account of principal of and interest on the Tranche A Term Loans or the Tranche
B Term Loans shall be made pro rata according to the respective outstanding
principal amounts of such Term Loans of such Borrower then held by the relevant
Term Loan Lenders (except as otherwise provided in paragraph (d) below). The
amount of each principal prepayment of the Term Loans shall be applied to reduce
the then remaining installments of the Tranche A Term Loans and Tranche B Term
Loans, as the case may be, pro rata based upon the then remaining principal
amount thereof. Amounts prepaid on account of the Term Loans may not be
reborrowed.
(c) Each payment (including each prepayment) by the Borrowers on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Section 2.11(d) or
2.17, with respect to the amount of any mandatory prepayment described in
Section 2.11 that is allocated to Tranche B Term Loans (such amounts, the
"Tranche B Prepayment Amount"), at any time when Tranche A Term Loans remain
outstanding, the Borrowers will, in lieu of applying such amount to the
prepayment of Tranche B Term Loans as provided in Section 2.11, on the date
specified in Section 2.11 for such prepayment, give the Administrative Agent
telephonic notice (promptly confirmed in writing) requesting that the
Administrative Agent prepare and provide to each Tranche B Term Loan Lender a
notice (each, a "Prepayment Option Notice") as described below. As promptly as
practicable after receiving such notice from the Borrowers, the Administrative
Agent will send to each Tranche B Term Loan Lender a Prepayment Option Notice,
which shall be in the form of Exhibit G, and shall include an offer by the
Borrowers to prepay on the date (each a "Mandatory Prepayment Date") that is 10
Business Days after the date of the Prepayment Option Notice, the relevant
Tranche B Term Loans of such Lender by an amount equal to the portion of the
Tranche B Prepayment Amount indicated in such Lender's Prepayment Option Notice
as being applicable to such Lender's Tranche B Term Loans. On the Mandatory
Prepayment Date, (i) the Borrowers shall pay to the Administrative Agent the
aggregate amount necessary to prepay that portion of the outstanding relevant
Term Loans in respect of which Tranche B
33
Term Loan Lenders have accepted prepayment as described above (such Lenders, the
"Accepting Lenders"), and such amount shall be applied to reduce the Tranche B
Repayment Amounts with respect to each Accepting Lender and (ii) the Borrowers
shall pay to the Administrative Agent an amount equal to the remaining portion
of the Tranche B Prepayment Amount not accepted by the Accepting Lenders, and
such amount shall be applied to the prepayment of the Tranche A Term Loans.
(e) All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 11.2, in Dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrowers a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 2.17(f) shall be conclusive in
the absence of manifest error. If such Lender's share of such borrowing is not
made available to the Administrative Agent by such Lender within three Business
Days of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrowers.
2.18 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Taxes covered by
Section 2.19 and changes in the rate of tax on the overall net income of
such Lender);
34
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of funds
by, any office of such Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrowers shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable; provided that the Borrowers
shall not be required to compensate a Lender pursuant to this paragraph for any
amounts incurred more than six months prior to the date that such Lender
notifies the Borrowers of such Lender's intention to claim compensation
therefor. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.18, it shall promptly notify the Borrowers (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrowers (with a copy to the Administrative
Agent) of a written request therefor, the Borrowers shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction; provided that the Borrowers shall not be required to compensate a
Lender pursuant to this paragraph for any amounts incurred more than six months
prior to the date that such Lender notifies the Borrowers of such Lender's
intention to claim compensation therefor.
(c) A certificate as to any additional amounts payable pursuant to
this Section 2.18 submitted by any Lender to the Borrowers (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrowers pursuant to this Section 2.18 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Taxes. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the
35
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrowers shall not be required to (x) increase any such amounts payable to any
Lender that is not organized under the laws of the United States of America or a
state thereof to the extent such Lender fails to comply with Section 2.19(b) or
(y) compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrowers of
such Lender's intention to claim compensation therefor. Whenever any
Non-Excluded Taxes are payable by the Borrowers, as promptly as possible
thereafter the Borrowers shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrowers showing payment
thereof. If the Borrowers fail to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrowers shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section 2.19
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrowers and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, an
annual certificate representing that such Non-U.S. Lender is not a "bank" for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrowers and is not a
controlled foreign corporation related to the Borrowers (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrowers under this Agreement
and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such Participant purchases the
related participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrowers at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrowers (or any other form
of certification adopted by the U.S. taxing authorities for
36
such purpose). Notwithstanding any other provision of this Section 2.19(b), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.19(b) that such Non-U.S. Lender is not legally able to deliver.
(c) In the event the Borrowers make any additional payment to any
Lender or the Administrative Agent pursuant to Section 2.19(a) and such Lender
or the Administrative Agent, by reason of payment by the Borrowers of any Taxes,
obtains a credit against, or return or reduction of, any tax payable by it in,
or any other currently realized tax benefit from, a taxing jurisdiction which it
would not have enjoyed but for such payment ("Tax Benefit"), such Lender or the
Administrative Agent shall, to the extent that it can do so without prejudice to
the retention of such Tax Benefit, thereupon pay to the Borrowers the amount
which, after the deduction of any additional tax savings realized as a result of
such payment, shall equal the amount of such Tax Benefit; provided, however,
that the Borrowers shall not be entitled to require such Lender or the
Administrative Agent to supply it with details of its tax position or to inspect
any records, including tax returns, of any Lender or the Administrative Agent.
The Borrowers agree to reimburse the Administrative Agent and each Lender upon
demand for out-of-pocket costs and expenses (other than expenses incurred in
connection with the preparation of any tax returns) incurred in connection with
any determination required pursuant to this Section 2.19(c).
2.20 Indemnity. The Borrowers agree to indemnify each Lender and to
hold each Lender harmless from any loss or expense (other than any loss of
Applicable Margin) which such Lender reasonably may sustain or incur as a
consequence of (a) default by the Borrowers in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrowers have given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrowers in making any prepayment after the Borrowers have given
a notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto. Such indemnification shall be based
upon the amount equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section 2.20 submitted to the Borrowers by any
Lender shall be presumptively correct in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.21 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.18 or 2.19(a)
with respect to such Lender, it will, if requested by the Borrowers, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and
37
provided, further, that nothing in this Section 2.21 shall affect or postpone
any of the obligations of any Borrower or the rights of any Lender pursuant to
Section 2.18 or 2.19(a).
2.22 Replacement of Lenders under Certain Circumstances. The
Borrowers shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.18 or 2.19 or (b) defaults
in its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall not have eliminated the continued need for payment of amounts
owing pursuant to Section 2.18 or 2.19, (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrowers shall
be liable to such replaced Lender under Section 2.20 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 11.6 (provided that the
Borrowers shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrowers shall pay all additional amounts (if any) required pursuant to
Section 2.18 or 2.19, as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights which the Borrowers, the
Administrative Agent or any other Lender shall have against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("Letters
of Credit") for the account of either Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Credit Commitments would be less
than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii)
expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date which is five Business Days prior to the Scheduled
Revolving Credit Termination Date, provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrowers may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers
38
and information as the Issuing Lender may request. Upon receipt of any
Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by the Issuing Lender and the Borrowers. The Issuing
Lender shall furnish a copy of such Letter of Credit to the relevant Borrower
promptly following the issuance thereof. The Issuing Lender shall promptly
furnish to the Administrative Agent, which shall in turn promptly furnish to the
Lenders, notice of the issuance of each Letter of Credit (including the amount
thereof).
3.3 Commissions, Fees and Other Charges. (a) The Borrowers will pay
a commission on all outstanding Letters of Credit at a per annum rate equal to
the Applicable Margin then in effect with respect to Eurodollar Loans under the
Revolving Credit Facility, shared ratably among the Revolving Credit Lenders and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, each Borrower shall pay to the Issuing Lender for its own
account a fronting fee of 1/4 of 1% per annum, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date with respect to each Letter of
Credit issued for the account of such Borrower.
(b) In addition to the foregoing fees and commissions, the Borrowers
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the relevant Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender's address for notices specified herein an amount equal to
such L/C Participant's Revolving Credit Percentage of the amount of such draft,
or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount
39
required to be paid by any L/C Participant pursuant to Section 3.4(a) is not
made available to the Issuing Lender by such L/C Participant within three
Business Days after the date such payment is due, the Issuing Lender shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to ABR Loans under the Revolving Credit Facility. A certificate of the Issuing
Lender submitted to any L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrowers or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
provided however that in the event that any such payment received by the Issuing
Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrowers. Each Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies such Borrower of the date and amount of a draft presented under any
Letter of Credit issued for the account of such Borrower and paid by the Issuing
Lender for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States of
America and in immediately available funds. Interest shall be payable on any and
all amounts remaining unpaid by the Borrowers under this Section from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in Section 2.14(c). Each
drawing under any Letter of Credit shall (unless an event of the type described
in clause (i) or (ii) of Section 8(f) shall have occurred and be continuing with
respect to either of the Borrowers, in which case the procedures specified in
Section 3.4 for funding by L/C Participants shall apply) constitute a request by
the relevant Borrower to the Administrative Agent for a borrowing pursuant to
Section 2.5 of ABR Loans (or, at the option of each of the Administrative Agent
and the Swing Line Lender in its respective sole discretion, a borrowing
pursuant to Section 2.7 of Swing Line Loans) in the amount of such drawing. The
Borrowing Date with respect to such borrowing shall be the date of such drawing.
3.6 Obligations Absolute. The Borrowers' obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrowers may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrowers also agree with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrowers'
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrowers and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrowers against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or
40
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of the
Issuing Lender. The Borrowers agree that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrowers and
shall not result in any liability of the Issuing Lender to the Borrowers.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
relevant Borrower of the date and amount thereof. The responsibility of the
Issuing Lender to the Borrowers in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Company and the Borrowers hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma summary
consolidated balance sheets (including a detailed statement of shareholder's
equity) of (i) Details and its consolidated Subsidiaries as at June 30, 1998
(including the notes thereto) (the "Details Pro Forma Balance Sheet") and (ii)
Holdings and its consolidated Subsidiaries as at June 30, 1998 (including the
notes thereto) (the "Holdings Pro Forma Balance Sheet" and collectively with the
Details Pro Forma Balance Sheet, the "Pro Forma Balance Sheets"), copies of
which have heretofore been furnished to each Lender, have been prepared giving
effect (as if such events had occurred on June 30, 1998) to (i) the consummation
of the Transaction, (ii) the Indebtedness to be incurred on the Closing Date
(including, without limitation, the New Intermediate Holdco Notes) and the use
of proceeds thereof and (iii) the payment of fees and expenses in connection
with the foregoing. The Pro Forma Balance Sheets have been prepared giving
consideration, among other factors, to the requirements of Regulation S-X of the
Securities Act based on the best information available to Holdings and Details
as of the date of delivery thereof, are consistent in all material respects with
the forecasts previously delivered to the Lenders and present fairly in all
material respects on a pro forma basis the estimated financial position of
Holdings and its consolidated Subsidiaries and Details and its consolidated
Subsidiaries, as the case may be, as at June 30, 1998, assuming that the events
specified in the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of Details as at
December 31, 1997 and December 31, 1996, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified
41
report from McGladrey & ▇▇▇▇▇▇, with respect to the 1996 fiscal year, and
PricewaterhouseCoopers LLP, with respect to the 1997 fiscal year, present fairly
in all material respects the consolidated financial condition of Details as at
such dates, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended. The audited consolidated
balance sheets of DCI as at December 31, 1997 and December 31, 1996, and the
related consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by an unqualified report
from PricewaterhouseCooopers LLP present fairly in all material respects the
consolidated financial condition of DCI as at such dates, and the consolidated
results of its operations and its consolidated cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheet of Details as
at March 31, 1998, and the related unaudited consolidated statements of income
and cash flows for the three-month period ended on such date, present fairly in
all material respects the consolidated financial condition of Details as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the three-month period then ended (subject to normal year-end audit
adjustments). The unaudited consolidated balance sheet of DCI as at March 31,
1998, and the related unaudited consolidated statements of income and cash flows
for the three-month period ended on such date, present fairly in all material
respects the consolidated financial condition of DCI as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firms
of accountants and disclosed therein). Neither Details and its Subsidiaries nor
DCI and its Subsidiaries have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent audited
financial statements referred to in this paragraph (b). During the period from
December 31, 1997 to and including the date hereof there has been no Disposition
by Details or DCI or any of their respective Subsidiaries of any material part
of its business or Property.
4.2 No Change. Since December 31, 1997 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of DCI, the
Company and their Subsidiaries (a) is duly organized, validity existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrowers, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the
42
case of the Borrowers, to authorize the borrowings on the terms and conditions
of this Agreement No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Transaction and the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
filings and notices described in Schedule 4.4, (ii) those consents,
authorizations, filings and notices (to the extent material) which have been
obtained or made and are in full force and effect and (iii) the filings referred
to in Section 4.19. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of DCI, the Company or any of
their Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to DCI, the Company or any of their
Subsidiaries could reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company or the Borrowers, threatened by or against DCI,
the Company or any of their Subsidiaries or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) which could reasonably
be expected to have a Material Adverse Effect.
4.7 No Default. Neither DCI, the Company nor any of their
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of DCI, the Company and each
of their Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other Property, and none of such Property is subject to any Lien except
as permitted by Section 7.3.
4.9 Intellectual Property. DCI, the Company and each of their
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Company or any Borrower know of any valid basis for any
such claim. The use by DCI, the Company and their Subsidiaries of Intellectual
Property which is material to the operations of DCI, the Company and their
Subsidiaries does not infringe on the rights of any Person in any material
respect.
43
4.10 Taxes. Each of DCI, the Company and each of their Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns which are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of DCI, the Company or their Subsidiaries, as the case may be); no tax
Lien has been filed, and (except as disclosed on Schedule 4.10), to the
knowledge of the Company and the Borrowers, no claim is being asserted, with
respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrowers will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-l referred to in said Regulation U.
4.12 Labor Matters. There are no strikes or other labor disputes
against DCI, the Company or any of their Subsidiaries pending or, to the
knowledge of the Company or the Borrowers, threatened that (individually or in
the aggregate) could reasonably be expected to have a Material Adverse Effect.
Hours worked by, and payment made to, employees of DCI, the Company and their
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. All payments due from DCI, the Company or any of their Subsidiaries on
account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of DCI, the Company
or such Subsidiary or otherwise disclosed in writing to the Lenders.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrowers nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan
which has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrowers nor any Commonly Controlled
Entity would become subject to any material liability under ERISA if either of
the Borrowers or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
44
4.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of DCI and the Company at the date hereof.
4.16 Use of Proceeds. The proceeds of the Tranche A Term Loans and
the Tranche B Term Loans shall be used to finance a portion of the Transaction
and to pay related fees and expenses. The proceeds of the Revolving Credit
Loans, the Swing Line Loans and the Letters of Credit shall be used for working
capital needs and general corporate purposes of the Borrowers and their
Subsidiaries in the ordinary course of business (including in connection with
any acquisition described in Section 7.8(i) or (j)).
4.17 Environmental Matters.
(a) The facilities and properties owned, leased or operated by DCI,
the Company or any of their Subsidiaries (the "Real Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances which (i)
constitute or constituted a violation of, or (ii) could give rise to
liability under, any Environmental Law, except in either case insofar as
such violation or liability, or any aggregation thereof, could not
reasonably be expected to result in the payment of a Material
Environmental Amount.
(b) The Real Properties and all operations at the Real Properties
are in material compliance, and have in the last five years been in
material compliance, with all applicable Environmental Laws, and there is
no contamination at, under or about the Real Properties or violation of
any Environmental Law with respect to the Real Properties or the business
operated by DCI, the Company or any of their Subsidiaries (the "Business")
which could materially interfere with the continued operation of the Real
Properties or materially impair the fair saleable value thereof. Neither
DCI, the Company nor any of their Subsidiaries has assumed any liability
of any other Person under Environmental Laws.
(c) Neither DCI, the Company nor any of their Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Real Properties or the Business, nor does the Company or the Borrowers
have knowledge or reason to believe that any such notice will be received
or is being threatened, except insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a matter or matters
that could reasonably be expected to result in the payment of a Material
Environmental Amount.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Real Properties in violation of, or in a manner or to
a location which could give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Real Properties
in violation of, or in a manner that could give rise to liability under,
any applicable Environmental Law, except insofar as any such
45
violation or liability referred to in this paragraph, or any aggregation
thereof, could not reasonably be expected to result in the payment of a
Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Company and the Borrowers,
threatened, under any Environmental Law to which DCI, the Company or any
of their Subsidiaries is or will be named as a party with respect to the
Real Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Real Properties or the Business,
except insofar as such proceeding, action, decree, order or other
requirement, or any aggregation thereof, could not reasonably be expected
to result in the payment of a Material Environmental Amount.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Real Properties, or arising from or
related to the operations of DCI, the Company or any of their Subsidiaries
in connection with the Real Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws, except insofar as any such
violation or liability referred to in this paragraph, or any aggregation
thereof, could not reasonably be expected to result in the payment of a
Material Environmental Amount.
4.18 Accuracy of Information, etc. No statement or information
(other than the projections and the pro forma financial information described in
the immediately following sentence) contained in this Agreement, any other Loan
Document, the Confidential Information Memorandum or any other document,
certificate or statement furnished to the Administrative Agent or the Lenders or
any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents taken as
a whole, contained as of the date such statement, information, document or
certificate was so furnished (or, in the case of the Confidential Information
Memorandum, as of the Closing Date), any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading. The projections and pro forma
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of Details to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the representations and warranties
contained in the Transaction Agreement are true and correct in all material
respects. There is no fact known to any Loan Party that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the other Loan Documents, in the Confidential Information Memorandum
or in any other documents, certificates and statements furnished to the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds
46
thereof. When financing statements in appropriate form are filed in the offices
specified on Schedule 4.19(a), the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person (other
than Liens permitted by Section 7.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to any other Person.
4.20 Solvency. Each Loan Party is, and after giving effect to the
Transaction and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent
4.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of Details under and as defined in the Senior Subordinated Note
Indenture. The obligations of each Subsidiary Guarantor under the Guarantee and
Collateral Agreement constitute "Guarantor Senior Indebtedness" of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
4.22 Regulation H. No Mortgage encumbers improved real property that
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of 1968
unless such insurance has been obtained.
4.23 Year 2000 Matters. The testing and reprogramming required to
permit the proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year 2000) in
and following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by the Borrowers or any of
their Subsidiaries or used or relied upon in the conduct of their business
(including any such systems and other equipment supplied by others or with which
the computer systems of the Borrowers or any of their Subsidiaries interface),
and the testing of all such systems and other equipment as so reprogrammed began
to be implemented in February 1998, and the Borrowers have no reason to believe
that any such testing and reprogramming required for the Borrowers and their
Subsidiaries to be year 2000 compliant will not be completed by June 30, 1999.
The costs to the Borrowers and their Subsidiaries that have not been incurred as
of the date hereof for such reprogramming and testing and for the other
reasonably foreseeable consequences to them of any improper functioning of other
computer systems and equipment containing embedded microchips due to the
occurrence of the year 2000 could not reasonably be expected to result in a
Default or Event of Default or to have a Material Adverse Effect.
47
4.24 Senior Indebtedness. The Indebtedness consisting of the Term
Loans is being incurred as Indebtedness permitted respectively by the proviso to
each of clause (a) of Section 1011 of the Company Indenture and clause (a) of
Section 1010 of the Senior Subordinated Note Indenture. This Agreement replaces
the senior secured Credit Agreement, dated as of October 28, 1997 (as amended
and restated as of December 5, 1997), among the Company, The Chase Manhattan
Bank, as administrative agent and the lenders party thereto. The Revolving
Extensions of Credit and the Indebtedness consisting of the Term Loans
constitute "Senior Indebtedness" (as defined in each of the Company Indenture
and the Senior Subordinated Note Indenture) by virtue of being "Bank
Indebtedness" (as so defined in said indentures).
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Company and the Borrowers and (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of the Company,
Details, DCI and each other Subsidiary Guarantor.
(b) Transaction, etc. The following transactions (collectively with
all other transactions in connection therewith, the "Transaction") shall
have been consummated:
(i) The current common shareholders of DCI shall each have
contributed to Holdings approximately 40% of the common equity of
DCI held by each of them (the "40% Shares")
(ii) Holdings shall have contributed the 40% Shares to New
Intermediate Holdco;
(iii) New Intermediate Holdco and investment funds managed by
▇▇▇▇ Capital each shall have contributed all of the common equity of
DCI then held by each of them to a Wholly Owned Subsidiary of New
Intermediate Holdco, a newly formed Delaware corporation, Details
Merger Corp. I ("MergerCo I"), and in return shall have received an
equal number of shares of the common equity of MergerCo I;
(iv) MergerCo I shall have merged with and into DCI, the
holders of all of the outstanding common equity of DCI (other than
that held by ▇▇▇▇ Capital and MergerCo I) shall have received an
aggregate amount of approximately $67,000,000 in exchange for the
cancellation of such common equity, the holders of the Class A
Preferred Stock of DCI shall have received an aggregate amount of
approximately $12,316,000 in exchange for the cancellation of such
Class A Preferred Stock and the Class B Preferred Stock of DCI (the
"DCI Preferred Stock") will remain outstanding;
48
(v) New Intermediate Holdco shall have received not less than
$33,000,000 in net proceeds from the issuance of the New
Intermediate Holdco Notes, which proceeds shall be lent to DCI, in
each case, on terms and conditions reasonably satisfactory to the
Administrative Agent; and
(vi) The transactions undertaken pursuant to clauses (i)
through (v) above shall be undertaken pursuant to the Transaction
Documents and in form and substance consistent with the terms
previously disclosed to the Administrative Agent in writing and on
other terms reasonably satisfactory to the Lenders.
(c) Pro Forma Balance Sheets; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheets, (ii) audited
consolidated financial statements of each of Details and DCI for the 1997
and 1996 fiscal years and (iii) unaudited interim consolidated financial
statements of each of Details and DCI for each fiscal quarterly period
ended subsequent to the date of the latest applicable financial statements
delivered pursuant to clause (ii) of this paragraph as to which such
financial statements are available, and such financial statements shall
not, in the reasonable judgment of the Lenders, reflect any material
adverse change in the consolidated financial condition of Details or DCI,
as reflected in the financial statements or projections previously
distributed by Details to the Administrative Agent or the Lenders in
writing or which are contained in the Confidential Information Memorandum.
(d) Business Plan. The Lenders shall have received a satisfactory
written business plan for each fiscal year through the scheduled final
maturity of the Tranche B Term Loan.
(e) Capitalization. The capitalization and structure of Holdings and
each of its Subsidiaries after giving effect to the Transaction shall be
consistent with the capitalization and structure previously disclosed to
the Lenders in writing.
(f) Payment of Outstanding Indebtedness. Each of Details and DCI
shall have repaid its outstanding bank indebtedness in an aggregate
principal amount approximately equal to $106,100,000 and $64,725,000,
respectively, and the terms and conditions of any indebtedness of Details
and DCI to remain outstanding after the Closing Date shall be reasonably
satisfactory to the Administrative Agent.
(g) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of Holdings or any of its Subsidiaries are located, and such search shall
reveal no liens on any of the assets of Holdings or any of its
Subsidiaries except for liens permitted by Section 7.3 and liens to be
discharged on or prior to the Closing Date pursuant to documentation
reasonably satisfactory to the Administrative Agent.
(h) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments.
(i) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
49
(i) the legal opinion of Ropes & ▇▇▇▇, counsel to the Company
and its Subsidiaries, substantially in the form of Exhibit E;
(ii) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Transaction
Agreement, accompanied by a reliance letter in favor of the Lenders;
and
(iii) the legal opinion of local counsel in California and of
such other special and local counsel as may be required by the
Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(j) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.
(k) Solvency Opinion. The Administrative Agent shall have received a
satisfactory solvency opinion from ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co. which shall
document the solvency of the Company and its Subsidiaries on a
consolidated basis after giving effect to the Transaction, the financing
thereof and the other transactions contemplated hereby.
(l) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.2 of the
Guarantee and Collateral Agreement.
(m) Environmental Audit. The Lenders shall have received a
satisfactory environmental audit with respect to the real property owned
or leased by DCI and its Subsidiaries from a firm satisfactory to the
Administrative Agent.
(n) Transaction Documents. The Company and its Subsidiaries and
Affiliates (i) shall not be in breach or violation of any of their
obligations under the Transaction Documents and (ii) shall not be subject
to any Requirements of Law or Contractual Obligations that would be
violated by the Transaction and none of the provisions of any of the
Transaction Documents shall have been amended, modified or waived in any
material respect without the written consent of the Administrative Agent.
(o) Transaction Fees and Expenses. The fees and expenses to be
incurred in connection with the Transaction and the financing thereof
shall not exceed $12,750,000 in the aggregate.
(p) Financial Ratios. The Administrative Agent shall be satisfied
that (i) the Consolidated Leverage Ratio as at the Closing Date shall not
be greater than 5.40 to 1.0 and (ii) the "Consolidated Coverage Ratio" of
Details and its "Restricted
50
Subsidiaries" (all as defined in the Senior Subordinated Note Indenture)
as at the Closing Date shall be at least 2.00 to 1.0, and Details shall
provide support for such calculations which is reasonably satisfactory to
the Administrative Agent (giving consideration, among other factors, to
the requirements of Regulation S-X of the Securities Act).
5.2 Condition to Loans on the Second Closing Date. The agreement of
each Lender to make the Loans to be made by it on the Second Closing Date is
subject to the satisfaction prior to or concurrently with the making of such
Loans on the Second Closing Date, of the following additional conditions
precedent:
(a) New Intermediate Holdco shall have contributed all of the common
equity owned by it in DCI to a wholly owned subsidiary of New Intermediate
Holdco, a newly formed Delaware corporation, Details Merger Corp. II
("MergerCo II");
(b) MergerCo II shall have merged with and into DCI and investment
funds managed by ▇▇▇▇ Capital holding shares of common equity of DCI shall
have received an aggregate amount of approximately $23,000,000 in exchange
for the cancellation of such common equity;
(c) New Intermediate Holdco shall then contribute all of the common
equity of DCI to the Company which will then contribute all of such common
equity to Details; and
(d) The transactions undertaken pursuant to clauses (a) through (c)
above shall be undertaken pursuant to the Transaction Documents and in
form and substance consistent with the terms previously disclosed to the
Administrative Agent in writing and on other terms reasonably satisfactory
to the Lenders.
5.3 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit on the Closing
Date and any extension of credit on the Second Closing Date) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrowers
hereunder shall constitute a representation and warranty by the Borrowers as of
the date of such extension of credit that the conditions contained in this
Section 5.3 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Company and the Borrowers hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any
51
Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, each of the Company and the Borrowers shall and shall cause each of
their Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent for
distribution to each of the Lenders:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of New Intermediate Holdco and Details, a copy of
the audited consolidated balance sheet of New Intermediate Holdco and its
consolidated Subsidiaries and Details and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by PricewaterhouseCoopers LLP or
other independent certified public accountants of nationally recognized
standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of New Intermediate Holdco and Details, the unaudited consolidated
balance sheet of New Intermediate Holdco and its consolidated Subsidiaries
and Details and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and of
cash flows for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments); and
(c) as soon as available, but in any event not later than 30 days
after the end of each month occurring during each fiscal year of New
Intermediate Holdco and Details (other than the third, sixth, ninth and
twelfth such month), the unaudited consolidated balance sheets of New
Intermediate Holdco and its consolidated Subsidiaries and Details and its
consolidated Subsidiaries as at the end of such month and the related
unaudited consolidated statements of income and of cash flows for such
month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except (x) as approved by such accountants or officer, as the case may
be, and disclosed therein and (y) in the case of the financial statements
delivered pursuant to clauses (b) and (c) above, for the absence of footnotes).
6.2 Certificates; Other Information. Furnish to the Administrative
Agent for distribution to each of the Lenders, or, in the case of clause (g), to
the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no
52
knowledge was obtained of any Default or Event of Default under the
financial covenants set forth in Section 7.1, except as specified in such
certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
each Loan Party during such period has in all material respects observed
or performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan Documents
to which it is a party to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the
case of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information necessary for determining
compliance by the Company and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of Details, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a listing of any county
or state within the United States where any Loan Party keeps inventory or
equipment and of any Intellectual Property acquired by any Loan Party
since the date of the most recent list delivered pursuant to this clause
(y) (or, in the case of the first such list so delivered, since the
Closing Date);
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of Details, a detailed consolidated
budget for the then-current fiscal year (including a projected
consolidated balance sheet of Details and its Subsidiaries as of the end
of such then-current fiscal year, and the related consolidated statements
of projected cash flow, projected changes in financial position and
projected income), and, as soon as available, significant revisions, if
any, of such budget and projections with respect to such fiscal year
(collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on reasonable estimates, information and assumptions
and that such Responsible Officer has no reason to believe that such
Projections are incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of Details,
a narrative discussion and analysis of the financial condition and results
of operations of Details and its Subsidiaries for such fiscal quarter and
for the period from the beginning of the then current fiscal year to the
end of such fiscal quarter, as compared to the portion of the Projections
covering such periods and to the comparable periods of the previous year;
(e) no later than 3 Business Days prior to the effectiveness thereof
(or, to the extent that the consent of all or any portion of the Lenders
is required hereunder in connection with such amendment, supplement,
waiver or modification, no later than 10 Business Days prior to the
effectiveness thereof), copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with respect
to the Company Indenture, the Senior Subordinated Note Indenture, the New
Intermediate Holdco Note Purchase Agreement or the Transaction Agreement;
(f) within five days after the same are sent, copies of all
financial statements and reports which Holdings, the Company or Details
sends to the holders of any class of its debt securities or public equity
securities and within five days after the same are
53
filed, copies of all financial statements and reports which Holdings, the
Company or Details may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Company or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence. etc. (a) (i)
Continue to engage in business of the same general type as now conducted by it,
(ii) preserve, renew and keep in full force and effect its corporate existence
and (iii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.4 and except, in the case of
clause (iii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its Property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit, upon
two Business Days' prior notice to the chief financial officer or other
Responsible Officer of the Company or Details (except when a Default or Event of
Default has occurred and is continuing, in which case, no notice shall be
required), representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants; provided
that all such visits and inspections shall be coordinated through the
Administrative Agent.
6.7 Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
54
(b) any litigation, investigation or proceeding which may exist at
any time affecting Holdings or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect;
(c) the following events, as soon as possible and in any event
within 30 days after Details knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC
or Details or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(d) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Company or the relevant Subsidiary of the
Company proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Interest Rate Protection. In the case of Details, within 90 days
after the Closing Date, enter into Interest Rate Protection Agreements to the
extent necessary to provide that at least 50% of the aggregate principal amount
of the Senior Subordinated Notes and the Term Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than three
years, which Interest Rate Protection Agreements shall have terms and conditions
reasonably satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by the Company or any of its Subsidiaries (other
than (x) any Property described in paragraph (b), (c) or (d) below and (y) any
Property subject to a Lien expressly permitted by Section 7.3(g)) as to which
the Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property, including without limitation,
the filing of Uniform Commercial Code financing statements in
55
such jurisdictions as may be required by the Guarantee and Collateral Agreement
or by law or as may be requested by the Administrative Agent.
(b) With respect to any fee interest in any real estate having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by the Company or any of its Subsidiaries (other than any such
real estate subject to a Lien expressly permitted by Section 7.3(g)), promptly
upon request of the Administrative Agent or the Required Lenders (i) execute and
deliver a first priority Mortgage or deed of trust, as the case may be, in favor
of the Administrative Agent, for the benefit of the Lenders, covering such real
estate, in form and substance reasonably satisfactory to the Administrative
Agent, (ii) if requested by the Administrative Agent, provide the Lenders with
(x) title and extended coverage insurance covering such real estate in an amount
at least equal to the purchase price of such real estate (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by the Company
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary) or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable in order to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Company or any of its
Subsidiaries, (ii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Lenders a
perfected first priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Company or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Company or any of its
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), and (ii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
56
6.11 DCI Drop Down. No later than the Second Closing Date, New
Intermediate Holdco shall contribute the note of DCI evidencing the loan
referred to in Section 5.1(b)(v) to the capital of DCI and, except for the DCI
Preferred Stock, shall cause DCI to be a Wholly Owned Subsidiary of Details as a
result of the transactions referred to in Section 5.2.
6.12 Mortgages, etc. Within 30 days after the Closing Date (which
period may be extended by the Administrative Agent for up to an additional 30
days):
(i) The Administrative Agent shall have received a Mortgage with
respect to each Mortgaged Property, executed and delivered by a duly
authorized officer of each party thereto.
(ii) If requested by the Administrative Agent, the Administrative
Agent shall have received, and the title insurance company issuing the
policy referred to in clause (iii) below (the "Title Insurance Company")
shall have received, maps or plats of an as-built survey of the sites of
the Mortgaged Properties certified to the Administrative Agent and the
Title Insurance Company in a manner satisfactory to them, dated a date
satisfactory to the Administrative Agent and the Title Insurance Company
by an independent professional licensed land surveyor satisfactory to the
Administrative Agent and the Title Insurance Company, which maps or plats
and the surveys on which they are based shall be made in accordance with
the Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without limiting
the generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the established
building setback lines; (B) the lines of streets abutting the sites and
width thereof; (C) all access and other easements appurtenant to the
sites; (D) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on the sites; (F) if
the site is described as being on a filed map, a legend relating the
survey to said map; and (G) the flood zone designations, if any, in which
the Mortgaged Properties are located.
(iii) The Administrative Agent shall have received in respect of
each Mortgaged Property a mortgagee's title insurance policy (or policies)
or marked up unconditional binder for such insurance. Each such policy
shall (A) be in an amount satisfactory to the Administrative Agent; (B) be
issued at ordinary rates; (C) insure that the Mortgage insured thereby
creates a valid first Lien on such Mortgaged Property free and clear of
all defects and encumbrances, except as disclosed therein; (D) name the
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70 and 10/17/84) (or equivalent policies); (F) contain such
endorsements and affirmative coverage as the Administrative Agent may
reasonably request and (G) be issued by title companies satisfactory to
the Administrative Agent (including any such title companies acting as
co-insurers or reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it that
57
all premiums in respect of each such policy, all charges for mortgage
recording tax, and all related expenses, if any, have been paid.
(iv) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance that (1) covers
any parcel of improved real property that is encumbered by any Mortgage
(2) is written in an amount not less than the outstanding principal amount
of the indebtedness secured by such Mortgage that is reasonably allocable
to such real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (3) has a term ending not
later than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (iii) above and a copy of
all other material documents affecting the Mortgaged Properties.
SECTION 7. NEGATIVE COVENANTS
The Company and the Borrowers hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, each of the Company and the Borrowers shall not,
and shall not permit any of their Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
Details ending during any period set forth below to exceed the ratio set forth
below opposite such period:
Consolidated
Period Leverage Ratio
------ --------------
Closing Date through December 30, 1999 6.00 to 1.0
December 31, 1999 through September 29, 2000 5.25 to 1.0
September 30, 2000 through September 29, 2001 4.50 to 1.0
September 30, 2001 through September 29, 2002 4.00 to 1.0
September 30, 2002 through September 29, 2003 3.50 to 1.0
September 30, 2003 through thereafter 3.00 to 1.0
58
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
Details ending during any period set forth below to be less than the ratio set
forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
------ ---------------------
Closing Date through September 29, 1999 1.75 to 1.0
September 30, 1999 through September 29, 2000 1.85 to 1.0
September 30, 2000 through September 29, 2001 2.25 to 1.0
September 30, 2001 through September 29, 2002 2.50 to 1.0
September 30, 2002 through September 29, 2003 2.75 to 1.0
September 30, 2003 through thereafter 3.00 to 1.0
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters (commencing with the period of four consecutive fiscal quarters
ending on December 31, 1998) of Details to be less than 1.05 to 1.0.
(d) Minimum EBITDA. Permit Consolidated EBITDA for any fiscal
year set forth below to be less than the amount set forth opposite such fiscal
year:
Consolidated
Fiscal Year EBITDA
----------- ------------
1998 60,000,000
1999 67,500,000
2000 75,000,000
2001 80,000,000
2002 85,000,000
2003 90,000,000
2004 90,000,000
2005 90,000,000
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist (in each case, to "Incur") any Indebtedness or issue any Preferred Stock,
except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of Details to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to Details or any other Subsidiary;
(c) Indebtedness secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $4,000,000 at any one time
outstanding;
(d) Capital Lease Obligations existing on the date hereof and other
Capital Lease Obligations, which other Capital Lease Obligations shall not
exceed $10,000,000 aggregate principal amount at any one time outstanding;
59
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(e) and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof);
(f) guarantees made in the ordinary course of business by Details or
any of its Subsidiaries of obligations of any Wholly Owned Subsidiary
Guarantor;
(g) (i) Indebtedness of Details in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$100,000,000 and (ii) Indebtedness of the Company in respect of the
Company Zeros in an aggregate, unaccreted principal amount not to exceed
$60,100,000;
(h) Indebtedness of the Company evidenced by the increase in the
principal amount of the Company Zeros in connection with the payment in
kind of interest thereon prior to the fifth anniversary of the Closing
Date;
(i) Indebtedness of a Person which becomes a Subsidiary after the
date hereof; provided, that (i) such Indebtedness existed at the time such
Person became a Subsidiary and was not created in anticipation of the
acquisition and (ii) such Indebtedness was not created in contemplation of
such Person becoming a Subsidiary;
(j) Indebtedness of Details and its Subsidiaries on account of the
deferred purchase price for acquisitions of Capital Stock and assets
permitted pursuant to Section 7.8;
(k) guarantees made by Subsidiaries of Details on account of the
Senior Subordinated Notes; provided, that such guarantees are subordinated
to the obligations of such Subsidiaries under the Guarantee and Collateral
Agreement and the other Security Documents upon terms satisfactory to the
Administrative Agent;
(l) (i) the DCI Preferred Stock and (ii) any other Preferred Stock
which is not redeemable and is not convertible into debt obligations of
the Company or any of its Subsidiaries, in each case, during the term of
this Agreement, the dividends with respect to which are payable only in
kind and the other terms and conditions of which are reasonably
satisfactory to the Administrative Agent; and
(m) additional Indebtedness of Details or any of its Subsidiaries in
an aggregate principal amount (for Details and all Subsidiaries) not to
exceed $20,000,000 at any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of Details or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a
60
period of more than 30 days or which are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) Liens in existence on the date hereof listed on Schedule 7.3(e),
securing Indebtedness permitted by Section 7.2(e), provided that no such
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(f) zoning restrictions, easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial m amount and which do not in
any case materially detract from the value of the Property subject thereto
or materially interfere with the ordinary conduct of the business of
Details or any of its Subsidiaries;
(g) Liens securing Indebtedness of Details or any of its
Subsidiaries incurred pursuant to Section 7.2(c) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall
be created substantially simultaneously with the acquisition of such fixed
or capital assets, (ii) such Liens do not at any time encumber any
Property other than the Property financed by such Indebtedness and (iii)
the amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into
by Details or any Subsidiary in the ordinary course of its business and
covering only the assets so leased (including, without limitation, with
respect to the capital leases of Details' principal manufacturing facility
and related equipment and covering only such facility and related
equipment); and
(j) Liens not otherwise permitted by this Section 7.3 so long as
neither (i) the aggregate principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the
date such Lien is incurred) of the assets subject thereto exceeds (as to
Details and all Subsidiaries) $4,000,000 at any one time outstanding.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or substantially all
of its Property or business, or make any material change in its present method
of conducting business, except:
(a) any Subsidiary of Details may be merged or consolidated with or
into Details (provided that Details shall be the continuing or surviving
corporation) or
61
with or into any Wholly Owned Subsidiary Guarantor (provided that the
Wholly Owned Subsidiary Guarantor shall be the continuing or surviving
corporation);
(b) Details or any of its Subsidiaries may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to Details or any
Wholly Owned Subsidiary Guarantor; and
(c) any Person may be merged or consolidated with or into Details or
any of its Subsidiaries pursuant to an investment permitted subsection
7.8(i) or (j) (provided that Details or the applicable Subsidiary shall be
the continuing or surviving corporation).
7.5 Limitation on Sale of Assets. Dispose of any of its Property or
business (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of property or assets that are no longer used or
useful in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to
Details or any Wholly Owned Subsidiary Guarantor;
(e) Details and its Subsidiaries may, in the ordinary course of
business, license Intellectual Property to third Persons and to one
another, so long as each such license does not otherwise prohibit the
granting of a Lien by Details or any of its Subsidiaries pursuant to the
Security Documents in the Intellectual Property which is the subject of
such license; and
(f) the sale of other assets having a fair market value not to
exceed $10,000,000 in the aggregate for any fiscal year of Details.
7.6 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of Details or any of
its Subsidiaries or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of Details or any of its Subsidiaries (collectively, "Restricted
Payments"), except that:
(a) any Subsidiary may make Restricted Payments to Details or any
Wholly Owned Subsidiary Guarantor;
(b) any payments made to the former shareholders of Holdings
pursuant to Section 1.11 of the Recapitalization Agreement;
62
(c) any payments on the DCI Preferred Stock on the terms in
existence on the date hereof and any payments of Deferred Payment Amounts;
(d) so long as no Default or Event of Default shall have occurred
and be continuing, Details may pay dividends to the Company to permit the
Company to pay dividends directly, or indirectly through the Company or
New Intermediate Holdco, to Holdings to permit Holdings to (i) purchase
Holdings' common stock or common stock options from present or former
officers or employees of Holdings or any of its Subsidiaries upon the
death, disability or termination of employment of such officer or
employee, provided that the aggregate amount of payments under this clause
(i) shall not exceed $4,000,000 during any fiscal year of Details and
$10,000,000 during the term of this Agreement, net, in any case, of any
proceeds received by Holdings and contributed to Details in connection
with resales of any common stock or common stock options so purchased
during the relevant period and (ii) pay management fees to ▇▇▇▇ Capital
and Bain Affiliates expressly permitted by Section 7.10(m); and
(e) Details may pay dividends to the Company to permit the Company,
New Intermediate Holdco or Holdings to (i) pay corporate overhead expenses
incurred in the ordinary course of business not to exceed $500,000 in any
fiscal year, (ii) pay any taxes which are due and payable by Holdings as
part of a consolidated group of which the Company, New Intermediate Holdco
and Details are members (provided that the amount of such dividends shall
not exceed the lesser of (x) the actual cash tax liability of Holdings
which is then due and payable to Governmental Authorities and (y) the cash
tax liability which would be owing by the Company and its Subsidiaries to
Governmental Authorities on a stand-alone basis), (iii) pay fees and
expenses (other than to Affiliates) relating to the Company Zeros and the
New Intermediate Holdco Notes, (iv) beginning no earlier than July 2002,
pay interest in cash on the Company Zeros, (v) no earlier than December
2003 and so long as no Default or Event of Default shall have occurred and
be continuing, make all or any portion of the AHYDO Payment; provided,
that (w) prior to Details making the dividend to permit all or any portion
of the AHYDO Payment to be made, Details shall provide a certificate to
the Administrative Agent, certifying that on a pro forma basis, after
giving effect to such dividend it is in compliance with all of the
covenants contained in Section 7.1, (x) the Borrower shall not be
permitted to borrow under the Revolving Credit Facility to finance such
dividend and (y) the amount of such dividend shall not exceed the lesser
of (I) the then unused Permitted Expenditure Amount plus $7,500,000 and
(II) $35,000,000, and (vi) after the date of the AHYDO Payment, pay
interest in cash on the New Intermediate Holdco Notes.
7.7 Limitation on Capital Expenditures. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except Capital
63
Expenditures of Details and its Subsidiaries in the ordinary course of business
not exceeding in any fiscal year of Details the amount set forth below opposite
such fiscal year (the "Base CapEx Amount") plus the then unused Permitted
Expenditure Amount:
Fiscal Year Base CapEx Amount
----------- -----------------
1998 $20,000,000
1999 $20,000,000
2000 $22,500,000
2001 $25,000,000
2002 $27,500,000
2003 $30,000,000
2004 $30,000,000
2005 $32,500,000
; provided, that (i) up to 50% of the Base CapEx Amount not expended in the
fiscal year for which it is permitted may be carried over for expenditure in the
next succeeding fiscal year, and (ii) Capital Expenditures made during any
fiscal year shall be deemed made, first, in respect of the Base CapEx Amount
permitted for such fiscal year as provided above and, second, in respect of any
portion of such Base CapEx Amount carried over from the prior fiscal year
pursuant to subclause (i) above; provided, further, that notwithstanding the
foregoing, Details and its Subsidiaries may make Capital Expenditures (which
Capital Expenditures shall not be included in the amount of Capital Expenditures
permitted to be made pursuant to this Section 7.7 without giving effect to this
second proviso) with Reinvestment Deferred Amounts.
7.8 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Company and its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Company and its Subsidiaries not to exceed
$1,000,000 at any one time outstanding,
(e) (i) the Company may acquire and hold obligations of one or more
officers or other employees of the Company or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of Holdings so long as no cash is paid by the Company or any
of its Subsidiaries in connection with the acquisition of any such
obligations, (ii) the Borrower may lend up to $1,000,000 in an aggregate
principal amount at any one time outstanding to officers and employees of
the Company and its Subsidiaries on or after the date on which any such
officers and employees exercise their options to purchase common stock of
Holdings issued to them in connection with the Transaction so long as the
proceeds of such loans are promptly used by such officers and employees to
pay taxes payable by them as a
64
result of such exercise and (iii) investments consisting of loans by the
Borrower or its Subsidiaries to employees of the Company or its
Subsidiaries, not exceeding (x) $650,000 in the aggregate for loans made
in connection with the Transaction or the transactions contemplated by the
Recapitalization Agreement and (y) $2,000,000 for loans made after the
Closing Date, in each case, in aggregate principal amount at any time
outstanding and made solely for the purpose of funding purchases by such
employees of common stock of Holdings;
(f) the Transaction;
(g) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases;
(h) investments by the Company or any of its Subsidiaries in Details
or any Person that, prior to such investment, is a Wholly Owned Subsidiary
Guarantor;
(i) Details and its Subsidiaries may acquire all or substantially
all of the Capital Stock or assets of any Person or business unit of a
Person; provided that (i) no Default or Event of Default has occurred and
is continuing or would result therefrom, (ii) the Company would have been
in compliance, on a pro forma basis, with each of the financial covenants
contained in Section 7.1 if such acquisition had been made on the first
day of the most recently completed period of calculation thereof, (iii)
the aggregate consideration (including the aggregate principal amount of
Indebtedness which is incurred, assumed or guaranteed, the aggregate
amount of any deferred consideration and the fair market value of any
non-cash consideration) paid on account of all such acquisitions which are
consummated after the Closing Date does not exceed the sum of $30,000,000
and the then unused Permitted Expenditure Amount; and
(j) in addition to investments otherwise expressly permitted by this
Section 7.8, investments by Details or any of its Subsidiaries in an
aggregate amount (valued at cost, but net of returns of capital from such
investments) not to exceed during the term of this Agreement the sum of
$10,000,000 and the then unused Permitted Expenditure Amount on the date
upon which such investment is made.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any payment, prepayment, repurchase
or redemption of or otherwise defease or segregate funds with respect to the
Senior Subordinated Notes, the Company Zeros or the New Intermediate Holdco
Notes (other than scheduled interest payments required to be made in cash and
the AHYDO Payment), (b) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the Senior Subordinated Notes, the Senior Subordinated Note Indenture,
the Company Zeros, the Company Indenture, the New Intermediate Holdco Notes or
the New Intermediate Holdco Note Purchase Agreement (other than any such
amendment, modification, waiver or other change which (i) would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate or extend the date for payment of interest thereon or (ii) is
not adverse in any respect to the interests of the Lenders in the reasonable
opinion of the Administrative Agent in its sole discretion) or (c) designate any
Indebtedness as "Designated Senior Indebtedness" for the purposes of the Senior
Subordinated Note Indenture.
65
7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Company, Details or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) not otherwise prohibited under this Agreement and (b) upon
fair and reasonable terms no less favorable to the Company, Details or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate; provided, that the
following transactions shall not be prohibited:
(i) the Transaction and the payment of fees to ▇▇▇▇ Capital and/or
Bain Affiliates and to Celerity Partners I, L.P. and Celerity Management
Co. in connection with the Transaction in an aggregate amount with respect
to all such fees not to exceed $4,500,000;
(ii) in connection with any acquisition consummated pursuant to
Section 7.8(i) or (j), the payment to ▇▇▇▇ Capital and/or Bain Affiliates
of a fee in an amount not to exceed 2% of the aggregate consideration paid
by the Company and its Subsidiaries on account of such acquisition;
(iii) so long as no Default or Event of Default shall have occurred
and is continuing, the payment, on a quarterly basis, of management fees
to ▇▇▇▇ Capital and/or the Bain Affiliates in an aggregate amount (for all
such Persons taken together) not to exceed $375,000 in any fiscal quarter
of Details; provided that the portion of such fee which accrued but was
not payable during the existence and continuance of such Default or Event
of Default shall be permitted to be paid at such time as all Defaults and
Events of Default have been cured or waived; and
(iv) the reimbursement of ▇▇▇▇ Capital and/or the Bain Affiliates
for their reasonable out-of-pocket expenses incurred by them in connection
with performing management services to Details and its Subsidiaries.
Notwithstanding anything to the contrary contained in this Section 7.10, at no
time will the Company or any of its Subsidiaries make any payments to ▇▇▇▇
Capital and/or any of its Affiliates in an amount which would exceed that amount
permitted to be paid pursuant to the Senior Subordinated Note Indenture, the
Company Indenture or the New Intermediate Note Indenture at such time.
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Company or any of its
Subsidiaries of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
of the Company or either of the Borrowers to end on a day other than December 31
or change the Company's or the Borrowers' method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
the Company or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its Property
66
or revenues, whether now owned or hereafter acquired, other than (a) this
Agreement and the other Loan Documents and (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in
which case, any prohibition or limitation shall only be effective against the
assets financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of Details to (a) pay dividends or
make any other distributions in respect of any Capital Stock of such Subsidiary
held by, or pay any Indebtedness owed to, Details or any other Subsidiary of
Details, (b) make loans or advances to Details or any other Subsidiary of
Details or (c) transfer any of its assets to Details or any other Subsidiary of
Details, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and (ii) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement which
has been entered into in connection with the Disposition of all or substantially
all of the Capital Stock or assets of such Subsidiary.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrowers and their Subsidiaries are engaged on the date of this Agreement
or which are reasonably related thereto.
7.16 Limitation on Amendments to Transaction Documents. (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the Recapitalization Agreement or any of the Transaction
Documents.
7.17 Limitation on Activities of the Company. In the case of the
Company and notwithstanding anything to the contrary in this Agreement or any
other Loan Document, (a) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its ownership of the Capital Stock of Details and the
transitory ownership of the Capital Stock of DCI, (b) incur, create, assume or
suffer to exist any Indebtedness or other liabilities or financial obligations,
other than (i) nonconsensual obligations imposed by operation of law, (ii)
pursuant to the Loan Documents to which it is a party, (iii) the Company Zeros
and the Company Indenture and (iv) obligations with respect to its Capital
Stock, or (c) own, lease, manage or otherwise operate any properties or assets
(including cash and Cash Equivalents), other than Capital Stock of Details and
the transitory ownership of the Capital Stock of DCI and cash received in
connection with dividends made by Details in accordance with Section 7.6 pending
application in the manner contemplated by said Section.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrowers shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrowers shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within three days after any such interest or other amount
becomes due in accordance with the terms hereof; or
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(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to the Company and the Borrowers only), Section 6.12 or in Section
7; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section),
and (to the extent that such default is susceptible of remedy) such
default shall continue unremedied for a period of 30 days after the
earlier of (x) the date upon which the Borrowers knows or should
reasonably be expected to know of the existence of such default or (y) the
date upon which either of the Borrowers receives notice of such event from
the Administrative Agent or any Lender; or
(e) Holdings or any of its Subsidiaries shall (i) default in making
any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or (in the case of any such Indebtedness constituting
a Guarantee Obligation) to become payable; provided, that a default, event
or condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default under this Agreement
unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $2,000,000;
or
(f) (i) Holdings or any of its Material Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for
all or any substantial part of its assets, or Holdings or any of its
Material Subsidiaries shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against Holdings or any of
its Material Subsidiaries any case, proceeding or other action of a nature
referred to in
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clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against Holdings or any of its Material Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) Holdings or
any of its Material Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings or any
of its Material Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of
either of the Borrowers or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a trustee is, in
the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) either of the Borrowers or any Commonly Controlled Entity shall, or in
the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could, in the sole judgment of
the Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $2,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) A Change of Control or a Specified Change of Control shall
occur; or
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(l) (i) After the Second Closing Date, other than with respect to
the DCI Preferred Stock, Details shall cease to own directly 100% on a
fully diluted basis of the economic and voting interest in DCI's capital
stock, free of Liens except Liens created by the Guarantee and Collateral
Agreement, (ii) the Company shall cease to own directly 100% on a fully
diluted basis of the economic and voting interest in Details's capital
stock, free of Liens except Liens created by the Guarantee and Collateral
Agreement, (iii) New Intermediate Holdco shall cease to own directly 100%
on a fully diluted basis of the economic and voting interest in the
Company's capital stock, free of Liens or (iv) Holdings shall cease to own
directly 100% on a fully diluted basis of the economic and voting interest
in New Intermediate Holdco's capital stock, free of Liens; or
(m) Holdings or New Intermediate Holdco shall (a) conduct, transact
or otherwise engage in, or commit to conduct, transact or otherwise engage
in, any business or operations other than those incidental to its
ownership of the Capital Stock of New Intermediate Holdco or the Company,
as the case may be and, in the case of New Intermediate Holdco, the
ownership of the Capital Stock of DCI and the making of the loan referred
to in Section 5.1(b)(iii) prior to the Second Closing Date, (b) incur,
create, assume or suffer to exist any Indebtedness or other liabilities or
financial obligations, other than (i) nonconsensual obligations imposed by
operation of law, (ii) in the case of New Intermediate Holdco, the New
Intermediate Holdco Notes, (iii) obligations with respect to its Capital
Stock, (iv) in the case of Holdings or New Intermediate Holdco,
Indebtedness incurred to finance AHYDO Payment and (v) the obligations of
Holdings under its cash bonus plan on terms in existence on the date
hereof, or (c) own, lease, manage or otherwise operate any properties or
assets (including cash and Cash Equivalents), other than Capital Stock of
New Intermediate Holdco or the Company, as the case may be, or, in the
case of New Intermediate Holdco, the Capital Stock of DCI prior to the
Second Closing Date, and cash received directly or indirectly in
connection with dividends paid by Details in accordance with Section 7.6
pending application in the manner contemplated by said Section; or
(n) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or
the obligations of the Subsidiary Guarantors under the Guarantee and
Collateral Agreement, as the case may be, as provided in the Senior
Subordinated Note Indenture, or any Loan Party, any Affiliate of any Loan
Party, the trustee in respect of the Senior Subordinated Notes or the
holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to either of the
Borrowers, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either of both of the following actions may
be taken: (i) with the consent of the Majority Revolving Credit Facility
Lenders, the Administrative Agent may, or upon the request of the Majority
Revolving Credit Facility Lenders, the Administrative Agent shall, by notice to
the Borrowers declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; and
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(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrowers, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrowers shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrowers hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrowers hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrowers (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrowers.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing result from its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or
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any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any other Loan Document or for any failure of any Loan
Party a party thereto to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company or the Borrowers), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender, the
Company or either of the Borrowers referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
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the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party or any affiliate of a Loan Party which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Company or the Borrowers and without limiting the obligation of the Company
or the Borrowers to do so), ratably according to their respective Revolving
Credit Percentages, Tranche A Term Loan Percentages and Tranche B Term Loan
Percentages in effect on the date on which indemnification is sought under this
Section 9.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which result from the Administrative Agent's
gross negligence or willful misconduct. The Administrative Agent shall have the
right to deduct any amount owed to it by any Lender under this Section from any
payment made by it to such Lender hereunder. The agreements in this Section 9.7
shall survive the payment of the Loans and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent was not the Administrative Agent. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
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9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and Details.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to either of the Borrowers shall have occurred and be continuing) be
approved by Details (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
9.10 Authorization to Release Liens. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Company or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 11.1.
SECTION 10. GUARANTEE
10.1 Guarantee. In order to induce the Administrative Agent and the
Lenders to execute and deliver this Agreement and to make or maintain the Loans
hereunder, and in consideration thereof, from and after the Second Closing Date
Details hereby unconditionally and irrevocably guarantees to the Administrative
Agent, for the ratable benefit of the Lenders, the prompt and complete payment
and performance by DCI when due (whether at stated maturity, by acceleration or
otherwise) of the DCI Obligations, and Details further agrees to pay any and all
expenses (including, without limitation, all reasonable fees, charges and
disbursements of counsel) that may be paid or incurred by the Administrative
Agent or by the Lenders in enforcing, or obtaining advice of counsel in respect
of, any of their rights under the guarantee contained in this Section 10. The
guarantee contained in this Section 10, subject to Section 10.5, shall remain in
full force and effect until The DCI Obligations are paid in full, the
Commitments are terminated and no Letters of Credit are outstanding,
notwithstanding that from time to time prior thereto DCI may be free from any
DCI Obligations.
Details agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent or any Lender on account of
its liability under this Section 10, it will notify the Administrative Agent and
such Lender in writing that such payment is made under the guarantee contained
in this Section 10 for such purpose. No payment or payments made by DCI or any
other Person or received or collected by the Administrative Agent or any Lender
from DCI or any other Person by virtue of any action or
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proceeding or any setoff or appropriation or application, at any time or from
time to time, in reduction of or in payment of the DCI Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of Details
under this Section 10 which, notwithstanding any such payment or payments, shall
remain liable for the DCI Obligations until, subject to Section 10.5, the DCI
Obligations are paid in full, the Commitments are terminated and no Letters of
Credit are outstanding.
10.2 No Subrogation. Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 10, Details hereby
irrevocably waives all rights that may have arisen in connection with the
guarantee contained in this Section 10 to be subrogated to any of the rights
(whether contractual, under the United States Bankruptcy Code (or similar action
under any successor law or under any comparable law), including Section 509
thereof, under common law or otherwise) of the Administrative Agent or any
Lender against DCI or against the Administrative Agent or any Lender for the
payment of the DCI Obligations, until the DCI Obligations shall have been paid
in full, no Letters of Credit shall be outstanding and the Commitments shall
have been terminated. Details hereby further irrevocably waives all contractual,
common law, statutory and other rights of reimbursement, contribution,
exoneration or indemnity (or any similar right) from or against DCI or any other
Person that may have arisen in connection with the guarantee contained in this
Section 10, until the DCI Obligations shall have been paid in full, no Letters
of Credit shall be outstanding and the Commitments shall have been terminated.
So long as the DCI Obligations remain outstanding, if any amount shall be paid
by or on behalf of DCI to Details on account of any of the rights waived in this
Section 10.2, such amount shall be held by Details in trust, segregated from
other funds of Details, and shall, forthwith upon receipt by Details, be turned
over to the Administrative Agent in the exact form received by Details (duly
indorsed by Details to the Administrative Agent, if required), to be applied
against the DCI Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine. The provisions of this Section 10.2 shall
survive the term of the guarantee contained in this Section 10 and the payment
in full of the DCI Obligations and the termination of the Commitments.
10.3 Amendments, etc. with respect to the DCI Obligations. Details
shall remain obligated under this Section 10 notwithstanding that, without any
reservation of rights against Details, and without notice to or further assent
by Details, any demand for payment of or reduction in the principal amount of
any of the DCI Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender, and any of the DCI
Obligations continued, and the DCI Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and this Agreement, any other Loan Document, and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Lenders (or the Required
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the DCI Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the DCI Obligations or
for the guarantee contained in this Section 10 or any property subject thereto.
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10.4 Guarantee Absolute and Unconditional. Details waives any and
all notice of the creation, renewal, extension or accrual of any of the DCI
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon the guarantee contained in this Section 10 or acceptance of the
guarantee contained in this Section 10; the DCI Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee contained
in this Section 10; and all dealings between DCI or Details, on the one hand,
and the Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 10. Details waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon DCI
or Details with respect to the DCI Obligations. The guarantee contained in this
Section 10 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of
this Agreement or any other Loan Document, any of the DCI Obligations or any
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, setoff or counterclaim (other than a defense of payment
or performance) that may at any time be available to or be asserted by DCI
against the Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of DCI or Details) that
constitutes, or might be construed to constitute, an equitable or legal
discharge of DCI for the DCI Obligations, or of Details under the guarantee
contained in this Section 10, in bankruptcy or in any other instance. When the
Administrative Agent or any Lender is pursuing its rights and remedies under
this Section 10 against Details, the Administrative Agent or any Lender may, but
shall be under no obligation to, pursue such rights and remedies as it may have
against DCI or any other Person or against any collateral security or guarantee
for the DCI Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to pursue such other rights or
remedies or to collect any payments from DCI or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of DCI or any such other Person or of any such
collateral security, guarantee or right of offset, shall not relieve Details of
any liability under this Section 10, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent and the Lenders against Details.
10.5 Reinstatement. The guarantee contained in this Section 10 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the DCI Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of DCI or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, DCI or any substantial part of its
property, or otherwise, all as though such payments had not been made.
10.6 Payments. Details hereby agrees that any payments in respect of
the DCI Obligations pursuant to this Section 10 will be paid to the
Administrative Agent without setoff or counterclaim in Dollars at its office
specified in Section 11.2.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
Required Lenders and each
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Loan Party party to the relevant Loan Document may, or, with the written consent
of the Required Lenders, the Administrative Agent and each Loan Party party to
the relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive or reduce the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest, fee or letter of credit commission payable hereunder or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender's Revolving Credit Commitment, in each case
without the consent of each Lender directly affected thereby; (ii) amend, modify
or waive any provision of this Section 11.1 or reduce any percentage specified
in the definition of Required Lenders or Required Prepayment Lenders, consent to
the assignment or transfer by either of the Borrowers of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release all or substantially all of the
Guarantors from their obligations under the Guarantee and Collateral Agreement,
in each case without the written consent of all Lenders; (iii) reduce the
percentage specified in the definition of Majority Facility Lenders without the
written consent of all Lenders under each affected Facility; (iv) amend, modify
or waive any provision of Section 9 without the written consent of the
Administrative Agent; (v) amend, modify or waive any provision of Section 2.6 or
2.7 without the written consent of the Swing Line Lender; (vi) amend, modify or
waive any provision of Section 3 without the written consent of the Issuing
Lender or (vii) amend, modify or waive any provision of Section 2.11(d)
providing for the application of any mandatory prepayments which would reduce
the amount or delay the application of any payment to be applied to any Facility
without the written consent of the Majority Facility Lenders in respect of such
Facility. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Company, the Borrowers and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
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The Company and the Borrowers: Details, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Dynamic Circuits, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇ Capital, Inc.
Two ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇ ▇▇▇▇/▇▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: The Chase Manhattan Bank
c/o The Loan and Agency Services Group
1 Chase Manhattan Plaza -8th Floor
New York, New York, 10081
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
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11.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
11.5 Payment of Expenses and Taxes. Each of the Borrowers agrees (a)
to pay or reimburse the Administrative Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to the Administrative Agent, (c) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Company or any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided that the Borrowers shall have no obligation hereunder to any indemnitee
with respect to indemnified liabilities to the extent such indemnified
liabilities result from the gross negligence or willful misconduct of such
indemnitee. The agreements in this Section 11.5 shall survive repayment of the
Loans and all other amounts payable hereunder.
11.6 Successors and Assigns: Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Company,
the Borrowers, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that neither of the
Borrowers may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Company or either of
the Borrowers, in accordance with applicable law, at any time sell to one or
more banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to
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the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrowers and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. In no
event shall any Participant under any such participation have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Loans or any fees payable hereunder, or postpone the date of the final
maturity of the Loans, in each case to the extent subject to such participation.
The Borrowers agree that if amounts outstanding under this Agreement and the
Loans are due or unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each Participant shall,
to the maximum extent permitted by applicable law, be deemed to have the right
of setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
11.7(a) as fully as if it were a Lender hereunder. The Borrowers also agree that
each Participant shall be entitled to the benefits of Sections 2.18, 2.19 and
2.20 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the case
of Section 2.19, such Participant shall have complied with the requirements of
said Section and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
law, at any time and from time to time assign to any Lender or any Affiliate or
Approved Fund thereof or, with the consent of Details and the Administrative
Agent (which, in each case, shall not be unreasonably withheld or delayed), to
an additional bank, financial institution or other entity (an "Assignee") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit D, executed by
such Assignee and such Assignor (and, in the case of an Assignee that is not
then a Lender or an affiliate or Approved Fund thereof, by Details and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that no such assignment to an
Assignee (other than any Lender or any affiliate or Approved Fund thereof) shall
be in an aggregate principal amount of less than $5,000,000 (other than in the
case of an assignment of all of a Lender's interests under this Agreement),
unless otherwise agreed to by Details and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding any provision of this
Section 11.6, the consent of Details shall not be required, and, unless
requested by the Assignee and/or the Assignor, new Notes
80
shall not be required to be executed and delivered by the Borrowers, for any
assignment which occurs at any time when any of the events described in Section
8 shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address referred
to in Section 11.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitments of, and the principal amount of the Loans owing
to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, each other Loan
Party, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate or Approved Fund thereof, by Details and the
Administrative Agent) together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto; provided however, that no such fee shall be payable in the case of an
assignment to another Lender or an Affiliate of a Lender or Approved Fund; and
provided further that, in the case of contemporaneous assignments by a Lender to
more than one fund managed by the same investment advisor (which funds are not
then Lenders hereunder), only a single $3,500 such fee shall be payable for all
such contemporaneous assignments.
(f) (i) To the extent requested by any Lender, the Loans made by
such Lender shall be evidenced by a Note issued by the Borrowers, substantially
in the form of Exhibit F-1, F-2 or F-3, as the case may be, payable to the order
of such Lender (or, in the case of any Alternative Note, payable to such Lender
or its registered assigns). Each Lender is hereby authorized to record, on the
schedule annexed to and constituting a part of the relevant Note, information
regarding the relevant Loans made by such Lender, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided that the failure to make any such recordation or any error in such
recordation shall not affect the Borrowers' obligations hereunder or under any
Note. On or prior to the effective date of an Assignment and Acceptance, the
Borrowers, at their own expense, shall, to the extent requested by the Assignee,
execute and deliver to the Administrative Agent, in exchange for the relevant
Notes, new Notes to the order of the Assignee and, if applicable, the Assignor.
Such new Notes shall be dated the Closing Date.
(ii) Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States or any taxing authority thereof ("U.S. Taxes") in
respect of payment of any Obligations due to such Non-U.S. Lender under this
Agreement if the Obligations were in registered form for U.S. federal income tax
purposes may request the Borrowers (through the Administrative Agent), and the
Borrowers agree thereupon, to exchange any promissory note(s) evidencing such
Obligations for promissory note(s) substantially in the form of Exhibit F-3
(each, an "Alternative Note"). Alternative Notes may not be exchanged for
promissory notes that are not Alternative Notes. Each Non-U.S. Lender that holds
Alternative Note(s) (an "Alternative Noteholder") (or, if such Alternative
Noteholder is not the beneficial owner thereof, such beneficial owner) shall
deliver to the Borrowers prior to or at the time such Non-U.S. Lender becomes an
Alternative Noteholder each of the forms and
81
certifications required by Section 2.19(b). An Alternative Note and the
Obligation(s) evidenced thereby may be assigned or otherwise transferred in
whole or in part only by registration of such assignment or transfer of such
Alternative Note and the Obligation(s) evidenced thereby on the Register (and
each Alternative Note shall expressly so provide). Any assignment or transfer of
all or part of such Obligation(s) and the Alternative Note(s) evidencing the
same shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Alternative Note(s) evidencing such Obligation(s),
duly endorsed by (or accompanied by a written instrument of assignment or
transfer duly executed by) the Alternative Noteholder thereof, and thereupon one
or more new Alternative Note(s) in the same aggregate principal amount shall be
issued to the designated Assignee(s). No assignment of an Alternative Note and
the Obligations evidenced thereby shall be effective unless it has been recorded
in the Register.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 11.6 concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or the Reimbursement
Obligations owing to such other Lender, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan and/or of the Reimbursement
Obligations owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Company or
the Borrowers, any such notice being expressly waived by the Company and the
Borrowers to the extent permitted by applicable law, upon any amount becoming
due and payable by the Company or either of the Borrowers hereunder (whether at
the stated maturity, by acceleration or otherwise) to set off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of the Company or the Borrowers. Each Lender agrees promptly to notify
the Company, the Borrowers and the Administrative Agent after any such setoff
and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
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11.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with Details and the Administrative
Agent.
11.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Company, the Borrowers, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. Each of the Company and
the Borrowers hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Company or the Borrowers, as the case may be at its address set forth in
Section 11.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section 11.12 any special, exemplary, punitive or consequential
damages.
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11.13 Acknowledgements. Each of the Company and the Borrowers hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Company or the Borrowers
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between Administrative Agent and
Lenders, on one hand, and the Company and the Borrowers, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Company, the Borrowers and the
Lenders.
11.14 WAIVERS OF JURY TRIAL. THE COMPANY, THE BORROWERS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to use reasonable efforts to keep confidential all non-public
information provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing herein
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any affiliate
of any Lender, (b) to any Participant or Assignee (each, a "Transferee") or
prospective Transferee which agrees to comply with the provisions of this
Section 11.15, (c) to the employees, directors, agents, attorneys, accountants
and other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over the
Administrative Agent or such Lender, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) which has been publicly disclosed other
than in breach of this Section 11.15, (h) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, or (i)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.
84
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
DETAILS CAPITAL CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
DETAILS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
DYNAMIC CIRCUITS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
THE CHASE MANHATTAN BANK, as
Administrative Agent, Collateral Agent, Co-
Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
BANKERS TRUST COMPANY, as Documentation
Agent, Co-Syndication Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, as Co-Agent
and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Relationship Manager
BANKBOSTON
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: MANAGING DIRECTOR
CREDITANSTALT CORPORATE FINANCE
By: [ILLEGIBLE]
-------------------------------
Name: [ILLEGIBLE]
Title: [ILLEGIBLE]
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Vice President
KZH CRESCENT-2 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
KZH CRESCENT LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company, Its
Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P.,
as Investment Advisor
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AUTHORIZED SIGNATORY
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE
FUND, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AUTHORIZED SIGNATORY
KZH-LV LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ PRIME
INCOME TRUST
By: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
CYPRESSTREE SENIOR FLOATING RATE FUND
By: CypressTree Investment Management
Company, Inc., as Portfolio Manager
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: PRINCIPAL
CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment Management
Company, Inc., as Managing Member
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: PRINCIPAL
KZH CYPRESSTREE-1 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
KZH ▇▇▇▇▇▇▇▇ LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
PILGRIM AMERICA PRIME RATE TRUST
By: Pilgrim America Investments Inc., as
its investment manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Annex A
PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS
TRANCHE A TERM LOANS AND COMMITMENT FEES
================================================================================
Applicable Margin Applicable
for Eurodollar Margin for ABR
Consolidated Loans and Letters Loans and Swing Commitment
Leverage Ratio of Credit Line Loans Fee Rate
--------------------------------------------------------------------------------
greater than or equal to
5.00 to 1.0 2.25% 1.25% 0.50%
--------------------------------------------------------------------------------
less than
5.00 to 1.0 and
greater than or equal to
4.00 to 1.0 2.00% 1.00% 0.50%
--------------------------------------------------------------------------------
less than
4.00 to 1.0 and
greater than or equal to
3.00 to 1.0 1.75% 0.75% 0.375%
--------------------------------------------------------------------------------
less than
3.00 to 1.0 and
greater than or equal to
2.50 to 1.0 1.50% 0.50% 0.375%
--------------------------------------------------------------------------------
less than
2.50 to 1.0 1.25% 0.25% 0.375%
================================================================================
Changes in the Applicable Margin with respect to Tranche A Term Loans or
Revolving Credit Loans or in the Commitment Fee Rate resulting from changes in
the Consolidated Leverage Ratio shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to Section 6.1 (but in any event not later than the 45th day after the
end of each of the first three quarterly periods of each fiscal year or the 90th
day after the end of each fiscal year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, if the
Administrative Agent or the Required Lenders so determine, the Consolidated
Leverage Ratio as at the end of the fiscal period that would have been covered
thereby shall for the purposes of this definition be deemed to be greater than
5.00 to 1.0. In addition, at all times while an Event of Default shall have
occurred and be continuing and the Administrative Agent or the Required Lenders
so determine, the Consolidated Leverage Ratio shall for the purposes of this
definition be deemed to be greater than 5.00 to 1.0. Each determination of the
Consolidated Leverage Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of Details ending at
the end of the period covered by the relevant financial statements.
Schedule 1.1A
Commitments
SCHEDULE 1.1A
COMMITMENTS
================================================================================================================
Tranche A Revolving
Term Loan Tranche B Term Credit
Lender Total Allocation Commitment Loan Commitment Commitment
================================================================================================================
The Chase Manhattan Bank $77,500,000.00 $15,750,000.00 $55,000,000.00 $6,750,000.00
----------------------------------------------------------------------------------------------------------------
Bankers Trust Company $22,500,000.00 $15,750,000.00 $6,750,000.00
----------------------------------------------------------------------------------------------------------------
Dresdner Bank AG, New York and Grand
Cayman Branches $20,000,000.00 $14,000,000.00 $6,000,000.00
----------------------------------------------------------------------------------------------------------------
State Street Bank & Trust $20,000,000.00 $14,000,000.00 $6,000,000.00
----------------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia $15,000,000.00 $10,500,000.00 $4,500,000.00
----------------------------------------------------------------------------------------------------------------
BankBoston $15,000,000.00 $10,500,000.00 $4,500,000.00
----------------------------------------------------------------------------------------------------------------
Fleet National Bank $15,000,000.00 $10,500,000.00 $4,500,000.00
----------------------------------------------------------------------------------------------------------------
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company $15,000,000.00 $7,000,000.00 $5,000,000.00 $3,000,000.00
----------------------------------------------------------------------------------------------------------------
CreditAnstalt Corporate Finance $15,000,000.00 $7,000,000.00 $5,000,000.00 $3,000,000.00
----------------------------------------------------------------------------------------------------------------
Sankaty High Yield Partners $20,000,000.00 $20,000,000.00
----------------------------------------------------------------------------------------------------------------
Trust Company of the West $19,000,000.00 $19,000,000.00
----------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management $11,000,000.00 $11,000,000.00
----------------------------------------------------------------------------------------------------------------
First Dominion $9,000,000.00 $9,000,000.00
----------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ $9,000,000.00 $9,000,000.00
----------------------------------------------------------------------------------------------------------------
CypressTree $6,500,00.00 $6,500,000.00
----------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Capital Management $6,000,000.00 $6,000,000.00
----------------------------------------------------------------------------------------------------------------
Pilgrim America Investments, Inc. $4,500,000.00 $4,500,000.00
----------------------------------------------------------------------------------------------------------------
TOTALS $300,000,000.00 $105,000,000.00 $150,000,000.00 $45,000,000.00
=============== =============== =============== ==============
================================================================================================================
Schedule 1.1B
Mortgaged Property
Schedule 1.1B
Mortgaged Property
I. Details Capital Corp.
None.
II. Details, Inc.
None.
III. Dynamic Circuits, Inc.
Cuplex, Inc. owns a property located at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
Schedule 4.4
Consents, Authorizations, Filings, Notices
Schedule 4.4
Consents, Authorizations, Filings, Notices
I. Details Capital Corp.
None required.
II. Details, Inc.
None required.
III. Dynamic Circuits, Inc.
A. Landlord Consents
i. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
ii. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
iii. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ (month to month tenancy)
B. Other
i. Credit Agreement dated as of October 9, 1997 among Dynamic
Circuits, Inc., Bankers Trust and various lenders.
ii. Lease Agreement dated 12/19/94 between Dynamic Circuits, Inc.
and Imaging Financial Services, Inc.
iii. Equipment Purchase Contract among ▇▇▇▇▇▇ International, Inc.,
▇▇▇▇▇▇ Electronic Materials group and Dynamic Circuits, Inc..
iv. General Electric Capital Corporation - Savin Copier Lease
Agreement.
v. AmeriGas Propane Supply Agreement and Equipment Lease.
vi. Aqua Mer Materials Sales Agreement by and between Dynamic
Circuits, Inc. and MacDermid Imaging Technology Incorporated.
vii. Purchase Agreement between Dynamic Circuits, Inc. and Polyclad
Laminates, Inc.
C. Cuplex, Inc.
i. Landlord Consents
Schedule 4.10
Taxes
Schedule 4.10
Taxes
I. Details Capital Corp.
None.
II. Details, Inc.
A. Sales audit occurred for the period from December 1994 through March
1997. Audit field work is complete but Details, Inc. has not
received official notice. Management anticipates that any
adjustments would be immaterial.
B. Details, Inc. has received notice of IRS Audit for the 1996 fiscal
year.
C. Colorado Springs Circuits, Inc. dba NTI
There was recently a State of Colorado Department of Revenue audit
of NTI's state sales, use, and payroll taxes for the periods 9/94 -
8/97. As of October 22, 1997, there were disputed issues in the
approximate amount of $50,000 plus interest and penalties, if any.
III. Dynamic Circuits, Inc.
A. Cuplex, Inc.
Cuplex was assessed a fine of approximately $6,000 in June 1998 for
delinquency in paying payroll/sales taxes, but no liability for the
payment of such taxes exists.
Schedule 4.15
Subsidiaries
Schedule 4.15
Subsidiaries
As of the first closing date:
I. Details Capital Corp. will directly own all the outstanding capital stock
of Details, Inc.
II. Details, Inc. will directly own all the outstanding capital stock of
Colorado Springs Circuits, Inc. dba NTI, Details Global Sales, Inc., a
Virgin Islands corporation and Details Europe Limited, a private limited
company incorporated under the Companies Act of 1985 of England and Wales.
III. Dynamic Circuits, Inc. will directly own all the outstanding capital stock
of Cuplex, Inc. and 80% of the equity interests in DCI/Design Plus, LLC.
As of the second closing date:
I. Details Capital Corp. will directly own all the outstanding capital stock
of Details, Inc.
II. Details, Inc. will directly own all the outstanding capital stock of
Dynamic Circuits, Inc., Colorado Springs Circuits, Inc. dba NTI, Details
Global Sales, Inc., and Details Europe Limited.
III. Dynamic Circuits, Inc. will directly own all the outstanding capital stock
of Cuplex, Inc. and 80% of the outstanding capital stock of DCI/Design
Plus, LLC.
Schedule
UCC Filing Jurisdictions
Schedule 4.19(a)
UCC Filing Jurisdictions
Details Capital Corp.
Secretary of State of California
Details, Inc.
I. Secretary of State of California
II. Colorado Springs Circuits. Inc. dba NTI
A. Secretary of State of Colorado
i. El Paso County
Dynamic Circuits, Inc.
I. Secretary of State of California
II. Secretary of State of Colorado
▇. ▇▇▇▇▇▇▇▇▇ County
III. Secretary of State of Florida
IV. Maryland State Department of Assessments and Taxation
V. Secretary of State of North Carolina
VI. Cuplex, Inc.
▇. ▇▇▇▇▇ County, ▇▇▇▇▇▇▇
▇. Secretary of State of Massachusetts
i. Town of Marlborough
C. Secretary of State of Texas
i. Collin County
ii. Dallas County
Schedule 4.19(b)
Mortgage Filing Jurisdictions
Schedule 4.19(b)
Mortgage Filing Jurisdictions
I. Details Capital Corp.
None.
II. Details. Inc.
None.
III. Dynamic Circuits. Inc.
Dallas County (Texas) Registry of Deeds.
Schedule 7.2(e)
Existing Indebtedness
Schedule 7.2(e)
Existing Indebtedness
I. Details Capital Corp.
Indenture dated November 18, 1997 between Details Capital Corp. (as
successor to Details Holdings Corp.) and the State Street Bank and Trust
Company, as trustee, as amended.
II. Details. Inc.
A. Indenture dated November 18, 1997 between Details, Inc. and the
State Street Bank and Trust Company, as trustee.
B. Leases dated February 28, 1998 and June 12, 1998 between Details,
Inc. and Orbotech, Inc. relating to the short-term financing of two
Automated Optical Inspection machines.
III. Dynamic Circuits. Inc.
Intercompany indebtedness in the amount of approximately $33,400,000 owed
to Details Intermediate Holdings Corp. by Dynamic Circuits, Inc., incurred
on July 23, 1998.
Schedule 7.3(e)
Existing Liens
Schedule 7.3(e)
Existing Liens
I. Details Capital Corp.
None.
II. Details. Inc.
A. UCC-1 filed with the Secretary of State of California by Orbotech,
Inc. on February 27, 1998, Filing No. ▇▇▇▇▇▇▇▇▇▇.
B. UCC-1 filed with the Secretary of State of California by Orbotech,
Inc. on February 27, 1998, Filing No. ▇▇▇▇▇▇▇▇▇▇.
III. Dynamic Circuits, Inc.
None.
Exhibit A
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
DETAILS INTERMEDIATE HOLDING CORP.,
DETAILS CAPITAL CORP.,
DETAILS, INC.,
DYNAMIC CIRCUITS, INC.,
and certain of their Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of July 23, 1998
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS ............................................. 1
1.1 Definitions ................................................. 1
1.2 Other Definitional Provisions ............................... 5
SECTION 2. GUARANTEE ................................................. 5
2.1 Guarantee ................................................... 5
2.2 Right of Contribution ....................................... 6
2.3 No Subrogation .............................................. 6
2.4 Amendments, etc. with respect to the Borrower Obligations ... 6
2.5 Guarantee Absolute and Unconditional ........................ 7
2.6 Reinstatement ............................................... 8
2.7 Payments .................................................... 8
SECTION 3. GRANT OF SECURITY INTEREST ................................. 8
SECTION 4. REPRESENTATIONS AND WARRANTIES ............................. 9
4.1 Representations in Credit Agreement ......................... 9
4.2 Title; No Other Liens ....................................... 9
4.3 Perfected First Priority Liens .............................. 9
4.4 Chief Executive Office ...................................... 9
4.5 Inventory and Equipment ..................................... 9
4.6 Farm Products ............................................... 9
4.7 Pledged Securities .......................................... 10
4.8 Receivables ................................................. 10
4.9 Intellectual Property ....................................... 10
SECTION 5. COVENANTS .................................................. 11
5.1 Delivery of Instruments and Chattel Paper ................... 11
5.2 Maintenance of Insurance .................................... 11
5.3 Payment of Obligations ...................................... 11
5.4 Maintenance of Perfected Security Interest; Further
Documentation ............................................. 11
5.5 Changes in Locations, Name, etc ............................. 12
5.6 Notices ..................................................... 12
5.7 Pledged Securities .......................................... 12
5.8 Receivables ................................................. 13
5.9 Intellectual Property ....................................... 13
SECTION 6. REMEDIAL PROVISIONS ........................................ 15
6.1 Certain Matters Relating to Receivables ..................... 15
6.2 Communications with Obligors; Grantors Remain Liable ........ 15
6.3 Pledged Stock ............................................... 16
6.4 Proceeds to be Turned Over To Administrative Agent .......... 17
6.5 Application of Proceeds ..................................... 17
6.6 Code and Other Remedies ..................................... 17
6.7 Registration Rights ......................................... 18
i
Page
----
6.8 Waiver, Deficiency .......................................... 19
SECTION 7. THE ADMINISTRATIVE AGENT ................................... 19
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc . 19
7.2 Duty of Administrative Agent ................................ 20
7.3 Execution of Financing Statements ........................... 21
7.4 Authority of Administrative Agent ........................... 21
SECTION 8. MISCELLANEOUS ............................................ 21
8.1 Amendments in Writing ....................................... 21
8.2 Notices ..................................................... 21
8.3 No Waiver by Course of Conduct; Cumulative Remedies ......... 21
8.4 Enforcement Expenses; Indemnification ....................... 22
8.5 Successors and Assigns ...................................... 22
8.6 Set-Off ..................................................... 22
8.7 Counterparts ................................................ 23
8.8 Severability ................................................ 23
8.9 Section Headings ............................................ 23
8.10 Integration ................................................. 23
8.11 GOVERNING LAW ............................................... 23
8.12 Submission To Jurisdiction; Waivers ......................... 23
8.13 Acknowledgements ............................................ 24
8.14 WAIVER OF JURY TRIAL ........................................ 24
8.15 Additional Grantors ......................................... 24
8.16 Releases .................................................... 24
ii
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of July 23, 1998, made
by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of THE CHASE
MANHATTAN BANK, as Administrative Agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions (the "Lenders") from time
to time parties to the Credit Agreement, dated as of July 23, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Details, Inc. (the "Details"), Dynamic Circuits, Inc. ("DCI", and
collectively with Details, the "Borrowers", and individually, a "Borrower"), the
Lenders and the Administrative Agent
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to either of the Borrowers upon
the terms and subject to the conditions set forth therein;
WHEREAS, each of the Borrowers are members of an affiliated group of
companies that includes each other Grantor,
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement may be used in part to enable the Borrowers to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective initial extensions of credit to the Borrowers
under the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Administrative Agent for the ratable benefit of the
Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit thereunder,
each Grantor hereby agrees with the Administrative Agent, for the ratable
benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Chattel Paper, Documents, Equipment, Farm
Products, Instruments, Inventory and Investment Property.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
2
"Borrower Obligations": the collective reference to the DCI
Obligations (as defined in the Credit Agreement) and the Details
Obligations.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings
and applications in the United States Copyright Office, and (ii) the right
to obtain all renewals thereof
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright, to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in such
agreement is not prohibited by such agreement without the consent of any
other party thereto, would not give any other party to such agreement the
right to terminate its obligations thereunder, or is permitted with
consent if all necessary consents to such grant of a security interest
have been obtained from the other parties thereto.
"Details Obligations": the collective reference to the unpaid
principal of and interest on the Loans made to Details and the
Reimbursement Obligations of Details and all other obligations and
liabilities of Details (including, without limitation, interest accruing
at the then applicable rate provided in the Credit Agreement after the
maturity of such Loans and such Reimbursement Obligations and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to Details, in its
capacity as a borrower under the Credit Agreement, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding)
to the Administrative Agent or any Lender (or, in the case of any Hedge
Agreement referred to below, any Affiliate of any Lender), whether direct
or indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Loan Documents, any
Letter of Credit or any Hedge Agreement entered into by Details with any
Lender (or any Affiliate of any Lender) or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to
the Lenders that are required to be paid by Details pursuant to the terms
of any of the foregoing agreements).
"Domestic Issuer": any Issuer that is organized under the laws of
any jurisdiction within the United States.
"Foreign Issuer": any Issuer that is organized under the laws of any
jurisdiction outside the United States.
3
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof, to which
such Grantor is a party or under which such Grantor has any right, title
or interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform and to exercise
all remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such contract, agreement, instrument or indenture is
not prohibited by such contract, agreement, instrument or indenture
without the consent of any other party thereto, would not give any other
party to such contract, agreement, instrument or indenture the right to
terminate its obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been obtained
from the other parties thereto (it being understood that the foregoing
shall not be deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect, limit, restrict
or impair the grant by such Grantor of a security interest pursuant to
this Agreement in any Receivable or any money or other amounts due or to
become due under any such contract, agreement, instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required to
be paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"Guarantors": the collective reference to each Grantor other than
(i) with respect to the DCI Obligations only, DCI, (ii) with respect to
the Details Obligations only, Details, and and (iii) any Grantor that is a
Foreign Subsidiary.
"Hedge Agreements": as to any Person, all interest rate swaps, caps
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest obligations,
either generally or under specific contingencies.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to its direct or indirect parent or any of its Subsidiaries.
4
"Issuers": the collective reference to each issuer of a Pledged
Security.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York
"Obligations": (i) in the case of Details, the Details Obligations,
(ii) in the case of DCI, the DCI Obligations, and (iii) in the case of
each Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof; all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in
Schedule 6, and (iii) all rights to obtain any reissues or extensions of
the foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or
sell any invention covered in whole or in part by a Patent, including,
without limitation, any of the foregoing referred to in Schedule 6 to the
extent the grant by such Grantor of a security interest pursuant to this
Agreement in its right, title and interest in such agreement is not
prohibited by such agreement without the consent of any other party
thereto, would not give any other party to such agreement the right to
terminate its obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been obtained
from the other parties thereto.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business) or any Investment Property.
"Pledged Securities": the collective reference to the Pledged Notes
and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect or any Investment Property.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, shall include, without limitation,
all dividends or other income from the Pledged Securities, collections
thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
5
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6 and (ii) the
right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in Schedule 6 to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in
such agreement is not prohibited by such agreement without the consent of
any other party thereto, would not give any other party to such agreement
the right to terminate its obligations thereunder, or is permitted with
consent if all necessary consents to such grant of a security interest
have been obtained from the other parties thereto.
1.2 Other Definitional Provisions. (a) The words "hereof;" "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrowers when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
6
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement either of the Borrowers may be free from any
Borrower Obligations.
(e) No payment made by the Borrowers, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrowers, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the maximum liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 Right of Contribution. Each Subsidiary Guarantor hereby agrees
that to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Administrative Agent and the Lenders, and each Subsidiary
Guarantor shall remain liable to the Administrative Agent and the Lenders for
the maximum liability of such Subsidiary Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against either of the Borrowers or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative Agent or any
Lender for the payment of the Borrower Obligations, nor shall any Guarantor seek
or be entitled to seek any contribution or reimbursement from either of the
Borrowers or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Administrative Agent and the Lenders
by the Borrowers on account of the Borrower Obligations are paid in full, no
Letter of Credit shall be outstanding and the Commitments are terminated. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Borrower Obligations shall not have been paid in full,
such amount shall be held by such Guarantor for the account of the
Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the
7
Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrowers
and any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment of the
Borrower Obligations and notice of default or nonpayment to or upon the
Borrowers or any of the Guarantors with respect to the Borrower Obligations.
Each Guarantor understands and agrees to the fullest extent permitted by
applicable law that the guarantee contained in this Section 2 shall be construed
as a continuing, absolute and unconditional guarantee of payment without regard
to (a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrowers or any other Person against the Administrative Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrowers or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrowers for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the Borrowers, any other Guarantor or any other Person or against
any collateral security or guarantee for the Borrower Obligations or any right
of offset with respect thereto, and any failure by the Administrative Agent or
any Lender to make any such demand, to pursue such other rights or remedies or
to collect any payments from the Borrowers, any other Guarantor or any other
Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrowers, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Lender against any Guarantor. For the purposes hereof "demand" shall include
the commencement and continuance of any legal proceedings.
8
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
either of the Borrowers or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, either of the Borrowers or any Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit of
the Lenders, a security interest in, all of the following property now owned or
at any time hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations,:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all Instruments;
(g) all Intellectual Property;
(h) all Inventory;
(i) all Investment Property;
(j) all Pledged Securities;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
Notwithstanding the foregoing, such Collateral does not include any
rights or property to the extent that any valid and enforceable law or
regulation applicable to such rights or property
9
prohibits the creation of a security interest therein. In addition, in the event
that any Grantor disposes of assets, in a transaction permitted by Section 7.5
of the Credit Agreement, such assets, but not the proceeds or products thereof,
shall be released from the Lien on the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrowers thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty to
either of the Borrower's knowledge shall, for the purposes of this Section 4.1,
be deemed to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest granted
to the Administrative Agent for the ratable benefit of the Lenders pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Lenders, pursuant to this
Agreement or as are permitted by the Credit Agreement.
4.3 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Liens permitted by the Credit Agreement
which have priority over the Liens on the Collateral by operation of law.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof; the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
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4.7 Pledged Securities. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute (i) all the issued and outstanding shares of
all classes of the Capital Stock of each Domestic Issuer owned by such Grantor
and (ii) 65% of the issued and outstanding shares of all classes of the Capital
Stock of each Foreign Issuer owned by such Grantor.
(b) All the shares of the Pledged Stock issued by either of the
Borrowers or any of its Subsidiaries have been duly and validly issued and are
fully paid and nonassessable.
(c) Each of the Pledged Notes of either of the Borrowers or any of
its Subsidiaries constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of; any other Person, except
the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
(b) Not more than 5% of the aggregate amount of the then outstanding
Receivables relate to obligors which are Governmental Authorities.
(c) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) Each Grantor owns, or is licensed to use, all Intellectual
Property necessary for the conduct of its business as currently conducted. No
material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does such Grantor know of any
valid basis for any such claim. The use by such Grantor of Intellectual Property
which is material to the operations of the Borrowers and their respective
Subsidiaries does not infringe on the rights of any Person in any material
respect. No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or such
Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect
(c) Except as set forth in Schedule 6, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
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SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper not constituting Investment Property, such
Instrument or Chattel Paper shall be immediately delivered to the Administrative
Agent, duly indorsed in a manner satisfactory to the Administrative Agent, to be
held as Collateral pursuant to this Agreement
5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) insuring such Grantor, the Administrative Agent and the Lenders against
liability for personal injury and property damage relating to such Inventory and
Equipment or to any motor vehicles owned or operated by such Grantor, such
policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the Lenders.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof; (ii) name the Administrative Agent as insured party or
loss payee, (iii) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Administrative Agent
(c) The Borrowers shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
at the time of delivery of the financial statements described in Section 6.1(a)
of the Credit Agreement
5.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all its material obligations of whatever nature, against or with
respect to the Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.
5.4 Maintenance of Perfected Security Interest, Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and
12
deliver, and have recorded, such further instruments and documents and take such
further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, the filing
of any financing or continuation statements under the Uniform Commercial Code
(or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.
5.5 Changes in Locations, Name, etc. Such Grantor will not, except
upon 15 days' prior written notice to the Administrative Agent and delivery to
the Administrative Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to Schedule 5 showing any additional
location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.6 Notices. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and
(b) the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.7 Pledged Securities. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer or any Investment Property, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any shares of
the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept
the same as the agent of the Administrative Agent and the Lenders, hold the same
in trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Pledged Securities upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged Securities
or any property shall be distributed upon or with respect to
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the Pledged Securities pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property for the account of the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
in each case, to any Person other than the Administrative Agent, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Pledged Securities or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Pledged Securities or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or (iv)
enter into any agreement or undertaking restricting the right or ability of such
Grantor or the Administrative Agent to sell, assign or transfer any of the
Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it
5.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
5.9 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any ▇▇▇▇ which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Agreement, and (v) not (and not permit any
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licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby such Trademark may become invalidated or impaired in any way, except in
each case to the extent that taking, or omitting to take, such action would not
have a Material Adverse Effect.
(b) Such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public, except in each case to the
extent that taking, or omitting to take, such action would not have a Material
Adverse Effect.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain, except to the extent that taking such action would not have a
Material Adverse Effect.
(d) Such Grantor (either itself or through licensees) will not do
any act that knowingly uses any material Intellectual Property to infringe the
intellectual property tights of any other Person, except to the extent that
taking such action would not have a Material Adverse Effect.
(e) Such Grantor will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon the reasonable request
of the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's and the
Lenders' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual
15
Property is of material economic value, promptly notify the Administrative Agent
after it learns thereof and ▇▇▇ for infringement, misappropriation or dilution,
to seek injunctive relief where appropriate and to recover any and all damages
for such infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Administrative
Agent shall have the right to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Administrative
Agent may require in connection with such test verifications; provided, that
prior to a Default or Event of Default such test verifications shall be done
without any notice that the verification is being done by a secured party being
given to any of the obligors on such Receivables. At any time and from time to
time, upon the Administrative Agent's request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control, and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor for the account of the Administrative Agent
and the Lenders, segregated from other funds of such Grantor. Each such deposit
of Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Administrative Agent's request upon the occurrence of a
Default or an Event of Default, each Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
6.2 Communications with Obligors: Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables; provided, that prior to the occurrence of an Event of Default, the
Administrative Agent shall not indicate to any obligors that the verification is
being done by a secured party.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Receivables that the Receivables have been assigned
to the Administrative Agent for the ratable benefit of the Lenders and that
payments in respect thereof shall be made directly to the Administrative Agent.
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(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) by reason of or arising
out of this Agreement or the receipt by the Administrative Agent or any Lender
of any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities; provided, however, that
no vote shall be cast or corporate right exercised or other action taken which,
in the Administrative Agent's reasonable judgment, would impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise its rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Securities and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and (ii)
any or all of the Pledged Securities shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder, if an Event of Default
shall occur and be continuing and the Administrative Agent shall give notice of
its intent to exercise its rights to such Grantor to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of
17
this Agreement, without any other or further instructions from such Grantor, and
each Grantor agrees that each Issuer shall be fully protected in so complying,
and (ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Pledged Securities directly to the Administrative
Agent
6.4 Proceeds to be Turned Over To Administrative Agent. In addition
to the rights of the Administrative Agent and the Lenders specified in Section
6.1 with respect to payments of Receivables, if an Event of Default shall occur
and be continuing, all Proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor for the account
of the Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by such Grantor in trust for the Administrative Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. If an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the
Administrative Agent to the Borrowers or to whomsoever may be lawfully entitled
to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrowers or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the Lenders, may exercise,
in addition to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and
18
expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations, in such order as the
Administrative Agent may elect, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the New
York UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.
6.7 Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and,
19
as a consequence, that each and every covenant contained in this Section 6.7
shall be specifically enforceable against such Grantor, and such Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose
of collecting any and all such moneys due under any Receivable or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section
6.6 or 6.7, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v)(i) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct (ii) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(iii) sign and indorse any
20
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (iv) commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (v)
defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (vi) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem appropriate;
(vii) assign any Copyright, Patent or Trademark (along with the goodwill
of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (viii) generally, sell, transfer, pledge
and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were
the absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any tights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with
interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due ABR Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor
to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account Neither the Administrative
Agent, any Lender nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive
21
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with subsection 11.1 of the Credit Agreement
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 11.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
22
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees
to pay or reimburse each Lender and the Administrative Agent for all its costs
and expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Lender and of
counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Lenders harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Borrowers would be required to do so pursuant to subsection 11.5 of
the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time while an
Event of Default shall have occurred and be continuing, without notice to such
Grantor or any other Grantor, any such notice being expressly waived by each
Grantor, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such
Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agent and each Lender under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.
23
8.7 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section 8.12 any special, exemplary, punitive or consequential
damages.
24
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative
Agent and Lenders, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Grantors and the Lenders.
8.14 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Grantors. Each Subsidiary of a Borrower that is
required to become a party to this Agreement pursuant to subsection 6.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other then accrued Obligations shall have been paid in full,
the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrowers, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrowers shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrowers stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
25
(c) Upon the occurrence of the Second Closing Date and the
contribution of all of the Capital Stock of DCI by New Intermediate Holdco to
Details Capital Corp., New Intermediate Holdco shall cease to be a Guarantor and
a Grantor without any further action on the part of New Intermediate Holdco, the
Administrative Agent or any of the Lenders. DCI shall remain a Guarantor and
Grantor for all purposes hereunder and the Capital Stock of DCI owned by Details
shall be deemed to be Pledged Stock pledged by Details pursuant to the terms
hereof. Furthermore, it is understood and agreed that prior to the Second
Closing Date DCI and Cuplex, Inc. shall be Guarantors and Grantors with respect
to the DCI Obligations only and shall not have any obligation with respect to
the Details Obligations.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
DETAILS INTERMEDIATE HOLDING CORP.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title:
DETAILS, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title:
DYNAMIC CIRCUITS, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title: Vice President, CFO and
Secretary
CUPLEX, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title: Senior Vice President, CFO
and Secretary
COLORADO SPRINGS CIRCUITS, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title:
27
DETAILS CAPITAL CORP.
By: /s/ [ILLEGIBLE]
-------------------------------------
Title:
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
Issuer Class of Stock Stock Certificate No. No. of Shares
--------------------------------------------------------------------------------
Pledged Notes:
Issuer Payee Principal Amount
--------------------------------------------------------------------------------
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]*
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock**
Other Actions
[Describe other actions to be taken]
----------
* Note that perfection of security interests in patents and trademarks
requires filings under the UCC in the jurisdictions where filings would be
made for general intangibles, as well as filings in the U.S Copyright
Office and the U.S. Patent & Trademark Office.
** If the interest of a Grantor in Pledged Stock appears on the books of a
financial intermediary, the procedures for creation of the pledge
specified in 8-313(h) of the New York UCC will have to be followed. These
procedures involve notification to the financial intermediary.
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
ACKNOWLEDGEMENT AND CONSENT***
The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of July 23, 1998 (the "Agreement"), made by the
Grantors parties thereto for the benefit of The Chase Manhattan Bank, as
Administrative Agent. The undersigned agrees for the benefit of the
Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) of
the Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.
[NAME OF ISSUER]
By _____________________________________
Title __________________________________
Address for Notices:
________________________________________
________________________________________
Fax:____________________________________
----------
*** This consent is necessary only with respect to any Issuer which is not
also a Grantor. This consent may be modified or eliminated with respect to any
Issuer that is not controlled by a Grantor. if a consent is required, its
execution and delivery should be included among the conditions to the initial
borrowing specified in the Credit Agreement.
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of___________ 19__, made by
______________________________ a ______________ corporation (the "Additional
Grantor"), in favor of THE CHASE MANHATTAN BANK, as administrative agent (in
such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") parties to the Credit Agreement referred to below.
All capitalized terms not defined herein shall have the meaning ascribed to them
in such Credit Agreement.
WITNESSETH:
WHEREAS, Details, Inc. (the "Details"), Dynamic Circuits, Inc.
("DCI"), the Lenders and the Administrative Agent have entered into a Credit
Agreement, dated as of July 23, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrowers and
certain of their Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of July 23, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.15
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules _________****
to the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
----------
**** Refer to each Schedule which needs to be supplemented.
2
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:_____________________________________
Name:
Title:
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
I. Details Intermediate Holdings Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
II. Details, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
III. Colorado Springs Circuits, Inc. dba NTI
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
IV. Dynamic Circuits, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
V. Cuplex, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
1. 1,000,000 shares of Common Stock of Colorado Springs Circuits, Inc. dba
NTI.
2. 1,431,923 shares of Common Stock of Cuplex, Inc.
3. 65 Ordinary Shares, (pounds)1 each of Details Europe Limited.
4. 650 shares of Common Stock of Details Global Sales, Inc.
5. Shares of Dynamic Circuits, Inc. held by Details Intermediate Holdings
Corp.*
6. Shares of Details, Inc. held by Details Capital Corp.
7. Shares Dynamic Circuits, Inc. held by Details, Inc.
Pledged Notes:
1. Intercompany Note, dated as of October 9, 1997, between Dynamic Circuits,
Inc., a Delaware corporation and Cuplex, Inc., a Delaware corporation, in
which Dynamic Circuits, Inc. promised to pay Cuplex, Inc. the unpaid
principal amount of all loans and advances made by Cuplex, Inc. to Dynamic
Circuits, Inc., and the interest thereon.
2. Intercompany Note, dated as of October 9, 1997, between Dynamic Circuits,
Inc., a Delaware corporation and Cuplex, Inc., a Delaware corporation, in
which Cuplex, Inc. promised to pay Dynamic Circuits, Inc. the unpaid
principal amount of all loans and advances made by Dynamic Circuits, Inc.
to Cuplex, Inc., and the interest thereon.
* Pursuant to the Guarantee and Collateral Agreement, Details Intermediate
Holdings Corp. shall cease to be a guarantor upon the Second Closing Date (as
defined therein) and the pledge of Dynamic Circuits, Inc. shall no longer be
deemed to be pledged by Details Intermediate Holdings Corp. thereafter.
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Filing of Forms UCC-1 with the following jurisdictions:
1. Secretary of State of California.
2. Secretary of State of Colorado
a. El Paso County
▇. ▇▇▇▇▇▇▇▇▇ County
3. Secretary of State of Florida
4. ▇▇▇▇▇ County, Georgia
5. Maryland State Department of Assessments and Taxation
6. Secretary of State of Massachusetts
a. Town of Marlborough
7. Secretary of State of North Carolina
8. Secretary of State of Texas
▇. ▇▇▇▇▇▇ County
b. Dallas County
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION
AND CHIEF EXECUTIVE OFFICE
Grantor Jurisdiction Location
------- ------------ --------
Details Intermediate Holdings Corp. California ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Details, Inc. California ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Colorado Springs Circuits, Inc. Colorado ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
dba NTI ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dynamic Circuits, Inc. Delaware ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cuplex, Inc. Delaware ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Address Location
------- -------
Details Intermediate ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Holdings Corp.
Details, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Colorado Springs Circuits, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Inc. dba NTI ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Dynamic Circuits, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇* ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇* ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Cuplex, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇* ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇* ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇* ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇* ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇* ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
*Addresses contain inventory of both Dynamic Circuits, Inc. and Cuplex, Inc.
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
None.
PATENTS AND PATENT LICENSES
None.
TRADEMARKS AND TRADEMARK LICENSES
a. Dynamic Circuits, Inc.: U.S. Registered Trademark No. 1,896,055 -
Trademark for "D & design"
b. Dynamic Circuits, Inc.: U.S. Registered Trademark No. 1,894,984 for "DCI &
design"
c. Dynamic Circuits, Inc.: U.S. Registered Trademark No. 1,952,341 for "DCI
Dynamic Circuits Incorporated & design"
d. Dynamic Circuits, Inc.: California Trademark No. 099661 for "DCI - Dynamic
Circuits, Incorporated"
EXHIBIT B
TO
CREDIT AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
To: The Lenders Parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to Section 6.2(b)
of the Credit Agreement, dated as of July 23, 1998, among Details Capital Corp.,
a California corporation (the "Company"), Details, Inc. ("Details") and Dynamic
Circuits, Inc., a Delaware corporation ("DCI", and collectively with Details,
the "Borrowers"), the Lenders party thereto and The Chase Manhattan Bank, as
Administrative Agent (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of the Company/Borrower;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed review of the
financial condition of the Company and Borrowers and its Subsidiaries for the
accounting period covered by the attached financial statements;
3. Except as set forth below, to the best of my knowledge, the
Company and each of the Borrowers and their Subsidiaries during the accounting
period covered by the attached financial statements observed or performed all of
its covenants and other agreements contained in the Credit Agreement and the
other Loan Documents to which it is a party to be observed or performed by it;
and the examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Default or an Event of Default during or at the end of such accounting period or
as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Company's, Borrowers' and each of their Subsidiary's
compliance with certain covenants of the Credit Agreement, all of which data and
computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3, listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Company and the Borrowers or the relevant
Subsidiary has taken, is taking, or proposes to take with respect to each such
condition or event:
2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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The foregoing certifications, together with the computations set
forth in Schedule I hereto and the financial statements delivered with this
Certificate in support thereof, are made and delivered in my capacity described
in paragraph 1 above for and on behalf of the Company and the Borrowers this
_____ day of ________, __.
DETAILS, INC.
By______________________
Name:
Title:
DYNAMIC CAPITAL INC.
By______________________
Name:
Title:
DETAILS CAPITAL CORP.
By______________________
Name:
Title:
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of ____________ __, ____ with
Section 7.1 of the Credit Agreement
(All calculations for trailing four quarters
except as otherwise required by the Credit Agreement)
ss.7.1(a) Consolidated Leverage Ratio.
The ratio of
(a) Consolidated Total Debt _______
Consolidated Total Debt is, at any date, the aggregate
principal amount of all Indebtedness of Details and its
Subsidiaries at such date, determined on a consolidated
basis in accordance with GAAP.
To _______
(b) Consolidated EBITDA
which is the Consolidated Net Income for Details and its _______
Subsidiaries
plus the sum of _______
(i) total income tax expenses
(ii) total interest expense _______
(iii) amortization or writeoff of debt discount and debt _______
issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness
(including the Loans)
(iv) total depreciation expense
(v) total amortization expense (including amortization _______
of intangibles (including, but not limited to,
goodwill) and organization costs)
2
(vi) any extraordinary or non-recurring expenses or _______
losses (including, whether or not otherwise
includable as a separate item in the statement of
such Consolidated Net Income for such period, losses
on the sales of assets outside of the ordinary
course of business)
(vii) charges for the write-off of any step-up in basis in _______
inventory required in a transaction which is
accounted for under the purchase method of
accounting
(viii) any other non-cash charges _______
(ix) all management fees paid to ▇▇▇▇ Capital and the
▇▇▇▇ Affiliates permitted by Section 7.10,
minus (to the extent included in the statement of such
Consolidated Net Income for such period)
(i) interest income _______
(ii) any extraordinary or non-recurring income or gains _______
(including, whether or not otherwise includable as a
separate item in the statement of such Consolidated
Net Income for such period, gains on the sales of
assets outside of the ordinary course of business)
(iii) any other non-cash income (other than non-cash _______
income resulting from the Company's accrual method
of accounting in accordance with past practice)
Notwithstanding the foregoing, there shall be added to
Consolidated EBITDA on a pro forma basis for purposes of
computing the financial covenants for any period set forth
in Section 7.1:
(i) the amount of compensation and other payments paid _______
to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (not to exceed $[_________])
which were deducted in computing Consolidated Net
Income for such period
3
(ii) the expenses deducted in computing Consolidated Net _______
Income for such period which were associated with
the vesting and exercise by existing management of
the Company of options on the Capital Stock of the
Company on or prior to the Closing Date and the
bonuses paid to such existing management pursuant to
Section 1.11 of the Transaction Agreement.
Consolidated Net Income for any period is the consolidated
net income (or loss) of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded therefrom (a)
the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the
Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is
actually received by the Borrower or such Subsidiary in
the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Borrower
to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is not at the
time permitted by the terms of any Contractual Obligation
(other than under any Loan Document) or Requirement of Law
applicable to such Subsidiary.
For purposes of determining the Consolidated Leverage
Ratio at a time when less than four full fiscal quarters
of the Company have begun after and fully elapsed since
the Closing Date, Consolidated EBITDA for the relevant
period shall be deemed to be the sum of (x) the aggregate
Consolidated EBITDA of the Company for those fiscal
quarters which have begun after and fully elapsed since
the Closing Date and (y) the aggregate Consolidated EBITDA
determined on a pro forma basis, as if the Four
Transactions had occurred on the first day of such period)
of Details for the requisite number of consecutive fiscal
quarters commencing prior to the Closing Date.
CONSOLIDATED LEVERAGE RATIO (a)(b) _______
Must be less than or equal to [Insert from Table]
4
ss.7.1(b) Consolidated Interest Coverage Ratio.
The ratio of
(a) Consolidated EBITDA (see above)
To
(b) Consolidated Interest Expense _______
Consolidated Interest Expense for any period is all cash
interest expense (including that attributable to Capital
Lease Obligations) of the Company and its Subsidiaries for
such period with respect to all outstanding Indebtedness
of the Company and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest
Rate Protection Agreements to the extent such net costs
are allocable to such period in accordance with GAAP) and
the amount of the AHYDO Payment.
For the purposes of determining the Consolidated Interest
Coverage Ratio described above at a time when less than
four full fiscal quarters of New Intermediate Holdco have
begun after and fully elapsed since the Closing Date, (x)
Consolidated EBITDA for the relevant period shall be
deemed to be the sum of (i) the aggregate Consolidated
EBITDA of the Company for those fiscal quarters which have
begun after and fully elapsed since the Closing Date and
(ii) the aggregate Consolidated EBITDA (determined on a
pro forma basis, as if the Four Transactions had occurred
on the first day of such period) of the Company for the
requisite number of consecutive fiscal quarters commencing
prior to the Closing Date and (y) Consolidated Interest
Expense shall be determined by annualizing the
Consolidated Interest Expense of New Intermediate Holdco
for those fiscal quarters which have begun after and fully
elapsed since the Closing Date.
CONSOLIDATED INTEREST COVERAGE RATIO (a)(b)
Must be greater than or equal to [Insert from Table]
5
ss.7.1(c) Consolidated Fixed Charge Coverage Ratio (commencing with
the period of four fiscal quarters ending on December 31, 1998).
The ratio of
(a) The difference between:
(i) Consolidated EBITDA (see above) and _______
(ii) The sum of:
o the aggregate amount actually paid by Details _______
and its Subsidiaries in cash during such
period on account of Capital Expenditures
(excluding the principal amount of
Indebtedness incurred in connection with such
expenditures and any Capital Expenditures
financed with Reinvestment Deferred Amounts)
and
o any provision for cash income taxes made by
Details and its Subsidiaries on a consolidated
basis in respect of such period.
To _______
(b) Consolidated Fixed Charges
Consolidated Fixed Charges is equal to the sum (without
duplication) of (a) Consolidated Interest Expense for such
period and (b) scheduled payments made during such period
on account of principal of Indebtedness of Details or any
of its Subsidiaries (including the Term Loans).
CONSOLIDATED FIXED CHARGE COVERAGE RATIO (a)/(b) _______
Must be greater than or equal to 1.05
ss.7.1(d) Minimum EBITDA.
Consolidated EBITDA (see above) must be greater [Insert from Table]
than or equal to
EXHIBIT C
TO
CREDIT AGREEMENT
FORM OF CLOSING CERTIFICATE
Pursuant to subsection 5.1(h) of the Credit Agreement, dated as of
July 23, 1998, among Details Capital Corp., a California corporation (the
"Company"), Details, Inc., a Delaware corporation ("Details") and Dynamic
Circuits, Inc., a Delaware corporation ("DCI" and collectively with Details, the
"Borrowers"), the lenders and other financial institutions which are parties
thereto (the "Lenders") and The Chase Manhattan Bank, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent") (the "Credit
Agreement"; terms defined therein being used herein as therein defined), the
undersigned Officers of the Company/Borrowers hereby certify as follows:
1. The representations and warranties of each of the Loan
Parties made on the Closing Date and set forth in each of the Loan
Documents to which each is a party or which are contained in any
certificate, document or financial or other statement furnished by
or on behalf of each such Loan Party pursuant to or in connection
with any Loan Document are true and correct in all material respects
on and as of the date hereof, except for representations and
warranties stated to relate to a specific earlier date, in which
case such representations and warranties were true and correct in
all material respects as of such earlier date;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the Loans
to be made on the date hereof and/or the issuance of any Letters of
Credit to be issued on the date hereof;
3. Since June 30, 1998, there has been no development or event
which has had or could reasonably be expected to have a Material
Adverse Effect;
4. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against the Company/Borrowers, nor has
any other event occurred affecting or threatening the corporate
existence of the Company/Borrowers;
5. Neither the Company/Borrowers nor any of their Subsidiaries
or Affiliates is subject to any litigation or other similar
proceedings the effect of which has had or could reasonably be
expected to have a Material Adverse Effect;
6. The chief executive office of the Company/Borrowers is
located at _____________________;
-2-
7. The persons named below are duly authorized to execute and
deliver, on behalf of the Company/Borrowers, the Credit Agreement,
the Guarantee and Collateral Agreement and all certificates,
notices, requests, reports and other documents and instruments
delivered pursuant thereto or in connection therewith including,
without limitation, Uniform Commercial Code financing statements for
filing with any jurisdiction necessary to perfect the security
interests of the Lenders (collectively, the "Credit Agreement
Documents") such persons are now duly elected and qualified officers
of the Company, holding the offices indicated next to their
respective names (and such officers have held such offices with the
Company/Borrowers at all times since [__________], to and including
the date hereof) and the signature set forth on the signature line
opposite their respective names is such officer's true and genuine
signature:
Name Signature Office
---- --------- ------
8. Attached hereto as Annex A are true and correct copies of
all consents, authorizations and filings, if any, required in
connection with the execution, delivery and performance by the
Company and the validity and enforceability against the
Company/Borrowers of the Loan Documents to which it is a party and
such consents, authorizations and filings are in full force and
effect;
9. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of California; attached
hereto as Annex B-1 is a true and complete copy of a Certificate,
dated as of a recent date, of the Secretary of State of California
as to the good standing of the Company under the laws of California;
10. Each of the Borrowers is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware;
attached hereto as Annex B-2 is a true and complete copy of a
Certificate, dated as of a recent date, of the Secretary of State of
Delaware as to the good standing of each of the Borrowers under the
laws of Delaware.
11. Attached hereto as Annex C is a true and complete copy of
resolutions duly adopted by the Board of Directors of the
Company/Borrowers on [________ __], 1997 authorizing the execution,
delivery and performance by the Company/Borrowers of the Credit
Agreement Documents and of the Transaction Documents; such
resolutions have not in any way been amended, modified, revoked or
rescinded and such resolutions have been in full force and
-3-
effect since their adoption to and including the date hereof and are
now in full force and effect and have been filed with the minutes of
the proceedings of the Board of Directors as required by Section
_________ of the ________________; and such resolutions are the only
corporate proceedings of the Company/Borrowers now in force relating
to or affecting the matters referred to therein;
12. Attached hereto as Annex D is a true and complete copy of
the By-Laws of the Company/Borrowers, in effect at all times since
[__________], to and including the date hereof; such By-Laws have
not been amended, modified, revoked or rescinded and such By-Laws
have been in full force and effect since their adoption to and
including the date hereof and are now in full force and effect;
13. Attached hereto as Annex E is a true and complete copy of
the Certificate of Incorporation of the Company/Borrowers, in effect
at all times since [__________], to and including the date hereof;
there has been no further amendment or other document filed
affecting any such Certificate of Incorporation of the
Company/Borrowers and no further amendment or other document has
been authorized by the Board of Directors or stockholders of the
Company/Borrowers.
-4-
IN WITNESS WHEREOF, the undersigned have hereunto set our names.
__________________
____________
Secretary
I, ____________,President, hereby certify that ______________ is the
duly elected Secretary of the Company/Borrowers and that the signature shown
above is his signature.
__________________
Date: ___________________, 1998
EXHIBIT D
TO
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of July 23, 1998
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Details Capital Corp., a California corporation (the
"Company"), Details, Inc. ("Details"), and Dynamic Circuits, Inc., a Delaware
corporation ("DCI", and collectively with Details, the "Borrowers"), the Lenders
named therein and The Chase Manhattan Bank, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"). Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
The Assignor identified on Schedule 1 hereto (the "Assignor") and
the Assignee identified on Schedule I hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"Assigned Facility" collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrowers, any of their
respective Subsidiaries or any other obligor of any of their respective
obligations under the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (c) attaches
any Notes held by it evidencing the Assigned Facilities and (i) requests that
the Administrative Agent, upon request by the Assignee, exchange the attached
Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor
has retained any interest in the Assigned Facility, requests that the
Administrative Agent exchange the attached Notes for a new Note or Notes payable
to the Assignor, in each case in amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
-2-
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 4.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
2.19(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance
Name of Assignor: ___________________________________
Name of Assignee: ___________________________________
Effective Date of Assignment: _______________________
Credit
Facility Assigned Amount Assigned Commitment Percentage Assigned
$ _________ _____. _____________%
[Name of Assignee] [Name of Assignor]
By: _____________________________ By: _____________________________
Title: Title:
Consented to: Consented to:
THE CHASE MANHATTAN BANK, DETAILS, INC.,
as Administrative Agent as Borrower
and as Issuing Lender
By: _____________________________ By: _____________________________
Title: Title:
DYNAMIC CIRCUITS, INC.,
By: _____________________________
Title:
Exhibit E
ROPES & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇. ▇.▇.
(▇▇▇) ▇▇▇-▇▇▇▇ SUITE 800 EAST
FAX: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
July 23, 1998
To each Agent and each
Lender party to each of the
Credit Agreements referred to below
Ladies and Gentlemen:
This opinion is delivered to you pursuant to the Credit Agreement, dated
as of July 23, 1998 (the "Credit Agreement"), among Details Capital Corp., a
California corporation (the "Company"), Details, Inc., a California corporation
("Details"), Dynamic Circuits, Inc., a Delaware corporation ("DCI" and together
with Details, the "Borrowers"), the lenders from time to time parry thereto, The
Chase Manhattan Bank, as Collateral, Co-Syndication and Administrative Agent and
Bankers Trust Company, as Documentation and Co-Syndication Agent. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings set forth in the Credit Agreement.
We have acted as counsel to the Borrowers, the Company, Details
Intermediate Holdings Corp., a California corporation ("Intermediate"), Cuplex,
Inc., a Delaware corporation ("Cuplex") and Colorado Springs Circuits, Inc., a
Colorado corporation ("NTI") in connection with the Credit Agreement and the
Guarantee and Collateral Agreement which Agreements are collectively referred to
as the "Credit Documents." We have also examined originals or copies, certified
or otherwise identified to our satisfaction, of such public or corporate
documents or records and have made such examination of law as we have deemed
necessary or appropriate as a basis for the opinions set forth herein. As to
questions of fact not independently verified by us, we have relied upon
certificates of officers of the Borrowers, the Company, Intermediate, Cuplex and
NTI, public officials and other appropriate persons and on the representations
and warranties as to matters of fact contained in the Credit Agreement.
The opinions expressed herein are limited to matters governed by the
internal laws of The Commonwealth of Massachusetts, the General Corporation Law
of the State of Delaware and the federal laws of the United States of America.
We call your attention to the fact that the Credit Documents provide that they
are to be construed in accordance with and governed by the law of
-2-
To each Agent and each Lender party to
each of the Credit Agreements referred
to below
the State of New York. We are of the opinion that a Massachusetts court or a
federal court sitting in Massachusetts would, under conflict of laws principles
observed by the courts of Massachusetts, give effect to such provision. For
purposes of rendering the opinions expressed below, we have assumed that New
York law is in all respects identical to Massachusetts law.
We also call your attention to the fact that the Company, Intermediate and
Details are organized under the laws of the State of California. We have relied
with respect to matters governed by the laws of the State of California upon the
opinion to you dated this date of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇. Said opinion
is satisfactory in form and scope, and although we have made no independent
investigation of such matters, we are of the opinion that you and we may
properly rely thereon as to all matters covered thereby. For purposes of
rendering the opinions expressed below, we have assumed that the execution and
delivery of the Guarantee and Collateral Agreement by NTI was duly authorized
under Colorado law.
Based upon the foregoing and subject to the additional qualifications set
forth below, we are of the opinion that:
1. Each of DCI and Cuplex (i) is a duly incorporated and validly existing
corporation in good standing under the laws of the State of Delaware and, (ii)
has the corporate power and authority to own its property and assets, to
transact the business in which it is permitted to engage under the terms of the
Credit Agreement and to execute, deliver and perform the terms and provisions of
each of the Credit Documents to which it is a party.
2. Each of the Borrowers, the Company, Intermediate, Cuplex and NTI has
duly authorized, executed and delivered each of the Credit Documents to which it
is a party, and (subject to the qualifications set forth in the unnumbered
paragraphs at the end hereof) each such Credit Document constitutes the legal,
valid and binding obligation of such of the Borrowers, the Company,
Intermediate, Cuplex and NTI as are party thereto and each such Credit Document
is enforceable in accordance with its terms against such of the Borrowers, the
Company, Intermediate, Cuplex and NTI as are party thereto.
3. Neither the execution, delivery or performance by the Borrowers, the
Company, Intermediate, Cuplex or NTI of the Credit Documents (including, without
limitation, the granting of Liens pursuant to the Guarantee and Collateral
Agreement), nor compliance by the Borrowers, the Company, Intermediate, Cuplex
or NTI with the terms and provisions thereof, will contravene any provision of
any Massachusetts or Federal law, statute, rule or regulation or of the General
Corporation Law of the State of Delaware.
4. To our knowledge, after having made inquiry of officers of the
Borrowers, the Company, Intermediate, Cuplex and NTI but without having
investigated any governmental
-3-
To each Agent and each Lender party to
each of the Credit Agreements referred
to below
records or court documents, there are no actions, suits or proceedings pending
against the borrowers, the Company, Intermediate, Cuplex or NTI which place in
question the validity or enforceability of or seek to enjoin the performance of
the Credit Documents.
5. The provisions of the Guarantee and Collateral Agreement are sufficient
to create a valid security interest in favor of the Administrative Agent in the
Collateral described therein to the extent that such security interest can be
created under Article 9 of the Uniform Commercial Code.
6. Neither the Borrowers, the Company, Intermediate, Cuplex nor NTI is an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
7. Neither the making of the loans under the Credit Agreement, nor the
application of the proceeds thereof as provided in the Credit Agreement will
violate the provisions of Regulation U or X of the Board of Governors of the
Federal Reserve System as in effect on the date hereof.
8. Subject to all of the assumptions and qualifications set forth therein,
we hereby confirm to you our opinion dated this date under Section 5.3(f) of the
Transaction Agreement and agree that you may rely on such opinion as if it were
addressed to you.
Our opinion that the Credit Documents constitute the legal, valid and
binding obligation of such of the Borrowers, the Company, Intermediate, Cuplex
or NTI as are party thereto, enforceable against each such Person in accordance
with each of its terms, is subject to (a) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights and
remedies of creditors and secured parties and (b) general principles of equity,
regardless of whether applied in proceedings in equity or at law. The opinions
expressed herein do not purport to cover, and we express no opinion with respect
to, the applicability of Section 548 of the federal Bankruptcy Code or any
comparable provision of state law. The opinions expressed herein are subject to
the qualification that the enforceability of provisions in the Credit Documents
providing for indemnification or contribution may be limited by public policy
considerations. In addition, we express no opinion (a) as to the extent to which
broadly worded waivers may be enforced, (b) as to the enforceability of any
provision of the Credit Documents which purports to grant the right of setoff to
a purchaser of a participation in the loans outstanding thereunder or pursuant
to the guarantees under the Guarantee and Collateral Agreement or (c) as to the
extent to which provisions providing for submission to jurisdiction or waiver of
service of process and venue will be enforced.
EXHIBIT F-1
TO
CREDIT AGREEMENT
FORM OF TRANCHE [A/B] TERM LOAN NOTE
$[________] New York, New York
July 23, 1998
FOR VALUE RECEIVED, the undersigned, Details, Inc., a California
corporation ("Details"), and Dynamic Circuits, Inc., a Delaware corporation
("DCI", and collectively with Details, the "Borrowers"), hereby unconditionally
promise to pay to the order of [NAME OF LENDER] (the "Lender") at the office of
TEE CHASE MANHATTAN BANK located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
in lawful money of the United States of America and in immediately available
funds, (a) the principal amount of [___________________]($[________]) or, if
less, (b)the unpaid principal amount of the Tranche [A/B] Term Loan made by the
Lender pursuant to Section 2.1 of the Credit Agreement, as hereinafter defined.
The principal amount shall be paid in the amounts and on the dates specified in
Section 2.3 of the Credit Agreement. The Borrowers further agree to pay interest
in like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in Sections 2.14 and
2.15 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof (or on a continuation thereof which shall be
attached hereto and made a part hereof) the date, Type and amount of the Tranche
[A/B] Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Euro currency Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence of
the accuracy of the information endorsed. The failure to make any such
endorsement shall not affect the obligations of the Borrowers in respect of such
Tranche [A/B] Term Loan.
This Note (a) is one of the Notes referred to in the Credit Agreement,
dated as of July 23, 1998 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among Details Capital Corp., a California
corporation (the "Company"), the Borrowers, the Lender, the other banks and
financial institutions from time to time parties thereto and The Chase Manhattan
Bank, as Administrative Agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
2
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
DETAILS, INC.
___________________________________
Name:
Title:
DYNAMIC CIRCUITS, INC.
___________________________________
Name:
Title:
Schedule A
to Tranche [A/B] Term Loan Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Principal Amount of ABR
Converted to of ABR Loans Converted to Unpaid Principal
Date Amount of ABR Loans ABR Loans Loans Repaid Eurocurrency Loans Balance of ABR Loans Notation Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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Schedule B
to Tranche [A/B] Term Loan Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EUROCURRENCY LOANS
---------------------------------------------------------------------------------------------------------------
Interest Amount of
Amount Period and Amount of Eurocurrency Unpaid
Converted Eurocurrency Principal of Loans Principal
Amount of to Rate Eurocurrency Converted to Balance of
Eurocurrency Eurocurrency with Respect Loans ABR Eurocurrency Notation
Date Loans Loans Thereto Repaid Loans Loans Made By
---------------------------------------------------------------------------------------------------------------
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EXHIBIT F-2
TO
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$[________] New York, New York
July 23, 1998
FOR VALUE RECEIVED, the undersigned, Details, Inc., a California
corporation ("Details") and Dynamic Circuits, Inc., a Delaware corporation
("DCI", and collectively with Details, the "Borrowers"), hereby unconditionally
promise to pay to the order of [NAME OF LENDER] (the "Lender") at the office of
The Chase Manhattan Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
in lawful money of the United States of America and in immediately available
funds, on the Scheduled Revolving Credit Commitment Termination Date or the
earlier date of termination of the Revolving Credit Commitments as provided in
the Credit Agreement, as hereinafter defined, the principal amount of (a)
_______________ (_________) or, if less, (b) the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Lender to the Borrowers
pursuant to Section 2.4 of the Credit Agreement. The Borrowers further agree to
pay interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates and on the dates specified in
Sections 2.14 and 2.15 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made pursuant to the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurocurrency Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Company in respect of such Revolving
Credit Loan.
This Note (a) is one of the Notes referred to in the Credit Agreement
dated as of July 23, 1998 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among Details Capital Corp., a California
corporation (the "Company"), the Borrowers, the Lender, the other banks and
financial institutions from time to time parties thereto and The Chase Manhattan
Bank, as Administrative Agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
DETAILS, INC.
_____________________________________
Name:
Title:
DYNAMIC CIRCUITS, INC.
_____________________________________
Name:
Title:
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Principal Amount of ABR
Converted to of ABR Loans Converted to Unpaid Principal
Date Amount of ABR Loans ABR Loans Loans Repaid Eurocurrency Loans Balance of ABR Loans Notation Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EUROCURRENCY LOANS
---------------------------------------------------------------------------------------------------------------
Interest Amount of
Amount Period and Amount of Eurocurrency Unpaid
Converted Eurocurrency Principal of Loans Principal
Amount of to Rate Eurocurrency Converted to Balance of
Eurocurrency Eurocurrency with Respect Loans ABR Eurocurrency Notation
Date Loans Loans Thereto Repaid Loans Loans Made By
---------------------------------------------------------------------------------------------------------------
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EXHIBIT F-3
TO
CREDIT AGREEMENT
FORM OF ALTERNATIVE TERM NOTE
$_____________ New York, New York
July 23, 1998
FOR VALUE RECEIVED, the undersigned, Details, Inc., a California
corporation ("Details") and Dynamic Circuits, Inc., a Delaware corporation
("DCI", and collectively with Details, the "Borrowers"), hereby unconditionally
promise to pay to the order of [NAME OF LENDER] (the "Lender") and its
successors and assigns, at the office of The Chase Manhattan Bank, located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States
of America and in immediately available funds, the principal amount of the
lesser of (a) _____________________ DOLLARS ($__________) and (b) the aggregate
unpaid principal amount of the Tranche [A/B] Term Loan made by the Lender to the
undersigned pursuant to Section 2.1 of the Credit Agreement, which sum shall be
payable in accordance with Section 2.3 of the Credit Agreement.
The Borrowers further agree to pay interest in like money at such
office on the unpaid principal amount hereof from time to time at the applicable
rates per annum and on the dates set forth in Sections 2.14 and 2.15 of the
Credit Agreement until such principal amount is paid in full (both before and
after judgment).
This Note is one of the Notes referred to in the Credit Agreement,
dated as of July 23, 1998 (as amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), among Details Capital
Corp., a California corporation (the "Company"), the Borrowers, the Lender, the
several banks and other financial institutions from time to time parties thereto
and The Chase Manhattan Bank, as Administrative Agent, and is entitled to the
benefits thereof, is secured and guaranteed as provided therein and is subject
to optional and mandatory prepayment in whole or in part as provided therein.
Terms used herein which are defined in the Credit Agreement shall have such
defined meanings unless otherwise defined herein or unless the context otherwise
requires.
As provided in Section 11.6(f) of the Credit Agreement, this
Alternative Term Note and the obligations evidenced hereby may be assigned in
whole or in part only by registration of such assignment of this Alternative
Term Note and the obligations evidenced hereby on the Register described in
Section 11.6(d) of the Credit Agreement. Any assignment of all or part of such
obligations and this Alternative Term Note evidencing the same shall be
registered on the Register only upon surrender for registration of assignment of
this Alternative Term Note evidencing such obligations, duly endorsed by (or
accompanied by a written instrument of assignment duly executed by) the holder
of this Alternative Term Note, and thereupon one or more new Alternative Term
Notes in the same aggregate principal amount shall be issued to the designated
Assignee(s) and this Alternative Term Note shall be returned to the Borrowers
marked "cancelled". No assignment of this Alternative Term Note and the
obligations evidenced hereby shall be effective unless such assignment shall
have
2
been recorded in the Register as provided herein and in Section 11.6(f) of the
Credit Agreement. This Alternative Term Note may not be exchanged for promissory
notes that are not Alternative Term Notes.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Alternative Term Note shall become, or may be declared to be, immediately due
and payable, all as provided therein.
THIS ALTERNATIVE TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
DETAILS, INC.
_____________________________________
Name:
Title:
DYNAMIC CIRCUITS, INC.
_____________________________________
Name:
Title:
EXHIBIT F-4
TO
CREDIT AGREEMENT
FORM OF ALTERNATIVE REVOLVING CREDIT NOTE
$_____________ New York, New York
July 23, 1998
FOR VALUE RECEIVED, the undersigned, Details, Inc., a California
corporation ("Details") and Dynamic Circuits, Inc., a Delaware corporation
("DCI", and collectively with Details, the "Borrowers"), hereby unconditionally
promise to pay to the order of [NAME OF LENDER] (the "Lender") and its
successors and assigns, at the office of The Chase Manhattan Bank, located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ in lawful money of the United States
of America and in immediately available funds, the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Lender to the undersigned
pursuant to Section 2.4 of the Credit Agreement, which sum shall be payable on
the Scheduled Revolving Credit Commitment Termination Date or the earlier date
of termination of the Revolving Credit Commitments as provided in the Credit
Agreement, as hereinafter defined.
The Borrowers further agree to pay interest in like money at such
office on the unpaid principal amount hereof from time to time at the applicable
rates per annum and on the dates set forth in Sections 2.14 and 2.15 of the
Credit Agreement until such principal amount is paid in full (both before and
after judgment).
This Note is one of the Notes referred to in the Credit Agreement,
dated as of July 23, 1998 (as amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), among Details Capital
Corp., a California corporation (the "Company"), the Borrowers, the Lender, the
other banks and financial institutions from time to time parties thereto and The
Chase Manhattan Bank, as Administrative Agent, and is entitled to the benefits
thereof, is secured and guaranteed as provided therein and is subject to
optional and mandatory prepayment in whole or in part as provided therein. Terms
used herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.
As provided in Section 11.6(f) of the Credit Agreement, this
Alternative Revolving Credit Note and the obligations evidenced hereby may be
assigned in whole or in part only by registration of such assignment of this
Alternative Revolving Credit Note and the obligations evidenced hereby on the
Register described in Section 11.6(d) of the Credit Agreement. Any assignment of
all or part of such obligations and this Alternative Revolving Credit Note
evidencing the same shall be registered on the Register only upon surrender for
registration of assignment of this Alternative Revolving Credit Note evidencing
such obligations, duly endorsed by (or accompanied by a written instrument of
assignment duly
2
executed by) the holder of this Alternative Revolving Credit Note, and thereupon
one or more new Alternative Revolving Credit Notes in the same aggregate
principal amount shall be issued to the designated Assignee(s) and this
Alternative Revolving Credit Note shall be returned to the Borrowers marked
"cancelled". No assignment of this Alternative Revolving Credit Note and the
obligations evidenced hereby shall be effective unless such assignment shall
have been recorded in the Register as provided herein and in Section 11.6(f) of
the Credit Agreement. This Alternative Revolving Credit Note may not be
exchanged for promissory notes that are not Alternative Revolving Credit Notes.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Alternative Revolving Credit Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
DETAILS, INC.
_____________________________________
Name:
Title:
DYNAMIC CIRCUITS, INC.
_____________________________________
Name:
Title:
EXHIBIT F-5
TO
CREDIT AGREEMENT
FORM OF SWING LINE NOTE
$[_____________________] New York, New York
July 23, 1998
FOR VALUE RECEIVED, the undersigned, Details, Inc., a California
corporation ("Details") and Dynamic Circuits, Inc., a Delaware corporation
("DCI", and collectively with Details, the "Borrowers"), hereby unconditionally
promise to pay to the order of THE CHASE MANHATTAN BANK (the "Swing Line
Lender") and its successors and assigns, at the office of The Chase Manhattan
Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United
States of America and in immediately available funds, the principal amount of
the lesser of (a) [______________________________] ($_____________) and (b) the
aggregate unpaid principal amount of all Swing Line Loans made by the Swing Line
Lender to the undersigned pursuant to Section 2.6 of the Credit Agreement, as
hereinafter defined, which sum shall be payable on the Scheduled Revolving
Credit Commitment Termination Date or the earlier date of termination of the
Revolving Credit Commitments as provided in the Credit Agreement.
The Borrowers further agree to pay interest in like money at such
office on the unpaid principal amount hereof from time to time at the applicable
rates per annum for ABR Loans and on the dates set forth in Sections 2.14 and
2.15 of the Credit Agreement until paid in full (both before and after
judgment).
This Swing Line Note is one of the Notes referred to in the Credit
Agreement, dated as of July 23, 1998 (as amended, supplemented, waived or
otherwise modified from time to time, the "Credit Agreement"), among Details
Capital Corp., a California corporation (the "Company"), the Borrowers, the
Swing Line Lender, and the other banks and financial institutions from time to
time parties thereto and The Chase Manhattan Bank, in its capacity as
Administrative Agent, and is entitled to the benefits thereof, is secured and
guaranteed as provided therein and is subject to optional and mandatory
prepayment in whole or in part as provided therein. Terms used herein which are
defined in the Credit Agreement shall have such defined meanings unless
otherwise defined herein or unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts remaining unpaid on this Swing
Line Note shall become, or may be declared to be, immediately due and payable
all as provided therein.
2
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
DETAILS, INC.
_____________________________________
Name:
Title:
DYNAMIC CIRCUITS, INC.
_____________________________________
Name:
Title:
EXHIBIT G
TO THE CREDIT AGREEMENT
FORM OF PREPAYMENT OPTION NOTICE
Attention of [ ]
Telecopy No. [ ]
[Date]
Ladies and Gentlemen:
The undersigned, The Chase Manhattan Bank, as administrative agent
(in such capacity, the "Administrative Agent") for the Lenders, refers to the
Credit Agreement dated as of July 23, 1998 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among Details Capital
Corp., a California corporation (the "Company"), Details, Inc. ("Details") and
Dynamic Circuits, Inc., a Delaware corporation ("DCI", and collectively with
Details the "Borrowers") the Lenders from time to time parties thereto and the
Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Administrative Agent hereby gives notice of an offer of prepayment made by
the Borrower pursuant to Section 2.17(d) of the Credit Agreement of the Tranche
B Prepayment Amount. Amounts applied to prepay the Tranche B Term Loans shall be
applied pro rata to the Tranche B Term Loan held by you. The portion of the
prepayment amount to be allocated to the Tranche B Term Loan held by you and the
date on which such prepayment will be made to you (should you elect to receive
such prepayment) are set forth below:
(A) Total Tranche B Prepayment Amount ________________
(B) Portion of Tranche B Prepayment Amount to be
received by you ________________
(C) Mandatory Prepayment Date (10 Business
Days after the date of this Prepayment
Option Notice) ________________
If you wish to receive the portion of the Tranche B Prepayment
Amount to be allocated to you on the Mandatory Prepayment Date indicated in
paragraph (B) above, please sign this notice in the space provided below as
evidence of your acceptance and return it via
2
telecopy to the attention of ▇▇▇▇▇ ▇▇▇▇▇▇ at The Chase Manhattan Bank, c/o The
Loan and Agency Services Group, no later than 10:00 a.m., New York time, on the
Mandatory Prepayment Date, at Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
THE CHASE MANHATTAN BANK, as Administrative
Agent
By: ____________________
Name:
Title:
[Lender]
By: _____________________
Name:
Title:
EXHIBIT H
TO
CREDIT AGREEMENT
[Texas]
DEED OF TRUST AND SECURITY AGREEMENT
from
CUPLEX, INC., Grantor
to
_____________________, Trustee
THE CHASE MANHATTAN BANK as Collateral, Co-Syndication
and Administrative Agent, Beneficiary
DATED AS OF JULY __, 1998
After recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
[Texas]
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT, dated as of July __, 1998
is made by CUPLEX, INC., a Delaware corporation ("Grantor"), whose address is
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to _______________________________
("Trustee"). This Deed of Trust is to secure certain indebtedness and
obligations hereinafter described owed and to become owed to THE CHASE MANHATTAN
BANK, a New York banking corporation whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as Collateral, Co-Syndication and Administrative Agent (in such
capacity, "Beneficiary") for itself and the several banks and financial
institutions (collectively, the "Lenders") from time to time parties to the
Credit Agreement dated as of the date hereof (as the same may be amended,
supplemented or otherwise modified from time to time, and together with any such
agreement, the "Credit Agreement") among Grantor, the Lenders and Beneficiary.
References to this "Deed of Trust" shall mean this instrument and any and all
renewals, modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Unless otherwise
defined herein, capitalized terms herein shall have the meanings ascribed to
them in the Credit Agreement.
Background
WHEREAS, Grantor is the fee owner of the parcel(s) of real property
together with the improvements located thereon (the "Improvements") described on
Schedule A attached hereto (the "Real Estate"); and
WHEREAS, pursuant to the terms of the Credit Agreement, the Lenders
have agreed, among other things, to make the Loans and each Issuing Lender has
agreed to issue the Letter(s) of Credit for the account of Grantor on the
condition (among others) that Grantor grants Trustee a first lien upon, grants
Beneficiary a first mortgage upon, and grants Beneficiary a perfected security
interest in, among other things, the Real Estate and other Trust Property
pursuant to the terms hereof;
NOW THEREFORE, in consideration of the premises and for the sum of
Ten Dollars ($10.00), the receipt and sufficiency of which is hereby
acknowledged, the Grantor hereby agrees as follows:
2
Granting Clauses
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Grantor agrees that to secure:
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans (as they may be evidenced by notes from time to
time) and all other obligations (including the Reimbursement Obligations)
and liabilities of the Grantor to the Beneficiary, the Issuing Lender and
the Lenders, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, the Loans, the Letters of
Credit, the Security Documents, any Interest Rate Agreement entered into
with any Lender or any banking affiliate of any Lender or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees, charges and disbursements of counsel to the Agent,
any Issuing Lender or any Lender that are required to be paid by any Loan
Party pursuant to the Credit Agreement) (the items set forth above being
referred to collectively as the "Indebtedness"); and
(b) the performance of all covenants, agreements, obligations and
liabilities of Grantor (the "Obligations") under or pursuant to the
provisions of the Credit Agreement, the Loans, this Deed of Trust, any
other document securing payment of the Indebtedness (the "Security
Documents") and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the foregoing (the
Credit Agreement, the Loans, the Letters of Credit, this Deed of Trust and
all other documents and instruments from time to time evidencing, securing
or guaranteeing the payment of the Indebtedness or the performance of the
Obligations, as any of the same may be amended, supplemented, extended,
renewed, restated, replaced or modified from time to time, are
collectively referred to as the "Loan Documents"); and
(c) IT IS AGREED THAT THIS DEED OF TRUST SHALL STAND AS SECURITY FOR
ALL SUCH FUTURE AND ADDITIONAL INDEBTEDNESS WHETHER IT BE INCURRED FOR ANY
BUSINESS PURPOSE THAT WAS RELATED OR WHOLLY UNRELATED TO THE PURPOSE OF
THE LOANS, OR
3
WHETHER IT WAS INCURRED FOR SOME PERSONAL OR NONBUSINESS PURPOSE, OR FOR
ANY OTHER PURPOSE RELATED OR UNRELATED, OR SIMILAR OR DISSIMILAR, TO THE
PURPOSE OF THE LOANS; AND
GRANTOR UPON THE TERMS AND CONDITIONS SET FORTH HEREIN, HEREBY CONVEYS TO
TRUSTEE AND HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO
TRUSTEE, IN TRUST (WITH RESPECT TO ALL OF THE FOLLOWING THAT CONSTITUTES REAL
PROPERTY IN THE STATE OF TEXAS), AND GRANTS BENEFICIARY A SECURITY INTEREST
(WITH RESPECT TO ALL OF THE FOLLOWING THAT CONSTITUTES PROPERTY IN WHICH A
SECURITY INTEREST MAY BE GRANTED UNDER THE LAWS OF THE STATE OF TEXAS) IN:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever of
Grantor, in possession or expectancy, in and to the Real Estate or any
part thereof;
(C) all right, title and interest of Grantor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, water and riparian rights,
development rights, air rights, mineral rights and all estates, rights,
titles, interests, privileges, licenses, tenements, hereditaments and
appurtenances belonging, relating or appertaining to the Real Estate, and
any reversions and remainders thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Real Estate to the
center line thereof;
(D) all fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in each
case, attachments, components, parts and accessories), currently owned or
subsequently acquired by Grantor and now or subsequently attached to, or
contained in or used or usable in any way in connection with any operation
or letting of the Real Estate, including but without limiting the
generality of the foregoing, all screens, awnings, shades, blinds,
curtains, draperies, artwork, carpets, rugs, storm doors and windows,
furniture and furnishings, heating, electrical, and mechanical equipment,
lighting, switchboards, plumbing, ventilating, air conditioning and
air-cooling apparatus, refrigerating, and incinerating equipment,
escalators, elevators, loading and unloading equipment and systems,
stoves, ranges, laundry equipment, cleaning systems (including window
cleaning apparatus), telephones, communication systems (including
satellite dishes and antennae), televisions, computers, sprinkler systems
and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines,
4
machinery, pipes, pumps, tanks, conduits, appliances, fittings and
fixtures of every kind and description (all of the foregoing in this
paragraph (D) being referred to as the "Equipment");
(E) all right, title and interest of Grantor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released to
Grantor or constructed, assembled or placed by Grantor on the Real Estate,
immediately upon such acquisition, release, construction, assembling or
placement, including, without limitation, any and all building materials
whether stored at the Real Estate or offsite, and, in each such case,
without any further mortgage, conveyance, assignment or other act by
Grantor;
(F) all books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof;
(G) all unearned premiums under insurance policies now or
subsequently obtained by Grantor relating to the Real Estate or Equipment
and Grantor's interest in and to all proceeds of any such insurance
policies (including title insurance policies) including the right to
collect and receive such proceeds, subject to the provisions relating to
insurance generally set forth below; and all awards and other
compensation, including the interest payable thereon and the right to
collect and receive the same, made to the present or any subsequent owner
of the Real Estate or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Real Estate or any
easement or other right therein, subject to the provisions relating to
condemnation awards generally set forth below;
(H) all right, title and interest of Grantor, to the extent
assignable, in and to (i) all contracts from time to time executed by
Grantor or any manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or financing
of the Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or any
property which is adjacent or peripheral to the Real Estate, together with
the right to exercise such options (collectively, the "Contracts"), (ii)
all consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "Plans");
5
(I) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering the
foregoing property or otherwise on deposit with or held by Beneficiary as
provided in this Deed of Trust;
(J) all accounts arising from the operation of the Improvements; and
(K) all proceeds, both cash and noncash, of the foregoing;
(all of the foregoing property and rights and interests now owned or
held or subsequently acquired by Grantor and described in the foregoing clauses
(A) through (E) are collectively referred to as the "Premises", and those
described in the foregoing clauses (A) through (K) are collectively referred to
as the "Trust Property").
TO HAVE AND TO HOLD all of the Trust Property that constitutes real
property in the State of Texas and the rights and privileges hereby granted unto
Trustee and its successors and assigns for the uses and purposes set forth,
until the Indebtedness is fully paid and the Obligations fully performed.
Terms and Conditions
Grantor further represents, warrants, covenants and agrees with
Trustee and Beneficiary as follows:
1. Warranty of Title. Grantor warrants that Grantor has good title
to the Real Estate in fee simple and good title to the rest of the Trust
Property, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Beneficiary to insure the
lien of this Deed of Trust (the "Permitted Exceptions") and Grantor shall
warrant, defend and preserve such title and the rights granted by this Deed of
Trust with respect thereto against all claims of all persons and entities.
Grantor further warrants that it has the right to grant this Deed of Trust.
2. Payment of Indebtedness. Grantor shall pay the Indebtedness at
the times and places and in the manner specified in the Credit Agreement and
shall perform all the Obligations.
3. Requirements.
(a) Grantor shall promptly comply with, or cause to be complied
with, and conform to all present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
6
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the Trust
Property and all covenants, restrictions and conditions now or later of record
which may be applicable to any of the Trust Property, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of any of the Trust Property, except to the extent that failure
to comply therewith, in the aggregate, would not reasonably be expected to have
a Material Adverse Effect (as defined in the Credit Agreement). All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Grantor or to any of the Trust Property and all covenants, restrictions, and
conditions which now or later may be applicable to any of the Trust Property are
collectively referred to as the "Legal Requirements".
(b) From and after the date of this Deed of Trust, Grantor shall not
by act or omission permit, other than Permitted Exceptions, any building or
other improvement on any premises not subject to this Deed of Trust to rely on
the Premises or any part thereof or any interest therein to fulfill any Legal
Requirement, and Grantor hereby assigns to Beneficiary any and all rights to
give consent for all or any portion of the Premises or any interest therein to
be so used. Grantor shall not by act or omission impair the integrity of any of
the Real Estate as a single zoning lot separate and apart from all other
premises. Grantor represents that each parcel of the Real Estate constitutes a
legally subdivided lot, in compliance with all subdivision laws and similar
Legal Requirements, except to the extent that failure to comply therewith, in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect (as defined in the Credit Agreement). Any act or omission by Grantor
which would result in a violation of any of the provisions of this subsection
shall be void.
4. Payment of Taxes and Other Impositions. (a) Grantor, prior to
delinquency, shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the benefit of any of the
Trust Property, all general and special assessments, levies, permits, inspection
and license fees, all water and sewer rents and charges and all other public
charges even if unforeseen or extraordinary, imposed upon or assessed against or
which may become a lien on any of the Trust Property, or arising in respect of
the occupancy, use or possession thereof, together with any penalties or
interest on any of the foregoing (all of the foregoing are collectively referred
to as the "Impositions"). Grantor shall within 30 days after the request of
Beneficiary deliver to Beneficiary (i) original or copies of receipted bills and
cancelled checks evidencing payment of such Imposition if it
7
is a real estate tax or other public charge and (ii) evidence reasonably
acceptable to Beneficiary showing the payment of any other such Imposition. If
by law any Imposition, at Grantor's option, may be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Imposition), Grantor
may elect to pay such Imposition in such installments and shall be responsible
for the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of Trustee or
Beneficiary under this Deed of Trust or otherwise, without notice or demand to
Grantor, to pay any Imposition after the date such Imposition shall have become
delinquent, and to add to the Indebtedness the amount so paid, together with
interest from the time of payment at the rate of interest described in
subsection ___ of the Credit Agreement (the "Default Rate"). Any sums paid by
Trustee or Beneficiary in discharge of any Impositions shall be (i) a charge on
the Premises secured hereby prior to any right or title to, interest in, or
claim upon the Premises subordinate to the lien of this Deed of Trust, and (ii)
payable on demand by Grantor to Trustee or Beneficiary, as the case may be,
together with interest at the Default Rate as set forth above.
(c) Grantor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Deed of Trust or on any
interest payable thereon for any taxes assessed against the Trust Property or
any part thereof, and shall not claim any deduction from the taxable value of
the Trust Property by reason of this Deed of Trust.
(d) Grantor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Grantor's covenant to pay any
such Imposition at the time and in the manner provided in this Section unless
(i) Grantor has given prior written notice to Beneficiary of Grantor's intent so
to contest or object to an Imposition, (ii) Grantor shall demonstrate to
Beneficiary's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Trust Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings and (iii) Grantor
shall have set aside on its books adequate reserves as required by GAAP (as
defined in the Credit Agreement).
(e) Upon written notice to Grantor, Beneficiary during the
continuance of an Event of Default (as defined below) shall be entitled to
require Grantor to pay monthly in advance to Beneficiary the equivalent of
1/12th of the estimated annual Impositions. Beneficiary may commingle such funds
with its own funds and Grantor shall not be entitled to interest thereon.
8
5. Insurance. (a) Grantor shall maintain or cause to be maintained
on all of the Premises
(i) property insurance against loss or damage by fire, lightning,
windstorm, tornado, water damage, flood, earthquake and by such other
further risks and hazards as now are or subsequently may be covered by an
"all risk" policy or a fire policy covering "special" causes of loss
(provided, however, that the maintenance of insurance against earthquake
and flood risks shall be subject to availability of such insurance
coverage on commercially reasonable terms). The policy shall include
building ordinance law endorsements and the policy limits shall be
automatically reinstated after each loss (other than with respect to flood
and earthquake coverage which shall be reinstated on a commercially
reasonable basis);
(ii) commercial general liability insurance under a policy including
the "broad form CGL endorsement" (or which incorporates the language or
similar language of such endorsement), covering all claims for personal
injury, bodily injury or death, or property damage, subject to standard
policy terms, conditions and exclusions, occurring on, in or about the
Premises in an amount not less than $10,000,000 combined single limit with
respect to personal injury, bodily injury or death, or property damage,
relating to any one occurrence plus such excess limits as Beneficiary
shall reasonably request from time to time;
(iii) when and to the extent reasonably required by Beneficiary,
insurance against loss or damage by any other risk commonly insured
against by persons occupying or using like properties in the locality or
localities in which the Real Estate is situated;
(iv) during the course of any construction or repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage for
elevators and escalators, if any). The policy shall include coverage for
independent contractors and completed operations. The completed operations
coverage shall stay in effect for two years after construction of any
Improvements has been completed. The policy shall provide coverage on an
occurrence basis against claims for personal injury, bodily injury, death
and property damage resulting from Grantor's negligence or other behavior
for which Grantor may be adjudged tortiously liable, subject to standard
policy terms, conditions and exclusions, occurring on, in or about the
Premises and the adjoining streets, sidewalks and passageways, such
insurance to afford immediate minimum protection to a limit of not less
than that reasonably required by Beneficiary with respect to personal
injury,
9
bodily injury or death to any one or more persons or damage to property;
(v) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Grantor engaged on or with
respect to the Premises in such amounts as are reasonably satisfactory to
Beneficiary, but in no event less than the limits established by law;
(vi) during the course of any construction, addition, alteration or
repair of the Improvements, builder's risk completed value property
insurance form against "all risks of physical loss," including collapse,
water damage, flood and earthquake and transit coverage, during
construction or repairs of the Improvements in reporting form, covering
the total replacement value of work performed and equipment, supplies and
materials furnished (with an appropriate limit for soft costs in the case
of construction); provided, however, that the maintenance of insurance
against earthquake and flood risks shall be subject to availability of
such insurance coverage on commercially reasonable terms;
(vii) boiler and machinery property insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided the
Improvements contain equipment of such nature, in such amounts as are
reasonably satisfactory to Beneficiary but not less than the lesser of
$1,000,000 or 10% of the value of the Improvements;
(viii) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an amount
reasonably satisfactory to Beneficiary, but in no event less than the
maximum limit of coverage available under the National Flood Insurance Act
of 1968, as amended; and
(ix) such other insurance in such amounts as Beneficiary may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30-days' prior written notice to Beneficiary, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$250,000, other than with respect to windstorm and earthquake perils for which
deductibles shall not exceed $500,000, contain a "Replacement Cost Endorsement"
without any deduction made for depreciation and with no co-insurance penalty (or
attaching an agreed amount endorsement reasonably satisfactory to Beneficiary),
with loss payable solely to Beneficiary (modified,
10
if necessary, to provide that proceeds in the amount of replacement cost may be
retained by Beneficiary without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
reasonably acceptable to Beneficiary and be written by insurance companies
having an A.M. Best Company, Inc. rating of A- or higher and a financial size
category of not less than VII, or otherwise as reasonably approved by
Beneficiary. Liability insurance policies shall name Beneficiary (and Trustee,
if Trustee shall so request) as an additional insured and contain a waiver of
subrogation against Beneficiary (and Trustee, if Trustee shall so request); all
such policies shall indemnify and hold Beneficiary (and Trustee, if Trustee
shall so request) harmless from all liability claims occurring on, in or about
the Premises and the adjoining streets, sidewalks and passageways, subject to
standard policy terms, conditions and exclusions. The amounts of each insurance
policy and the form of each such policy shall at all times be reasonably
satisfactory to Beneficiary. Each policy shall expressly provide that any
proceeds which are payable to Beneficiary shall be paid by check payable to the
order of Beneficiary only and requiring the endorsement of Beneficiary only. If
any required insurance shall expire, be withdrawn, become void by breach of any
condition thereof by Grantor or by any lessee of any part of the Trust Property
or become void or unsafe by reason of the failure or impairment of the capital
of any insurer, or if for any other reason whatsoever such insurance shall
become unsatisfactory to Beneficiary, Grantor shall immediately obtain new or
additional insurance reasonably satisfactory to Beneficiary. Grantor shall not
take out any separate or additional insurance which is contributing in the event
of loss unless it is properly endorsed and otherwise reasonably satisfactory to
Beneficiary in all respects.
(b) Grantor shall deliver to Beneficiary an original of each
insurance policy required to be maintained, or a certificate of such insurance
reasonably acceptable to Beneficiary, together with a copy of the declaration
page for each such policy. Grantor shall (i) pay as they become due all premiums
for such insurance, (ii) not later than 7 days prior to the expiration of each
policy to be furnished pursuant to the provisions of this Section, deliver a
renewed policy or policies or certificates of insurance reasonably acceptable to
Beneficiary, or duplicate original or originals thereof. Within 60 days of the
inception of each insurance policy or renewal, Grantor shall deliver to
Beneficiary evidence reasonably satisfactory to Beneficiary of payment therefor.
Upon the reasonable request of Beneficiary, Grantor shall cause its insurance
underwriter or broker to certify to Beneficiary in writing that all the
requirements of this Deed of Trust governing insurance have been satisfied.
(c) If Grantor is in default of its obligations to insure or deliver
any such prepaid policy or policies or certificates of insurance reasonably
acceptable to Beneficiary,
11
then Beneficiary, at its option and without notice, may effect such insurance
from year to year, and pay the premium or premiums therefor, and Grantor shall
pay to Beneficiary on demand such premium or premiums so paid by Beneficiary
with interest from the time of payment at the Default Rate and the same shall be
deemed to be secured by this Deed of Trust and shall be collectible in the same
manner as the Indebtedness secured by this Deed of Trust.
(d) Grantor shall increase the amount of property insurance required
to equal 100% replacement cost pursuant to the provisions of this Section at the
time of each renewal of each policy (but not later than 12 months from the date
of this Deed of Trust and each successive 12 month period to occur thereafter)
by using the ▇▇▇▇▇▇▇▇ & Swift Building Cost Index to determine whether there
shall have been an increase in the replacement value since the most recent
adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Grantor promptly shall in all material respects comply with and
conform to (i) all provisions of each such insurance policy, and (ii) all
requirements of the insurers applicable to Grantor or to any of the Trust
Property or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Trust Property. Grantor shall
not use or permit the use of the Trust Property in any manner which would permit
any insurer to cancel any insurance policy or void coverage required to be
maintained by this Deed of Trust.
(f) If the Trust Property, or any part thereof, shall be destroyed
or damaged by fire or any other casualty, whether insured or uninsured, or in
the event any claim is made against Grantor for any personal injury, bodily
injury or property damage incurred on or about the Premises, Grantor shall
promptly give notice thereof to Beneficiary. If the Trust Property is damaged by
fire or other casualty and the cost to repair such damage is less than the
lesser of (i) 30% of the replacement cost of the Improvements at the affected
Real Estate site and (ii) $1,000,000, then provided that no Event of Default
shall have occurred and be continuing, Grantor shall have the right to adjust
such loss, and the insurance proceeds relating to such loss may be paid over to
Grantor; provided that Grantor shall, promptly after any such damage, repair in
all material respects all such damage regardless of whether any insurance
proceeds have been received or whether such proceeds, if received, are
sufficient to pay for the costs of repair. If the Trust Property is damaged by
fire or other casualty, and the cost to repair such damage exceeds the above
limit, or if an Event of Default shall have occurred and be continuing, then
Grantor authorizes and empowers Beneficiary, at Beneficiary's option and in
Beneficiary's reasonable discretion, as attorney-in-fact for Grantor, to make
proof of loss, to adjust and compromise any
12
claim under any insurance policy, to appear in and prosecute any action arising
from any policy, to collect and receive insurance proceeds and to deduct
therefrom Beneficiary's expenses incurred in the collection process. Each
insurance company concerned is hereby authorized and directed to make payment
for such loss directly to Beneficiary. Beneficiary shall have the right to
require Grantor to repair or restore the Trust Property in all material
respects, and may make on behalf of Grantor any election required or permitted
under any insurance policy relating to repair or restoration. The insurance
proceeds or any part thereof received by Beneficiary may be applied by
Beneficiary toward reimbursement of all reasonable costs and expenses of
Beneficiary in collecting such proceeds, and the balance shall be advanced to
Grantor to be used for the restoration or repair of the Trust Property,
provided, however, if an Event of Default has occurred and is continuing, the
balance may be applied, at Beneficiary's option in its sole and absolute
discretion, to the principal (to the installments in inverse order of maturity,
if payable in installments) and interest due on the Loans, to fulfill any other
Obligation of Grantor, to the restoration or repair of the property damaged, or
released to Grantor. In the event Beneficiary elects to release such proceeds to
Grantor, Grantor shall be obligated to use such proceeds to restore or repair
the Trust Property. Application by Beneficiary of any insurance proceeds toward
the last maturing installments of principal and interest due or to become due on
the Loans shall not excuse Grantor from making any regularly scheduled payments
due thereunder, nor shall such application extend or reduce the amount of such
payments.
(g) In the event of foreclosure of this Deed of Trust or other
transfer of title to the Trust Property in extinguishment of the Indebtedness,
all right, title and interest of Grantor in and to any insurance policies then
in force shall pass to the purchaser or grantee and Grantor hereby agrees that
Beneficiary, in Grantor's name, may assign and transfer all such policies and
proceeds to such purchaser or grantee.
(h) Upon written notice to Grantor, Beneficiary, during the
continuance of an Event of Default, shall be entitled to require Grantor to pay
monthly in advance to Beneficiary the equivalent of 1/12th of the estimated
annual premiums due on such insurance. Beneficiary may commingle such funds with
its own funds and Grantor shall not be entitled to interest thereon.
(i) Grantor may maintain insurance required under this Deed of Trust
by means of one or more blanket insurance policies maintained by Grantor;
provided, however, that (A) any such policy shall specify, or Grantor shall
furnish to Beneficiary a written statement from the insurer so specifying, the
maximum amount of the total insurance afforded by such blanket policy that is
allocated to the Premises and the other Trust Property and any sublimits in such
blanket policy applicable to the Premises and the other Trust Property, (B) each
such blanket
13
policy shall include an endorsement providing that, in the event of a loss
resulting from an insured peril, insurance proceeds shall be allocated to the
Trust Property in an amount equal to the coverages required to be maintained by
Grantor as provided above and (C) the protection afforded under any such blanket
policy shall be no less than that which would have been afforded under a
separate policy or policies relating only to the Trust Property.
6. Maintenance; No Alteration; Inspection; Utilities. (a) Grantor
shall maintain or cause to be maintained all the Improvements in good condition
and repair and shall not commit or suffer any waste of the Improvements. Grantor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be damaged or destroyed by any casualty whatsoever to a condition
substantially equivalent to its condition prior to the damage or destruction.
Except as permitted by the Credit Agreement, the Improvements shall not be
demolished or materially altered, nor any material additions built, without the
prior written consent of Beneficiary, provided that Grantor may make alterations
or additions without the consent of Beneficiary that do not materially reduce
the value of the Trust Property.
(b) Beneficiary and any persons authorized by Beneficiary shall,
upon reasonable notice and at any reasonable time, have the right to enter and
inspect the Premises and the right to inspect all work done, labor performed and
materials furnished in and about the Improvements and the right to inspect and
make copies, to the extent reasonable, of all books, contracts and records of
Grantor relating to the Trust Property.
(c) Grantor shall pay or cause to be paid prior to delinquency, all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
7. Condemnation/Eminent Domain. Promptly upon obtaining knowledge of
the institution of any proceedings for the condemnation of the Trust Property,
or any portion thereof, Grantor will notify Beneficiary of the pendency of such
proceedings. Grantor authorizes Beneficiary, at Beneficiary's option and in
Beneficiary's reasonable discretion, on behalf of Grantor, to commence, appear
in and prosecute, in Beneficiary's or Grantor's name, any action or proceeding
relating to any condemnation of the Trust Property, or any portion thereof, and
to settle or compromise any claim in connection with such condemnation upon the
occurrence and during the continuance of an Event of Default. If Beneficiary
elects not to participate in such condemnation proceeding, then Grantor shall,
at its expense, diligently prosecute any such proceeding and shall consult with
Beneficiary, its attorneys and experts and cooperate with them in any defense of
any such proceedings. All awards and proceeds of
14
condemnation shall be assigned to Beneficiary to be applied in the same manner
as insurance proceeds, as provided above, and Grantor agrees to execute any such
assignments of all such awards as Beneficiary may request.
8. Restoration. If Beneficiary elects or is required hereunder to
release funds to Grantor for restoration of any of the Trust Property, then such
restoration shall be performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall be
submitted to and reasonably approved by Beneficiary;
(ii) prior to making any advance of restoration funds, Beneficiary
shall be reasonably satisfied that the remaining restoration funds are
sufficient to complete the restoration and to pay all related expenses,
including interest on the Indebtedness and real estate taxes on the
Premises, during restoration;
(iii) at the time of any disbursement of the restoration funds, (A)
no Default (as defined in the Credit Agreement) shall then exist, (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the requested
restoration funds and (C) a reasonably satisfactory bring-down or
continuation of title insurance on the Premises shall be delivered to
Beneficiary;
(iv) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of reasonably satisfactory evidence of the stage of completion and
of performance of the work in a good and workmanlike manner and in
accordance with the contracts, plans and specifications reasonably
acceptable to Beneficiary;
(v) with respect to each advance of restoration funds, Beneficiary
may retain 10% of the amount of such advance as a holdback until the
restoration is fully completed;
(vi) the restoration funds shall bear no interest and may be
commingled with Beneficiary's other funds;
(vii) Beneficiary may impose such other conditions as are
customarily imposed by construction lenders; and
(viii) any restoration funds remaining shall be retained by
Beneficiary and shall be applied by Beneficiary to the Indebtedness in the
order specified in subsection 4.4(g) of the Credit Agreement or to other
expenses related to the Trust Property, as herein permitted.
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9. Leases. (a) Grantor shall not (i) execute an assignment or pledge
of any Lease relating to all or any portion of the Trust Property other than in
favor of Beneficiary, or (ii) without the prior written consent of Beneficiary,
which consent shall not be unreasonably withheld or delayed, execute or permit
to exist any Lease of any of the Trust Property, except for Permitted
Encumbrances and except as permitted by subsection 8.6 of the Credit Agreement.
(b) As to any Lease consented to by Beneficiary, Grantor shall:
(i) promptly perform in all material respects all of the provisions
of the Lease on the part of the lessor thereunder to be performed;
(ii) promptly enforce all of the material provisions of the Lease on
the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising under or
in any manner connected with the Lease or the obligations of Grantor as
lessor or of the lessee thereunder;
(iv) exercise, within 5 days after a reasonable request by
Beneficiary, any right to request from the lessee a certificate with
respect to the status thereof;
(v) promptly deliver to Beneficiary copies of any notices of default
which Grantor may at any time forward to or receive from the lessee;
(vi) promptly deliver to Beneficiary a fully executed counterpart of
the Lease; and
(vii) promptly deliver to Beneficiary, upon Beneficiary's reasonable
request, an assignment of the Grantor's interest under such Lease.
(c) Grantor shall deliver to Beneficiary, within 10 days after a
reasonable request by Beneficiary, a written statement, certified by Grantor as
being true, correct and complete, containing the names of all lessees and other
occupants of the Trust Property, the terms of all Leases and the spaces occupied
and rentals payable thereunder, and a list of all Leases which are then in
default, including the nature and magnitude of the default; such statement shall
be accompanied by credit information with respect to the lessees and such other
information as Beneficiary may reasonably request.
(d) All Leases entered into by Grantor after the date hereof, if
any, and all rights of any lessees thereunder shall be subject and subordinate
in all respects to the lien and
16
provisions of this Deed of Trust unless Beneficiary shall otherwise elect in
writing.
(e) As to any Lease now in existence or subsequently consented to by
Beneficiary, Grantor shall not supplement, alter, revise, modify or amend such
Lease or permit any such action to be taken nor shall Grantor accept the payment
of rent more than thirty (30) days in advance of its due date.
(f) In the event of the enforcement by Beneficiary of any remedy
under this Deed of Trust, the lessee under each Lease shall, if requested by
Beneficiary or any other person succeeding to the interest of Beneficiary as a
result of such enforcement, attorn to Beneficiary or to such person and shall
recognize Beneficiary or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Beneficiary or
such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the consent of Beneficiary or such
successor in interest; (iii) liable for any previous act or omission of Grantor
(or its predecessors in interest); (iv) responsible for any monies owing by
Grantor to the credit of such lessee or subject to any credits, offsets, claims,
counterclaims, demands or defenses which the lessee may have against Grantor (or
its predecessors in interest); (v) bound by any covenant to undertake or
complete any construction of the Premises or any portion thereof; or (vi)
obligated to make any payment to such lessee other than any security deposit
actually delivered to Beneficiary or such successor in interest. Each lessee or
other occupant, upon request by Beneficiary or such successor in interest, shall
execute and deliver an instrument or instruments confirming such attornment. In
addition, Grantor agrees that each Lease entered into after the date of this
Deed of Trust shall include language to the effect of subsections (d)-(f) of
this Section; provided that the provisions of such subsections shall be
self-operative and any failure of any Lease to include such language shall not
impair the binding effect of such provisions on any lessee under such Lease.
10. Further Assurances. To further assure Beneficiary's and
Trustee's rights under this Deed of Trust, Grantor agrees upon demand of
Beneficiary or Trustee to do any act or execute any additional documents
(including, but not limited to, security agreements on any personalty included
or to be included in the Trust Property and a separate assignment of each Lease
in recordable form) as may be reasonably required by Beneficiary or Trustee to
confirm the lien of this Deed of Trust and all other rights or benefits
conferred on Beneficiary or Trustee by this Deed of Trust.
11. Beneficiary's Right to Perform. If Grantor fails to perform any
of the covenants or agreements of Grantor,
17
Beneficiary or Trustee, without waiving or releasing Grantor from any obligation
or default under this Deed of Trust, may, at any time (but shall be under no
obligation to) pay or perform the same, and the amount or cost thereof, with
interest at the Default Rate, shall immediately be due from Grantor to
Beneficiary or Trustee (as the case may be) and the same shall be secured by
this Deed of Trust and shall be encumbrances on the Trust Property prior to any
right, title to, interest in or claim upon the Trust Property attaching
subsequent to the date of this Deed of Trust. No payment or advance of money by
Beneficiary or Trustee under this Section shall be deemed or construed to cure
Grantor's default or waive any right or remedy of Beneficiary or Trustee.
12. Events of Default. The occurrence of an Event of Default under
the Credit Agreement shall constitute an Event of Default hereunder.
13. Remedies.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Beneficiary may have pursuant to the Loan Documents,
or as provided by law, and without limitation, the Indebtedness and all other
amounts payable with respect to the Loans, the Letters of Credit, the Credit
Agreement, this Deed of Trust and the other Security Documents shall become due
and payable as provided in the Credit Agreement. Except as expressly provided
above in this Section, notice of intention to accelerate, notice of
acceleration, presentment, demand, protest and all other notices of any kind are
hereby expressly waived. In addition, upon the occurrence of any Event of
Default, Beneficiary may immediately take such action, without notice or demand,
as it deems advisable to protect and enforce its rights against Grantor and in
and to the Trust Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
manner as Beneficiary may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of Beneficiary:
(i) Beneficiary may direct Trustee and Trustee shall follow such
direction unless it is modified or withdrawn by Beneficiary to sell or
offer for sale the Trust Property in such portions, order and parcels as
Beneficiary may determine, with or without having first taken possession
of the same, to the highest bidder for cash at public auction. Such sale
shall be made at the courthouse door of the County wherein the Real Estate
(or any of that portion thereof to be sold) is situated (whether the parts
or parcels thereof, if any, in different counties are contiguous or not,
and without the necessity of having any personal property hereby mortgaged
present at such sale) on the first Tuesday of any month between the hours
of 10:00 a.m. and 4:00 p.m. after having given notice of such sale in
accordance with the
18
statutes of the State of Texas then in effect governing sales of real
estate under powers conferred by deed of trust. The sale shall be
accomplished by following the procedures permitted or required by Tex.
Prop. Code ▇▇▇. 51.002 (▇▇▇▇▇▇ 1984), as same may be amended from time to
time, relating to the sale of real estate and/or by Chapter 9 of the Texas
Uniform Commercial Code relating to the sale of personal property
collateral after default by a debtor (as said Section and Chapter may now
exist or may hereafter be amended or succeeded), or by any other present
or subsequent articles or enactments relating to the same. Nothing
contained in this subsection shall be construed to limit in any way
Trustee's rights to sell the Trust Property by private sale if, and to the
extent, that such private sale is permitted under the laws of the State of
Texas or by public or private sale after entry of judgment by any court of
competent jurisdiction ordering the same. At any such sale (i) whether
made under power herein contained, the aforesaid ss. 51.002, the Texas
Uniform Commercial Code, any other legal requirement or by virtue of any
judicial procedure or any other legal right, remedy or recourse, it shall
not be necessary for Trustee to have physically present, or to have
constructive possession of, the Trust Property (Grantor hereby covenanting
and agreeing to deliver to Trustee any portion of the Trust Property not
actually or constructively possessed by Trustee immediately upon demand by
Trustee), and the title to and right of possession of any such property
shall pass to the purchaser thereof as completely as if the same had been
actually present and delivered to purchaser at such sale, (ii) each
instrument of conveyance executed by Trustee shall contain a special
warranty of title, subject to Permitted Encumbrances, binding upon
Grantor, (iii) each and every recital contained in any instrument of
conveyance made by Trustee shall be prima facie proof of the truth and
accuracy of the matters recited therein, including, without limitation,
nonpayment of the Indebtedness, advertisement and conduct of such sale in
the manner provided herein and otherwise by law and appointment of any
successor Trustee hereunder, (iv) there shall be a prima facie presumption
that any and all prerequisites to the validity thereof shall have been
performed, (v) the receipt of Trustee shall be a sufficient discharge to
the purchaser or purchasers for his or their purchase money and no such
purchaser or purchasers, or his or their assigns or personal
representatives, shall thereafter be obligated to see to the application
of such purchase money or be in any way answerable for any loss,
misapplication or nonapplication thereof, (vi) to the fullest extent
permitted by law, Grantor shall be completely and irrevocably divested of
all of its right, title, interest, claim and demand whatsoever, either at
law or in equity, in and to the property sold and such sale shall be a
perpetual bar, both at law and in equity, against Grantor, and against any
and all other persons claiming or to claim
19
the property sold or any part thereof, by, through or under Grantor, and
(vii) to the extent and under such circumstances as are permitted by law,
Beneficiary may be a purchaser at any such sale;
(ii) Beneficiary may, to the extent permitted by applicable law, (A)
institute and maintain an action of judicial foreclosure against all or
any part of the Trust Property, (B) institute and maintain an action on
the Loans (including any notes issued to evidence the Loans), or (C) take
such other action at law or in equity for the enforcement of this Deed of
Trust or any of the Loan Documents as the law may allow. Beneficiary may
proceed in any such action to final judgment and execution thereon for all
sums due hereunder, together with interest thereon as provided in the
Credit Agreement and all reasonable costs of suit, including, without
limitation, reasonable attorneys' fees and disbursements. Interest at the
Default Rate shall be due on any judgment obtained by Beneficiary from the
date of judgment until actual payment is made of the full amount of the
judgment.
(iii) Beneficiary may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the Trust
Property or any other collateral as security for the Indebtedness and
Obligations enter into and upon the Trust Property and each and every part
thereof and exclude Grantor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Grantor hereby agreeing to
surrender possession of the Trust Property to Beneficiary upon demand at
any such time) and use, operate, manage, maintain and control the Trust
Property and every part thereof. Following such entry and taking of
possession, Beneficiary shall be entitled, without limitation, (x) to
lease all or any part or parts of the Trust Property for such periods of
time and upon such conditions as Beneficiary may, in its discretion, deem
proper, (y) to enforce, cancel or modify any Lease and (z) generally to
execute, do and perform any other act, deed, matter or thing concerning
the Trust Property as Beneficiary shall deem appropriate as fully as
Grantor might do.
(b) Beneficiary, in any action to foreclose this Deed of Trust in a
judicial procedure or in connection with the exercise of any non-judicial power
of sale by Trustee, shall be entitled to the appointment of a receiver. In case
of a trustee's sale or foreclosure sale, the Real Estate may be sold, at
Beneficiary's election, in one parcel or in more than one parcel and Beneficiary
is specifically empowered (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Trust Property
to be held.
20
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Deed of Trust, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Beneficiary or Trustee shall be entitled to enjoin such breach and obtain
specific performance of any covenant, agreement, term or condition and
Beneficiary and Trustee shall have the right to invoke any equitable right or
remedy as though other remedies were not provided for in this Deed of Trust.
(d) Following any sale of the Trust Property, or any part hereof,
under the provisions of this instrument, all persons and parties in possession
of the property sold shall be divested of any and all interest in and claim to
the Trust Property, and shall be obligated to immediately vacate the premises,
and prior to such vacation shall be tenants at sufferance of the purchaser of
the property sold and shall be subject to eviction in an action of forcible
detainer; provided, the provisions of this subparagraph shall be subject to any
agreements made in writing by Beneficiary with reference to any existing and/or
future leases; provided, further, the purchaser at any foreclosure sale shall
have the option but not the obligation to affirm any then existing leases or
tenancies or otherwise succeed to the rights of Grantor thereunder.
14. Right of Beneficiary to Credit Sale. Upon the occurrence of any
sale made under this Deed of Trust, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Beneficiary may bid for and acquire the Trust Property or any part
thereof. In lieu of paying cash therefor, Beneficiary may make settlement for
the purchase price by crediting upon the Indebtedness or other sums secured by
this Deed of Trust the net sales price after deducting therefrom the expenses of
sale and the cost of the action and any other sums which Beneficiary is
authorized to deduct under this Deed of Trust. In such event, this Deed of Trust
and any and all documents evidencing expenditures secured hereby may be
presented to the person or persons conducting the sale in order that the amount
so used or applied may be credited upon the Indebtedness as having been paid.
15. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Beneficiary as a matter of right and without notice
to Grantor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Trust Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Grantor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Trust Property, and
Grantor hereby irrevocably consents to such appointment and waives notice of any
application therefor (except as may be required by law). Any such receiver or
receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Beneficiary in
21
case of entry as provided in this Deed of Trust, including, without limitation
and to the extent permitted by law, the right to enter into leases of all or any
part of the Trust Property, and shall continue as such and exercise all such
powers until the date of confirmation of sale of the Trust Property unless such
receivership is sooner terminated.
16. Extension, Release, etc. (a) Without affecting the encumbrance
or charge of this Deed of Trust upon any portion of the Trust Property not then
or theretofore released as security for the full amount of the Indebtedness,
Beneficiary may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Beneficiary's option any parcel, portion or all of the Trust
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Deed of Trust shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall not
reduce the amount of the encumbrance of this Deed of Trust until the encumbrance
amount shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Trust Property or upon any other property
of Grantor shall affect the encumbrance of this Deed of Trust or any liens,
rights, powers or remedies of Beneficiary or Trustee hereunder, and such liens,
rights, powers and remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose this Deed of
Trust or to direct the Trustee to exercise its power of sale, Grantor authorizes
Beneficiary at its option to foreclose the lien of this Deed of Trust (or direct
the Trustee to sell the Trust Property, as the case may be) subject to the
rights of any tenants of the Trust Property. The failure to make any such
tenants parties defendant to any such foreclosure proceeding and to foreclose
their rights, or to provide notice to such tenants as required in any statutory
procedure governing a sale of the Trust Property by Trustee, or to terminate
such tenant's rights in such sale will not be asserted by Grantor as a defense
to any proceeding instituted by Beneficiary to collect the Indebtedness or to
foreclose this Deed of Trust.
(d) Unless expressly provided otherwise, in the event that
Beneficiary's interest in this Deed of Trust and title to the Trust Property or
any estate therein shall become vested in the same person or entity, this Deed
of Trust shall not merge in such title but shall continue as a valid charge on
the Trust Property for the amount secured hereby.
22
17. Security Agreement under Uniform Commercial Code. (a) It is the
intention of the parties hereto that this Deed of Trust shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State in which the Trust Property is located. If an Event of
Default shall occur under this Deed of Trust, then in addition to having any
other right or remedy available at law or in equity, Beneficiary shall have the
option of either (i) proceeding under the Code and exercising such rights and
remedies as may be provided to a secured party by the Code with respect to all
or any portion of the Trust Property which is personal property (including,
without limitation, taking possession of and selling such property) or (ii)
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Trust Property in accordance with
Beneficiary's rights, powers and remedies with respect to the real property (in
which event the default provisions of the Code shall not apply). If Beneficiary
shall elect to proceed under the Code, then five days' notice of sale of the
personal property shall be deemed reasonable notice and the reasonable expenses
of retaking, holding, preparing for sale, selling and the like incurred by
Beneficiary shall include, but not be limited to, reasonable attorneys' fees and
legal expenses. At Beneficiary's request during the continuance of an Event of
Default, Grantor shall assemble the personal property and make it available to
Beneficiary at a place designated by Beneficiary which is reasonably convenient
to both parties.
(b) Grantor and Beneficiary agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Deed of
Trust upon recording or registration in the real estate records of the proper
office shall constitute a financing statement filed as a "fixture filing" within
the meaning of Sections 9.313 and 9.402 of the Code; (iii) Grantor is the record
owner of the Real Estate; and (iv) the addresses of Grantor and Beneficiary are
as set forth on the first page of this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to time, shall
execute, acknowledge and deliver to Beneficiary one or more separate security
agreements, in form reasonably satisfactory to Beneficiary, covering all or any
part of the Trust Property and will further execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any financing statement,
affidavit, continuation statement or certificate or other document as
Beneficiary may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Deed of Trust and
such security instrument. Grantor further agrees to pay to Beneficiary on demand
all reasonable costs and expenses incurred by Beneficiary in connection with the
preparation, execution, recording, filing and re-filing of any such document and
all reasonable costs and expenses of any record searches for
23
financing statements Beneficiary shall reasonably require. If Grantor shall fail
to furnish any financing or continuation statement within 10 days after request
by Beneficiary, then pursuant to the provisions of the Code, Grantor hereby
authorizes Beneficiary, without the signature of Grantor, to execute and file
any such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Beneficiary to
proceed against any personal property encumbered by this Deed of Trust as real
property, as set forth above.
18. Assignment of Rents. In order to provide a source of future
payment of the Indebtedness, Grantor hereby absolutely and unconditionally
assigns to Beneficiary, all rights of Grantor in respect of cash and securities
deposited and the right to receive and collect the revenues, income, rents,
issues and profits arising from the use and enjoyment of the Trust Property
(including, without limitation, any leases, subleases, underlettings, licenses
or occupancy agreements relating thereto) (collectively, the "Rents") and
Grantor grants to Beneficiary the right to enter the Trust Property for the
purpose of collecting the same and to let the Trust Property or any part
thereof, and to apply the Rents on account of the Indebtedness. The foregoing
assignment and grant is present and absolute and shall continue in effect until
the Indebtedness is paid in full, but Beneficiary and Trustee hereby waive the
right to enter the Trust Property for the purpose of collecting the Rents,
letting the Trust Property or any part thereof or applying the Rents and Grantor
shall be entitled to collect, receive, use and retain the Rents as a trust fund
to be applied as required by Beneficiary until the occurrence of an Event of
Default under this Deed of Trust; such right of Grantor to collect, receive, use
and retain the Rents may be revoked by Beneficiary upon the occurrence of any
Event of Default under this Deed of Trust by giving not less than five days'
written notice of such revocation to Grantor; in the event such notice is given,
Grantor shall pay over to Beneficiary, or to any receiver appointed to collect
the Rents, any lease security deposits, and shall pay monthly in advance to
Beneficiary, or to any such receiver, the fair and reasonable rental value as
determined by Beneficiary for the use and occupancy of the Trust Property or of
such part thereof as may be in the possession of Grantor or any affiliate of
Grantor, and upon default in any such payment Grantor and any such affiliate
will vacate and surrender the possession of the Trust Property to Beneficiary or
to such receiver, and in default thereof may be evicted by summary proceedings
or otherwise. Grantor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any).
(b) Beneficiary's acceptance of this assignment shall not, prior to
entry upon and taking possession of the Trust Property by Beneficiary, be deemed
to constitute Beneficiary a
24
"mortgagee in possession", nor obligate Beneficiary to appear in or defend any
proceeding relating to any of the Leases or to the Trust Property, take any
action hereunder, expend any money, incur any expenses, or perform any
obligation or liability under the Leases, or assume any obligation for any
deposits delivered to Grantor by any tenant and not delivered to Beneficiary, or
render Beneficiary liable for any injury or damage to person or property in or
about the Trust Property. Neither the collection of Rents due under the Leases
herein described, nor possession of the Trust Property by Beneficiary under any
of the circumstances set forth herein shall render Beneficiary liable with
respect to any obligations of Grantor to any tenant or subtenant under said
Leases, such liability to arise only with respect to a party purchasing the
Trust Property at a foreclosure sale or receiving a deed covering the Trust
Property in lieu of foreclosure and then to arise only with respect to
obligations accruing subsequent to such foreclosure sale or deed in lieu
thereof.
(c) By Beneficiary's acceptance of this Deed of Trust, it is
understood and agreed that a full and complete release of this Deed of Trust
shall operate as a full and complete reassignment to Grantor of the
Beneficiary's rights and interests under this Section.
(d) All provisions hereof shall inure to the benefit of and all
actions authorized hereunder shall be exercisable by the Trustee or the
Substitute Trustee at Beneficiary's request.
19. Additional Rights. The holder of any subordinate lien or
subordinate deed of trust on the Trust Property shall have no right to terminate
any Lease whether or not such Lease is subordinate to this Deed of Trust nor
shall any holder of any subordinate lien or subordinate deed of trust join any
tenant under any Lease in any trustee's sale or action to foreclose the lien or
modify, interfere with, disturb or terminate the rights of any tenant under any
Lease. By recordation of this Deed of Trust all subordinate lienholders and the
trustees and beneficiaries under subordinate deeds of trust are subject to and
notified of this provision, and any action taken by any such lienholder or
trustee or beneficiary contrary to this provision shall be null and void. Upon
the occurrence of any Event of Default, Beneficiary may, in its sole discretion
and without regard to the adequacy of its security under this Deed of Trust,
apply all or any part of any amounts on deposit with Beneficiary under this Deed
of Trust against all or any part of the Indebtedness. Any such application shall
not be construed to cure or waive any Default or Event of Default or invalidate
any act taken by Beneficiary on account of such Default or Event of Default.
20. Changes in Method of Taxation. In the event of the passage after
the date hereof of any law of any Governmental Authority deducting from the
value of the Premises for the purposes of taxation any lien or deed of trust
thereon, or
25
changing in any way the laws for the taxation of mortgages or deeds of trust or
debts secured thereby for federal, state or local purposes, or the manner of
collection of any such taxes, and imposing a tax, either directly or indirectly,
on mortgages or deeds of trust or debts secured thereby, the holder of this Deed
of Trust shall, to the extent not otherwise prohibited by applicable law, have
the right to declare the Indebtedness due on a date to be specified by not less
than 30 days' written notice to be given to Grantor unless within such 30-day
period Grantor shall assume as an Obligation hereunder the payment of any tax so
imposed until full payment of the Indebtedness and such assumption shall be
permitted by law.
21. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been sufficiently given or served when served
in the manner set forth in Section 10.2 of the Credit Agreement; provided that,
service of a notice required by Tex. Prop. Code ▇▇▇. ss. 51.002 shall be
considered complete when the requirements of that statute are met.
22. No Oral Modification. This Deed of Trust may not be changed or
terminated orally. Any agreement made by Grantor and Beneficiary after the date
of this Deed of Trust relating to this Deed of Trust shall be superior to the
rights of the holder of any intervening or subordinate deed of trust, lien or
encumbrance. Trustee's execution of any written agreement between Grantor and
Beneficiary shall not be required for the effectiveness thereof as between
Grantor and Beneficiary.
23. Partial Invalidity. In the event any one or more of the
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Deed of
Trust or in any provisions of the Indebtedness or Loan Documents, the
obligations of Grantor and of any other obligor under the Indebtedness or Loan
Documents shall be subject to the limitation that Beneficiary shall not charge,
take or receive, nor shall Grantor or any other obligor be obligated to pay to
Beneficiary, any amounts constituting interest in excess of the maximum rate
permitted by law to be contracted for, charged or received by Beneficiary.
24. Grantor's Waiver of Rights. To the fullest extent permitted by
law, Grantor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Trust Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Trust Property from attachment,
26
levy or sale under execution or exemption from civil process. To the full extent
Grantor may do so, Grantor agrees that Grantor will not at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Deed of Trust before exercising any
other remedy granted hereunder and Grantor, for Grantor and its successors and
assigns, and for any and all persons ever claiming any interest in the Trust
Property, to the extent permitted by law, hereby waives and releases all rights
of redemption, valuation, appraisement, stay of execution, notice of election to
mature or declare due the whole of the secured indebtedness and marshalling in
the event of exercise by Trustee or Beneficiary of the power of sale or other
rights hereby created.
25. Remedies Not Exclusive. Beneficiary and Trustee shall be
entitled to enforce payment of the Indebtedness and performance of the
Obligations and to exercise all rights and powers under this Deed of Trust or
under any of the other Loan Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the Indebtedness and
Obligations may now or hereafter be otherwise secured, whether by deed of trust,
mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the
acceptance of this Deed of Trust nor its enforcement, shall prejudice or in any
manner affect Beneficiary's right to realize upon or enforce (or to direct
Trustee to realize upon or enforce) any other security now or hereafter held by
Beneficiary or Trustee (or cause the enforcement of) and Trustee shall be
entitled to enforce, it being agreed that Beneficiary and Trustee shall be
entitled to enforce this Deed of Trust and any other security now or hereafter
held by Beneficiary or Trustee in such order and manner as Beneficiary may
determine in its absolute discretion. No remedy herein conferred upon or
reserved to Trustee or Beneficiary is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given by any
of the Loan Documents to Beneficiary or Trustee or to which either may otherwise
be entitled, may be exercised, concurrently or independently, from time to time
and as often as may be deemed expedient by Beneficiary or Trustee, as the case
may be. In no event shall Beneficiary or Trustee, in the exercise of the
remedies provided in this Deed of Trust (including, without limitation, in
connection with the assignment of Rents, or the appointment of a receiver and
the entry of such receiver on to all or any part of the Trust Property), be
deemed a "mortgagee in possession," and neither Beneficiary nor Trustee shall in
any way be made liable for any act, either of commission or omission, in
connection with the exercise of such remedies.
27
26. Multiple Security. If (a) the Premises shall consist of one or
more parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Deed of Trust, Beneficiary shall now or
hereafter hold or be the beneficiary of one or more additional mortgages, liens,
deeds of trust or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Premises are located (whether or
not such property is owned by Grantor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Beneficiary may, at its election, commence or
consolidate in a single trustee's sale or foreclosure action all trustee's sale
or foreclosure proceedings against all such collateral securing the Indebtedness
(including the Trust Property), which action may be brought or consolidated in
the courts of, or sale conducted in, any county in which any of such collateral
is located. Grantor acknowledges that the right to maintain a consolidated
trustee's sale or foreclosure action is a specific inducement to Beneficiary to
extend the Indebtedness, and Grantor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure proceedings
in a single action and any objections to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter have. Grantor
further agrees that if Trustee or Beneficiary shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Trust Property or
against any collateral other than the Trust Property, which collateral directly
or indirectly secures the Indebtedness, or if Beneficiary shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral
(or, in the case of a trustee's sale, shall have met the statutory requirements
therefor with respect to such collateral), then, whether or not such proceedings
are being maintained or judgments were obtained in or outside the State in which
the Premises are located, Beneficiary may commence or continue any trustee's
sale or foreclosure proceedings and exercise its other remedies granted in this
Deed of Trust against all or any part of the Trust Property and Grantor waives
any objections to the commencement or continuation of a foreclosure of this Deed
of Trust or exercise of any other remedies hereunder based on such other
proceedings or judgments, and waives any right to seek to dismiss, stay, remove,
transfer or consolidate either any action under this Deed of Trust or such other
proceedings on such basis. The commencement or continuation of proceedings to
sell the Trust Property in a trustee's sale, to foreclose this Deed of Trust or
the exercise of any other rights hereunder or the recovery of any judgment by
Beneficiary or the occurrence of any sale by the Trustee in any such proceedings
shall not prejudice, limit or preclude Beneficiary's right to commence or
continue one or more trustee's sales, foreclosure or other proceedings or obtain
a judgment against (or, in the case of a trustee's sale, to meet the statutory
requirements for, any such sale of) any other collateral (either in or outside
the State in which the Real Estate is located) which directly or indirectly
secures the
28
Indebtedness, and Grantor expressly waives any objections to the commencement
of, continuation of, or entry of a judgment in such other sales or proceedings
or exercise of any remedies in such sales or proceedings based upon any action
or judgment connected to this Deed of Trust, and Grantor also waives any right
to seek to dismiss, stay, remove, transfer or consolidate either such other
sales or proceedings or any sale or action under this Deed of Trust on such
basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Beneficiary may, at its election, cause the sale of all
collateral which is the subject of a single trustee's sale or foreclosure action
at either a single sale or at multiple sales conducted simultaneously and take
such other measures as are appropriate in order to effect the agreement of the
parties to dispose of and administer all collateral securing the Indebtedness
(directly or indirectly) in the most economical and least time-consuming manner.
27. Successors and Assigns. All covenants of Grantor contained in
this Deed of Trust are imposed solely and exclusively for the benefit of
Beneficiary and Trustee and their respective successors and assigns, and no
other person or entity shall have standing to require compliance with such
covenants or be deemed, under any circumstances, to be a beneficiary of such
covenants, any or all of which may be freely waived in whole or in part by
Beneficiary or Trustee at any time if in the sole discretion of Beneficiary (or,
to the extent required by applicable law, Trustee) such waiver is deemed
advisable. All such covenants of Grantor shall run with the land and bind
Grantor, the successors and assigns of Grantor (and each of them) and all
subsequent owners, encumbrancers and tenants of the Trust Property, and shall
inure to the benefit of Beneficiary, Trustee and their respective successors and
assigns. Without limiting the generality of the foregoing, any successor to
Trustee appointed by Beneficiary shall succeed to all rights of Trustee as if
such successor had been originally named as Trustee hereunder. The word
"Grantor" shall be construed as if it read "Grantors" whenever the sense of this
Deed of Trust so requires and if there shall be more than one Grantor, the
obligations of the Grantors shall be joint and several.
28. No Waivers, etc. Any failure by Beneficiary to insist upon the
strict performance by Grantor of any of the terms and provisions of this Deed of
Trust shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Beneficiary or Trustee, notwithstanding any such failure, shall have
the right thereafter to insist upon the strict performance by Grantor of any and
all of the terms and provisions of this Deed of Trust to be performed by
Grantor. Beneficiary may release, regardless of consideration and without the
necessity for any notice to or consent by the beneficiary of any subordinate
deed of trust or the holder of any subordinate lien on the Trust Property, any
part of the security held for the obligations secured by this
29
Deed of Trust without, as to the remainder of the security, in any way impairing
or affecting this Deed of Trust or the priority of this Deed of Trust over any
subordinate lien or deed of trust.
29. GOVERNING LAW, ETC. THIS DEED OF TRUST SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT THAT GRANTOR
EXPRESSLY ACKNOWLEDGES THAT BY ITS TERMS THE CREDIT AGREEMENT SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAW, AND FOR PURPOSES OF CONSISTENCY,
GRANTOR AGREES THAT IN ANY IN PERSONAM PROCEEDING RELATED TO THIS DEED OF TRUST
THE RIGHTS OF THE PARTIES TO THIS DEED OF TRUST SHALL ALSO BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK GOVERNING
CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAW.
30. Waiver of Trial by Jury. Grantor, Trustee and Beneficiary each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Deed of Trust and for any counterclaim
brought therein.
31. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Deed of Trust shall be used interchangeably in singular or plural form and
the word "Grantor" shall mean "each Grantor or any subsequent owner or owners of
the Trust Property or any part thereof or interest therein," the word
"Beneficiary" shall mean "Beneficiary or any successor Administrative Agent,"
the word "Trustee" shall mean "Trustee and any successor or substitute trustee
hereunder," the word "notes" shall mean "the notes that may from time to time be
issued pursuant to the terms of the Credit Agreement or any other evidence of
indebtedness secured by this Deed of Trust," the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Trust
Property" shall include any portion of the Trust Property or interest therein.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. The captions in this
Deed of Trust are for convenience or reference only and in no way limit or
amplify the provisions hereof. All terms used herein which are defined in the
Texas Uniform Commercial Code shall be used in accordance with the definition
therefor in said Code.
32. Enforceability; Usury. In no event shall any provision of this
Deed of Trust, the notes, or any other instrument evidencing or securing the
indebtedness ever obligate Grantor to pay or allow Beneficiary to collect
interest on the Loans or any other indebtedness secured hereby at a rate greater
than the maximum non-usurious rate permitted by applicable law (herein referred
to as the "Highest Lawful Rate"), or obligate
30
Grantor to pay any taxes, assessments, charges, insurance premiums or other
amounts to the extent that such payments, when added to the interest payable on
the Loans or any other note secured hereby, would be held to constitute the
payment by Grantor of interest at a rate greater than the Highest Lawful Rate;
and this provision shall control over any provision to the contrary. To the
extent the Highest Lawful Rate is determined by reference to the laws of the
State of Texas, same shall be determined by reference to the indicated (weekly)
rate ceiling (as defined and described in Texas Revised Civil Statutes Article
5069-1.04, as amended) at the applicable time in effect.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the Indebtedness shall be
accelerated for any reason, then such principal amount so accelerated shall be
credited with any interest theretofore paid thereon in advance and remaining
unearned at the time of such acceleration. If, pursuant to the terms of this
instrument or the Loans, any funds are applied to the payment of any part of the
principal amount of the Indebtedness prior to the maturity thereof, then (a) any
interest which would otherwise thereafter accrue on the principal amount so paid
by such application shall be canceled, and (b) the Indebtedness remaining unpaid
after such application shall be credited with the amount of all interest, if
any, theretofore collected on the principal amount so paid by such application
and remaining unearned at the date of said application; and if the funds so
applied shall be sufficient to pay in full all the Indebtedness, then
Beneficiary shall refund to Grantor all interest theretofore paid thereon in
advance and remaining unearned at the time of such acceleration. Regardless of
any other provision in this instrument, or in any of the written evidences of
the Indebtedness, Grantor shall never be required to pay any unearned interest
on the Indebtedness or any portion thereof, and shall never be required to pay
interest thereon at a rate in excess of the Highest Lawful Rate construed by
courts having competent jurisdiction thereof.
33. Homestead. Grantor represents and covenants that the Trust
Property forms no part any property owned, used or claimed by Grantor as a
business or residential homestead, or as exempt from forced sale under the laws
of the State of Texas, and disclaims and renounces all and every such claim
thereto.
34. Substitute Trustee. In case of the resignation of the Trustee,
or the inability (through death or otherwise), refusal or failure of the Trustee
to act, or at the option of Beneficiary or the holder(s) of a majority of the
Indebtedness for any other reason (which reason need not be stated), a
Substitute Trustee may be named, constituted and appointed by Beneficiary or the
holder(s) of a majority of the Indebtedness, without other formality than an
appointment and designation in writing, which appointment and designation shall
be full evidence of the right and authority to make the same and of all facts
31
therein recited, and this conveyance shall vest in the Substitute Trustee the
title, powers and duties herein conferred on the Trustee originally named
herein, and the conveyance of the Substitute Trustee to the purchaser(s) at any
sale of the Trust Property of any part thereof shall be equally valid and
effective. The right to appoint a Substitute Trustee shall exist as often and
whenever from any of said causes, the Trustee, original or Substitute, resigns
or cannot, will not or does not act, or Beneficiary or the holder(s) of a
majority of the Indebtedness desires to appoint a new Trustee. No bond shall
ever be required of the Trustee, original or Substitute. The recitals in any
conveyance made by the Trustee, original or Substitute, shall be accepted and
construed in court and elsewhere as prima facie evidence and proof of the facts
recited, and no other proof shall be required as to the request by Beneficiary
or the Holder(s) of a majority of the Indebtedness to the Trustee to enforce
this Deed of Trust, or as to the notice of or holding of the sale, or as to any
particulars thereof, or as to the resignation of the Trustee, original or
Substitute, or as to the inability, refusal or failure of the Trustee, original
or Substitute, to act, or as to the election of Beneficiary or the holder(s) of
a majority of the Indebtedness to appoint a new Trustee, or as to appointment of
a Substitute Trustee, and all prerequisites of said sale shall be presumed to
have been performed; and each sale made under the powers herein granted shall be
a perpetual bar against Grantor and the heirs, personal representatives,
successors and assigns of Grantor. Trustee, original or substitute, is hereby
authorized and empowered to appoint any one or more persons as attorney-in-fact
to act as Trustee under him and in his name, place and ▇▇▇▇▇ in order to take
any actions that Trustee is authorized and empowered to do hereunder, such
appointment to be evidenced by an instrument signed and acknowledged by said
Trustee, original or substitute; and all acts done by said attorney-in-fact
shall be valid, lawful and binding as if done by said Trustee, original or
substitute, in person.
35. Indemnification of Trustee. EXCEPT FOR GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT, TRUSTEE SHALL NOT BE LIABLE FOR ANY ACT OR OMISSION OR ERROR
OF JUDGMENT. Trustee may rely on any document believed by him in good faith to
be genuine. All money received by Trustee shall, until used or applied as herein
provided, be held in trust, and Trustee shall not be liable for interest
thereon. GRANTOR SHALL INDEMNIFY TRUSTEE AGAINST ALL LIABILITY AND EXPENSE THAT
HE MAY INCUR IN THE PERFORMANCE OF HIS DUTIES HEREUNDER, INCLUDING LIABILITY AND
EXPENSES CAUSED BY TRUSTEE'S NEGLIGENCE BUT EXCLUDING THOSE CAUSED BY TRUSTEE'S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
36. Business or Commercial Purpose. Grantor warrants that the
extension of credit evidenced by the Loans secured hereby is solely for business
or commercial purposes, other than agricultural purposes. Grantor further
warrants that the credit transaction evidenced by the Loans is specifically
exempted under
32
Section 226.3(a) of Regulation Z issued by the Board of Governors of the Federal
Reserve System and Title 12 (Truth in Lending Act) and Section 1603 of Title 15
(General Provisions) of the Consumer Credit Protection Act and that no
disclosures are required to be given under such regulations and federal laws in
connection with the above transaction.
37. Final Agreement. In consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby confirms and agrees that this Deed of Trust
(including the Schedules hereto), the Loans, any guarantees of the Loans
executed by any guarantors and all other Loan Documents and loan papers together
constitute a written "loan agreement" as defined in Section 26.02(a) of the
Texas Business and Commerce Code. Grantor and Beneficiary take notice of an
agree to the following:
(a) PURSUANT TO SUBSECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE
CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED THEREIN EXCEEDS $50,000 IN
VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND SIGNED BY THE
PARTY TO BE BOUND OR BY THAT PARTY'S AUTHORIZED REPRESENTATIVE.
(b) PURSUANT TO SUBSECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE
CODE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE LOAN DOCUMENTS SHALL BE
DETERMINED SOLELY FROM THE LOAN DOCUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN
THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN DOCUMENTS.
(c) THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES HERETO
38. Release of Deed of Trust. Upon payment in full of the
Indebtedness, the termination of all Revolving Credit Commitments and all Swing
Line Commitments under the Credit Agreement and the compliance with the
Obligations then required to be complied with, Beneficiary shall release the
lien of this Deed of Trust.
39. Conflict With Credit Agreement. In the event of any conflict or
inconsistency between the terms and provisions of this Deed of Trust and the
terms and provisions of the Credit Agreement, the terms and provisions of the
Credit Agreement shall govern, other than with respect to the Governing Law
provision set forth in Section 29 hereof.
This Deed of Trust has been duly executed by Grantor on the date
first above written.
GRANTOR:
CUPLEX, INC.,
a Delaware corporation
By:_______________________________
Name: ____________________________
Title:____________________________
BENEFICIARY:
THE CHASE MANHATTAN BANK, as
Collateral, Co-Syndication and
Administrative Agent
By:_______________________________
Name: ____________________________
Title:____________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me on the ___ day of July,
1998, by ___________________________, the _______ President of Cuplex, Inc., a
Delaware corporation, on behalf of the corporation.
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me on the ____ day of July,
1998, by _________________________, the ______ President of The Chase Manhattan
Bank, a New York banking corporation, on behalf of the corporation.
_________________________
Notary Public
[Notarial Stamp]
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]