Exhibit 10.21
364-DAY CREDIT AGREEMENT
Dated as of October 30, 1998
among
GLENAYRE ELECTRONICS, INC.,
as Borrower,
GLENAYRE TECHNOLOGIES, INC. AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.........................................................1
1.1 Definitions........................................................1
1.2 Computation of Time Periods.......................................26
1.3 Accounting Terms..................................................26
SECTION 2CREDIT FACILITIES....................................................27
2.1 Loans. ...........................................................27
2.2Letter of Credit Subfacility.......................................29
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.....................34
3.1 Default Rate......................................................34
3.2 Extension and Conversion..........................................34
3.3 Prepayments.......................................................35
3.4 Termination and Reduction of Committed Amount.....................36
3.5 Fees. ...........................................................36
3.6 Capital Adequacy..................................................37
3.7 Limitation on Eurodollar Loans....................................38
3.8 Illegality........................................................38
3.9 Requirements of Law...............................................39
3.10 Treatment of Affected Loans......................................40
3.11 Taxes............................................................40
3.12 Compensation.....................................................43
3.13 Pro Rata Treatment...............................................43
3.14 Sharing of Payments..............................................44
3.15 Payments, Computations, Etc......................................45
3.16 Evidence of Debt.................................................46
SECTION 4 GUARANTY...........................................................47
4.1 The Guarantee.....................................................47
4.2 Obligations Unconditional.........................................48
4.3 Reinstatement.....................................................49
4.4 Certain Additional Waivers........................................49
4.5 Remedies..........................................................49
4.6 Rights of Contribution............................................50
4.7 Continuing Guarantee..............................................51
SECTION 5 CONDITIONS.........................................................51
5.1 Closing Conditions................................................51
5.2 Conditions to all Extensions of Credit............................53
SECTION 6 REPRESENTATIONS AND WARRANTIES.....................................54
6.1 Financial Condition...............................................54
i
6.2 No Change; Dividends..............................................55
6.3 Organization and Good Standing....................................55
6.4 Power; Authorization; Enforceable Obligations.....................55
6.5 No Conflicts......................................................56
6.6 No Default........................................................56
6.7 Ownership.........................................................56
6.8 Indebtedness......................................................57
6.9 Litigation........................................................57
6.10 Taxes............................................................57
6.11 Compliance with Laws.............................................57
6.12 ERISA.54 ........................................................57
6.13 Subsidiaries.....................................................58
6.14 Governmental Regulations, Etc....................................59
6.15 Purpose of Loans and Letters of Credit...........................60
6.16 Environmental Matters............................................60
6.17 Intellectual Property............................................61
6.18 Solvency.........................................................61
6.19 Investments......................................................61
6.20 Disclosure.......................................................61
6.21 No Burdensome Restrictions.......................................61
6.22 Labor Matters....................................................62
6.23 Nature of Business...............................................62
6.24 Year 2000 Compliance.............................................62
SECTION 7 AFFIRMATIVE COVENANTS..............................................62
7.1 Information Covenants.............................................62
7.2 Preservation of Existence and Franchises..........................65
7.3 Books and Records.................................................65
7.4 Compliance with Law...............................................65
7.5 Payment of Taxes and Other Indebtedness...........................66
7.6 Insurance.........................................................66
7.7 Maintenance of Property...........................................66
7.8 Performance of Obligations........................................66
7.9 Use of Proceeds...................................................66
7.10 Audits/Inspections...............................................67
7.11 Financial Covenants..............................................67
7.12 Additional Credit Parties........................................67
7.13 Funded Debt Reduction............................................68
7.14 Year 2000 Compliance.............................................68
SECTION 8 NEGATIVE COVENANTS.................................................68
8.1 Indebtedness......................................................68
8.2 Liens. ...........................................................69
8.3 Nature of Business................................................69
ii
8.4 Consolidation, Merger, Dissolution, etc...........................70
8.5 Asset Dispositions................................................71
8.6 Investments.......................................................71
8.7 Restricted Payments...............................................71
8.8 Prepayments of Indebtedness, etc..................................72
8.9 Transactions with Affiliates......................................72
8.10 Fiscal Year; Organizational Documents............................72
8.11 Limitation on Restricted Actions.................................73
8.12 Ownership of Subsidiaries........................................73
8.13 Sale and Leasebacks and Synthetic Leases.........................73
8.14 No Further Negative Pledges......................................74
8.15 Operating Lease Obligations......................................74
8.16 Customer Financing Transactions..................................74
SECTION 9 EVENTS OF DEFAULT..................................................75
9.1 Events of Default.................................................75
9.2 Acceleration; Remedies............................................77
SECTION 10 AGENCY PROVISIONS.................................................78
10.1 Appointment, Powers and Immunities...............................78
10.2 Reliance by Agent................................................79
10.3 Defaults.........................................................79
10.4 Rights as a Lender...............................................80
10.5 Indemnification..................................................80
10.6 Non-Reliance on Agent and Other Lenders..........................80
10.7 Successor Agent..................................................81
SECTION 11 MISCELLANEOUS.....................................................81
11.1 Notices..........................................................81
11.2 Right of Set-Off; Adjustments....................................82
11.3 Benefit of Agreement.............................................83
11.4 No Waiver; Remedies Cumulative...................................85
11.5 Expenses; Indemnification........................................85
11.6 Amendments, Waivers and Consents.................................86
11.7 Counterparts.....................................................87
11.8 Headings.........................................................88
11.9 Survival.........................................................88
11.10 Governing Law; Submission to Jurisdiction; Venue................88
11.11 Severability....................................................89
11.12 Entirety........................................................89
11.13 Binding Effect; Termination.....................................89
11.14 Confidentiality.................................................89
11.15 Conflict........................................................90
11.16 Limitation on Attorneys' Fees..................................90
iii
SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 2.1(a) Lenders
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
iv
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 30, 1998 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among GLENAYRE ELECTRONICS, INC., a Colorado corporation (the
"Borrower"), GLENAYRE TECHNOLOGIES, INC., a Delaware corporation (the "Parent"),
and certain Domestic Subsidiaries (as defined herein) of the Borrower which are
Guarantors (as defined herein), the Lenders (as defined herein) and NATIONSBANK,
N.A., as Agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$50,000,000 364-day credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such
Person of the Capital Stock or all or substantially all of the Property
of another Person, whether or not involving a merger or consolidation
with such Person.
"Additional Credit Party" means each Domestic Subsidiary of the
Parent or the Borrower (excluding Inactive Subsidiaries) that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
1
"Affiliate" means, with respect to any Person, any other Person
(i) directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the Capital
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Agency Services Address" means NationsBank, N. A.,
NC1-001-15-04, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: Agency Services, or such other address as may be identified by
written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement, dated
as of October 8, 1998, between the Agent and the Borrower, as amended,
modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrower by written notice as
the office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Eurodollar Loan, or the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b) or the applicable rate of the Letter of Credit Fee for any day
for purposes of Section 3.5(c)(i), the appropriate applicable percentage
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date:
--------------------- ------------------ ------------------ ------------------ ------------------
Applicable Applicable Applicable
Pricing Leverage Percentage for Percentage for Percentage for
Level Ratio Eurodollar Loans Letters of Credit Unused Fees
--------------------- ------------------ ------------------ ------------------ ------------------
I >=1.25 1.25% 1.25% 0.375%
--------------------- ------------------ ------------------ ------------------ ------------------
II <1.25 >=1.0 1.125% 1.125% 0.375%
--------------------- ------------------ ------------------ ------------------ ------------------
III < 1.0 >= 0.75 1.000% 1.000% 0.300%
--------------------- ------------------ ------------------ ------------------ ------------------
IV < 0.75 >= 0.50 0.875% 0.875% 0.300%
--------------------- ------------------ ------------------ ------------------ ------------------
V < 0.50 >= 0.25 0.750% 0.750% 0.250%
--------------------- ------------------ ------------------ ------------------ ------------------
VI < 0.25 0.625% 0.625% 0.250%
--------------------- ------------------ ------------------ ------------------ ------------------
The Applicable Percentages shall be determined and adjusted quarterly on
the date (each a "Calculation Date") five Business Days after the date
by which the Borrower is required to provide the officer's certificate
in accordance with the provisions of Section 7.1(c) for the most
recently ended fiscal quarter of the Consolidated Parties; provided,
however, that (i) the initial Applicable Percentages shall be based on
the Leverage Ratio as of the last day of the fiscal quarter ended June
30, 1998 and shall remain at such Pricing Level until the first
Calculation Date subsequent to the Closing Date and, thereafter, the
Pricing Level shall be determined by the Leverage Ratio as of the last
day of the most recently ended fiscal quarter of the Consolidated
Parties preceding the applicable Calculation Date, and (ii) if the
Borrower fails to provide the officer's certificate to the Agency
Services Address as required by Section 7.1(c) for the last day of the
most recently ended fiscal quarter of the Consolidated Parties, the
Applicable Percentage from such Calculation Date shall be based on
Pricing Level I until such time as an appropriate officer's certificate
is provided, whereupon the Pricing Level shall be determined by the
Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding such Calculation Date.
Each Applicable Percentage shall be effective from one Calculation Date
until the next Calculation Date. Any adjustment in the Applicable
Percentages shall be applicable to all existing Loans as well as any new
Loans made or issued.
"Application Period", in respect of any Asset Disposition, shall
have the meaning assigned to such term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the
assets of any Consolidated Party whether by sale, lease, transfer or
otherwise, but excluding (a) the sale of inventory in the ordinary
course of business for fair consideration, (b) the sale or disposition
of machinery and equipment no longer used or useful in the conduct of
such Person's business and (c) any Equity Issuance.
"Asset Disposition Prepayment Event" means, with respect to any
Asset Disposition other than an Excluded Asset Disposition, (i) any
Asset Disposition not occurring in the ordinary course of Business of
the Borrower or (ii) the failure of the Borrower to apply (or cause to
be applied) the Net Cash Proceeds of such Asset Disposition to the
purchase, acquisition or construction of Eligible Assets during the
Application Period for such Asset Disposition.
"Attributed Principal Amount" means, on any day, with respect to
any Permitted Receivables Financing entered into by a Credit Party
(other than the Parent), the aggregate amount (with respect to any such
transaction, the "Invested Amount") paid to, or borrowed by, such Person
as of such date under such Permitted Receivables Financing, minus the
aggregate amount received by the applicable Receivables Financier and
applied to the reduction of the Invested Amount under such Permitted
Receivables Financing.
3
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime
Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close, except that, when
used in connection with a Eurodollar Loan, such day shall also be a day
on which dealings between banks are carried on in U.S. dollar deposits
in London, England.
"Calculation Date" has the meaning set forth in the definition of
"Applicable Percentage" set forth in this Section 1.1.
4
"Canadian Property" means, the real property located at 1570 and
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv) in
the case of a limited liability company, membership interests and (v)
any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than eighteen months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000
or (iii) any bank whose short-term commercial paper rating from S&P is
at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1
or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than eighteen months from the date
of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within
six months of the date of acquisition, (d) repurchase agreements with a
bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500,000,000
for direct obligations issued by or fully guaranteed by the United
States of America in which any Credit Party shall have a perfected first
priority security interest (subject to no other Liens) and having, on
the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations, (e) Investments, classified in
accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as
amended, which are administered by reputable financial institutions
having capital of at least $500,000,000 and the portfolios of which are
limited to Investments of the character described in the foregoing
subdivisions (a) through (d), and (f) Investments of the character
described in the foregoing subdivisions (a) through (d) by a
Consolidated Party (other than a Credit Party) in countries in which
such Consolidated Party operates.
5
"Cash-on-Hand" means as to any Person, the sum of all deposits in
checking, money market, brokerage or savings accounts maintained by such
Person at a financial institution.
"Change of Control" means the occurrence of any of the following
events: (i) the failure of the Parent to own all of the Capital Stock of
the Borrower, (ii) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership, directly or indirectly, of, or
shall have acquired by contract or otherwise, or shall have entered into
a contract or arrangement that, upon consummation, will result in its or
their acquisition of, control over, Voting Stock of the Parent (or other
securities convertible into such Voting Stock) representing 30% or more
of the combined voting power of all Voting Stock of the Parent, or (iii)
during any period of up to 12 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 12 month period
were directors of the Parent (together with any new director whose
election by the Parent's Board of Directors or whose nomination for
election by the Parent's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority of the directors of the Parent then in office.
As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Commitment" means (i) with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Committed Amount, (A) to make Loans in accordance with the provisions of
Section 2.1(a) and (B) to purchase Participation Interests in Letters of
Credit in accordance with the provisions of Section 2.2(c), and (ii)
with respect to the Issuing Lender, the LOC Commitment.
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Committed Amount" shall have the meaning assigned to such term
in Section 2.1(a).
"Consolidated Capital Expenditures" means, for any period, all
capital expenditures of the Consolidated Parties on a consolidated basis
for such period, as determined in accordance with GAAP.
6
"Consolidated Cash Taxes" means, for any period, the aggregate of
all taxes of the Consolidated Parties on a consolidated basis for such
period (excluding income taxes incurred in connection with income from
the sales of Western Multiplex Corporation and Glenayre OPTIONS Corp.),
as determined in accordance with GAAP, to the extent the same are paid
in cash during such period.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal,
state, local and foreign income, value added and similar tax expenses,
(C) depreciation and amortization expense, all as determined in
accordance with GAAP and (D) other non-cash charges.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest
component under Permitted Receivables Financings and the implied
interest component under Synthetic Leases) of the Consolidated Parties
on a consolidated basis for such period, as determined in accordance
with GAAP.
"Consolidated Interest Income" means, for any period, interest
income for such period of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income
(excluding extraordinary items, but including in any event Consolidated
Interest Income) after taxes for such period of the Consolidated Parties
on a consolidated basis, as determined in accordance with GAAP;
provided, however, Consolidated Net Income shall not include income
arising under Permitted Customer Financing Transactions with maturities
exceeding 120 days until cash payment in respect of such income has been
received by the applicable Consolidated Party.
"Consolidated Net Worth" means, as of any date, shareholders'
equity or net worth of the Consolidated Parties on a consolidated basis,
as determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the Parent
and its Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Scheduled Funded Debt Payments" means, as of the
end of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness for the applicable period
ending on such date (including the principal component of payments due
7
on Capital Leases during the applicable period ending on such date); it
being understood that Scheduled Funded Debt Payments shall not include
voluntary prepayments or the mandatory prepayments required pursuant to
Section 3.3.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
"Conxus Credit Agreement" means that Second Amended and Restated
Credit Agreement dated as of May 28, 1998 among Conxus Financial Corp.,
a Delaware corporation, the several banks and other financial
institutions from time to time parties thereto, Glenayre Electronics,
Inc., a Colorado corporation, Motorola, Inc. by and through its
Messaging Systems Products Group and the Chase Manhattan Bank, a New
York banking association, as administration agent for the lenders
thereunder.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, and all other related agreements and documents
issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case, as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time) and
"Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower and
the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of whether
such interest is an allowed claim under the Bankruptcy Code) and (ii)
all liabilities and obligations, whenever arising, owing from the
Borrower to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"Customer Financing Policy" means that certain Customer Financing
Policy No. FIN-110 of Glenayre Technologies, Inc. issued July 19, 1997
and revised October 22, 1997.
"Customer Financing Transaction" means as to any Consolidated
Party, any extension of credit to another Person to finance (i) the cost
of equipment, inventory or other goods (including, without limitation,
software) manufactured or sold by such Consolidated
8
Party to such Person or (ii) the cost of any services provided by such
Consolidated Party to such Person.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day of
when due, (b) other than as set forth in (a) above, has failed to pay to
the Agent or any Lender an amount owed by such Lender pursuant to the
terms of this Credit Agreement within one Business Day of when due,
unless such amount is subject to a good faith dispute or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of assets of
which) a receiver, trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial part
of another business or other long-term assets, in each case, in, or used
or useful in, the same or a similar line of business as the Consolidated
Parties were engaged in on the Closing Date or any reasonable extensions
or expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower
(such approval not to be unreasonably withheld or delayed by the
Borrower); provided, however, that neither the Borrower nor an Affiliate
of the Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes.
9
"Equity Issuance" means any issuance by any Consolidated Party to
any Person which is not a Credit Party of (a) shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity. The term "Equity
Issuance" shall not include any Asset Disposition or any issuance of
Capital Stock pursuant to stock option plans maintained by the Parent
existing as of the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common control
with any Consolidated Party within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group which includes the Borrower and which
is treated as a single employer under Sections 414(b) or (c) of the
Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence
of a Reportable Event or the substantial cessation of operations (within
the meaning of Section 4062(e) of ERISA); (ii) the withdrawal by any
Consolidated Party or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term
is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of any Consolidated Party or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under
Section 302(f) of ERISA exist with respect to any Plan; or (viii) the
adoption of an amendment to any Plan requiring the provision of security
to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the
quotient obtained by dividing (a) the Interbank Offered Rate for such
Eurodollar Loan for such Interest Period by (b) 1 minus the Eurodollar
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the
10
Board of Governors of the Federal Reserve System (or any successor) by
member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting
the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member
banks with respect to (i) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be
determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Loans. The Adjusted Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Requirement.
"Excluded Asset Disposition" means (i) the sale, conveyance or
other contribution of applicable Transferred Assets by a Credit Party
(other than the Parent) as part of any Permitted Receivables Financing,
(ii) any Asset Disposition by any Consolidated Party to any Credit Party
if after giving effect such Asset Disposition, no Default or Event of
Default exists and (iii) any Asset Disposition by any Consolidated Party
(which is not a Credit Party) to any other Consolidated Party if after
giving effect such Asset Disposition, no Default or Event of Default
exists.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, vice president,
chief financial officer or treasurer of such Person.
"Event of Default" means such term as defined in Section 9.1.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate charged to the
Agent (in its individual capacity) on such day on such transactions as
determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties for the twelve month period ending
on such date, the ratio of (a) the sum of (i) Consolidated EBITDA for
the applicable period minus (ii) Consolidated Cash Taxes for the
applicable period to (b) the sum of (i) Consolidated Interest Expense
for the applicable period plus (ii) Consolidated Capital Expenditures
plus (iii) Restricted Payments made in cash.
11
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness
of the types referred to in clauses (e), (f), (g), (i) and (n) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all
Indebtedness of another Person of the type referred to in clause (a)
above secured by (or for which the holder of such Funded Indebtedness
has an existing right, contingent or otherwise, to be secured by) any
Lien on, or payable out of the proceeds of production from, Property
owned or acquired by such Person, whether or not the obligations secured
thereby have been assumed, (c) all Guaranty Obligations of such Person
with respect to Indebtedness of the type referred to in clause (a) above
of another Person and (d) Indebtedness of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which
such Person is legally obligated or has a reasonable expectation of
being liable with respect thereto.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantors" means a collective reference to the Parent and each
of the Domestic Subsidiaries of the Parent (excluding the Borrower) and
the Borrower identified as a "Guarantor" on the signature pages hereto
and each Additional Credit Party which may hereafter execute a Joinder
Agreement, together with their successors and permitted assigns, and
"Guarantor" means any one of them; provided, however, that "Guarantors"
shall not include any Inactive Subsidiary.
"Guaranty Obligations" means, with respect to any Person, without
duplication as to the Consolidated Parties, any obligations of such
Person (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing or
intended to guarantee any Indebtedness of any other Person in any
manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such
Indebtedness or any Property constituting security therefor, (ii) to
advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other
balance sheet condition of such other Person (including without
limitation keep well agreements, maintenance agreements, comfort letters
or similar agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall
12
(subject to any limitations set forth therein) be deemed to be an amount
equal to the outstanding principal amount (or maximum principal amount,
if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made.
"Hedging Agreements" means any interest rate protection
agreement, foreign currency exchange agreement or commodity/raw
materials price hedging agreement between any Consolidated Party and any
Lender, or any Affiliate of a Lender.
"Inactive Subsidiary" means any of the following entities:
Wireless Access, Inc., a Delaware corporation, Western Multiplex
International Sales Corp., a California corporation, Sunway Financial
Services, Inc. or Sunway Management, Inc; provided that on or after the
Closing Date (i) no Inactive Subsidiary shall have EBITDA greater than
5% of Consolidated EBITDA and (ii) the aggregate EBITDA of all Inactive
Subsidiaries shall not exceed 10% of Consolidated EBITDA.
"Indebtedness" means, with respect to any Person, without
duplication as to the Consolidated Parties, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, or upon which
interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements
relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations of
such Person issued or assumed as the deferred purchase price of Property
or services purchased by such Person which would appear as liabilities
on a balance sheet of such Person, (e) all obligations of such Person
under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds
of production from, Property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of
such Person under Hedging Agreements, (j) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred
Capital Stock issued by such Person and required by the terms thereof to
be redeemed, or for which mandatory sinking fund payments are due, by a
fixed date, (l) with respect to the Borrower or any of its Subsidiaries,
the outstanding Attributed Principal Amount under any Permitted
Receivables Financing, (m) the principal portion of all obligations of
such Person under Synthetic Leases and (n) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a
general partner or a joint venturer. In no event shall the term
"Indebtedness" include accounts payable due within six months of
incurrence thereof, accrued expenses, deferred revenue items, pension
liabilities, and other advance payments incurred in the ordinary course
of business.
13
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Interest Payment Date" means (a) as to Base Rate Loans, December
31, 1998, March 31, 1999, June 30, 1999, September 30, 1999 and the
Maturity Date, and (b) as to Eurodollar Loans, the last day of each
applicable Interest Period and the Maturity Date, and in addition where
the applicable Interest Period for a Eurodollar Loan is greater than
three months, then also the date three months from the beginning of the
Interest Period and each three months thereafter.
"Interest Period" means as to any Eurodollar Loan, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that in the case of Eurodollar Loans where the next succeeding
Business Day falls in the next succeeding calendar month, then on the
next preceding Business Day), (b) no Interest Period shall extend beyond
the Maturity Date and (C) in the case of Eurodollar Loans, where an
Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is
to end, such Interest Period shall end on the last Business Day of such
calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than deposits
made in connection with the purchase of equipment or other assets in the
ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on
behalf of such Person) incurred for the benefit of such Person, but
excluding any Restricted Payment to such Person.
14
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.12 hereto, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.12.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way
of assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2.
"Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(i).
"Leverage Ratio" means, with respect to the Consolidated Parties
on a consolidated basis for the twelve month period ending on the last
day of any fiscal quarter, the ratio of (a) Funded Indebtedness of the
Consolidated Parties on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA for such period.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" shall have the meaning assigned to such term in
Section 2.1(a) and shall include within the meaning thereof any portion
of any Loan bearing interest at the Base Rate or the Adjusted Eurodollar
Rate and referred to as a Base Rate Loan or a Eurodollar Loan.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such
term in Section 2.2(a).
15
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned or
at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(ii) the aggregate amount of all drawings under Letters of Credit
honored by the Issuing Lender but not theretofore reimbursed by the
Borrower.
"Material Adverse Effect" means a material adverse effect on (i)
the condition (financial or otherwise), results of operations, business,
assets, liabilities or prospects of the Consolidated Parties taken as a
whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii)
the material rights and remedies of the Lenders under the Credit
Documents.
"Materials of Environmental Concern" means 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 Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means October 29, 1999.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
or assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N. A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received by
the Consolidated Parties in respect of any Asset Disposition, Equity
Issuance or Permitted Receivables Financing, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking
fees, and sales commissions) and (b) taxes paid or payable as a result
thereof; it being understood that "Net Cash Proceeds" shall include,
16
without limitation, any cash received upon the sale or other disposition
of any non-cash consideration received by the Consolidated Parties in
any Asset Disposition, Equity Issuance or Permitted Receivables
Financing.
"Note" or "Notes" means the promissory notes of the Borrower in
favor of each of the Lenders evidencing the Loans provided pursuant to
Section 2.1(e), individually or collectively, as appropriate, as such
promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property which is not a Capital Lease other
than any such lease in which that Person is the lessor.
"Other Taxes" means such term as is defined in Section 3.11.
"Parent" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Participation Interest" means, a purchase by a Lender of a
participation in any Letters of Credit or LOC Obligations as provided in
Section 2.2(c) or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means an Acquisition by any Consolidated
Party for the fair market value of the Capital Stock or Property
acquired; provided that (i) the Capital Stock or Property acquired in
such Acquisition relates to a line of business similar to the business
of the Consolidated Parties engaged in on the Closing Date, (ii) the
Agent shall have received all items in respect of the Capital Stock or
Property acquired in such Acquisition (and/or the seller thereof)
required to be delivered by the terms of Section 7.12, (iii) in the case
of an Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) of such other Person
shall have duly approved such Acquisition, (iv) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a Pro Forma Basis, the
Consolidated Parties shall be in compliance with all of the covenants
set forth in Section 7.11, (v) the representations and warranties made
by the Credit Parties in any Credit Document shall be true and correct
in all material respects at
17
and as if made as of the date of such Acquisition (after giving effect
thereto) except to the extent such representations and warranties
expressly relate to an earlier date, (vi) the cost (including cash and
non-cash consideration) for any such Acquisition or transaction
described in Section 8.4 occurring after the Closing Date shall not
exceed $50,000,000 and (vii) the aggregate cost (including cash and
non-cash consideration plus the book value of assumed liabilities) for
all such Acquisitions and all transactions described in Section 8.4
occurring after the Closing Date shall not exceed $100,000,000.
"Permitted Customer Financing Transactions" means (i) any
Customer Financing Transaction permitted under the terms and conditions
set forth in the Customer Financing Policy or (ii) extensions of credit
by the Borrower under the Conxus Credit Agreement.
"Permitted Investments" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired or
made by any Consolidated Party in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; (iii)
Investments consisting of Capital Stock, obligations, securities or
other property received by any Consolidated Party in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing Date and
set forth in Schedule 1.1A, (v) Guaranty Obligations permitted by
Section 8.1; (vi) transactions permitted by Section 8.9 or Section 8.16,
(vii) advances or loans to directors, officers, employees, agents,
customers or suppliers that do not exceed $500,000 in the aggregate at
any one time outstanding for all of the Consolidated Parties; (viii)
Investments in any Credit Party; (ix) Permitted Acquisitions; (x)
Investments by a Consolidated Party in a Receivables Financing SPC made
in connection with a Permitted Receivables Financing; (xi) equity
securities listed on the New York Stock Exchange, provided that (A) the
long-term credit rating of the corporation issuing such securities shall
be A- (or the equivalent thereof) or better from S&P or A3 (or the
equivalent thereof) or better from ▇▇▇▇▇'▇ and (B) the purchase price
paid for all such equity securities held at any time shall not exceed
$1,000,000; (xii) Investments in Foreign Subsidiaries of any
Consolidated Party not exceeding in the aggregate $45,000,000 per fiscal
year of the Borrower; (xiii) Investments in joint ventures,
partnerships, limited liability companies or OEMs in which a
Consolidated Party owns an equity interest, provided such Investments
shall not exceed (when combined with Investments described in clause
(xiv)), in the aggregate, 5% of Consolidated Net Worth; and (xiv)
Investments consisting of Capital Stock and/or warrants, taken by any
Consolidated Party as consideration in a Permitted Customer Financing
Transaction in lieu of cash, provided such Investments shall not exceed
(when combined with Investments described in clause (xiii)), in the
aggregate, 5% of Consolidated Net Worth.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
18
(ii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet
due or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other
Liens imposed by law or pursuant to customary reservations or
retentions of title arising in the ordinary course of business,
provided that such Liens secure only amounts not yet due and
payable or, if due and payable, are unfiled and no other action
has been taken to enforce the same or are being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as
to which the Property subject to any such Lien is not yet subject
to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall
have been discharged within 30 days after the expiration of any
such stay;
(vi) easements, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title
and other similar charges or encumbrances not, in any material
respect, impairing the use of the encumbered Property for its
intended purposes;
(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section
8.1(c) and Liens on the Canadian Property with respect to Sale
and Leaseback Transactions and Synthetic Leases to the extent
permitted under Section 8.1(g), provided that any such Lien
attaches to such Property concurrently with or within 90 days
after the acquisition thereof;
(viii) leases or subleases granted to others not
interfering in any material respect with the business of any
Consolidated Party;
19
(ix) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating
to, leases permitted by this Credit Agreement;
(x) Liens in favor of a Receivables Financing SPC or
Receivables Financier created or deemed to exist in connection
with a Permitted Receivables Financing (including any related
filings of any financing statements), but only (a) to the extent
that any such Lien relates to the applicable Transferred Assets
actually sold, contributed, financed or otherwise conveyed or
pledged pursuant to such transaction or (b) as required in
connection with the Non-Notification Factoring Agreement to be
executed by NationsBanc Commercial Corporation and a Credit Party
(other than the Parent);
(xi) Liens deemed to exist in connection with Investments
in repurchase agreements permitted under Section 8.6;
(xii) normal and customary rights of setoff upon deposits
of cash in favor of banks or other depository institutions;
(xiii) Liens existing as of the Closing Date and set forth
on Schedule 1.1B, as renewed, refunded or refinanced; provided
that (a) no such Lien shall at any time be extended to or cover
any Property other than the Property subject thereto on the
Closing Date and (b) the Indebtedness secured by such Liens shall
not be increased; and
(xiv) other Liens not to exceed in the aggregate
$15,000,000.
"Permitted Receivables Financing" means any one or more
receivables financings in which (i) a Consolidated Party (a) sells (as
determined in accordance with GAAP) any accounts receivable, notes
receivable, rights to future lease payments or residuals (collectively,
together with certain related property relating thereto and the right to
collections thereon, being the "Transferred Assets") to any Person that
is not a Subsidiary or Affiliate of the Borrower (with respect to any
such transaction, the "Receivables Financier"), (b) borrows from such
Receivables Financier and secures such borrowings by a pledge of such
Transferred Assets and/or (c) otherwise finances its acquisition of such
Transferred Assets and, in connection therewith, conveys an interest in
such Transferred Assets to the Receivables Financier or (ii) a
Consolidated Party sells, conveys or otherwise contributes any
Transferred Assets to a Receivables Financing SPC, which Receivables
Financing SPC then (a) sells (as determined in accordance with GAAP) any
such receivables (or an interest therein) to any Receivables Financier,
(b) borrows from such Receivables Financier and secures such borrowings
by a pledge of such receivables or (c) otherwise finances its
acquisition of such receivables and, in connection therewith, conveys an
interest in such receivables to the Receivables Financier, provided that
(1) the
20
aggregate amount of uncollected accounts receivable subject to all such
receivables financings shall not at any time exceed the lesser of
$25,000,000 or 25% of total accounts receivable of the Consolidated
Parties on a consolidated basis, as determined in accordance with GAAP,
as of the most recent fiscal quarter end preceding any date of
determination with respect to which the Agent shall have received the
Required Financial Information, (2) such receivables financing shall not
involve any recourse to the Borrower or any of its Subsidiaries for any
reason other than (A) repurchases of non-eligible receivables, (B)
indemnifications for losses other than credit losses related to the
receivables sold in such financing or (C) in connection with the
Non-Notification Factoring Agreement to be executed by NationsBanc
Commercial Corporation and a Credit Party (other than the Parent), (3)
the Agent shall be reasonably satisfied with the structure of and
documentation for any such transaction and that the terms of such
transaction, including the discount at which receivables are sold (which
in any event shall not exceed 10%), the term of the commitment of the
Receivables Financier thereunder and any termination events, shall be
(in the good faith understanding of the Agent) consistent with those
prevailing in the market for similar transactions involving a
receivables originator/servicer of similar credit quality and a
receivables pool of similar characteristics, (4) the documentation for
such transaction shall not be amended or modified without the prior
written approval of the Agent, which approval shall not be unreasonably
withheld or delayed and (5) the Net Cash Proceeds received from such
Permitted Receivables Financing shall be immediately applied to prepay
the Loans in accordance with Section 3.3(b)(ii).
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located at Charlotte, North Carolina.
"Pro Forma Basis" means, with respect to any transaction,
that such transaction shall be deemed to have occurred (for purposes of
calculating compliance in respect of such transaction with each of the
financial covenants set forth in Section 7.11 as of the most recent
fiscal quarter end preceding the date of such transaction with respect
to which the Agent has received the Required Financial Information) as
of the first day of the four fiscal-quarter period ending as of such
fiscal quarter end. As used herein, "transaction"
21
shall mean (i) any incurrence or assumption of Indebtedness as referred
to in Section 8.1(g), (ii) any merger or consolidation as referred to in
Section 8.4, (iii) any Asset Disposition as referred to in Section 8.5,
(iv) any Permitted Acquisition or (v) any Restricted Payment as referred
to in Section 8.7. With respect to any transaction of the type described
in clause (i) above regarding Indebtedness which has a floating or
formula rate, the implied rate of interest for such Indebtedness for the
applicable period for purposes of this definition shall be determined by
utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination. With respect to
any transaction of the type described in clause (ii) or (iv) above, any
Indebtedness incurred by the Borrower or any of its Subsidiaries in
order to consummate such transaction (A) shall be deemed to have been
incurred on the first day of the applicable period and (B) if such
Indebtedness has a floating or formula rate, then the implied rate of
interest for such Indebtedness for the applicable period for purposes of
this definition shall be determined by utilizing the rate which is or
would be in effect with respect to such Indebtedness as at the relevant
date of determination. In connection with any calculation of the
financial covenants set forth in Section 7.11 upon giving effect to a
transaction on a Pro Forma Basis for purposes of Section 8.1(g), Section
8.4, Section 8.5, clause (v) of the definition of "Permitted
Acquisition" set forth in this Section 1.1, or Section 8.7, as
applicable:
(A) for purposes of any such calculation in respect of any
incurrence or assumption of Indebtedness as referred to in
Section 8.1(g), any Indebtedness which is retired in connection
with such incurrence or assumption shall be excluded and deemed
to have been retired as of the first day of the applicable
period;
(B) for purposes of any such calculation in respect of any
Asset Disposition as referred to in Section 8.5, (1) income
statement items (whether positive or negative) attributable to
the Property disposed of in such Asset Disposition shall be
excluded and (2) any Indebtedness which is retired in connection
with such Asset Disposition shall be excluded and deemed to have
been retired as of the first day of the applicable period;
(C) for purposes of any such calculation in respect of any
merger or consolidation as referred to in Section 8.4, any
Permitted Acquisition or any Restricted Payment as referred to in
Section 8.7, (1) any Indebtedness incurred by the Borrower or any
of its Subsidiaries in connection with such transaction shall be
deemed to have been incurred as of the first day of the
applicable period and (2) income statement items (whether
positive or negative) attributable to the Property acquired in
such transaction or to the Investment comprising such
transaction, as applicable, shall be included to the extent
relating to the relevant period; and
22
(D) for purposes of any such calculation, the principles
set forth in the second paragraph of Section 1.3 shall be
applicable.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with (i) any incurrence, assumption or retirement of Indebtedness as
referred to in Section 8.1(g), (ii) any merger or consolidation as
referred to in Section 8.4, (iii) any Asset Disposition as referred to
in Section 8.5, (iv) any Permitted Acquisition or (v) any Restricted
Payment as referred to in Section 8.7, as applicable, and containing
reasonably detailed calculations, upon giving effect to the applicable
transaction on a Pro Forma Basis, of the Fixed Charge Coverage Ratio and
the Leverage Ratio as of the most recent fiscal quarter end preceding
the date of the applicable transaction with respect to which the Agent
shall have received the Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Receivables Financier" shall have the meaning assigned to such
term in the definition of "Permitted Receivables Financing" set forth in
this Section 1.1.
"Receivables Financing SPC" shall mean, in respect of any
Permitted Receivables Financing, any Subsidiary or Affiliate of the
Borrower to which the Borrower or any of its Subsidiaries sells,
contributes or otherwise conveys any Transferred Assets in connection
with such Permitted Receivables Financing.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation T, U, or X" means Regulation T, U or X, respectively,
of the Board of Governors of the Federal Reserve System as from time to
time in effect and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section 7.1(a)
or (b) for the fiscal period or quarter ending as of such Calculation
Date, and (ii) the certificate of an Executive Officer of the Borrower
23
required by Section 7.1(c) to be delivered with the financial statements
described in clause (i) above.
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i) the Commitments (and
Participation Interests therein) or (ii) if the Commitments have been
terminated, the outstanding Loans and Participation Interests (including
the Participation Interests of the Issuing Lender in any Letters of
Credit).
"Requirement of Law" means, 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 material
property is subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of Capital Stock of any Consolidated Party, now
or hereafter outstanding and (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding.
"S&P" means Standard & Poor's Ratings Services Group, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or later
acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom funds
have been, or are to be, advanced by such Person on the security of such
Property.
"Single Employer Plan" means any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize
upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (ii) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature in their ordinary course, (iii)
such Person is not engaged in a business or a
24
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (iv) the fair
value of the Property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person and (v) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors
of such corporation (irrespective of whether or not at the time, any
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries, and
(b) any partnership, association, joint venture or other entity of which
such Person directly or indirectly through Subsidiaries has more than
50% Capital Stock at any time.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease
for accounting purposes.
"Taxes" means such term as is defined in Section 3.11.
"Transferred Assets" shall have the meaning assigned to such term
in the definition of "Permitted Receivables Financing" set forth in this
Section 1.1.
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(b).
"Unused Fee Calculation Period" shall have the meaning assigned
to such term in Section 3.5(b).
"Unused Committed Amount" means, for any period, the amount by
which (a) the then applicable Committed Amount exceeds (b) the daily
average sum for such period of (i) the outstanding aggregate principal
amount of all Loans plus (ii) the outstanding aggregate principal amount
of all LOC Obligations.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
25
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a
contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100%
of whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
"Year 2000 Compliant" shall have the meaning assigned to such
term in Section 6.24.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 31, 1997); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Agent or the
Required Lenders shall so object in writing within 30 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance with the
financial covenants set forth in Section 7.11 (including without limitation for
purposes of the definitions of "Applicable Percentage" and "Pro Forma Basis" set
forth in Section 1.1), (i)(A) income statement items (whether positive or
negative) attributable to the Property disposed of in any Asset Disposition as
contemplated by Section 8.5, as applicable, shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and (B)
Indebtedness which is retired in connection with any such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of the
applicable period and (ii) income statement items (whether positive or negative)
attributable to any Property acquired in any Investment transaction contemplated
by
26
Section 8.6 shall be included to the extent relating to any period applicable in
such calculations occurring after the date of such transaction (and,
notwithstanding the foregoing, during the first four fiscal quarters following
the date of such transaction, shall be included on an annualized basis).
SECTION 2
CREDIT FACILITIES
2.1 Loans.
(a) Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower such Lender's
Commitment Percentage of revolving credit loans requested pursuant to
this Credit Agreement by the Borrower in Dollars ("Loans") from time to
time from the Closing Date until the Maturity Date, or such earlier date
as the Commitments shall have been terminated as provided herein for the
purposes hereinafter set forth; provided, however, that the sum of the
aggregate principal amount of outstanding Loans shall not exceed FIFTY
MILLION AND 00/100 DOLLARS ($50,000,000.00) (as such aggregate maximum
amount may be reduced from time to time as provided in Section 3.4, the
"Committed Amount"); provided, further, (i) with regard to each Lender
individually, such Lender's outstanding Loans shall not exceed such
Lender's Commitment Percentage of the Committed Amount, and (ii) the
aggregate principal amount of outstanding Loans plus LOC Obligations
outstanding shall not exceed the Committed Amount. Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; provided, however, that no more than 5 Eurodollar
Loans shall be outstanding hereunder at any time. For purposes hereof,
Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Eurodollar Loan with a single Interest Period. Loans
hereunder may be repaid and reborrowed in accordance with the provisions
hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Loan
borrowing by written notice (or telephonic notice promptly
confirmed in writing) to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to the
date of the requested borrowing in the case of Base Rate Loans,
and on the third Business Day prior to the date of the requested
borrowing in the case of Eurodollar Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a Loan
is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to
be borrowed, and
27
(D) whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the
Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a Eurodollar
Loan, then such notice shall be deemed to be a request for an
Interest Period of one month, or (II) the type of Loan requested,
then such notice shall be deemed to be a request for a Base Rate
Loan hereunder. The Agent shall give notice to each affected
Lender promptly upon receipt of each Notice of Borrowing pursuant
to this Section 2.1(b)(i), the contents thereof and each such
Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate
Loan shall be in a minimum aggregate principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof
(or the remaining amount of the Committed Amount, if less).
(iii) Advances. Each Lender will make its Commitment
Percentage of each Loan borrowing available to the Agent for the
account of the Borrower as specified in Section 3.15(a), or in
such other manner as the Agent may specify in writing, by 1:00
P.M. (Charlotte, North Carolina time) on the date specified in
the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Agent. Such borrowing will then be
made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Loans shall be due and
payable in full on the Maturity Date, unless accelerated sooner pursuant
to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Loans shall be
comprised in whole or in part of Base Rate Loans, such Base Rate
Loans shall bear interest at a per annum rate equal to the Base
Rate;
(ii) Eurodollar Loans. During such periods as Loans shall
be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to
the Adjusted Eurodollar Rate.
Interest on Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified
herein).
(e) Notes. The Loans made by each Lender shall be evidenced by a
duly executed promissory note of the Borrower to such Lender in an
original principal amount
28
equal to such Lender's Commitment Percentage of the Committed Amount and
in substantially the form of Exhibit 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participates in the
issuance by the Issuing Lender of, Letters of Credit in Dollars from
time to time from the Closing Date until the Maturity Date as the
Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the LOC Obligations outstanding shall not at
any time exceed FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00) (the
"LOC Committed Amount") and (ii) the sum of the aggregate principal
amount of outstanding Loans plus LOC Obligations outstanding shall not
at any time exceed the aggregate Committed Amount. No Letter of Credit
shall have an original expiry date more than one year from the date of
issuance. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry dates of each Letter of Credit shall
be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter
of Credit shall be submitted by the Borrower to the Issuing Lender at
least three (3) Business Days prior to the requested date of issuance.
The Issuing Lender will, at least quarterly and more frequently upon
request, disseminate to each of the Lenders a detailed report specifying
the Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of
the prior report, and including therein, among other things, the
beneficiary, the face amount and the expiry date, as well as any payment
or expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a
Participation Interest from the applicable Issuing Lender in such Letter
of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its pro rata share
of the obligations under such Letter of Credit (based on the respective
Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's Participation Interest in any Letter
of Credit, to the extent that the Issuing Lender has not been reimbursed
as required hereunder or under any such Letter of Credit, each such
Lender shall pay to the Issuing Lender its pro rata share of such
unreimbursed drawing in same day funds on the day of notification by the
Issuing Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) below. The obligation of each Lender to so reimburse the
Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other
29
occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the Issuing
Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any Letter
of Credit, the Issuing Lender will promptly notify the Borrower. Unless
the Borrower shall immediately notify the Issuing Lender that the
Borrower intends to otherwise reimburse the Issuing Lender for such
drawing, the Borrower shall be deemed to have requested that the Lenders
make a Loan in the amount of the drawing as provided in subsection (e)
below on the related Letter of Credit, the proceeds of which will be
used to satisfy the related reimbursement obligations. The Borrower
promises to reimburse the Issuing Lender on the day of drawing under any
Letter of Credit (either with the proceeds of a Loan obtained hereunder
or otherwise) in same day funds. If the Borrower shall fail to reimburse
the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Base
Rate plus 2%. The Borrower's reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of
any rights of setoff, counterclaim or defense to payment the Borrower
may claim or have against the Issuing Lender, the Agent, the Lenders,
the beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of the
amount of any unreimbursed drawing and each Lender shall promptly pay to
the Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's pro rata share
of such unreimbursed drawing. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such notice
is received at or before 2:00 P.M. (Charlotte, North Carolina time)
otherwise such payment shall be made at or before 12:00 Noon (Charlotte,
North Carolina time) on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to the
Issuing Lender in full upon such request, such Lender shall, on demand,
pay to the Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such
Lender pays such amount to the Issuing Lender in full at a rate per
annum equal to, if paid within two (2) Business Days of the date that
such Lender is required to make payments of such amount pursuant to the
preceding sentence, the Federal Funds Rate and thereafter at a rate
equal to the Base Rate. Each Lender's obligation to make such payment to
the Issuing Lender, and the right of the Issuing Lender to receive the
same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations of
the Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of
each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing
Lender or such Lender, acquire a Participation Interest in an amount
equal to such payment (excluding the portion of such
30
payment constituting interest owing to the Issuing Lender) in the
related unreimbursed drawing portion of the LOC Obligation and in the
interest thereon and in the related LOC Documents, and shall have a
claim against the Borrower with respect thereto.
(e) Repayment with Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Loan advance to
reimburse a drawing under a Letter of Credit, the Agent shall give
notice to the Lenders that a Loan has been requested or deemed requested
by the Borrower to be made in connection with a drawing under a Letter
of Credit, in which case a Loan advance comprised of Base Rate Loans (or
Eurodollar Loans to the extent the Borrower has complied with the
procedures of Section 2.1(b)(i) with respect thereto) shall be
immediately made to the Borrower by all Lenders (notwithstanding any
termination of the Commitments pursuant to Section 9.2) pro rata based
on the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to
Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each
such Lender hereby irrevocably agrees to make its pro rata share of each
such Loan immediately upon any such request or deemed request in the
amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not comply
with the minimum amount for advances of Loans otherwise required
hereunder, (ii) whether any conditions specified in Section 5.2 are then
satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) failure for any such request or deemed request for Loan to be made
by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Loans are otherwise permitted to be made
hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the
event that any Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any Credit Party), then each such Lender hereby agrees
that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the
Issuing Lender such Participation Interests in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share in
such LOC Obligations ratably (based upon the respective Commitment
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)); provided,
however, that at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Lender shall
be required to pay to the Issuing Lender, to the extent not paid to the
Issuer by the Borrower in accordance with the terms of subsection (d)
above, interest on the principal amount of Participation Interests
purchased for each day from and including the day upon which such
borrowing would otherwise have occurred to but excluding the date of
payment for such Participation Interests, at the rate equal to, if paid
within two (2) Business Days of the date of the Loan advance, the
Federal Funds Rate, and thereafter at a rate equal to the Base Rate.
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(f) Designation of Consolidated Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of
Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Consolidated Party other
than the Borrower, provided that notwithstanding such statement, the
Borrower shall be the actual account party for all purposes of this
Credit Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect
to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same
as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this
Section 2.2, the Borrower hereby agrees to pay, and protect,
indemnify and save each Lender harmless from and against, any and
all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys' fees) that such
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of such Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government
or Governmental Authority (all such acts or omissions, herein
called "Government Acts").
(ii) As between the Borrower and the Lenders (including
the Issuing Lender), the Borrower shall assume all risks of the
acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. No Lender (including the Issuing Lender)
shall be responsible: (A) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder
or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (B) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (C) for any loss or delay in the
transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit or of the proceeds
thereof; and (D) for any consequences arising from causes beyond
the control of such Lender, including,
32
without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action
taken or omitted by any Lender (including the Issuing Lender),
under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
such Lender under any resulting liability to the Borrower or any
other Credit Party. It is the intention of the parties that this
Credit Agreement shall be construed and applied to protect and
indemnify each Lender (including the Issuing Lender) against any
and all risks involved in the issuance of the Letters of Credit,
all of which risks are hereby assumed by the Borrower (on behalf
of itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. No Lender
(including the Issuing Lender) shall, in any way, be liable for
any failure by such Lender or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to limit
the reimbursement obligations of the Borrower contained in
subsection (d) above. The obligations of the Borrower under this
subsection (i) shall survive the termination of this Credit
Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Lenders (including the Issuing Lender)
to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary contained in
this subsection (i), the Borrower shall have no obligation to
indemnify any Lender (including the Issuing Lender) in respect of
any liability incurred by such Lender (A) arising solely out of
the gross negligence or willful misconduct of such Lender, as
determined by a court of competent jurisdiction, or (B) caused by
such Lender's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit, as determined by a court
of competent jurisdiction, unless such payment is prohibited by
any law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood
and agreed that the obligations of the Issuing Lender hereunder to the
Lenders are only those expressly set forth in this Credit Agreement and
that the Issuing Lender shall be entitled to assume that the conditions
precedent set forth in Section 5.2 have been satisfied unless it shall
have acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this
Section 2.2 shall be deemed to prejudice the right of any Lender to
recover from the Issuing Lender any amounts made available by such
Lender to the Issuing Lender pursuant to this Section 2.2 in the event
that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence
or willful misconduct on the part of the Issuing Lender.
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(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter
of credit application), this Credit Agreement shall control.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Base Rate plus 2%).
3.2 Extension and Conversion.
Subject to the terms of Section 5.2, the Borrower shall have the option,
on any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "Interest Period" set forth in Section 1.1 and shall be in
such minimum amounts as provided in, with respect to Loans, Section 2.1(b)(ii),
(iv) no more than 5 Eurodollar Loans shall be outstanding hereunder at any time
(it being understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in Schedule 2.1(a), or at such other office as the Agent may designate
in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the
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applicable Interest Periods with respect thereto. Each request for extension
or conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (b), (c), (d),
(e) and (f) of Section 5.2. In the event the Borrower fails to request extension
or conversion of any Eurodollar Loan in accordance with this Section, or any
such conversion or extension is not permitted or required by this Section, then
such Eurodollar Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable thereto. The Agent shall give each
Lender notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of Loans shall be in a minimum principal
amount of $1,000,000 and integral multiples of $500,000. Subject to the
foregoing terms, amounts prepaid under this Section 3.3(a) shall be
applied as the Borrower may elect; provided that if the Borrower fails
to specify a voluntary prepayment then such prepayment shall be applied
first to first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments under this Section
3.3(a) shall be subject to Section 3.12, but otherwise without premium
or penalty.
(b) Mandatory Prepayments.
(i) Committed Amount. If at any time the sum of the
aggregate principal amount of outstanding Loans plus LOC
Obligations outstanding shall exceed the Committed Amount, the
Borrower shall immediately prepay the outstanding principal
balance on the Loans (or, after all Loans have been repaid, cash
collateralize the LOC Obligations) in an amount sufficient to
eliminate such excess.
(ii) Permitted Receivables Financing. Upon the occurrence
and during the continuance of a Default or Event of Default,
immediately upon the receipt by any Consolidated Party of Net
Cash Proceeds from any Permitted Receivables Financing, the
Borrower shall prepay the Loans in an aggregate amount equal to
the Net Cash Proceeds of the related Permitted Receivables
Financing (such prepayment to be applied as set forth in clause
(iv) below).
(iii) Asset Dispositions. Immediately upon the occurrence
of any Asset Disposition Prepayment Event, the Borrower shall
prepay the Loans in an aggregate amount equal to the Net Cash
Proceeds of the related Asset Disposition not applied (or caused
to be applied) by the Consolidated Parties during the related
Application Period to the purchase, acquisition or construction
of Eligible Assets as contemplated by the terms of Section 8.5(f)
(such prepayment to be applied as set forth in clause (iv)
below).
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(iv) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 3.3(b) shall be
applied to Loans (first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities) and, after
all Loans have been repaid, to a cash collateral account in
respect of LOC Obligations. All prepayments under this Section
3.3(b) shall be subject to Section 3.12 but shall otherwise be
without any premium or penalty.
3.4 Termination and Reduction of Committed Amount.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Committed Amount in whole or in part
(in minimum aggregate amounts of $5,000,000 or in integral multiples of
$1,000,000 in excess thereof (or, if less, the full remaining amount of
the then applicable Committed Amount)) upon five Business Days' prior
written notice to the Agent; provided, however, no such termination or
reduction shall be made which would cause the aggregate principal amount
of outstanding Loans plus LOC Obligations outstanding to exceed the
Committed Amount unless, concurrently with such termination or
reduction, the outstanding Loans are repaid to the extent necessary to
eliminate such excess. The Agent shall promptly notify each Lender of
receipt by the Agent of any notice from the Borrower pursuant to this
Section 3.4(a).
(b) Mandatory Reductions. On any date that the Loans are required
to be prepaid pursuant to the terms of Sections 3.3(b)(ii) and
3.3(b)(iii), the Committed Amount automatically shall be permanently
reduced by the amount of such required prepayment, provided, however,
that the Committed Amount shall not be reduced in connection with any
prepayment required as a result of the sales of Western Multiplex
Corporation and Glenayre OPTIONS Corp. and the Sale and Leaseback
Transactions or Synthetic Leases with respect to the Canadian Property.
(c) Maturity Date. The Commitments of the Lenders shall
automatically terminate on the Maturity Date.
(d) General. The Borrower shall pay to the Agent for the account
of the Lenders in accordance with the terms of Section 3.5(b), on the
date of each termination or reduction of the Committed Amount, the
Unused Fee accrued through the date of such termination or reduction on
the amount of the Committed Amount so terminated or reduced.
3.5 Fees.
(a) Upfront Fees. The Borrower agrees to pay to the Agent for the
benefit of the Lenders in immediately available funds on or before the
Closing Date an upfront fee (the "Upfront Fee") in the amount provided
in the Agent's Fee Letter.
36
(b) Unused Fee. In consideration of the Commitments of the
Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Fee") on the Unused Committed
Amount computed at a per annum rate for each day during the applicable
Unused Fee Calculation Period (hereinafter defined) at a rate equal to
the Applicable Percentage in effect from time to time. The Unused Fee
shall commence to accrue on the Closing Date and shall be due and
payable in arrears on the last business day of each March, June,
September and December (and any date that the Committed Amount is
reduced as provided in Section 3.4(a) and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Unused Fee is payable hereunder being
herein referred to as an "Unused Fee Calculation Period"), beginning
with the first of such dates to occur after the Closing Date.
(c) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration of the
issuance of Letters of Credit hereunder, the Borrower promises to
pay to the Agent for the account of each Lender a fee (the
"Letter of Credit Fee") on such Lender's Commitment Percentage of
the average daily maximum amount available to be drawn under each
such Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration equal to the
Applicable Percentage. The Letter of Credit Fee will be payable
quarterly in arrears on the last Business Day of each March,
June, September and December for the immediately preceding
quarter (or a portion thereof).
(ii) Issuing Lender Fees. In addition to the Letter of
Credit Fee payable pursuant to clause (i) above, the Borrower
promises to pay to the Issuing Lender for its own account without
sharing by the other Lenders a letter of credit fronting fee
equal to 0.125% on the average daily maximum amount available to
be drawn under each such Letter of Credit (such fee to be payable
quarterly in arrears on the last Business Day of each March,
June, September and December for the immediately preceding
quarter (or a portion thereof)) and the customary charges from
time to time of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively, the
"Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the Agent,
for its own account, the fees referred to in the Agent's Fee Letter
(collectively, the "Agent's Fees").
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance
37
by such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent determines (which determination shall be
conclusive) 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 Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable); provided, however, that before giving any notice to the Borrower
pursuant to this Section, the notifying Lender shall designate a different
Applicable Lending Office or other lending office if such designation will avoid
the need for giving such notice and will not in the reasonable judgment of the
Lender be materially disadvantageous to the Lender.
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3.9 Requirements of Law.
(a) If, after the date hereof, the adoption of any applicable law, rule,
or regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Eurodollar
Loans, its Notes, or its obligation to make Eurodollar Loans, or change
the basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Credit Agreement or its Notes in
respect of any Eurodollar Loans (other than taxes imposed on the overall
net income, and franchise taxes of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of,
such Lender (or its Applicable Lending Office), including the Commitment
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will
39
not, in the judgment of such Lender, be otherwise unreasonably disadvantageous
to it. Any Lender claiming compensation under this Section 3.9 shall furnish to
the Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base
Rate Loans, and all Base Rate Loans of such Lender that would otherwise
be Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by the Borrower to or for the account of
any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Agent, taxes imposed on its income and
franchise taxes imposed on it (including any interest and penalties
imposed thereon), by the jurisdiction
40
under the laws of which such Lender (or its Applicable Lending Office)
or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable under
this Credit Agreement or any other Credit Document to any Lender or the
Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 3.11) such Lender or the
Agent receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law,
and (iv) the Borrower shall furnish to the Agent, at its address
referred to in Section 11.1, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present
or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made
under this Credit Agreement or any other Credit Document or from the
execution or delivery of, or otherwise with respect to, this Credit
Agreement or any other Credit Document (hereinafter referred to as
"Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent
for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto provided, however, that the Borrower shall have no obligation to
indemnify such Lender or the Agent (i) unless five days' notice has been
given by such Lender or the Agent, as applicable, to afford the
Borrower, in good faith, a reasonable opportunity to contest such
payment by such Lender or the Agent, provided such opportunity to
contest exists under Applicable Law, and (ii) until such Lender or the
Agent shall have delivered to the Borrower a certificate setting forth
in reasonable detail the basis of the Borrower's obligation to indemnify
such Lender or the Agent pursuant to this Section 3.11. This
indemnification shall be made within 30 days from the date such Lender
or the Agent (as the case may be) makes written demand therefor. If the
Agent (or such Lender, as the case may be), in its discretion ,
determines that such Taxes or Other Taxes are incorrectly or illegally
asserted against it, and the Agent or such Lender has made a claim
against the Borrower for such amount, then the Agent or such Lender
shall take reasonable action to seek a refund and deliver said refund if
received, to the Borrower.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Agent (but
only so long as such
41
Lender remains lawfully able to do so), shall provide the Borrower and
the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces
the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Credit Agreement is effectively
connected with the conduct of a trade or business in the United States,
(ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (iii) any
other form or certificate required by any taxing authority (including
any certificate required by Sections 871(h) and 881(c) of the Internal
Revenue Code), certifying that such Lender is entitled to an exemption
from or a reduced rate of tax on payments pursuant to this Credit
Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law,
or regulation occurring subsequent to the date on which a form
originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 3.11, then such
Lender will agree to use its reasonable best efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise disadvantageous
to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.
(h) The agreements and obligations of the Borrower contained in
this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
(i) Each Lender (and the Agent with respect to payments to the
Agent for its own account) agrees that (i) it will take all reasonable
actions by all usual means to maintain all exemptions, if any, available
to it from United States withholding taxes (whether available by treaty,
existing administrative waiver, by virtue of the location of any
Applicable Lending Office) and (ii) otherwise cooperate with Borrower to
minimize amounts payable by the Borrower under this Section 3.11.
42
3.12 Compensation.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan
for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 9.2) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 5 to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this Credit
Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) 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 the applicable 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 Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) 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. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans or reimbursement obligations arising from
drawings under Letters of Credit, each payment of Unused Fees, each
payment of the Letter of Credit Fee, each reduction of the Committed
Amount and each conversion or extension of any Loan, shall be allocated
pro rata among the Lenders in accordance with the respective principal
amounts of their outstanding Loans and Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of
a borrowing hereunder; provided,
43
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations
hereunder. Unless the Agent shall have been notified by any Lender prior
to the date of any requested borrowing that such Lender does not intend
to make available to the Agent its ratable share of such borrowing to be
made on such date, the Agent may assume that such Lender has made such
amount available to the Agent on the date of such borrowing, and the
Agent in reliance upon such assumption, may (in its sole discretion but
without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the
Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent shall
also be entitled to recover from the Lender or the Borrower, as the case
may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Agent
to the Borrower to the date such corresponding amount is recovered by
the Agent (i) from the Borrower at a per annum rate equal to the
applicable rate for the applicable borrowing pursuant to the Notice of
Borrowing and (ii) from a Lender at a per annum rate equal to the
Federal Funds Rate.
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this
44
Credit Agreement on the date when such amount is due, such payments
shall be made together with interest thereon for each date from the date
such amount is due until the date such amount is paid to the Agent or
such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this
Section 3.14 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 3.14 to
share in the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all
payments hereunder shall be made to the Agent in dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding
of any kind, at the Agent's office specified in Schedule 2.1(a) not
later than 2:00 P.M. (Charlotte, North Carolina time) on the date when
due. Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Agent may (but shall
not be obligated to) debit the amount of any such payment owed by the
Borrower which is not made by such time to any ordinary deposit account
of the Borrower maintained with the Agent (with notice to the Borrower).
The Borrower shall, at the time it makes any payment under this Credit
Agreement, specify to the Agent the Loans, LOC Obligations, Fees,
interest or other amounts payable by the Borrower hereunder to which
such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms
hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of
Section 3.13(a)). The Agent will distribute such payments to such
Lenders, if any such payment is received prior to 12:00 Noon (Charlotte,
North Carolina time) on a Business Day in like funds as received prior
to the end of such Business Day and otherwise the Agent will distribute
such payment to such Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day (subject to accrual of interest and Fees
for the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next
following calendar month, then such payment shall instead be made on the
next preceding Business Day. Except as expressly provided otherwise
herein, all computations of interest and fees shall be made on the basis
of actual number of days elapsed over a year of 360 days, except with
respect to computation of interest on Base Rate Loans which shall be
calculated based on a year of 365 or 366 days, as appropriate. Interest
shall accrue from and include the date of borrowing, but exclude the
date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Agent or any Lender on
account of the Credit Party Obligations or any other amounts outstanding
under any of the Credit Documents shall be paid over or delivered as
follows:
45
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Agent in connection with enforcing the rights of the Lenders under
the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender from time to time for
any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the
types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time,
including the amounts of principal
46
and interest payable and paid to such Lender from time to time under
this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update
its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of the Borrower and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
SECTION 4
GUARANTY
4.1 The Guarantee.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement and the
Agent as hereinafter provided the prompt payment of the Credit Party Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Credit Party Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Credit Party
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited
47
to an aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the Bankruptcy
Code or any comparable provisions of any applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and
several, and, to the fullest extent permitted by applicable law, absolute and
unconditional, irrespective of (i) the value, genuineness, validity, regularity
or enforceability of any of the Credit Documents or Hedging Agreements, or any
other agreement or instrument referred to therein, or any substitution, release,
impairment or exchange of any other guarantee of or security for any of the
Credit Party Obligations, and (ii) any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Credit Party Obligations for amounts paid under this
Section 4 until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under this
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of
the Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Credit Party
Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender
or Lenders as security for any of the Credit Party Obligations shall
fail to attach or be perfected; or
48
(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ▇▇.▇▇.
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
agrees that such Guarantor shall have no right of recourse to security for the
Credit Party Obligations, except through the exercise of the rights of
subrogation pursuant to Section 4.2 and through the exercise of rights of
contribution pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party
49
Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors for purposes of Section 4.1.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of any Guaranteed Obligations. For
purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of such Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors; provided, however, that, for purposes of calculating the
Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (d) "Contribution Share" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Borrower and all of the Guarantors other than the maker of
such Excess Payment exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Borrower and the Guarantors hereunder) of
the Borrower and all of the Guarantors other than the maker of such Excess
Payment; provided, however, that, for purposes of calculating the Contribution
Shares of the Guarantors in respect of any Excess Payment, any Guarantor that
became a Guarantor subsequent to the date of any such Excess Payment shall be
deemed to have been a Guarantor on the date of such Excess Payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such
50
Guarantor in connection with such Excess Payment. This Section 4.6 shall not be
deemed to affect any right of subrogation, indemnity, reimbursement or
contribution that any Guarantor may have under applicable law against the
Borrower in respect of any payment of Guaranteed Obligations. Notwithstanding
the foregoing, all rights of contribution against any Guarantor shall terminate
from and after such time, if ever, that such Guarantor shall be relieved of its
obligations pursuant to Section 8.4.
4.7 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; and (iii)
all other Credit Documents, each in form and substance acceptable to the
Agent in its sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of each
Credit Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery
51
thereof, certified by a secretary or assistant secretary of such
Credit Party to be true and correct and in force and effect as of
the Closing Date.
(iv) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction of
incorporation and each other jurisdiction in which the failure to
so qualify and be in good standing could have a Material Adverse
Effect.
(v) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true
and correct as of the Closing Date.
(c) Opinions of Counsel. The Agent shall have received, in each
case dated as of the Closing Date:
(i) an opinion of legal counsel for the Credit Parties
in form and substance satisfactory to the Agent; and
(ii) a legal opinion of special local counsel for each
Credit Party incorporated in the State of Colorado in form and
substance satisfactory to the Agent.
(d) Material Adverse Effect. No material adverse change shall
have occurred since December 31, 1997 in the condition (financial or
otherwise), business, management or prospects of the Consolidated
Parties taken as a whole.
(e) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party
that could have a Material Adverse Effect.
(f) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that to the best of the
Borrower's knowledge (A) each Consolidated Party is in compliance with
all of its existing material financial obligations, (B) all
governmental, shareholder and third party consents and approvals, if
any, with respect to the Credit Documents and the transactions
contemplated thereby have been obtained, (C) no action, suit,
investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to
affect any Consolidated Party or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding
could have a Material Adverse Effect, and (D) immediately after giving
effect to this Credit Agreement, the other Credit Documents and all the
transactions contemplated therein to occur on such date, (1) the
Borrower, the Parent and the Consolidated Parties, taken as a whole, are
Solvent, (2) no Default or Event of Default exists, (3) all
representations and
52
warranties contained herein and in the other Credit Documents are true
and correct in all material respects, and (4) the Credit Parties are in
compliance with each of the financial covenants set forth in
Section 7.11.
(g) Fees and Expenses. Payment by the Credit Parties of all fees
and expenses owed by them to the Lenders and the Agent, including,
without limitation, payment to the Agent of the fees set forth in the
Fee Letter.
(h) Financial Statements. Receipt by the Agent of (a) financial
statements described in Section 7.1(a) for the fiscal year ending
December 31, 1997, and (b) financial statements described in Section
7.1(b) for each of the first two fiscal quarters of 1998.
(i) The Agent shall have received a certificate describing the
insurance coverage of the Consolidated Parties which identifies carrier,
policy number, expiration date, type and amount.
(j) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender.
5.2 Conditions to all Extensions of Credit.
The obligations of each Lender to make, convert or extend any Loan and
of the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any
Loan, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (ii) in the case of any Letter of Credit, the
Issuing Lender shall have received an appropriate request for issuance
in accordance with the provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 6
shall be, subject to the limitations set forth therein, true and correct
in all material respects as of such date (except for those which
expressly relate to an earlier date);
(c) There shall not have been commenced against any Credit Party
an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
53
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) As of the Closing Date,. no material adverse change shall
have occurred since December 31, 1997 in the condition (financial or
otherwise), business, results of operations or prospects of the
Consolidated Parties taken as a whole; and
(f) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof) or to the issuance of such
Letter of Credit, as the case may be, (i) the sum of the aggregate
principal amount of outstanding Loans plus LOC Obligations outstanding
shall not exceed the Committed Amount, and (ii) the LOC Obligations
shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), (d), (e) and (f) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The audited consolidated balance sheet of the Consolidated
Parties as of December 31, 1996 and December 31, 1997 and the audited
consolidated statements of earnings and statements of cash flows for the
years ended December 31, 1996 and December 31, 1997 have heretofore been
furnished to each Lender. Such financial statements (including the notes
thereto) (i) have been audited by Ernst & Young, LLP (ii) have been
prepared in accordance with GAAP consistently applied throughout the
periods covered thereby and (iii) present fairly (on the basis disclosed
in the footnotes to such financial statements) the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. The unaudited
interim balance sheets of the Consolidated Parties as at the end of, and
the related unaudited interim statements of earnings and of cash flows
for, each quarterly period ended after June 30, 1998 and prior to the
Closing Date have heretofore been furnished to each Lender. Such interim
financial statements for each such quarterly period, (i) have been
prepared in accordance with GAAP consistently applied throughout the
periods covered thereby and (ii) present fairly (on the basis disclosed
in the footnotes to such financial statements) the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. During the
period from June 30, 1998 to and including the Closing Date, there has
been no sale, transfer or other disposition by any
54
Consolidated Party of any material part of the business or property of
the Consolidated Parties, taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any
Capital Stock of any other person) material in relation to the
consolidated financial condition of the Consolidated Parties, taken as a
whole, in each case, which, is not reflected in the foregoing financial
statements or in the notes thereto and has not otherwise been disclosed
in writing to the Lenders on or prior to the Closing Date.
(b) The financial statements delivered to the Lenders pursuant to
Section 7.1(a) and (b), (i) have been prepared in accordance with GAAP
(except as may otherwise be permitted under Section 7.1(a) and (b)) and
(ii) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date
and for such periods.
6.2 No Change; Dividends.
Since December 31, 1997, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could have a
Material Adverse Effect and (b) except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock in a Consolidated Party nor has any of the Capital Stock
in a Consolidated Party been redeemed, retired, purchased or otherwise acquired
for value by such Consolidated Party.
6.3 Organization and Good Standing.
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization except where the failure to be so organized, existing or in good
standing would not reasonably be expected to have a Material Adverse Effect, (b)
has the corporate or other necessary 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, and (c) is duly
qualified as a foreign entity 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, other than in such jurisdictions
where the failure to be so qualified and in good standing could not have a
Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other
55
extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of the Credit Documents to which such Credit Party is
a party, except for (i) consents, authorizations, notices and filings described
in Schedule 6.4, all of which have been obtained or made or have the status
described in such Schedule 6.4 and (ii) those the failure of which to obtain
could not have a Material Adverse Effect. This Credit Agreement has been, and
each other Credit Document to which any Credit Party is a party will be, duly
executed and delivered on behalf of the Credit Parties. This Credit Agreement
constitutes, and each other Credit Document to which any Credit Party is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such 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).
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or conflict in any material respect with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict in any material
respect with contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which it is a party or by which it may be bound, the violation
of which could have a Material Adverse Effect, or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.6 No Default.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could have a Material Adverse Effect. No Default or Event
of Default has occurred or exists except as previously disclosed in writing to
the Lenders.
6.7 Ownership.
Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective material assets and none of such material assets
is subject to any Lien other than Permitted Liens
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6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.
6.9 Litigation.
Except as disclosed in Schedule 6.9, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
could reasonably be expected to have a Material Adverse Effect.
6.10 Taxes.
Each Consolidated Party has filed, or caused to be filed, all material
tax returns (federal, state, local and foreign) required to be filed and paid
(a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP except where the failure to make such filings or pay such
amounts could not have a Material Adverse Effect.
6.11 Compliance with Laws.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect. No applicable Requirement of Law could reasonably be expected to
cause a Material Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition
has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no lien in favor of the PBGC
or a Plan has arisen or is reasonably likely to arise on account of any
Plan.
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(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior to
the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither any
Consolidated Party nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if any Consolidated Party or any ERISA
Affiliate were to withdraw completely from all Multiemployer Plans and
Multiple Employer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made. Neither
any Consolidated Party nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of
Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge
of the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Consolidated Party or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code which could reasonably be expected to have a Material
Adverse Effect, or under any agreement or other instrument pursuant to
which any Consolidated Party or any ERISA Affiliate has agreed or is
required to indemnify any person against any such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates has
any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106. Each Plan which is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in compliance in all
material respects with such sections.
6.13 Subsidiaries.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation and the percentage of outstanding shares of each
class owned (directly, indirectly or beneficially) by such Consolidated Party.
The outstanding Capital Stock of all such Subsidiaries is validly issued, fully
58
paid and non-assessable and is owned by each such Consolidated Party, directly,
indirectl or beneficially, free and clear of all Liens (other than Permitted
Liens). Other than as set forth in Schedule 6.13, no Consolidated Party has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to its Capital Stock. Schedule 6.13 may be updated
from time to time by the Borrower by giving written notice thereof to the Agent.
6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U, or for
the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Agent, the Borrower will furnish to the
Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans
was or will be incurred for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U or any "margin security"
within the meaning of Regulation T. "Margin stock" within the meaning of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Consolidated Parties. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation T, U or X.
(b) No Consolidated Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or required
to be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company", or
a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(c) No director, executive officer or principal shareholder of
any Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto
in Regulation O issued by the Board of Governors of the Federal Reserve
System.
(d) Each Consolidated Party has obtained and holds in full force
and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way
and other rights, consents and approvals which are necessary for
59
the ownership of its respective Property and to the conduct of its
respective businesses as presently conducted other than those for which
the failure to obtain and hold such could not be expected to have a
Material Adverse Effect.
(e) No Consolidated Party is in violation of any applicable
statute, regulation or ordinance of the United States of America, or of
any state, city, town, municipality, county or any other jurisdiction,
or of any agency thereof (including without limitation, environmental
laws and regulations), which violation could reasonably be expected to
have a Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports
and documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in compliance in all
material respects with all applicable rules and regulations of such
commissions.
6.15 Purpose of Loans and Letters of Credit.
The proceeds of the Loans hereunder shall be used solely by the Borrower
for working capital, capital expenditures and other lawful corporate purposes.
The Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance, domestic or international trade transactions and obligations
not otherwise aforementioned relating to transactions entered into by the
applicable account party in the ordinary course of business.
6.16 Environmental Matters.
Except as disclosed and described in Schedule 6.16 attached hereto, no
Consolidated Party has and to the best of Borrower's knowledge, no other person
has stored, treated, used, managed, generated or disposed of any substance
deemed hazardous by any applicable Environmental Laws on any real property now
owned by any Consolidated Party in violation of any Environmental Law. The
Consolidated Parties are not in violation of or subject to any existing, pending
or, to the best of the Borrower's knowledge, threatened investigation or inquiry
by any Governmental Authority or to any material remedial obligations under any
applicable Environmental Laws, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
Governmental Authorities of all relevant facts, conditions and circumstances, if
any pertaining to any real property of the Consolidated Parties. The
Consolidated Parties have not obtained and are not required to obtain any
permits, licenses or similar authorizations (which have not already been
obtained) to construct, occupy, operate or use any buildings, improvements,
fixtures, and equipment forming a part of any real property of the Consolidated
Parties by reason of any applicable Environmental Laws. No Consolidated Parties,
and to the best of Borrower's knowledge, no other person has caused the release
of any Materials of Environmental Concern on or to the real property of the
Consolidated Parties in any manner or quantities which would be deemed a
violation or require investigation or remediation under the applicable
Environmental Laws.
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6.17 Intellectual Property.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Material Adverse Effect. Except as provided on Schedule
6.17, no claim has been asserted in writing and is pending or to the best of the
Borrower's knowledge, threatened by any Person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, and to the Credit Parties' knowledge the use of such
Intellectual Property by any Consolidated Party does not infringe on the rights
of any Person, in either case except for such claims and infringements that in
the aggregate, could not have a Material Adverse Effect. Schedule 6.17 may be
updated from time to time by the Borrower by giving written notice thereof to
the Agent. Upon the reasonable request of the Agent, the Borrower will provide a
list of all registered Intellectual Property owned by each Consolidated Party or
that any Consolidated Party has the right to use.
6.18 Solvency.
The Borrower, the Parent and the Consolidated Parties, taken as a whole,
are and, after consummation of the transactions contemplated by this Credit
Agreement, will be Solvent.
6.19 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.20 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.21 No Burdensome Restrictions.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
61
6.22 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the five years preceding the Closing
Date.
6.23 Nature of Business.
As of the Closing Date, the Consolidated Parties are engaged in the
business of manufacturing, selling, financing, licensing and servicing
telecommunications products and services, developing software related thereto
and conducting other activities related thereto.
6.24 Year 2000 Compliance.
Each of the Consolidated Parties has (i) initiated a review and
assessment of all areas within its and each of its Subsidiaries' businesses and
operations (including those affected by suppliers, vendors and customers) that
could be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications may not be able to recognize and properly perform
date-sensitive functions after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable. Based on the
foregoing, the Borrower believes that all computer applications (including those
of its suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' business and operations are reasonably expected on a timely basis
to be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so could not reasonably be expected to have a Material
Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent and
each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 120 days after the close of each fiscal year of the Parent,
a consolidated balance sheet and income statement of the Consolidated
Parties, as of the end of such fiscal year, together
62
with related consolidated statements of operations and retained earnings
and of cash flows for such fiscal year, setting forth in comparative
form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Agent and
whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP (except for changes with which
such accountants concur) and shall not be limited as to the scope of the
audit or qualified as to the status of the Consolidated Parties as a
going concern.
(b) Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the close of each fiscal quarter of the
Parent (other than the fourth fiscal quarter, in which case 120 days
after the end thereof) a consolidated balance sheet and income statement
of the Consolidated Parties, as of the end of such fiscal quarter,
together with related consolidated statements of operations and retained
earnings and of cash flows for such fiscal quarter in each case setting
forth in comparative form consolidated figures for the corresponding
period of the preceding fiscal year, all such financial information
described above to be in reasonable form and detail and reasonably
acceptable to the Agent, and accompanied by a certificate of the chief
financial officer of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the
financial condition of the Consolidated Parties and have been prepared
in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of the chief financial officer of the Borrower substantially
in the form of Exhibit 7.1(c), (i) demonstrating compliance with the
financial covenants contained in Section 7.11 by calculation thereof as
of the end of each such fiscal period and (ii) stating that no Default
or Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Credit Parties propose to take with respect thereto.
(d) Compliance With Certain Provisions of the Credit Agreement.
Within 120 days after the end of each fiscal year of the Borrower, a
certificate containing information regarding the amount of all Asset
Dispositions and Equity Issuances that were made during the prior fiscal
year.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy of
any other material report or "management letter" submitted by
independent accountants to any Consolidated Party in connection with any
annual, interim or special audit of the books of such Person.
(f) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as any Consolidated Party shall send to its shareholders or to
63
a holder of any Indebtedness owed by any Consolidated Party in its
capacity as such a holder and (ii) upon the request of the Agent, all
reports and written information to and from the United States
Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(g) Notices. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent (i) promptly of the occurrence of an
event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (ii) within ten
Business Days of the occurrence of any of the following with respect to
any Consolidated Party (A) the commencement of any litigation, arbitral
or governmental proceeding against such Person which if adversely
determined is likely to have a Material Adverse Effect, (B) the
institution of any proceedings against such Person with respect to, or
the receipt of notice by such Person of potential liability or
responsibility for violation, or alleged violation of any federal, state
or local law, rule or regulation, including but not limited to,
Environmental Laws, the violation of which could have a Material Adverse
Effect, or (C) any notice or determination concerning the imposition of
any withdrawal liability by a Multiemployer Plan against such Person or
any ERISA Affiliate, the determination that a Multiemployer Plan is, or
is expected to be, in reorganization within the meaning of Title IV of
ERISA or the termination of any Plan.
(h) ERISA. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent promptly (and in any event within ten
Business Days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against the Borrower or any of its ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due date
(including extensions) thereof of all amounts which any Consolidated
Party or any ERISA Affiliate is required to contribute to each Plan
pursuant to its terms and as required to meet the minimum funding
standard set forth in ERISA and the Code with respect thereto; or (iv)
any change in the funding status of any Plan that could have a Material
Adverse Effect, together with a description of any such event or
condition or a copy of any such notice and a statement by the chief
financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, the Credit
Parties shall furnish the Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form
5500 series), as well as all schedules and attachments thereto required
to be filed with the Department of Labor and/or the Internal
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Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(i) Environmental.The Consolidated Parties will conduct and
complete all investigations, studies, sampling, and testing and all
remedial, removal, and other actions reasonably necessary to address all
Materials of Environmental Concern on , from or affecting any of the
Properties to the extent necessary to be in compliance with all
Environmental Laws and with the validly issued orders and directives of
all Governmental Authorities with jurisdiction over such Properties to
the extent any failure could have a Material Adverse Effect.
(j) Permitted Customer Financing Transactions. Contemporaneously
with the furnishing of the annual and quarterly financial statements
described in clauses (a) and (b) above, a schedule setting forth in
detail reasonably satisfactory to the Agent, all outstanding Customer
Financing Transactions (including extensions of credit under the Conxus
Credit Agreement), the principal and interest balances of each such
transaction and the date and amounts of each payment default with
respect to each such transaction.
(k) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the
Required Lenders may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority unless the failure to do so could not have a Material
Adverse Effect.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves) (unless such is not permitted by the
applicable Governmental Authority).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply in all material respects with all applicable laws, rules, regulations and
orders and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property if noncompliance with any such law, rule,
regulation, order or restriction could have a Material Adverse Effect.
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7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all material taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful material claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that no Consolidated Party shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.
7.6 Insurance.
Each Credit Party will, and will cause each of its Subsidiaries
(excluding Inactive Subsidiaries) to, at all times maintain in full force and
effect insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in such
amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries (except
Inactive Subsidiaries) to, maintain and preserve its properties and equipment
material to the conduct of its business in reasonably good repair, working order
and condition, taken as a whole, normal wear and tear and casualty and
condemnation excepted, and will make, or cause to be made, in such properties
and equipment from time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound, the failure of which
to perform could have a Material Adverse Effect.
7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans and will use the Letters
of Credit solely for the purposes set forth in Section 6.15.
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7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent (including, without limitation, independent accountants,
agents, attorneys, and appraisers) to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person.
7.11 Financial Covenants.
(a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Consolidated
Parties, shall be greater than 1.0 to 1.0.
(b) Leverage Ratio. The Leverage Ratio, as of the last day
of each fiscal quarter of the Consolidated Parties, shall be less than
or equal to 1.5:1.0.
(c) Consolidated Net Worth. At all times the Consolidated
Net Worth shall be greater than or equal to 90% of Consolidated Net
Worth as of June 30, 1998, increased on a cumulative basis as of the end
of each fiscal quarter of the Consolidated Parties, commencing with the
fiscal quarter ending September 30, 1998 by (i) an amount equal to 50%
of Consolidated Net Income, to the extent positive for the fiscal
quarter then ended and (ii) an amount equal to 100% of the Net Proceeds
of any Equity Issuances.
7.12 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person
becomes a Subsidiary (other than an Inactive Subsidiary) of any Credit Party,
the Borrower shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person and
shall (a) if such Person is a Domestic Subsidiary of a Credit Party, cause such
Person to execute a Joinder Agreement in substantially the same form as Exhibit
7.12 and (b) cause such Person to deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above) and other items of the
types required to be delivered pursuant to Section 5.1, all in form, content and
scope reasonably satisfactory to the Agent.
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7.13 Funded Debt Reduction.
The Borrower shall reduce the outstanding principal balance of all Loans
to $0 for one consecutive 30-day period during the term of this Credit
Agreement. For the purpose of this Section 7.13, all Cash-on-Hand and all Cash
Equivalents maturing within such 30-day period of the Borrower shall be treated
as reducing the outstanding principal balance of said Loans.
7.14 Year 2000 Compliance.
The Borrower will promptly notify the Agent in the event any
Consolidated Party discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness of the Consolidated Parties set forth in
Schedule 8.1 (and renewals, refinancings and extensions thereof on terms
and conditions no less favorable to such Person than such existing
Indebtedness);
(c) purchase money Indebtedness and Capital Leases (excluding
Capital Leases entered into in connection with any Sale and Leaseback
Transaction permitted pursuant to Section 8.13) hereafter incurred by
the Consolidated Parties to finance the purchase of fixed assets
provided that (i) the total of all such Indebtedness shall not exceed an
aggregate principal amount of $5,000,000 at any one time outstanding
(including any such Indebtedness referred to in subsection (b) above);
(ii) such Indebtedness when incurred shall not exceed the purchase price
of the asset(s) financed; and (iii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing;
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(d) obligations of the Consolidated Parties in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
(e) intercompany Indebtedness arising out of loans and
advances permitted under Section 8.6;
(f) obligations of the Consolidated Parties in connection with
any Permitted Receivables Financing, to the extent such obligations
constitute Indebtedness;
(g) Indebtedness incurred in connection with any Sale and
Leaseback Transaction or Synthetic Lease involving the Canadian Property
provided that (i) the total of all such Indebtedness shall not exceed an
aggregate principal amount of $35,000,000 at any one time outstanding;
(ii) such Indebtedness when incurred shall not exceed the fair market
value as evidenced by an appraisal (in a form reasonably satisfactory to
the Agent) of the asset(s) financed; and (iii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;
(h) in addition to the Indebtedness otherwise permitted by this
Section 8.1, other unsecured Indebtedness hereafter incurred by the
Consolidated Parties provided that (A) the loan documentation with
respect to such Indebtedness shall not contain covenants or default
provisions relating to any Consolidated Party that are more restrictive
than the covenants and default provisions contained in the Credit
Documents, (B) the Borrower shall have delivered to the Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving effect on a
Pro Forma Basis to the incurrence of such Indebtedness and to the
concurrent retirement of any other Indebtedness of any Consolidated
Party, no Default or Event of Default would exist hereunder and (C) the
aggregate principal amount of such Indebtedness shall not exceed
$20,000,000 at any time.
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not permit any Consolidated Party to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date or reasonable extensions thereof.
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8.4 Consolidation, Merger, Dissolution, etc.
Except in connection with an Asset Disposition permitted by the terms of
Section 8.5, the Credit Parties will not permit any Consolidated Party to enter
into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution) without obtaining the
prior written consent of the Required Lenders; provided that, notwithstanding
the foregoing provisions of this Section 8.4, (a) the Borrower may merge or
consolidate with any of its Subsidiaries provided that (i) the Borrower shall be
the continuing or surviving corporation, (ii) the Borrower shall have delivered
to the Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, no Default or Event of Default
would exist, (iii) the representations and warranties contained in Section 6 are
true immediately prior to and after giving effect to such transaction and (iv)
no Default or Event of Default exists or will exist after giving effect to such
transaction, (b) any Credit Party may merge or consolidate with any other Credit
Party provided that (i) neither the Parent nor the Borrower may merge or
consolidate with one another, (ii) in the case of a merger or consolidation
involving the Parent or the Borrower, the Parent or the Borrower, as the case
may be, shall be the continuing or surviving corporation, (iii) the Borrower
shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist, (iv) the representations and
warranties contained in Section 6 are true immediately prior to and after giving
effect to such transaction and (v) no Default or Event of Default exists or will
exist after giving effect to such transaction, (c) any Consolidated Party which
is not a Credit Party may be merged or consolidated with or into any Credit
Party provided that (i) such Credit Party shall be the continuing or surviving
corporation and (ii) the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect on a Pro Forma
Basis to such transaction, no Default or Event of Default would exist, (iii) the
representations and warranties contained in Section 6 are true immediately prior
to and after giving effect to such transaction and (iv) no Default or Event of
Default exists or will exist after giving effect to such transaction, (d) any
Consolidated Party which is not a Credit Party may be merged or consolidated
with or into any other Consolidated Party which is not a Credit Party provided
(i) the Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to such
transaction, no Default or Event of Default would exist, (ii) the
representations and warranties contained in Section 6 are true immediately prior
to and after giving effect to such transaction and (iii) no Default or Event of
Default exists or will exist after giving effect to such transaction, (e) a
Consolidated Party (other than the Parent) may merge with any Person other than
a Consolidated Party in connection with a Permitted Acquisition if (i) such
Consolidated Party shall be the continuing or surviving corporation and (ii) the
Borrower shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist, (iii) the representations and
warranties contained in Section 6 are true immediately prior to and after giving
effect to such transaction and (iv) no Default or Event of Default exists or
will exist after giving effect to such transaction, and (f) any Wholly-Owned
Subsidiary (including Inactive Subsidiaries) of the Borrower or the Parent
(excluding the Borrower) may dissolve, liquidate or wind up its affairs at any
time. The consideration for any transaction permitted by this Section 8.4 shall
not exceed $50,000,000, and
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the aggregate consideration for all transactions permitted hereby shall not
exceed $100,000,000 during the term of this Credit Agreement.
8.5 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party (other than an
Inactive Subsidiary) to make any Asset Disposition (including, without
limitation, any Sale and Leaseback Transaction) other than Excluded Asset
Dispositions unless (a) the consideration paid in connection therewith is cash
or Cash Equivalents, (b) if such transaction is a Sale and Leaseback
Transaction, such transaction is permitted by the terms of Section 8.13, (c)
such transaction does not involve the sale or other disposition of a minority
equity interest in any Consolidated Party, (d) the aggregate net book value of
all of the assets sold or otherwise disposed of by the Consolidated Parties in
all such transactions (including, without limitation, Sale and Leaseback
Transactions) after the Closing Date (excluding (i) the sale of Western
Multiplex Corporation and Glenayre OPTIONS Corp. and (ii) Sale and Leaseback
Transactions and Synthetic Leases involving the Canadian Property) shall not
exceed $15,000,000, (e) the Borrower shall have delivered to the Agent a Pro
Forma Compliance Certificate demonstrating that, upon giving effect on a Pro
Forma Basis to such transaction, no Default or Event of Default would exist
hereunder, and (f) no later than 15 days prior to such Asset Disposition, the
Agent and the Lenders shall have received a certificate of an officer of the
Borrower specifying the anticipated or actual date of such Asset Disposition,
briefly describing the assets to be sold or otherwise disposed of and setting
forth the net book value of such assets, the aggregate consideration and the Net
Cash Proceeds to be received for such assets in connection with such Asset
Disposition, and thereafter the Borrower shall, within the period of 12 months
following the consummation of such Asset Disposition (with respect to any such
Asset Disposition, the "Application Period"), apply (or cause to be applied) an
amount equal to the Net Cash Proceeds of such Asset Disposition to (i) the
purchase, acquisition or, in the case of improvements to real property,
construction of Eligible Assets or (ii) to the prepayment of any outstanding
Loans in accordance with the terms of Section 3.3(b)(iii).
Upon a sale of assets or the sale of Capital Stock of a Consolidated
Party permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of such Consolidated Party from all of its obligations, if any, under the Credit
Documents.
8.6 Investments.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends
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payable solely in the same class of Capital Stock of such Person, (b) to make
dividends or other distributions payable to any Credit Party (directly or
indirectly through Subsidiaries), (c) as permitted by Section 8.8 and (d) other
Restricted Payments provided that the Borrower shall have delivered to the Agent
a Pro Forma Compliance Certificate demonstrating that, upon giving effect on a
Pro Forma Basis to such transaction, no Default or Event of Default would exist.
8.8 Prepayments of Indebtedness, etc..
The Credit Parties will not permit any Consolidated Party to, if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, (a) after the issuance thereof, amend
or modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof, or (b) make (or give any notice with
respect thereto) any voluntary or optional payment or prepayment or redemption
or acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), refund, refinance or exchange of any other
Indebtedness.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
advances of working capital to any Credit Party, (b) transfers of cash and
assets to any Credit Party, (c) transactions permitted by Section 8.1, Section
8.4, Section 8.5, Section 8.6, or Section 8.7, (d) normal compensation and
reimbursement of expenses of officers and directors and (e) except as otherwise
specifically limited in this Credit Agreement, other transactions which are
entered into in the ordinary course of such Person's business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without the prior written consent of the Required Lenders
except as may be permitted or required pursuant to a transaction permitted by
Section 8.4.
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.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the documents executed in
connection with any Permitted Receivables Financing (but only to the extent that
the related encumbrance or restriction pertains to the applicable Transferred
Assets actually sold, contributed, financed or otherwise conveyed or pledged
pursuant to such Permitted Receivables Financing), (iii) applicable law or (iv)
any Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Parent, the Borrower or any other Wholly-Owned
Subsidiary of the Parent which is a Credit Party) to own any Capital Stock of
any Subsidiary of the Borrower; provided, however, Glenayre Electronics (UK)
Limited shall be permitted to own 100% of the Capital Stock of Glenayre
Electronics (Korea) Limited, (ii) permit any Subsidiary of the Borrower to issue
Capital Stock (except to the Parent, the Borrower or any other Wholly-Owned
Subsidiary of the Parent which is a Credit Party), (iii) permit, create, incur,
assume or suffer to exist any Lien thereon, in each case (A) except to qualify
directors where required by applicable law or to satisfy other requirements of
applicable law with respect to the ownership of Capital Stock of Foreign
Subsidiaries, (B) except as a result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4 or Section 8.5
or (C) except for Permitted Liens and (iv) notwithstanding anything to the
contrary contained in clause (ii) above, permit any Subsidiary of the Borrower
to issue any shares of preferred Capital Stock.
8.13 Sale and Leasebacks and Synthetic Leases.
(a) Other than Sale and Leaseback Transactions involving the
Canadian Property permitted under Section 8.1(g), the Credit Parties
will not permit any Consolidated Party to, directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with
respect to any lease, whether an Operating Lease or a Capital Lease, of
any Property (whether real or personal or mixed), whether now owned or
hereafter acquired, (a) which such Consolidated Party has sold or
transferred or is to sell or transfer to a Person
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which is not a Consolidated Party or (b) which such Consolidated Party
intends to use for substantially the same purpose as any other Property
which has been sold or is to be sold or transferred by such Consolidated
Party to another Person which is not a Consolidated Party in connection
with such lease.
(b) The Credit Parties will not permit any Consolidated Party to
enter into any Synthetic Lease other than with respect to the Canadian
Property to the extent permitted under Section 8.1(g).
8.14 No Further Negative Pledges.
The Credit Parties will not permit any Consolidated Party to enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its Property, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation except (a) pursuant to this
Credit Agreement and the other Credit Documents, (b) pursuant to the documents
executed in connection with any Permitted Receivables Financing (but only (i) to
the extent that the related prohibitions against other encumbrances pertain to
the applicable Transferred Assets actually sold, contributed, financed or
otherwise conveyed or pledged pursuant to such Permitted Receivables Financing
and (ii) as required in connection with the Non-Notification Factoring Agreement
to be executed by NationsBanc Commercial Corporation and a Credit Party (other
than the Parent)), and (c) in connection with any Permitted Lien or any document
or instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien.
8.15 Operating Lease Obligations.
The Credit Parties will not permit any Consolidated Party to enter into,
assume or permit to exist any obligations for the payment of rental under
Operating Leases which in the aggregate for all such Persons would exceed
$10,000,000 in any fiscal year (without duplication as to the
Consolidated Parties).
8.16 Customer Financing Transactions.
The Credit Parties will not permit any Consolidated Party to engage in
any Customer Financing Transactions except for Permitted Customer Financing
Transactions. For the purpose of determining compliance with this Section 8.16,
all extensions of credit by the Borrower pursuant to the Conxus Credit Agreement
shall be deemed within the scope of transactions governed by the Customer
Financing Policy.
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SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of
any of the Loans or of any reimbursement obligations arising from
drawings under Letters of Credit, or
(ii) default, and such default shall continue for three
(3) or more Business Days, in the payment when due of any
interest on the Loans or on any reimbursement obligations arising
from drawings under Letters of Credit, or of any Fees or other
amounts owing hereunder, under any of the other Credit Documents
or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.9, 7.11,
7.12, 7.13 or 8.1 through 8.16, inclusive;
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.1(a), (b) or
(c) and such default shall continue unremedied for a period of at
least 5 Business Days after the earlier of a responsible officer
of a Credit Party becoming aware of such default or notice
thereof by the Agent; or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to
in subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 45 days after the
earlier of a responsible
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officer of a Credit Party becoming aware of such default or
written notice thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure
periods, if any), or (ii) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5, any Credit Document shall fail to be in full
force and effect or to give the Agent and/or the Lenders the rights,
powers and privileges purported to be created thereby, or any Credit
Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5, the guaranty given by any Guarantor
hereunder (including any Additional Credit Party) or any provision
thereof shall cease to be in full force and effect, or any Guarantor
(including any Additional Credit Party) hereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) Any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period
with respect thereto, if any) or any material obligation or
condition of any contract or lease material to the Consolidated
Parties taken as a whole; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) in excess
of $5,000,000 in the aggregate for the Consolidated Parties taken
as a whole, (A) any Consolidated Party shall (1) default in any
payment (beyond the applicable grace period with respect thereto,
if any) with respect to any such Indebtedness, or (2) the
occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto,
or any other event or condition shall occur or condition exist,
the effect of which default or other event or condition is to
cause, or permit, the holder or holders of such Indebtedness (or
trustee or agent on behalf of such holders) to cause (determined
without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its
stated maturity; or (B) any such Indebtedness shall be declared
due and payable, or required to be prepaid other
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than by a regularly scheduled required prepayment, prior to the
stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$10,000,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition could have a Material Adverse Effect: (i) any
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, shall exist
with respect to any Plan, or any lien shall arise on the assets of any
Consolidated Party or any ERISA Affiliate in favor of the PBGC or a
Plan; (ii) an ERISA Event shall occur with respect to a Single Employer
Plan, which is, in the reasonable opinion of the Agent, likely to result
in the termination of such Plan for purposes of Title IV of ERISA; (iii)
an ERISA Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Agent, likely to result in (A) the termination of such Plan for purposes
of Title IV of ERISA, or (B) any Consolidated Party or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan;
or (iv) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
shall occur which may subject any Consolidated Party or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability; or
(j) Defaults under Permitted Customer Financing Transactions.
During any fiscal year of the Borrower, the aggregate amount of payment
defaults occurring with respect to principal and interest payments owed
to the Consolidated Parties pursuant to Permitted Customer Financing
Transactions (including extensions of credit pursuant to the Conxus
Credit Agreement) shall exceed $15,000,000.
(k) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures
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in Section 11.6), the Agent shall, upon the request and direction of the
Required Lenders, by written notice to the Credit Parties take any of the
following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness
or obligations of any and every kind owing by the Borrower to the Agent
and/or any of the Lenders hereunder to be due whereupon the same shall
be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower.
(c) Cash Collateral. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default under Section 9.1(f), it will immediately pay) to the
Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding
Letters of Credit in an amount equal to the maximum aggregate amount
which may be drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all rights
and remedies available at law or in equity.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable without
the giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the Agent to act
as its agent under this Credit Agreement and the other Credit Documents with
such powers and discretion as are specifically delegated to the Agent by the
terms of this Credit Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto. The Agent (which term as
used in this sentence and in Section 10.5 and the first sentence of Section 10.6
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hereof shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless 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 any such action.
10.3 Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice of the occurrence of a Default or
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Event of Default, the Agent shall give prompt notice thereof to the Lenders.
The Agent shall (subject to Section 10.2 hereof) take such action with respect
to such Default or Event of Default as shall reasonably be directed by the
Required Lenders, provided that, unless and until the Agent shall have received
such directions, the 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 interest of the Lenders.
10.4 Rights as a Lender.
With respect to its Commitment and the Loans made by it, NationsBank
(and any successor acting as Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including attorneys'
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document; provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any costs or expenses payable by the Borrower under Section 11.5, to
the extent that the Agent is not promptly reimbursed for such costs and expenses
by the Borrower. The agreements in this Section 10.5 shall survive the repayment
of the Loans, LOC Obligations and other obligations under the Credit Documents
and the termination of the Commitments hereunder.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Credit Parties and
their Subsidiaries and decision to enter into this
80
Credit Agreement and that it will, independently and without reliance upon the
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 analysis and
decisions in taking or not taking action under the Credit Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Credit Party or any of its Subsidiaries or Affiliates that may come into the
possession of the Agent or any of its Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Agent with the prior written consent of the
Borrower (such consent not to be unreasonably withheld). If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may with the prior written
consent of the Borrower (such consent not to be unreasonably withheld), on
behalf of the Lenders, appoint a successor Agent which shall be a commercial
bank organized under the laws of the United States of America having combined
capital and surplus of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor shall thereupon
succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 10 shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
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if to the Borrower or the Guarantors:
Glenayre Electronics, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Treasury Department
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
Glenayre Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Agent:
NationsBank, N. A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Agency Services/▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank, N. A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any
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and all of the obligations of such Person now or hereafter existing under this
Credit Agreement, under the Notes, under any other Credit Document or otherwise,
irrespective of whether such Lender shall have made any demand under hereunder
or thereunder and although such obligations may be unmatured. Each Lender agrees
promptly to notify any affected Credit Party after any such set-off and
application made by such Lender. The rights of each Lender under this Section
11.2 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto; provided that none of the Credit Parties may
assign or transfer any of its interests and obligations without prior
written consent of the Lenders; provided further that the rights of each
Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section
11.3.
(b) Each Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its
Notes, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender
or an assignment of all of a Lender's rights and obligations
under this Credit Agreement, any such partial assignment shall be
in an amount at least equal to $5,000,000 (or, if less, the
remaining amount of the Commitment being assigned by such Lender)
or an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit 11.3(b) hereto, together with
any Note subject to such assignment and a processing fee of
$3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of
a Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Agent and the
Borrower shall make appropriate
83
arrangements so that, if required, new Notes are issued to the assignor
and the assignee. If the assignee is not incorporated under the laws of
the United States of America or a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11. The Credit Parties
shall not be liable for any fees or expenses of the Agent, any Lender or
any Eligible Assignee incurred in connection with such assignment.
(c) The Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrower or any Lender
at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment
and payment of the processing fee, the Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of
Exhibit 11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations
under this Credit Agreement (including all or a portion of its
Commitment and its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive, and the right of set-off contained
in Section 11.2, and (iv) the Borrower shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Borrower relating to
its Loans and its Notes and to approve any amendment, modification, or
waiver of any provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the
rate at which interest is payable on such Loans or Notes, extending any
scheduled principal payment date or date fixed for the payment of
interest on such Loans or Notes, or extending its Commitment). The
Credit Parties shall not be liable for any fees or expenses of the
Agent, any Lender or any Eligible Assignee incurred in connection with
such assignment.
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(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder. The Credit Parties
shall not be liable for any fees or expenses of the Agent, any Lender or
any Eligible Assignee incurred in connection with such assignment.
(g) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 11.14 hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Borrower or any other Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
modification, and amendment of this Credit Agreement, the other Credit
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Borrower further agrees to pay
on demand all costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses and the
cost of internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and the
other documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses,
85
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any litigation, or
proceeding or preparation of defense in connection therewith) the Credit
Documents, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Loans, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 11.5
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Credit Parties and the Lenders,
including the Agent, agree not to assert any claim against the other, any of
such other's Affiliates, or any of such other's respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower and the
Lenders contained in this Section 11.5 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower; provided, however, that:
(a) the consent of each Lender affected thereby is required to
(i) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees
hereunder,
(iii) reduce or waive the principal amount of any Loan or of
any reimbursement obligation, or any portion thereof, arising
from drawings under Letters of Credit,
86
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver
of any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, release the Borrower or substantially all of
the other Credit Parties from its or their obligations under the
Credit Documents,
(vi) except, amend, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(vii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(viii) consent to the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby;
(b) without the consent of the Agent, no provision of Section 10
may be amended;
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled
to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions
of Section 1126(c) of the Bankruptcy Code supersedes the unanimous
consent provisions set forth herein and (y) the Required Lenders may
consent to allow a Credit Party to use cash collateral in the context of
a bankruptcy or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
87
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA WITHOUT REFERENCE TO THE CONFLICT OR CHOICE
OF LAW PRINCIPLES THEREOF. Any legal action or proceeding with respect
to this Credit Agreement or any other Credit Document may be brought in
the courts of the State of North Carolina in Mecklenburg County, or of
the United States for the Western District of North Carolina, and, by
execution and delivery of this Credit Agreement, each of the Credit
Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction
of such courts. Each of the Credit Parties further irrevocably consents
to the service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 11.1, such service to become effective three
(3) Business Days after such mailing. Nothing herein shall affect the
right of the Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
88
been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on
or after the Closing Date when it shall have been executed by the Credit
Parties and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding
upon and inure to the benefit of the Credit Parties, the Agent and each
Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans,
LOC Obligations or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding, all of the Credit Party Obligations have
been irrevocably satisfied in full and all of the Commitments hereunder
shall have expired or been terminated.
11.14 Confidentiality.
The Agent and each Lender (each, a "Lending Party") agree to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is (i) marked confidential or (ii)
otherwise identified as confidential at the time of disclosure and confirmed as
confidential in a writing delivered by the Borrower to the applicable Lending
Parties within ten Business Days following the disclosure of such information;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other
89
Lending Party or any Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of any Lending
Party, (b) to any other Person if reasonably incidental to the administration of
the credit facility provided herein, provided that such Person agrees to be
bound by confidentiality obligations which are no less protective as those
contained herein, (c) as required by any law, rule, regulation or judicial
decree (d) upon the order of any court or administrative agency, (e) upon the
request or demand of any regulatory agency or authority, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party prohibited by this
Credit Agreement, (g) in connection with any litigation that is related to the
transactions contemplated hereby to which such Lending Party or any of its
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
and (i) subject to written provisions substantially similar to those contained
in this Section 11.14, to any actual or proposed participant or assignee.
11.15 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.16 Limitation on Attorneys' Fees.
Notwithstanding anything to the contrary herein or in any other Credit
Document, attorneys' fees due in connection with the Credit Documents shall be
reasonable and calculated without regard to any statutory presumption and
determined based on the standard hourly rates of the attorneys and paralegals
performing the work.
[Signature Pages to Follow]
90
Credit Agreement - Glenayre Electronics, Inc.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: Glenayre electronics, Inc.
a Colorado corporation
By: ________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Chief Operating Officer
GUARANTORS: GLENAYRE TECHNOLOGIES, INC.
a Delaware corporation
By:________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Chief Operating Officer
WESTERN MULTIPLEX CORPORATION
a California corporation
By: ________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer and
Treasurer
GLENAYRE OPTIONS CORP.
a Texas corporation
By: ________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Treasurer
OPEN DEVELOPMENT CORPORATION
a Delaware corporation
By: ________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Treasurer
Credit Agreement - Glenayre Electronics, Inc.
WIRELESS ACCESS, INC.
a California corporation
By: ________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer and
Treasurer
GLENAYRE DIGITAL SYSTEMS, INC.
a North Carolina corporation
By: ________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
GLENAYRE ELECTRONICS CAPITAL
CORPORATION
a North Carolina corporation
By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
President and Chief Executive
Officer
GTI ACQUISITION CORP.
a Delaware corporation
By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President and Treasurer
Credit Agreement - Glenayre Electronics, Inc.
LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:______________________________
Name:____________________________
Title:___________________________
Credit Agreement - Glenayre Electronics, Inc.
ABN AMRO BANK N.V.
By:______________________________
Name:____________________________
Title:___________________________
By:______________________________
Name:____________________________
Title:___________________________
Credit Agreement - Glenayre Electronics, Inc.
FIRST UNION NATIONAL BANK
By:_______________________________
Name:______________________________
Title:_____________________________
Schedule 1.1A
INVESTMENTS
CONXUS Convertible Senior Subordinated Notes and Warrants
Investments in Glenayre entities. See Schedule 6.13.
Schedule 1.1B
LIENS
None.
Schedule 2.1(a)
LENDERS
Lender Commitment Percentage Commitment
--------- --------------------- -------------
NationsBank, N.A. 40% $20,000,000.00
First Union National Bank 30% $15,000,000.00
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇-▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
ABN Amro Bank N.V. 30% $15,000,000.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Total 100% $50,000,000.00
Schedule 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
The Credit Agreement will be filed with the Securities and Exchange Commission.
Schedule 6.9
LITIGATION
As of 10-30-98
Case Name Parties Description
------------------------------ ---------------------------- -----------------------------------
Access Global et al v. Open Plaintiffs: Access Global Breach of contract, fraud &
Development Corporation Telecom, Inc. And Sunnet negligent misrepresentation claim
et al. Telecom, Inc. brought by plaintiffs who allege
Superior Court, Middlesex a switching/ database platform
County, (Massachusetts) Defendants: Open they purchased from ODC failed to
No. 97-3834 Development Corp., ▇▇▇▇▇▇▇ perform functions critical to
▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ their business.
[Complaint Filed 8/1/97 -
dismissed 11/4/97] ODC denies the allegations and
asserts plaintiff's outdated and
[Arbitration Demand Filed poorly maintained equipment was
5/22/98] the primary cause of any problems
experienced.
It is anticipated arbitration
will be scheduled for May 1999.
------------------------------ ---------------------------- -----------------------------------
In Re Glenayre Plaintiffs: LLM (a Securities class action lawsuit
Technologies, Inc., partnership) and ▇▇▇▇▇ alleging violations of Sections 10(b)
Securities Litigation Kwalbrun, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and 20(a) of the Securities Exchange
US District Court, Southern and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Act of 1934 and Rule ▇▇▇-▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, (NY) (individuals), on behalf of promulgated by the SEC. Plaintiffs
▇▇ ▇▇▇. ▇▇▇▇ (▇▇) themselves and all similarly contend that between 2/6/96 and
situated. 9/13/96 defendants sold Glenayre
stock while in possession of material,
[2nd Amended Complaint filed adverse, non-public information about
12/19/97] Defendants: Glenayre Glenayre (such as the pending FCC
Technologies, Inc., ▇▇▇▇▇ license freeze and its impact on
▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. Glenayre) and while under a duty
▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to disclose such information or
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, abstain from trading.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. The defendants filed a motion to
▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, dismiss this lawsuit on January
▇▇▇▇▇▇ ▇. Israel, ▇▇▇▇▇▇ 23, 1998 and are awaiting the
▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. Judge's decision on that motion.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
and A.C. Israel
Enterprises.
------------------------------ ---------------------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇ v. ▇▇▇▇▇▇▇ ▇. Plaintiff: ▇▇▇▇▇ ▇▇▇▇ "Derivative" action brought by
▇▇▇▇▇▇▇▇▇, et. al. and plaintiff Krim as a companion
Glenayre Technologies, Inc., Defendants: "▇▇▇▇▇▇▇" suit to the securities class
U.S. District Court Southern (▇▇▇▇▇) ▇. ▇▇▇▇▇▇▇▇▇ action claim. The complaint
District of New York, (NY) (sic), ▇▇▇▇▇ ▇. ▇▇▇▇, seeks declaratory relief and
96 Civ. 1163 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, damages resulting from alleged
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ breaches of trust and fiduciary
[Filed 2/20/97] ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. duty owed by the named defendants
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ to Glenayre and its shareholders.
and ▇▇▇▇▇▇ ▇. Israel Plaintiff contends breaches subjected
(defendants) and Glenayre Glenayre to the securities class
Technologies, Inc. action litigation.
(nominal defendant).
This action has been stayed
pending the Judge's decision on
the motion to dismiss the
securities class action lawsuit.
------------------------------ ---------------------------- -----------------------------------
------------------------------ ---------------------------- -----------------------------------
Mountain ▇▇▇▇▇▇▇ Plaintiff: Mountain Negligence, breach of implied and
Patio/Terrace Maintenance ▇▇▇▇▇▇▇ Patio/Terrace express warranties, negligent
Association, v. Nu-West, Maintenance Association. misrepresentations & strict
Inc. et al. liability claim brought by a
U.S. District Court, Central Defendants: Mountain homeowners association in Pomona,
District of California, ▇▇▇▇▇▇▇ I, Nu-West, Inc., California known as "Mountain
(Cal.) Mountain ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇" in connection with the
No. 93-7450 Development Co., Inc., design and construction of a
Western Savings and Loan development. The complaint
[Filed 6/19/93] Association, Western alleges Nu-West (GEI) is/was a
Property Service general partner of Mountain
Corporation, and DOES 1 ▇▇▇▇▇▇▇.
through 500 inclusive
GEI has never been served with
the complaint. As Plaintiff has
already settled with most of the
co-defendants, it is anticipated
the court may ▇▇▇▇ the entire
matter dismissed within the next
few months.
------------------------------ ---------------------------- -----------------------------------
See also Schedule 6.17.
Schedule 6.12
ERISA
The Plans of Western Multiplex Corporation and Glenayre OPTIONS Corp.
(fka CNET, Inc.) have previously been merged into the Plans maintained by
Glenayre Technologies, Inc. or Glenayre Electronics, Inc. The Plans of
Wireless Access, Inc. and Open Development Corporation either have been or
will be merged into the Plans maintained by Glenayre Technologies, Inc. or
Glenayre Electronics, Inc.
Schedule 6.13
SUBSIDIARIES
Glenayre Technologies, Inc. (Delaware)
Glenayre Electronics, Inc. (Colorado) -100%
Glenayre Administracion, S.A. de C.V. (Mexico) - 100%
Glenayre de Mexico S.A. de C.V. (Mexico) - 100%
Glenayre Electronics South America Ltda (Brazil) - 100%
Glenayre Digital Systems, Inc. (North Carolina) - 100%
Glenayre Electronics Capital Corporation (North Carolina) - 100%
Glenayre Electronics (UK) Ltd. (England) - 100%
Glenayre Electronics (Korea) Limited (Korea) - 100%
Glenayre Electronics Europe b.v. (Netherlands) - 100%
Glenayre Electronics Middle East LLC (Dubai, UAE) - 49%
Glenayre Electronics (Proprietary) Limited (South Africa) - 100%
Glenayre Electronics Singapore PTE Ltd. (Singapore) - 100%
Glenayre Electronics Philippines Inc. (Philippines) - 100%
Glenayre (India) Private Ltd. (India) - 100%
Nihon Glenayre Electronics K.K. (Japan) - 100%
Glenayre Electronics (Hong Kong) Ltd. (Hong Kong) - 100%
Glenayre Electronics Export Sales Corporation (Barbados) - 100%
GTI Acquisition Corp. (Delaware) - 100%
Western Multiplex Corporation (California) - 100%
Western Multiplex International Sales Corporation
(California) - inactive
Wireless Access, Inc. (California) - 100%
Wireless Access, Inc. (Delaware) - inactive
Open Development Corporation (Delaware) - 100%
Glenayre Services Ltd. (Canada) - 100%
Glenayre OPTIONS Corp. (Texas) - 100%
CNET GmbH (Germany) - 100%
Glenayre R & D Inc. (Canada) - 100%
Glenayre Manufacturing Ltd. (Canada) - 100%
Sunway Financial Services, Inc. - inactive
Sunway Management, Inc. - inactive
CERTAIN RIGHTS IN CAPITAL STOCK
Certain conversion and redemption rights that Glenayre Electronics, Inc. has as
a shareholder in certain of the Foreign Subsidiaries, including rights as the
owner of preferred shares.
Stock which has been and will be issued from time to time pursuant to stock
option plans (including employee stock purchase plan) maintained as of the
Closing Date by Glenayre Technologies, Inc.
Schedule 6.16
ENVIRONMENTAL DISCLOSURES
None.
Schedule 6.17
INTELLECTUAL PROPERTY CLAIMS AGAINST
GLENAYRE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
October 30, 1998
COJK Parties Description
File No.
------------- -------------------------------- -----------------------------------
5-14032 Open Development Corporation Open Development Corporation
and First Data Resources Inc. ("ODC") has been approached by at
least one of its customers
regarding the possibility that
ODC's product(s) may infringe one
or more of 44 U.S. patents
listing ▇▇▇▇▇▇ ▇. ▇▇▇▇ as
inventor (the "▇▇▇▇ patents").
5-14990 Freedom Wireless, Inc. v. Open Freedom Wireless has claimed
Development Corporation infringement of and has offered
to license ODC under
U.S.P. 5,722,067 (the "Fougnies
patent") relating to the
provision of prepaid cellular
services.
5-14344 Lemelson Foundation Limited Lemelson has notified Glenayre of
Partnership v. Glenayre infringement of numerous U.S.
Technologies, Inc. patents relating to various
manufacturing methods and
systems, including automatic
identification operations such as
bar code identification,
electronic assembly operations,
integrated circuit manufacturing
operations, and flexible
manufacturing systems, and has
offered a license thereunder.
7-10056 Glenayre OPTIONS Corp. Claims by both Glenayre and US
(formerly Cnet) v. US WEST New WEST for breach of a Software
Vector Group, Inc. Purchase and License Agreement
dated 1/31/95 and relating to the
BOS and WINGS products.
File No. Current Status
------------ -------------------------------------------------------------
5-14032 COJK is conducting an in depth validity and infringement
investigation of the ▇▇▇▇ patents, pertaining to the ODC,
MVP and GL3000 platforms. A number of the patents are of
interest with respect to the noted products.
5-14990 COJK's preliminary infringement investigation indicates
that the Fougnies patent is of interest with respect to the
ODC and MVP platforms. Further investigations are being
conducted.
5-14344 COJK has completed a preliminary infringement review of the
Lemelson patents, and has determined that some of the
patents are of interest with respect to Glenayre's
manufacturing methods and systems, primarily by reason of
Glenayre's use of machines manufactured and sold to
Glenayre by others. Glenayre has notified its vendors of
these machines of the claims, and requested indemnification
therefrom. COJK has had one negotiation meeting with the
attorneys for Lemelson to determine the license terms
available. Glenayre's exposure under the proposed license
terms is currently being determined by Glenayre and COJK.
7-10056 The parties are discussing a settlement proposal for
termination of the Agreement.
Schedule 8.1
INDEBTEDNESS
A letter of credit issued by a Consolidated Party in the amount of 50,000
Canadian dollars with the Royal Bank of Canada for the City of Vancouver to
build a turning lane after the new Vancouver building is completed.
Standby letters of credit issued by a Consolidated Party from time to time in
the ordinary course of business of the Consolidated Parties.
Preferred Capital Stock owned in various Foreign Subsidiaries by a Credit Party.
Exhibit 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Lenders
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Independence Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, GLENAYRE ELECTRONICS, INC. (the "Borrower"), refers to
the Credit Agreement dated as of October 30, 1998 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the Guarantors, the Lenders and NationsBank, N. A., as Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice pursuant to Section 2.1 of the Credit Agreement that it requests a
Loan advance under the Credit Agreement, and in connection therewith sets forth
below the terms on which such Loan advance is requested to be made:
(A) Date of Borrowing (which is a Business Day) ______________________
(B) Principal Amount of Borrowing ______________________
(C) Interest rate basis ______________________
(D) Interest Period and the last day thereof ______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
Glenayre electronics, Inc.
By:________________________
Name:______________________
Title:_____________________
Exhibit 2.1(e)
FORM OF REVOLVING NOTE
$_________________ October 30, 1998
FOR VALUE RECEIVED, GLENAYRE ELECTRONICS, INC., a Colorado corporation
(the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ Center, NC1-001-15-04, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such
other place or places as the holder hereof may designate), at the times set
forth in the 364-Day Credit Agreement dated as of the date hereof among the
Borrower, the Guarantors, the Lenders and the Agent (as it may be amended,
modified, extended or restated from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date, in
Dollars and in immediately available funds, the principal amount of
________________________ DOLLARS ($____________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Loans made by the Lender to
the Borrower pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rates selected in accordance with Section 2.1(d) of the
Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section 3.1
of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender pursuant to the Credit
Agreement shall become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees limited as set
forth in the Credit Agreement.
This Note and the Loans evidenced hereby may be transferred in whole or
in part only by registration of such transfer on the Register maintained by or
on behalf of the Borrower as provided in Section 11.3(c) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
GLENAYRE ELECTRONICS, INC.
By:_______________________
Name:_____________________
Title:____________________
Exhibit 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Lenders
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
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Attention: Agency Services
Ladies and Gentlemen:
The undersigned, GLENAYRE ELECTRONICS, INC. (the "Borrower"), refers to
the Credit Agreement dated as of October 30, 1998 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the Guarantors, the Lenders and NationsBank, N. A., as Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice pursuant to Section 3.2 of the Credit Agreement that it requests an
extension or conversion of a Loan outstanding under the Credit Agreement, and in
connection therewith sets forth below the terms on which such extension or
conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(B) Principal Amount of Extension or Conversion _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
GLENAYRE ELECTRONICS, INC.
By:______________________
Name:____________________
Title:___________________
Exhibit 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of GLENAYRE ELECTRONICS, INC. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of October 30, 1998 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the other Credit Parties party thereto,
the Lenders party thereto and NationsBank, N. A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and
have been prepared in accordance with GAAP applied on a
consistent basis, subject to changes resulting from normal
year-end audit adjustments; and
b. Since ___________ (the date of the last similar certification,
or, if none, the Closing Date) no Default or Event of Default has
occurred and is continuing under the Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
Glenayre electronics, Inc.
By:_____________________
Name:___________________
Title:__________________
Attachment to Officer's Certificate
Computation of Financial Covenants
Exhibit 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
19__, is by and between _____________________, a ___________________ (the
"Domestic Subsidiary"), and NATIONSBANK, N. A., in its capacity as Agent under
that certain Credit Agreement (as it may be amended, modified, extended or
restated from time to time, the "Credit Agreement"), dated as of October 30,
1998, by and among Glenayre electronics, Inc., a Colorado corporation (the
"Borrower"), the other Credit Parties party thereto, the Lenders party thereto
and NationsBank, N. A., as Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.
The Domestic Subsidiary is an Additional Credit Party, and,
consequently, the Credit Parties are required by Section 7.12 of the Credit
Agreement to cause the Domestic Subsidiary to become a "Guarantor".
Accordingly, the Domestic Subsidiary hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Domestic Subsidiary hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Domestic Subsidiary will be deemed
to be a party to the Credit Agreement and a "Guarantor" for all purposes of the
Credit Agreement, and shall have all of the obligations of a Guarantor
thereunder as if it had executed the Credit Agreement. The Domestic Subsidiary
hereby ratifies, as of the date hereof, and agrees to be bound by, all of the
terms, provisions and conditions applicable to the Guarantors contained in the
Credit Agreement. Without limiting the generality of the foregoing terms of this
paragraph 1, the Domestic Subsidiary hereby jointly and severally together with
the other Guarantors, guarantees to each Lender and the Agent, as provided in
Section 4 of the Credit Agreement, the prompt payment and performance of the
Credit Party Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise) strictly in accordance with
the terms thereof.
2. The address of the Domestic Subsidiary for purposes of all notices
and other communications is ____________________, ____________________________,
Attention of ______________ (Facsimile No. ____________).
3. The Domestic Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the Domestic Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Domestic Subsidiary.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina without reference to the
conflicts or choice of law principles thereof.
IN WITNESS WHEREOF, the Domestic Subsidiary has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
[DOMESTIC SUBSIDIARY]
By:_______________________
Name:_____________________
Title:____________________
Acknowledged and accepted:
NATIONSBANK, N. A., as Agent
By:_______________________
Name:_____________________
Title:____________________
Exhibit 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October 30, 1998,
as amended and modified from time to time thereafter (the "Credit Agreement")
among GLENAYRE ELECTRONICS, INC., the other Credit Parties party thereto, the
Lenders party thereto and NationsBank, N. A., as Agent. Terms defined in the
Credit Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Credit Documents. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the Loans owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) 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 Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Agent exchange such Notes for new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment retained by the
Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 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; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor 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; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) 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 (ii) 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.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of North Carolina without regard to the
conflicts or choice of law principles thereof.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By: _____________________________
Name: ___________________________
Title: __________________________
_____________________, as Assignee
By: ______________________________
Name: ____________________________
Title: ___________________________
Notice address of Assignee:
[Assignee]
==========================
Attn: _____________________
Telephone: (___) ________
Telecopy: (___) ________
CONSENTED TO:
NATIONSBANK, N. A., *
as Agent
By:___________________________
Name:_________________________
Title:________________________
Glenayre ELECTRONICS, Inc.*
By:___________________________
Name:_________________________
Title:________________________
--------
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment* :
(e) Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(f) Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(g) Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(h) Committed Amount as of Effective Date $_____________
(i) Dollar Amount of Assignor's Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (g)) $_____________
(j) Dollar Amount of Assignee's Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (f)) $_____________
--------
* This date should be no earlier than five Business Days after delivery of this
Assignment and Acceptance to the Agent.