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EXHIBIT 10.23
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CALIFORNIA MICROWAVE, INC.
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CREDIT AGREEMENT
Dated as of November 2, 1998
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UNION BANK OF CALIFORNIA, N.A.
Agent and Issuing Bank
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS........................................................................1
SECTION 1.01 Certain Defined Terms..............................................1
SECTION 1.02 Accounting Principles.............................................17
(a) Accounting Terms..................................................17
(b) GAAP Changes......................................................17
(c) "Fiscal Year" and "Fiscal Quarter"................................17
SECTION 1.03 Interpretation....................................................17
ARTICLE II THE LOANS........................................................................18
SECTION 2.01 The Loans.........................................................18
SECTION 2.02 Borrowing Procedure...............................................18
(a) Notice to the Agent...............................................18
(b) Notice to the Banks...............................................19
SECTION 2.03 Non-Receipt of Funds..............................................19
SECTION 2.04 Lending Offices...................................................19
SECTION 2.05 Evidence of Indebtedness..........................................20
SECTION 2.06 Minimum Amounts...................................................20
SECTION 2.07 Required Notice...................................................20
ARTICLE III THE LETTERS OF CREDIT...........................................................20
SECTION 3.01 The Letter of Credit Subfacility..................................20
(a) Letters of Credit.................................................20
(b) Conditions to Issuance............................................21
SECTION 3.02 Issuance, Amendment and Renewal of Letters of Credit..............22
(a) Notice to Issuing Bank of Issuance Request........................22
(b) Issuance of Letters of Credit.....................................22
(c) Notice to Issuing Bank of Amendment Request.......................22
(d) Notice to Issuing Bank of Renewal Request.........................23
(e) Expiry of Letters of Credit.......................................23
(f) Conflicts with L/C-Related Documents..............................23
(g) Delivery of Copies of Letters of Credit...........................23
(h) Notices to Banks..................................................23
SECTION 3.03 Existing Letters of Credit, Participations, Drawings and
Reimbursements....................................................24
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(a) Existing Letters of Credit........................................24
(b) Participations of Banks in Additional Letters of Credit...........24
(c) Drawing and Reimbursement.........................................24
(d) Funding by Banks..................................................24
(e) L/C Unreimbursed Drawings.........................................25
(f) Obligation of Banks Absolute......................................25
SECTION 3.04 Repayment of Participations.......................................25
SECTION 3.05 Role of the Issuing Bank..........................................26
(a) No Responsibility of Issuing Bank.................................26
(b) No Liability of Agent/IB-Related Persons..........................26
SECTION 3.06 Obligations of Borrower Absolute..................................26
SECTION 3.07 Cash Collateral Pledge............................................27
SECTION 3.08 Letter of Credit Fees.............................................28
(a) Certain Letter of Credit Fees.....................................28
(b) Certain Additional Fees and Charges...............................28
(c) Fees Nonrefundable................................................28
SECTION 3.09 Uniform Customs and Practice......................................28
ARTICLE IV INTEREST AND FEES; CONVERSION OR CONTINUATION....................................29
SECTION 4.01 Interest..........................................................29
(a) Interest Rate.....................................................29
(b) Interest Periods for Eurodollar Loans.............................29
(c) Interest Payment Dates............................................29
(d) Notice to the Borrower and the Banks..............................30
SECTION 4.02 Default Rate of Interest..........................................30
SECTION 4.03 Fees..............................................................30
(a) Commitment Fee....................................................30
(b) Other Fees........................................................30
(c) Fees Nonrefundable................................................30
SECTION 4.04 Computations......................................................30
SECTION 4.05 Conversion or Continuation........................................31
(a) Election..........................................................31
(b) Automatic Conversion..............................................31
(c) Notice to the Agent...............................................31
(d) Notice to the Banks...............................................31
SECTION 4.06 Replacement of Reference Banks....................................32
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SECTION 4.07 Highest Lawful Rate...............................................32
ARTICLE V REDUCTION OF COMMITMENTS; REPAYMENT; PREPAYMENT...................................32
SECTION 5.01 Reduction or Termination of the Commitments.......................32
(a) Optional Reduction or Termination.................................32
(b) Mandatory Termination.............................................32
SECTION 5.02 Repayment of the Loans............................................33
SECTION 5.03 Prepayments.......................................................33
(a) Optional Prepayments..............................................33
(b) Mandatory Prepayments.............................................33
(c) Notice; Application...............................................33
ARTICLE VI YIELD PROTECTION AND ILLEGALITY..................................................33
SECTION 6.01 Inability to Determine Rates......................................33
SECTION 6.02 Funding Losses....................................................34
SECTION 6.03 Regulatory Changes................................................34
(a) Increased Costs...................................................34
(b) Capital Requirements..............................................35
(c) Requests..........................................................35
SECTION 6.04 Illegality........................................................35
SECTION 6.05 Funding Assumptions...............................................35
SECTION 6.06 Obligation to Mitigate............................................35
ARTICLE VII PAYMENTS........................................................................36
SECTION 7.01 Pro Rata Treatment................................................36
SECTION 7.02 Payments..........................................................36
(a) Payments..........................................................36
(b) Authorization to Agent............................................36
(c) Authorization to Banks............................................36
(d) Application.......................................................37
(e) Extension.........................................................37
SECTION 7.03 Taxes.............................................................37
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(a) No Reduction of Payments..........................................37
(b) Deduction or Withholding; Tax Receipts............................37
(c) Indemnity.........................................................38
(d) Lender Representations............................................38
(e) Form 1001 and 4224................................................38
(f) Bank's Indemnity..................................................38
(g) Mitigation........................................................39
SECTION 7.04 Non-Receipt of Funds..............................................39
SECTION 7.05 Sharing of Payments...............................................39
ARTICLE VIII CONDITIONS PRECEDENT...........................................................40
SECTION 8.01 Conditions Precedent to the Initial Credit Extensions.............40
(a) Fees and Expenses.................................................40
(b) Loan Documents....................................................40
(c) Documents and Actions Relating to Collateral......................40
(d) Additional Closing Documents and Actions..........................40
(e) Corporate Documents...............................................41
(f) Legal Opinions....................................................41
SECTION 8.02 Conditions Precedent to All Credit Extensions.....................41
(a) Notice............................................................41
(b) Material Adverse Effect...........................................41
(c) Representations and Warranties; No Default........................42
(d) Perfection of Collateral Documents................................42
(e) Additional Documents..............................................42
(f) Post-Closing Conditions...........................................42
(g) Government Division Disposal......................................42
ARTICLE IX REPRESENTATIONS AND WARRANTIES...................................................42
SECTION 9.01 Representations and Warranties....................................42
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(a) Organization and Powers...........................................43
(b) Authorization; No Conflict........................................43
(c) Binding Obligation................................................43
(d) Consents..........................................................43
(e) No Defaults.......................................................43
(f) Title to Properties; Liens........................................43
(g) Litigation........................................................43
(h) Compliance with Environmental Laws................................44
(i) Governmental Regulation...........................................44
(j) ERISA.............................................................44
(k) Subsidiaries......................................................45
(l) Margin Regulations................................................45
(m) Taxes.............................................................45
(n) Patents and Other Rights..........................................45
(o) Insurance.........................................................45
(p) Financial Statements and Projections..............................45
(q) Liabilities.......................................................46
(r) Labor Disputes, Etc...............................................46
(s) Solvency..........................................................46
(t) Disclosure........................................................46
(u) Collateral Documents..............................................46
ARTICLE X COVENANTS.........................................................................47
SECTION 10.01 Reporting Covenants...............................................47
(a) Financial Statements and Other Reports............................47
(b) Additional Information............................................48
SECTION 10.02 Financial Covenants...............................................49
(a) Leverage Ratio....................................................49
(b) Minimum Consolidated Tangible Net Worth...........................49
(c) Quick Ratio.......................................................50
(d) Fixed Charge Coverage Ratio.......................................50
SECTION 10.03 Additional Affirmative Covenants..................................50
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(a) Preservation of Existence, Etc....................................50
(b) Payment of Obligations............................................50
(c) Maintenance of Insurance..........................................50
(d) Keeping of Records and Books of Account...........................51
(e) Inspection Rights.................................................51
(f) Compliance with Laws, Etc.........................................51
(g) Maintenance of Properties, Etc....................................51
(h) Licenses..........................................................51
(i) Action Under Environmental Laws...................................51
(j) Use of Proceeds...................................................52
(k) Year 2000.........................................................52
(l) Further Assurances and Additional Acts............................52
(m) Post-Closing Actions..............................................52
SECTION 10.04 Negative Covenants................................................53
(a) Indebtedness......................................................53
(b) Liens; Negative Pledges...........................................54
(c) Change in Nature of Business......................................54
(d) Restrictions on Fundamental Changes...............................54
(e) Sales of Assets...................................................54
(f) Loans and Investments.............................................55
(g) Capital Expenditures..............................................56
(h) Sales and Leasebacks..............................................56
(i) Distributions.....................................................57
(j) Amendments of Certain Documents...................................57
(k) Redemption of Subordinated Debt...................................57
(l) Transactions with Related Parties.................................58
(m) Hazardous Substances..............................................58
(n) Accounting Changes................................................58
(o) Additional Subsidiaries...........................................58
(p) Industrial Revenue Bonds..........................................58
ARTICLE XI EVENTS OF DEFAULT................................................................59
SECTION 11.01 Events of Default.................................................59
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(a) Payments..........................................................59
(b) Representations and Warranties....................................59
(c) Failure by Borrower to Perform Certain Covenants..................59
(d) Failure by Borrower to Perform Other Covenants....................59
(e) Insolvency; Voluntary Proceedings.................................59
(f) Involuntary Proceedings...........................................59
(g) Default Under Other Indebtedness..................................59
(h) Judgments.........................................................60
(i) ERISA.............................................................60
(j) Dissolution, Etc..................................................61
(k) Material Adverse Effect...........................................61
(l) Change of Control.................................................61
(m) Subordination Provisions..........................................61
(n) Collateral Documents..............................................61
(o) Permitted Receivable Financings...................................61
(p) Failure to Perform Subsidiary Guaranty............................62
SECTION 11.02 Effect of Event of Default........................................62
SECTION 11.03 Perfection of Collateral..........................................62
SECTION 11.04 Foreign Collateral................................................63
ARTICLE XII THE AGENT.......................................................................63
SECTION 12.01 Authorization and Action..........................................63
SECTION 12.02 Limitation on Liability of Agent; Notices; Closing................64
(a) Limitation on Liability of Agent and Issuing Bank.................64
(b) Notices...........................................................64
(c) Closing and Syndication...........................................65
SECTION 12.03 Agent and Affiliates..............................................65
SECTION 12.04 Notice of Defaults................................................65
SECTION 12.05 Non-Reliance on Agent and Issuing Bank............................65
SECTION 12.06 Indemnification...................................................66
SECTION 12.07 Delegation of Duties..............................................66
SECTION 12.08 Successor Agent...................................................66
SECTION 12.09 Collateral Matters................................................66
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(a) Authorization.....................................................66
(b) Collateral Releases...............................................67
ARTICLE XIII MISCELLANEOUS..................................................................67
SECTION 13.01 Amendments and Waivers............................................67
SECTION 13.02 Notices...........................................................68
(a) Notices...........................................................68
(b) Facsimile and Telephonic Notice...................................69
SECTION 13.03 No Waiver; Cumulative Remedies....................................69
SECTION 13.04 Costs and Expenses; Indemnification...............................69
(a) Costs and Expenses................................................69
(b) Indemnification...................................................70
(c) Other Charges.....................................................70
SECTION 13.05 Right of Set-Off..................................................70
SECTION 13.06 Survival..........................................................71
SECTION 13.07 Obligations Several...............................................71
SECTION 13.08 Benefits of Agreement.............................................71
SECTION 13.09 Binding Effect; Assignment........................................71
(a) Binding Effect....................................................71
(b) Assignment........................................................71
SECTION 13.10 Governing Law.....................................................73
SECTION 13.11 Submission to Jurisdiction........................................73
(a) Submission to Jurisdiction........................................73
(b) No Limitation.....................................................73
SECTION 13.12 Waiver of Jury Trial..............................................73
SECTION 13.13 Limitation on Liability...........................................74
SECTION 13.14 Confidentiality...................................................74
SECTION 13.15 Entire Agreement..................................................75
SECTION 13.16 Severability......................................................75
SECTION 13.17 Senior Debt.......................................................75
SECTION 13.18 Counterparts......................................................75
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SCHEDULES AND ANNEXES
Annex 1 Pricing Grid
Schedule 1 Commitments and Pro Rata Shares
Schedule 2 Lending Offices; Addresses for Notices
Schedule 3 Existing Letters of Credit
Schedule 4 Existing Indebtedness
Schedule 5 Existing Liens
Schedule 6 Subsidiaries
Schedule 7 Litigation
EXHIBITS
Exhibit A Form of Revolving Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Conversion or Continuation
Exhibit D Form of Compliance Certificate
Exhibit E Form of Security Agreement
Exhibit F Form of Patent and Trademark Security Agreement
Exhibit G Form of Copyright Security Agreement
Exhibit H Form of Pledge Agreement
Exhibit I Form of Subsidiary Guaranty
Exhibit J Form of Opinion of Howard, Rice, Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇
Exhibit K Form of Opinion of Counsel to ABL
Exhibit L Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of November 2,
1998, is made among California Microwave, Inc., a Delaware corporation (the
"Borrower"), the financial institutions listed on the signature pages of this
Agreement under the heading "BANKS" (each a "Bank" and, collectively, the
"Banks"), Union Bank of California, N.A. as letter of credit issuing bank (in
such capacity, the "Issuing Bank"), and Union Bank of California, N.A. as agent
for the Banks hereunder (in such capacity, the "Agent").
The Borrower has requested that the Banks, and the Banks have
agreed to, make a revolving credit facility (including a letter of credit
subfacility) available to the Borrower, upon the terms and subject to the
conditions set forth in this Agreement.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement (including
in the recitals hereof), the following terms shall have the following meanings:
"ABL" means Adaptive Broadband Limited, a corporation
incorporated in England and Wales with company registration number 3552746
(formerly known as Pitcomp 174 Limited).
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (i) the
acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (ii) the acquisition of in excess of 50% of
the capital stock, partnership interests, membership interests or equity of any
Person, of otherwise causing any Person to become a Subsidiary, or (iii) a
merger or consolidation or any other combination with another Person (other than
a Person that is a Subsidiary) provided that the Company or the Subsidiary is
the surviving entity.
"Affiliate" means any Person which, directly or indirectly,
controls, is controlled by or is under common control with another Person. For
purposes of the foregoing, "control," "controlled by" and "under common control
with" with respect to any Person shall mean the possession, directly or
indirectly, of the power (i) to vote 30% or more of the securities having
ordinary voting power of the election of directors of such Person, or (ii) to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"Agent" has the meaning set forth in the introduction to this
Agreement.
"Agent/IB-Related Persons" means UBOC as Agent and Issuing Bank,
any successor Agent arising under Section 12.08, together with their respective
Affiliates, and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
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"Agent's Account" means the account of the Agent set forth on
Schedule 2 or such other account as the Agent from time to time shall designate
in a written notice to the Borrower and the Banks.
"Applicable Commitment Fee Amount" means with respect to the
commitment fee payable hereunder, the amount set forth opposite the indicated
Level below the heading "Commitment Fee" in the pricing grid set forth on Annex
I in accordance with the parameters for calculations of such amount also set
forth on Annex I.
"Applicable L/C Fee Amount" means with respect to the letter of
credit fee payable hereunder, the amount set forth opposite the indicated level
below the heading "L/C Fee" in the pricing grid set forth on Annex I in
accordance with the parameters for calculation of such amount also set forth on
Annex I.
"Applicable Margin" means (i) with respect to Reference Rate
Loans the amount set forth opposite the indicated level below the heading
"Reference Rate Loan Spread" in the pricing grid set forth on Annex I and (ii)
with respect to Eurodollar Rate Loans, the amount set forth opposite the
indicated level below the heading "Eurodollar Rate Loan Spread" in the pricing
grid set forth on Annex I; in each case in accordance with the parameters for
calculations of such amount also set forth on Annex I.
"Assignment and Acceptance" has the meaning set forth in Section
12.02.
"BABC Letter of Credit" means the Letter of Credit issued
pursuant to Section 3.03(a).
"Banks" has the meaning specified in the introductory clause
hereto. References to the Banks shall include references to UBOC in its capacity
as the Issuing Bank; for purposes of clarification only, to the extent that UBOC
may have any rights or obligations in addition to those of the Banks due to its
status as the Issuing Bank, its status as such will be specifically referenced.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy."
"Borrower" has the meaning set forth in the introductory
paragraph to this Agreement.
"Borrower's Account" means the account of the Borrower set forth
on Schedule 2, or such other account as the Borrower from time to time shall
designate in a written notice to the Agent.
"Borrowing" means a borrowing consisting of simultaneous
Revolving Loans made at any one time by the Borrower from the Banks, pursuant to
Article II or Article III.
"Business Day" means a day (i) other than Saturday or Sunday, and
(ii) on which commercial banks are open for business in New York, New York, and
San Francisco, California.
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"Capital Lease" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP, would, at the
time a determination is made, be required to be recorded as a capital lease in
respect of which such Person is liable as lessee.
"Change of Control" means (i) any "person" (as such term is used
in subsections 13(d) and 14(d) of the Securities Exchange Act of 1934) or group
of persons on or after the Closing Date, becomes the "beneficial owner" (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
a corporation representing 30% or more of the combined voting power of the
Borrower's then-outstanding voting securities, or (ii) the existing directors of
the Borrower for any reason cease to constitute a majority of the Borrower's
board of directors. "Existing directors" means (x) individuals constituting the
Borrower's board of directors on the Closing Date, and (y) any subsequent
director whose election by the board of directors or nomination for election by
the Borrower's shareholders was approved by a vote of at least two-thirds of the
directors then in office, which directors either were directors on the Closing
Date or whose election or nomination for election was previously so approved.
"Closing Date" means the date on which all conditions precedent
set forth in Section 8.01 are satisfied or waived by UBOC.
"Collateral" means the property described in the Collateral
Documents, and all other property now existing or hereafter acquired which may
at any time be or become subject to a Lien in favor of the Agent or the Banks
pursuant to the Collateral Documents or otherwise, securing the payment and
performance of the Obligations.
"Collateral Documents" means the Security Agreement, the Patent
and Trademark Security Agreement, the Copyright Security Agreement, the
Subsidiary Guaranty, the Pledge Agreement and any other agreement pursuant to
which the Borrower or any other Person provides a Lien on its assets in favor of
the Banks or the Agent for the benefit of the Banks and all financing
statements, fixture filings, patent, trademark and copyright filings,
assignments, acknowledgments and other certificates, filings, documents and
agreements made or delivered pursuant thereto.
"Commitment" means, for each Bank, its Revolving Commitment
(including therein its L/C Commitment).
"Compliance Certificate" means a certificate of a Responsible
Officer of the Borrower, in substantially the form of Exhibit D, with such
changes thereto as the Agent or any Bank may from time to time reasonably
request.
"Consolidated Capital Expenditures" means, for any period, the
amount of gross expenditures incurred by the Borrower and its consolidated
Subsidiaries during such period for fixed assets, real property, plant and
equipment, and renewals, improvements and replacements thereto required to be
included in `capital expenditures', `additions to property, plant or equipment'
or comparable items in the consolidated statement of changes in financial
position of the Borrower and its Subsidiaries in conformity with GAAP, including
insurance proceeds received as the result of damage or destruction of the
property being replaced but excluding
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expenditures relating to Permitted Acquisitions or expenditures to the extent
financed by the incurrence of Indebtedness permitted pursuant to Section 10.04
(a)
"Consolidated Current Liabilities" means, as of any date of
determination, the current liabilities of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Consolidated EBITDA" for any date of determination means
Consolidated Net Income plus Consolidated Interest Expense plus income tax
expense plus depreciation expense, amortization expense and other non-cash
expenses which were deducted in determining Consolidated Net Income, of the
Borrower and its Subsidiaries on a consolidated basis, for the four fiscal
quarter period ending immediately prior to the date of determination, as
determined in accordance with GAAP; provided, that, non-cash expenses included
in Consolidated EBITDA shall not exceed (i) $8,300,000 in the case of the first
fiscal quarter of the 1998/1999 fiscal year of the Borrower and (ii) $8,000,000
in the aggregate in the case of all other fiscal quarters.
"Consolidated Fixed Charges" means, for any date of determination
and without duplication, the sum of (i) Consolidated Interest Expense for the
four fiscal quarters ending immediately prior to such date, plus (ii) scheduled
reductions of the principal of, without duplication, all Indebtedness of
Borrower and its Subsidiaries for the four fiscal quarters following such date
including that portion of rental payments with respect to Capital Leases (which
should be applied as a reduction to the principal of such Capital Leases in
accordance with GAAP), plus (iii) rental expenses incurred by Borrower and its
Subsidiaries, without duplication in respect of Operating Leases for the four
fiscal quarters ending immediately prior to such date, plus (iv) cash
Consolidated Capital Expenditures for the four fiscal quarters ending
immediately prior to such date, plus (v) cash taxes paid by the Borrower and its
Subsidiaries, without duplication, during the four fiscal quarters ending
immediately prior to such date, plus (vi) Earn-Out Payments made during the four
fiscal quarters ending immediately prior to such date; all as determined in
accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, interest
expense (including that attributable to Capital Leases) of the Borrower and its
Subsidiaries on a consolidated basis, including all commissions, discounts and
other fees and charges owed with respect to standby letters of credit, as
determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net income
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period, as determined in accordance with GAAP;
provided, however, that there shall be excluded therefrom the net income of any
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary.
"Consolidated Quick Assets" means, as of any date of
determination, the cash, cash equivalents and accounts receivable due within one
year of the Borrower and its Subsidiaries on a consolidated basis, as determined
in accordance with GAAP; provided that
4.
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there shall be excluded any such assets subject to security interests in favor
of anyone other than the Agent (on behalf of itself and the Banks).
"Consolidated Tangible Net Worth" means, as of any date of
determination, Consolidated Total Assets, minus Consolidated Total Liabilities,
plus (minus) cumulative foreign currency translation adjustments as of such
date; provided, however, that there shall be excluded from Consolidated Total
Assets the following: (i) all assets which would be classified as intangible
assets in accordance with GAAP, including goodwill, organizational expense,
research and development expense, patent applications, patents, trademarks,
trade names, brands, copyrights, trade secrets, customer lists, licenses,
franchises and covenants not to compete; (ii) all unamortized debt discount and
expense; (iii) all receivables from Affiliates or directors, officers or
employees of the Borrower or any Subsidiary; and (iv) any write-up in the book
value of assets resulting from a revaluation thereof subsequent to September 30,
1998.
"Consolidated Total Assets" means, as of any date of
determination, the total assets of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Consolidated Total Liabilities" means, as of any date of
determination, the total liabilities of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"Copyright Security Agreement" means the Copyright Security
Agreement between the Borrower and the Agent, in substantially the form of
Exhibit H.
"Credit Extension" means each of (i) the making of any Revolving
Loans hereunder; (ii) the continuation or conversion of any Loan pursuant to
Section 4.05; (iii) the issuance of any Letters of Credit hereunder; and (iv)
the amendment or renewal of any Letters of Credit hereunder.
"Default" means an Event of Default or an event or condition
which with notice or lapse of time or both would constitute an Event of Default.
"Dollars" and the sign "$" each means lawful money of the United
States.
"Earn-Out Payments" means any payment or other discharge in
respect of the deferred purchase price or other deferred consideration payable
in connection with the acquisition of stock or other ownership interests or the
business of any Person by Borrower or any of its Subsidiaries.
"Effective Amount" means (i) with respect to any Revolving Loans
on any date the aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of Revolving Loans
occurring on such date; and (ii) with respect to any outstanding L/C Obligations
on any date the amount of such L/C Obligations on such date after giving effect
to any issuances, amendments and renewals of Letters of Credit occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of
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Credit or any reductions in the maximum amount available for drawing under
Letters of Credit taking effect on such date.
"Eligible Assignee" means (i) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (ii) a commercial bank organized
under the laws of any other country which is a member of the OECD, or a
political subdivision of any such country, and having a combined capital and
surplus of at least $100,000,000, provided that such bank is acting through a
branch or agency located in the United States and licensed by the United States
or any state thereof; and (iii) a Person that is primarily engaged in the
business of commercial banking and that is (A) a Subsidiary of a Bank, (B) a
Subsidiary of a Person of which a Bank is a Subsidiary, or (C) a Person of which
a Bank is a Subsidiary.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directives, requests, licenses, authorizations
and permits of, and agreements with (including consent decrees), any
Governmental Authorities, in each case relating to or imposing liability or
standards of conduct concerning public health, safety and environmental
protection matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the California Hazardous
Waste Control Law, the California Solid Waste Management, Resource Recovery and
Recycling Act, the California Water Code and the California Health and Safety
Code.
"ERISA" means the Employee Retirement Income Security Act of
1974, including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is under common control with the Borrower within the meaning
of Section 4001(a)(14) of ERISA and Sections 414(b), (c) and (m) of the Internal
Revenue Code.
"Eurodollar Business Day" means a Business Day on which dealings
in Dollar deposits are carried on in the London interbank market.
"Eurodollar Rate" means for each Interest Period for each
Eurodollar Rate Loan the rate per annum (rounded upward, if necessary, to the
nearest 1/100 of 1%) determined by the Agent pursuant to the following formula:
Eurodollar Rate = Interbank Rate
------------------------------------
100% - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Eurodollar Rate Loan" means a Revolving Loan bearing interest
based on the Eurodollar Rate.
6.
17
"Eurodollar Reference Banks" means UBOC, subject to the
provisions of Section 4.06.
"Eurodollar Reserve Percentage" means the maximum reserve
requirement percentage (including any ordinary, supplemental, marginal and
emergency reserves), if any, as determined by the Agent, then applicable under
Regulation D in respect of Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities") of a member bank in the Federal Reserve System with
deposits exceeding $1,000,000,000 (which, at the date of this Agreement, is
zero).
"Event of Default" has the meaning set forth in Section 11.01.
"Event of Loss" means with respect to any asset of the Borrower
or its Subsidiaries any of the following: (i) any loss, destruction or damage of
such asset; (ii) any pending or threatened institution of any proceedings for
the condemnation or seizure of such asset or of any right of eminent domain; or
(iii) any actual condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, of such asset, or confiscation of such asset or
requisition of the use of such asset.
"Existing BABC Credit" means that certain Loan and Security
Agreement dated as of June 30, 1997 between the Borrower, EFData Corporation and
BankAmerica Business Credit (as amended).
"Existing Letters of Credit" means the letters of credit
described in Schedule 3.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Fee Letter" means that certain fee letter dated September 28,
1998 from UBOC to the Borrower (and related summary terms and conditions) and
any fee letter between UBOC and the Borrower relating to and post closing
syndication or sell down of the facility.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%), as determined by the
Agent, equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for any day of determination (or if such day of
determination is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Final Maturity Date" means March 31, 1999.
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.
"Funded Debt" means, as of any date of determination,
Indebtedness of the Borrower and its Subsidiaries, on a consolidated basis.
7.
18
"GAAP" means generally accepted accounting principles in the U.S.
as in effect from time to time.
"Governmental Authority" means any federal, state, local or other
governmental department, commission, board, bureau, agency, central bank, court,
tribunal or other instrumentality or authority, domestic or foreign, exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Government Division" means The Borrower's government business
division (formally known as the Information Systems Division), comprised of
Airborne Systems, Ground Information Systems and Government Communications
Systems.
"Guaranty Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person with respect to
any Indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (ii) to advance or provide funds (A) for the payment or discharge
of any such primary obligation, or (B) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (iv) in connection with any synthetic lease or other similar off
balance sheet lease transaction, or (v) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof.
"Hazardous Substances" means any toxic or hazardous substances,
materials, wastes, contaminants or pollutants, including asbestos, PCBs,
petroleum products and byproducts, and any substances defined or listed as
"hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances" (or similarly identified), regulated under or forming the basis for
liability under any applicable Environmental Law.
"IRS" means the Internal Revenue Service, or any successor
thereto.
"Indebtedness" means, for any Person: (i) all indebtedness or
other obligations of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under Capital Leases; (v) all reimbursement or other obligations
of such Person under or in respect of letters of credit and bankers acceptances,
and all net obligations in respect of Rate Contracts; (vi) all reimbursement or
other obligations of such Person in respect of any bank guaranties, shipside
bonds, surety bonds and similar instruments issued for the account of such
Person or as to which such Person is otherwise liable for reimbursement of
drawings or payments; (vii) all Guaranty Obligations;
8.
19
and (viii) all indebtedness of another Person secured by any Lien upon or in
property owned by the Person for whom Indebtedness is being determined, whether
or not such Person has assumed or become liable for the payment of such
indebtedness of such other Person. For all purposes of this Agreement, the
Indebtedness of any Person shall include all recourse Indebtedness of any
partnership or joint venture or limited liability company in which such Person
is a general partner or a joint venturer or a member.
"Insolvency Proceeding" with respect to any Person, means (i) any
case, action or proceeding before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (ii) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each case undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Industrial Development Bonds" means the Industrial Development
Bonds issued by the Borrower and listed in Schedule 4.
"Interbank Rate" means the rate per annum determined by the
Agent, on the basis of quotations furnished to it by the Eurodollar Reference
Banks, to be the average (rounded upward, if necessary, to the nearest 1/16 of
1%) of the rates at which deposits in Dollars are offered to each of the
Eurodollar Reference Banks by prime banks in the London interbank market, at
approximately 11:00 (London time), three Eurodollar Business Days before the
first day of such Interest Period, in an amount substantially equal to the
proposed Eurodollar Rate Loan to be made, continued or converted by such
Eurodollar Reference Bank and for a period of time comparable to such Interest
Period. If any Eurodollar Reference Bank shall fail to furnish a quotation of
its applicable rate to the Agent, the Interbank Rate for such Interest Period
shall be determined on the basis of the quotations furnished to the Agent by the
other Eurodollar Reference Bank or Reference Banks.
"Interest Payment Date" means a date specified for the payment of
interest pursuant to Section 4.01(c).
"Interest Period" means, with respect to any Eurodollar Rate
Loan, the period determined in accordance with Section 4.01(b) applicable
thereto.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"Issuing Bank" has the meaning set forth in the introductory
paragraph to this Agreement. Each Issuing Bank shall be an Issuing Bank only
with respect to Letters of Credit issued by it.
"L/C Advance" means each Bank's participation in any L/C
Unreimbursed Draw in accordance with its Pro Rata Share.
9.
20
"L/C Amendment Application" means an application form for
amendments of outstanding standby letters of credit as shall at any time be in
use at the Issuing Bank, as the Issuing Bank shall request and as shall be
satisfactory to the Agent.
"L/C Application" means such application form for issuances of
standby letters of credit as shall at any time be in use at the Issuing Bank, as
the Issuing Bank shall request and as shall be satisfactory to the Agent.
"L/C Commitment" means, when used with reference to any Bank at
the time any determination thereof is to be made, the obligation of such Bank to
participate in Letters of Credit issued or outstanding pursuant to Article III
and to make L/C Advances, in an aggregate amount not to exceed on any date the
amount set forth opposite such Bank's name on Schedule 1; provided that each
Bank's L/C Commitment is a part of its Revolving Commitment rather than a
separate, independent commitment.
"L/C Obligations" means at any time the sum of (i) the aggregate
undrawn amount of all Letters of Credit, plus (ii) the amount of all
unreimbursed drawings under all Letters of Credit, including all L/C
Unreimbursed Draws.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document, agreement
and instrument relating to any Letter of Credit, including any of the Issuing
Bank's standard form documents for letter of credit issuances.
"L/C Unreimbursed Draw" means an extension of credit resulting
from a drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans.
"Lending Office" has the meaning set forth in Section 2.04.
"Letters of Credit" means any standby letter of credit issued by
the Issuing Bank pursuant to Article III.
"Lien" means any mortgage, deed of trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien
(statutory or other), or other preferential arrangement (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing or any agreement
to give any security interest).
"Loan" means an extension of credit, in the form of a Revolving
Loan or L/C Advance, by a Bank to the Borrower pursuant to Article II or III.
"Loan Documents" means this Agreement, the Revolving Notes, the
Collateral Documents, the Fee Letter and all other certificates, documents,
agreements and instruments delivered to the Agent, the Issuing Bank and the
Banks under or in connection with this Agreement, and all L/C-Related Documents.
10.
21
"Majority Banks" means at any time Banks holding at least 66-2/3%
of the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks having at least 66-2/3% of the
aggregate Commitments.
"Material Adverse Effect" means any event, matter, condition or
circumstance which (i) has or would reasonably be expected to have a material
adverse effect on the business, properties, results of operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole;
(ii) would materially impair the ability of the Borrower or any other Person to
perform or observe its obligations under or in respect of the Loan Documents, or
(iii) affects the legality, validity, binding effect or enforceability of any of
the Loan Documents or the perfection or priority of any Lien granted to the
Banks or the Agent for the benefit of the Banks under any of the Collateral
Documents.
"Minimum Amount" has the meaning set forth in Section 2.06.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
"Net Cash Proceeds" means when used in respect of any sale of
assets of the Borrower or any Subsidiary, the gross proceeds received by the
Borrower or such Subsidiary from such disposition less all direct costs and
expenses incurred or to be incurred, and all federal, state, local and foreign
taxes assessed or to be assessed, in connection therewith.
"Notice" means a Notice of Borrowing, a Notice of Conversion or
Continuation or a Notice of Prepayment.
"Notice of Borrowing" has the meaning set forth in Section
2.02(a).
"Notice of Conversion or Continuation" has the meaning set forth
in Section 4.05(c).
"Notice of Prepayment" has the meaning set forth in Section
5.03(c).
"Obligations" means the indebtedness, liabilities and other
obligations of the Borrower to the Agent, the Issuing Bank or any Bank under or
in connection with the Loan Documents, including all Loans, all interest accrued
thereon, all fees due under this Agreement and all other amounts payable by the
Borrower to the Agent, the Issuing Bank, or any Bank thereunder or in connection
therewith, whether now or hereafter existing or arising, and whether due or to
become due, absolute or contingent, liquidated or unliquidated, determined or
undetermined.
"OECD" means the Organization for Economic Cooperation and
Development.
"Operating Lease" means, for any Person, any lease of any
property of any kind by that Person as lessee which is not a Capital Lease.
"Patent and Trademark Security Agreement" means the Patent and
Trademark Security Agreement between the Borrower and the Agent, in
substantially the form of Exhibit F.
11.
22
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means any employee pension benefit plan covered by
Title IV of ERISA (other than a Multiemployer Plan) that is maintained for
employees of the Borrower or any ERISA Affiliate or with regard to which the
Borrower or an ERISA Affiliate is a contributing sponsor within the meaning of
Sections 4001(a)(13) or 4069 of ERISA.
"Permitted Acquisition" means an acquisition or investment
permitted pursuant to Section 10.04(f)(iii) completed on or after September 30,
1998.
"Permitted Investments" means any of the following Dollar
denominated investments, maturing within one year from the date of acquisition,
selected by the Borrower:
(i) marketable direct obligations issued or unconditionally
guaranteed by the United States government or issued by any agency thereof and
backed by the full faith and credit of the United States;
(ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof and, at the time of acquisition, having the highest
credit rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's");
(iii) commercial paper or corporate promissory notes bearing at
the time of acquisition the highest credit rating either of S&P or Moody's
issued by United States, Australian, Canadian, European or Japanese bank holding
companies or industrial or financial companies (other than an Affiliate of the
Borrower);
(iv) certificates of deposit issued by and bankers acceptances of
and interest bearing deposits with any Bank, or with any United States,
Australian, Canadian, European or Japanese commercial banks having capital and
surplus of at least $500,000,000 or the equivalent and which issues (or the
parent of which issues) commercial paper or other short term securities bearing
the highest credit rating obtainable from either S&P or ▇▇▇▇▇'▇; and
(v) money market funds organized under the laws of the United
States or any state thereof that invest solely in any of the foregoing
investments permitted under clauses (i), (ii), (iii) and (iv).
"Permitted Liens" means:
(i) Liens in favor of the Banks or the Agent for the benefit of
the Banks to secure the Obligations;
(ii) the existing Liens listed in Schedule 4 or incurred in
connection with the extension, renewal or refinancing of the Indebtedness
secured by such existing Liens, provided that any extension, renewal or
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or
refinanced does not increase;
12.
23
(iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and which are adequately reserved for in accordance with
GAAP;
(iv) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers or employees arising in the ordinary course of
business and securing obligations either not delinquent or being contested in
good faith by appropriate proceedings which are adequately reserved for in
accordance with GAAP and which do not in the aggregate materially impair the use
or value of the property or risk the loss or forfeiture of title thereto;
(v) Liens consisting of deposits or pledges to secure the payment
of worker's compensation, unemployment insurance or other social security
benefits or obligations arising in the ordinary course of business, or to secure
the performance of bids, trade contracts (other than for borrowed money),
Operating Leases, public or statutory obligations, surety or appeal bonds or
other obligations of a like nature incurred in the ordinary course of business
(other than for indebtedness or any Liens arising under ERISA);
(vi) easements, rights of way, servitudes or zoning or building
restrictions and other minor encumbrances on real property and irregularities in
the title to such property which do not in the aggregate materially impair the
use or value of such property or risk the loss or forfeiture of title thereto;
(vii) statutory landlord's Liens under leases to which the
Borrower or any of its Subsidiaries is a party;
(viii) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Borrower in excess of those set forth by regulations promulgated
by the FRB, and (ii) such deposit account is not intended by the Borrower or any
Subsidiary to provide collateral to the depository institution;
(ix) Liens (A) upon or in any property acquired or held by the
Borrower or any of its Subsidiaries to secure the purchase price of such
property or Indebtedness incurred solely for the purpose of financing the
acquisition of such property, or (B) existing on such property at the time of
its acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon; and
(x) Liens granted in connection with a Permitted Receivable
Financing.
"Permitted Receivables Financing" means a sale of accounts
receivable (including sales pursuant to the RZB Agreement); provided that (i)
the aggregate amount of all such account receivables sales shall not exceed
$10,000,000 in any fiscal year, (ii) such accounts receivable shall be foreign
accounts receivable, fully insured or backed by letter of credit acceptable to
the Majority Banks, (iii) the proceeds from the sale of any such accounts
receivable shall be not less than 90% of the face value thereof and (iv) such
sales are either non-recourse to the Borrower or on recourse terms acceptable to
the Agent and Majority Banks.
13.
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"Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or any
other entity of whatever nature or any Governmental Authority.
"Plan" means any employee pension benefit plan as defined in
Section 3(2) of ERISA (including any Multiemployer Plan) and any employee
welfare benefit plan, as defined in Section 3(1) of ERISA (including any plan
providing benefits to former employees or their survivors).
"Pledge Agreement" means the Pledge Agreement between the
Borrower and Agent substantially in the form of Exhibit H.
"Premises" means any and all real property, including all
buildings and improvements now or hereafter located thereon and all
appurtenances thereto, now or hereafter owned, leased, occupied or used by the
Borrower and its Subsidiaries.
"Principal Payment Date" means a day on which the Borrower is
required to make a payment of principal pursuant to Section 5.02.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal) at such time of such Bank's
Commitments divided by the combined Commitments of all Banks (or, if all
Commitments have been terminated, the aggregate principal amount of such Bank's
Loans divided by the aggregate principal amount of the Loans then held by all
Banks). The initial Pro Rata Share of each Bank is set forth opposite such
Bank's name in Schedule 1 under the heading "Pro Rata Share."
"Rate Contracts" means interest rate swaps, caps, floors and
collars, currency swaps, or other similar financial products designed to provide
protection against fluctuations in interest, currency or exchange rates.
"Reference Rate" means for any day the higher of: (i) the rate
announced by UBOC from time to time at its corporate headquarters as its
"Reference Rate". The Reference Rate in an index rate determined by UBOC from
time to time as a means of pricing certain extensions of credit and is neither
directly tied to any external rate of interest or index nor necessarily the
lowest rate of interest charged by Bank at any given time, or (ii) the Federal
Funds Rate, plus 1/2 of 1% per annum. Each change in the interest rate on the
Loans or other Obligations bearing interest at the Reference Rate based on a
change in the Reference Rate shall be effective as of the effective date of such
change in the Reference Rate.
"Reference Rate Loan" means a Revolving Loan or an L/C Advance
bearing interest based on the Reference Rate.
"Regulation D" means Regulation D of the FRB.
"Regulatory Change" has the meaning set forth in Section 6.03.
"Related Person" has the meaning set forth in Section 13.04(b).
14.
25
"Required Notice Date" has the meaning set forth in Section 2.07.
"Responsible Officer" means, with respect to any Person, the
chief executive officer, the president, the chief financial officer or the
treasurer of such Person, or any other senior officer of such Person having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of any such Person, or any other senior officer of such Person
involved principally in the financial administration or controllership function
of such Person and having substantially the same authority and responsibility.
"Revolving Commitment" means, when used with reference to any
Bank at the time any determination thereof is to be made, the amount set forth
opposite the name of such Bank on Schedule 1 or, where the context so requires,
the obligation of such Bank to make Revolving Loans up to such amount on the
terms and conditions set forth in this Agreement.
"Revolving Expiry Date" means March 30, 1999.
"Revolving Loan" has the meaning set forth in Section 2.01.
"Revolving Note" means a Promissory Note of the Borrower payable
to the order of a Bank, in substantially the form of Exhibit A.
"RZB Agreement" means that certain Agreement for the purchase of
Export Receivables dated as of December 23, 1997 between Borrower and RZB
Finance LLC, a Delaware corporation (as amended).
"SEC" means the Securities and Exchange Commission, or any
successor thereto.
"Security Agreement" means the Security Agreement between the
Borrower and the Agent, in substantially the form of Exhibit E.
"Solvent" means, as to any Person at any time, that (i) the fair
value of the property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (ii) the present fair saleable value of the
property 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; (iii) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (iv) 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; and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinated Debt" means (i) the Subordinated Notes and (ii) any
Indebtedness of the Borrower or any Subsidiary incurred after the date hereof
and subordinated on terms acceptable to the Agent and the Majority Banks (in
their sole discretion).
15.
26
"Subordinated Notes" means the 5 1/4% Convertible Subordinated
Notes due 2003 of the Borrower issued and outstanding pursuant to an Indenture
dated as of December 15, 1993 between Borrower and Union Bank (as Trustee).
"Subsidiary" means any corporation, association, partnership,
joint venture or other business entity of which more than 50% of the voting
stock or other equity interest is owned directly or indirectly by any Person or
one or more of the other Subsidiaries of such Person or a combination thereof.
"Subsidiary Guaranty" means a Guaranty executed by ABL in favor
of the Agent and Banks substantially in the form of Exhibit I.
"Substantial Assets" has the meaning set forth in Section
10.04(e).
"Swap Termination Value" means, in respect of any one or more
Rate Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Rate Contracts, (i) for any date on or after
the date such Rate Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (ii) for any
date prior to the date referenced in clause (i) the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Rate Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Rate Contracts (which may include any Bank).
"Taxes" has the meaning set forth in Section 6.03.
"Termination Event" means any of the following:
(i) with respect to a Pension Plan, a reportable event described
in Section 4043 of ERISA and the regulations issued thereunder (other than a
reportable event not subject to the provisions for 30-day notice to the PBGC
under such regulations);
(ii) the withdrawal of the Borrower or an ERISA Affiliate from a
Pension Plan during a plan year in which the withdrawing employer was a
"substantial employer" as defined in Section 4001(a)(2) or 4062(e) of ERISA;
(iii) the taking of any actions (including the filing of a notice
of intent to terminate) by the Borrower, an ERISA Affiliate, the PBGC, a Plan
Administrator, or any other Person to terminate a Pension Plan or the treatment
of a Plan amendment as a termination of a Pension Plan under Section 4041 of
ERISA;
(iv) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; or
(v) the complete or partial withdrawal of the Borrower or an
ERISA Affiliate from a Multiemployer Plan.
"UBOC" means Union Bank of California, N.A.
16.
27
"UCC" means the Uniform Commercial Code of the jurisdiction the
law of which governs the Loan Document in which such term is used or the
attachment, perfection or priority of the Lien on any Collateral.
"UCP" has the meaning set forth in Section 3.09.
"Unfunded Accrued Benefits" means the excess of a Pension Plan's
accrued benefits, as defined in Section 3(23) of ERISA, over the current value
of that Plan's assets, as defined in Section 3(26) of ERISA.
"United States" and "U.S." each means the United States of
America.
SECTION 1.02 Accounting Principles.
(a) Accounting Terms. Unless otherwise defined or the context
otherwise requires, all accounting terms not expressly defined herein shall be
construed, and all accounting determinations and computations required under the
Loan Documents shall be made, in accordance with GAAP, consistently applied.
(b) GAAP Changes. If GAAP shall have been modified after the
Closing Date and the application of such modified GAAP shall have a material
effect on any financial computations hereunder (including the computations
required for the purpose of determining compliance with the covenants set forth
in Section 10.02), then such computations shall be made and the financial
statements, certificates and reports due hereunder shall be prepared, and all
accounting terms not otherwise defined herein shall be construed, in accordance
with GAAP as in effect prior to such modification, unless and until the Majority
Banks and the Borrower shall have agreed upon the terms of the application of
such modified GAAP.
(c) "Fiscal Year" and "Fiscal Quarter". References herein to
"fiscal year" and "fiscal quarter" refer to such fiscal periods of the Borrower.
SECTION 1.03 Interpretation. In the Loan Documents, except to the extent
the context otherwise requires:
(i) Any reference to an Article, a Section, a Schedule or an
Exhibit is a reference to an article or Section thereof, or a schedule or an
exhibit thereto, respectively, and to a subsection or a clause is, unless
otherwise stated, a reference to a subsection or a clause of the Section or
subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto," "hereunder" and the
like mean and refer to this Agreement or any other Loan Document as a whole and
not merely to the specific Article, Section, subsection, paragraph or clause in
which the respective word appears.
(iii) The meaning of defined terms shall be equally applicable to
both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include" shall be
deemed to be followed by the words "without limitation."
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(v) References to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are not
prohibited by the terms of the Loan Documents.
(vi) References to statutes or regulations are to be construed as
including all statutory and regulatory provisions consolidating, amending or
replacing the statute or regulation referred to.
(vii) Any table of contents, captions and headings are for
convenience of reference only and shall not affect the construction of this
Agreement or any other Loan Document.
(viii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding"; and the word "through"
means "to and including."
(ix) The use of a word of any gender shall include each of the
masculine, feminine and neuter genders.
(x) This Agreement and the other Loan Documents are the result of
negotiations among the Agent, the Borrower and the other parties, have been
reviewed by counsel to the Agent, the Borrower and such other parties, and are
the products of all parties. Accordingly, they shall not be construed against
the Banks or the Agent merely because of the Agent's or Banks' involvement in
their preparation.
ARTICLE II
THE LOANS
SECTION 2.01 The Loans. Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make revolving loans (each a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower from time to
time on any Business Day during the period from the Closing Date until the
Revolving Expiry Date, in an aggregate principal amount up to but not exceeding
at any time outstanding such Bank's Revolving Commitment; provided, that the
Effective Amount of all Revolving Loans plus the Effective Amount of all L/C
Obligations shall not exceed the aggregate Revolving Commitments; and provided
further, that the Effective Amount of the Revolving Loans of any Bank plus the
participation of such Bank in the Effective Amount of all L/C Obligations shall
not exceed such Bank's Revolving Commitment. Within the foregoing limits and
subject to the other terms and conditions hereof, during such period the
Borrower may borrow, repay the Revolving Loans in whole or in part, and
reborrow, all in accordance with the terms and conditions hereof.
SECTION 2.02 Borrowing Procedure.
(a) Notice to the Agent. Each Borrowing shall be made on a
Business Day upon written or telephonic notice (in the latter case to be
confirmed promptly in writing) from the Borrower to the Agent, which notice
shall be received by the Agent not later than 10:00 A.M.
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(California time) on the Required Notice Date. Each such notice, except as
provided in Sections 6.01 and 6.04, shall be irrevocable and binding on the
Borrower, shall be in substantially the form of Exhibit B (a "Notice of
Borrowing") and shall specify whether the Borrowing consists of Reference Rate
Loans or Eurodollar Rate Loans and the other information required thereby.
(b) Notice to the Banks. The Agent shall give each Bank prompt
notice by telephone (confirmed promptly in writing) or by facsimile of each
Borrowing of Revolving Loans, specifying the information contained in the
Borrower's Notice and such Bank's Pro Rata Share of such Borrowing. On the date
of each Borrowing of Revolving Loans, each Bank shall make available such Bank's
Pro Rata Share of such Borrowing of Revolving Loans, in same day or immediately
available funds, to the Agent for the Agent's Account, not later than 11:00 A.M.
(California time). Upon fulfillment of the applicable conditions set forth in
Article VIII and after receipt by the Agent of any such funds, and unless other
payment instructions are provided by the Borrower, the Agent shall make such
funds available to the Borrower by crediting the Borrower's Account with same
day or immediately available funds on such Borrowing date.
SECTION 2.03 Non-Receipt of Funds. Unless the Agent shall have received
notice from a Bank prior to the date of any Borrowing that such Bank shall not
make available, as required by this Agreement, to the Agent such Bank's Pro Rata
Share of such Borrowing, the Agent may assume that such Bank has made such
portion available as required by this Agreement to the Agent on the date of such
Borrowing in accordance with Section 2.02(b) and the Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent such Bank shall not have so made such Pro Rata
Share available to the Agent, and the Agent in such circumstances shall have
made available to the Borrower such amount, such Bank agrees to repay to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at the Federal Funds
Rate. If such Bank shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan as part of such Borrowing for
purposes of this Agreement. If such amount is not made available by such Bank to
the Agent on the Business Day following the Borrowing date, the Agent shall
notify the Borrower of such failure to fund and, upon demand by the Agent, the
Borrower shall pay such amount to the Agent for the Agent's Account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
SECTION 2.04 Lending Offices. The Loans made by each Bank may be made
from and maintained at such offices of such Bank (each a "Lending Office") as
such Bank may from time to time designate (whether or not such office is
specified on Schedule 2). A Bank shall not elect a Lending Office (other than
that set forth on the signature pages hereof) that, at the time of making such
election, increases the amounts which would have been payable by the Borrower to
such Bank under this Agreement in the absence of such election. With respect to
Eurodollar Rate Loans made from and maintained at any Bank's non-U.S. offices,
the obligation of the Borrower to repay such Eurodollar Rate Loans shall
nevertheless be to such Bank and shall, for all purposes of this Agreement
(including for purposes of the definition of the term "Majority Banks") be
deemed made or maintained by it, for the account of any such office.
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SECTION 2.05 Evidence of Indebtedness. The Loans made by each Bank shall
be evidenced by one or more loan accounts maintained by such Bank in accordance
with its usual practices. The loan accounts maintained by the Agent and each
such Bank shall be rebuttable presumptive evidence of the amount of the Loans
made by such Bank to the Borrower and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Loans. At the request of any Bank, as additional
evidence of the Indebtedness of the Borrower to such Bank resulting from the
Revolving Loans made by such Bank, the Borrower shall execute and deliver for
account of such Bank a Revolving Note setting forth such Bank's Revolving
Commitment as the maximum principal amount thereof.
SECTION 2.06 Minimum Amounts. Any Borrowing, conversion, continuation or
prepayment of Revolving Loans hereunder shall be in an aggregate amount
determined as follows (each such specified amount a "Minimum Amount"): (i) any
Borrowing or partial prepayment of Reference Rate Revolving Loans shall be in
the amount of $1,000,000 or a greater amount which is an integral multiple of
$250,000; and (ii) any Borrowing, continuation or partial prepayment of, or
conversion into, Eurodollar Rate Loans shall be in the amount of $5,000,000 or a
greater amount which is an integral multiple of $1,000,000.
SECTION 20.7 Required Notice. Any Notice hereunder shall be given not
later than the date determined as follows (each such specified date a "Required
Notice Date"): (i) any Notice with respect to a Borrowing of, or conversion
into, Reference Rate Loans shall be given not later than the Business Day
immediately preceding the date of the proposed borrowing or conversion; (ii) any
Notice with respect to any Borrowing or continuation of, or conversion into,
Eurodollar Rate Loans shall be given at least 3 Eurodollar Business Days prior
to the date of the proposed Borrowing, conversion or continuation; (iii) any
Notice with respect to any prepayment under Section 5.03(a), except as otherwise
provided in Section 5.03(b), be given at least 3 Business Days prior to the
proposed prepayment date; (iv) any notice with respect to the issuance of any
Letter of Credit shall, except to the extent the Issuing Bank may agree in a
particular instance to a shorter notice period in its sole and absolute
discretion, be given at least 3 Business Days prior to the proposed issuance
date; and (v) any notice with respect to the amendment or renewal of any Letter
of Credit shall, except to the extent the Issuing Bank may agree in a particular
instance to a shorter notice period in its sole and absolute discretion, be
given at least 3 Business Days prior to the proposed amendment or renewal date.
ARTICLE III
THE LETTERS OF CREDIT
SECTION 3.01 The Letter of Credit Subfacility.
(a) Letters of Credit. On the terms and conditions hereinafter
set forth, (i) the Issuing Bank hereby agrees (A) from time to time on any
Business Day during the period from the Closing Date to the Revolving Expiry
Date to issue Letters of Credit for the account of the Borrower in accordance
with Section 3.02(a), and to amend or renew Letters of Credit previously issued
by it, in accordance with subsections 3.02(c) and 3.02(e), in an aggregate
amount not to exceed at any time the aggregate L/C Commitments, and (B) to honor
drafts under the Letters of
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Credit; and (ii) the Banks severally agree to participate in Letters of Credit
issued for the account of the Borrower; provided, that the Issuing Bank shall
not be obligated to issue any Letter of Credit if (1) the Effective Amount of
all L/C Obligations plus the Effective Amount of all Revolving Loans shall
exceed the aggregate Revolving Commitments, (2) the participation of any Bank in
the Effective Amount of all L/C Obligations plus the Effective Amount of the
Revolving Loans of such Bank shall exceed such Bank's Revolving Commitment, or
(3) the Effective Amount of L/C Obligations shall exceed the aggregate L/C
Commitments. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower's ability to obtain Letters of Credit shall be
fully revolving, and, accordingly, the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit which have expired
or which have been drawn upon and reimbursed.
(b) Conditions to Issuance. The Issuing Bank shall be under no
obligation to issue, amend or reinstate any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank
from issuing, amending or reinstating such Letter of Credit, or any law, rule or
regulation applicable to the Issuing Bank or any request, guideline or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing
Bank refrain from, the issuance, amendment or reinstatement of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Issuing Bank with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise compensated)
not in effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) the Issuing Bank has received written notice from any Bank,
the Agent or the Borrower, at least one Business Day prior to the requested date
of issuance, amendment or reinstatement of such Letter of Credit, that one or
more of the applicable conditions contained in Article VIII is not then
satisfied;
(iii) the expiry date of any requested Letter of Credit is more
than one year after the date of issuance, unless the Majority Banks have
approved such expiry date in writing; provided that a Letter of Credit may state
that the expiry date thereof is extendible for an additional term as shall be
satisfactory to the Issuing Bank (either upon prior notice or automatically) so
long as the next succeeding additional term at any time is not more than one
year; provided, further, that the Issuing Bank may permit the issuance of
evergreen Letters of Credit and Letters of Credit with an expiry date up to two
years from their date of issuance in a face amount not to exceed, in the
aggregate, $1,000,000.
(iv) any requested Letter of Credit does not provide for drafts,
or is not otherwise in form and substance acceptable to the Issuing Bank, or the
issuance, amendment or renewal of a Letter of Credit shall violate any
applicable policies of the Issuing Bank;
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(v) any standby Letter of Credit is for the purpose of supporting
the issuance or, except for the Existing Letters of Credit, maintenance of any
letter of credit issued by any other Person;
(vi) such Letter of Credit is denominated in a currency other
than Dollars; or
(vii) such Letter of Credit is for the purposes of supporting
workers compensation claims or programs.
SECTION 3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Notice to Issuing Bank of Issuance Request. Each Letter of
Credit shall be issued upon the irrevocable written request of the Borrower
received by the Issuing Bank (with a copy sent by the Borrower to the Agent) not
later than the Required Notice Date. Each such request for issuance of a Letter
of Credit shall be in writing, in the form of an L/C Application, and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the proposed
date of issuance of the Letter of Credit (which shall be a Business Day); (ii)
the face amount of the Letter of Credit; (iii) the expiry date of the Letter of
Credit; (iv) the name and address of the beneficiary thereof; (v) the documents
to be presented by the beneficiary of the Letter of Credit in case of any
drawing thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (vii) such other matters as
the Issuing Bank may require.
(b) Issuance of Letters of Credit. At least two Business Days
prior to the issuance of any Letter of Credit or any amendment or renewal of any
Letter of Credit, the Issuing Bank shall confirm with the Agent (by telephone or
in writing) that the Agent has received a copy of the L/C Application or L/C
Amendment Application from the Borrower and, if not, the Issuing Bank will
provide the Agent with a copy thereof. Unless the Issuing Bank has received
notice on or before the Business Day immediately preceding the date the Issuing
Bank is to issue, amend or renew a requested Letter of Credit from the Agent (i)
directing the Issuing Bank not to issue, amend or renew such Letter of Credit
because such issuance, amendment or renewal is not then permitted under Section
3.01(a) as a result of the limitations set forth in clauses (1) through (3)
thereof or clause of Section 3.01(b); or (ii) that one or more conditions
specified in Article VIII are not then satisfied; then, subject to the terms and
conditions hereof, the Issuing Bank shall, on the requested date, issue a Letter
of Credit for the account of the Borrower or amend or renew a Letter of Credit,
as the case may be, in accordance with the Issuing Bank's usual and customary
business practices.
(c) Notice to Issuing Bank of Amendment Request. From time to
time while a Letter of Credit is outstanding and prior to the Revolving Expiry
Date, the Issuing Bank shall, upon the written request of the Borrower received
by the Issuing Bank (with a copy sent by the Borrower to the Agent) not later
than the Required Notice Date, amend any Letter of Credit issued by it. Each
such request for amendment of a Letter of Credit shall be made in writing, in
the form of an L/C Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be amended; (ii)
the proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv) such other
matters as the Issuing Bank may require. The Issuing Bank shall be under no
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obligation to amend any Letter of Credit, and shall not permit the amendment of
a Letter of Credit, if: (A) the Issuing Bank would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such Letter of Credit does not accept
the proposed amendment to the Letter of Credit.
(d) Notice to Issuing Bank of Renewal Request. The Issuing Bank
and the Banks agree that, while a Letter of Credit is outstanding and prior to
the Revolving Expiration Date, at the option of the Borrower and upon the
written request of the Borrower received by the Issuing Bank (with a copy sent
by the Borrower to the Agent) not later than the Required Notice Date, the
Issuing Bank shall be entitled to authorize the automatic renewal of any Letter
of Credit issued by it. Each such request for renewal of a Letter of Credit
shall be made in writing, in the form of an L/C Amendment Application, and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the Letter of
Credit to be renewed; (ii) the proposed date of notification of renewal of the
Letter of Credit (which shall be a Business Day); (iii) the revised expiry date
of the Letter of Credit; and (iv) such other matters as the Issuing Bank may
require. The Issuing Bank shall be under no obligation so to renew any Letter of
Credit, and shall not permit any renewal (including any automatic renewal of a
Letter of Credit), if: (A) the Issuing Bank would have no obligation at such
time to issue or amend such Letter of Credit in its renewed form under the terms
of this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed renewal of the Letter of Credit. If any outstanding Letter
of Credit shall provide that it shall be automatically renewed unless the
beneficiary thereof receives notice from the Issuing Bank that such Letter of
Credit shall not be renewed, and if at the time of renewal the Issuing Bank
would be entitled to authorize the automatic renewal of such Letter of Credit in
accordance with this subsection (d) upon the request of the Borrower but the
Issuing Bank shall not have received any L/C Amendment Application from the
Borrower with respect to such renewal or other written direction by the Borrower
with respect thereto, the Issuing Bank shall nonetheless be permitted to allow
such Letter of Credit to renew, and the Borrower and the Banks hereby authorize
such renewal, and, accordingly, the Issuing Bank shall be deemed to have
received an L/C Amendment Application from the Borrower requesting such renewal.
(e) Expiry of Letters of Credit. The Issuing Bank may, at its
election (or shall, when required by the Agent at the direction of the Majority
Banks), deliver any notices of termination or other communications to any Letter
of Credit beneficiary or transferee, or take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the expiry
date of such Letter of Credit to be a date not later than that permitted by this
Agreement.
(f) Conflicts with L/C-Related Documents. This Agreement shall
control in the event of any conflict with any L/C-Related Document (other than
any Letter of Credit).
(g) Delivery of Copies of Letters of Credit. The Issuing Bank
shall also deliver to the Agent, concurrently with or promptly following its
delivery of a Letter of Credit, or amendment to or renewal of a Letter of
Credit, to an advising bank or a beneficiary, a true and complete copy of each
such Letter of Credit or amendment to or renewal of a Letter of Credit.
(h) Notices to Banks. The Agent shall promptly notify the Banks
of the receipt by it of (i) any L/C Application or L/C Amendment Application and
(ii) the issuance,
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amendment or renewal of a Letter of Credit hereunder (including the date thereof
and the amount, expiry and reference number of such Letter of Credit).
SECTION 3.03 Existing Letters of Credit, Participations, Drawings and
Reimbursements.
(a) Existing Letters of Credit. The Borrower shall be deemed to
have requested the Issuing Bank to issue, as of the Closing Date, to BankAmerica
Business Credit, Inc., a Letter of Credit in an amount equal to $1,362,213.23
(on terms acceptable to the Issuing Bank, the Agent and the Banks).
(b) Participations of Banks in Additional Letters of Credit.
Immediately upon the issuance of each Letter of Credit, the Issuing Bank shall
be deemed irrevocably to have sold and transferred to each Bank without recourse
or warranty, and each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase and accept from the Issuing Bank, for such
Bank's own account and risk, an undivided interest and a participation in such
Letter of Credit and each drawing thereunder in an amount equal to the product
of (i) the Pro Rata Share of such Bank, times (ii) the maximum amount available
to be drawn under such Letter of Credit and the amount of such drawing,
respectively. For purposes of Section 3.01(a), each issuance of a Letter of
Credit shall be deemed to utilize the Revolving Commitment of each Bank by an
amount equal to the amount of such participation.
(c) Drawing and Reimbursement. In the event of any request for a
drawing under a Letter of Credit by the beneficiary thereof, the Issuing Bank
shall immediately notify the Borrower and the Agent. The Borrower shall
reimburse the Issuing Bank prior to 10:00 A.M. (California time), on each date
that any amount is paid by the Issuing Bank under any Letter of Credit, in an
amount equal to the amount paid by the Issuing Bank on such date under such
Letter of Credit. In the event the Borrower shall fail to reimburse the Issuing
Bank for the full amount of any drawing under any Letter of Credit by 10:00 A.M.
(California time) on the same date such drawing is honored by the Issuing Bank,
the Issuing Bank shall promptly notify the Agent and the Agent shall promptly
notify each Bank thereof (including the amount of the drawing and such Bank's
Pro Rata Share thereof), and the Borrower shall be deemed to have requested that
Reference Rate Loans be made by the Banks to be disbursed on the date of payment
by the Issuing Bank under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Commitment and subject to the conditions set
forth in clauses (b) and (c) of Section 8.02. The Borrower hereby directs that
the proceeds of any such Loans deemed to be made by it shall be used to pay its
reimbursement obligations in respect of any such drawing. Solely for the
purposes of making such Loans, the Minimum Amount limitations set forth in
Section 2.06 shall not be applicable. Any notice given by the Issuing Bank or
the Agent pursuant hereto may be telephonic if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(d) Funding by Banks. Each Bank shall upon receipt of any notice
pursuant to subsection 3.03(c) make available to the Agent for the account of
the Issuing Bank an amount in Dollars and in same day or immediately available
funds equal to its Pro Rata Share of the amount of the drawing, whereupon the
participating Banks shall (subject to subsection 3.03(c))
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each be deemed to have made a Revolving Loan consisting of a Reference Rate Loan
to the Borrower in that amount. If any Bank so notified shall fail to make
available to the Agent for the account of the Issuing Bank the amount of such
Bank's Pro Rata Share of the amount of the drawing by no later than 12:00 Noon
(California time) on the date such drawing was honored by the Issuing Bank (the
"Participation Date"), then interest shall accrue on such Bank's obligation to
make such payment, from the Participation Date to the date such Bank makes such
payment, at a rate per annum equal to (i) the Federal Funds Rate in effect from
time to time during the period commencing on the Participation Date and ending
on the date three Business Days thereafter, and (ii) thereafter at the Reference
Rate as in effect from time to time. The Agent shall promptly give notice of the
occurrence of the Participation Date, but failure of the Agent to give any such
notice on the Participation Date or in sufficient time to enable any Bank to
effect such payment on such date shall not relieve such Bank from its
obligations under this Section 3.03.
(e) L/C Unreimbursed Drawings. With respect to any unreimbursed
drawing that is not converted into Revolving Loans consisting of Reference Rate
Loans to the Borrower in whole or in part, because of the Borrower's failure to
satisfy the conditions set forth in clauses (b) and (c) of Section 8.02 or for
any other reason, the Borrower shall be obligated to the Issuing Bank for an L/C
Unreimbursed Draw in the amount of such drawing, which L/C Unreimbursed Draw
shall be due and payable on demand, together with interest, and shall bear
interest at a rate per annum equal to the Reference Rate, plus the then
applicable Applicable Margin plus 2% per annum, and each Bank's payment to the
Issuing Bank pursuant to subsection 3.03(d) shall be deemed payment in respect
of its participation in such L/C Unreimbursed Draw and shall constitute an L/C
Advance from such Bank in satisfaction of its participation obligation under
this Section 3.03.
(f) Obligation of Banks Absolute. Each Bank's obligation in
accordance with this Agreement to make the Revolving Loans or L/C Advances, as
contemplated by this Section 3.03, as a result of a drawing under a Letter of
Credit shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the Issuing Bank, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default, an Event of Default or a Material Adverse Effect; or (iii) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
SECTION 3.04 Repayment of Participations. Upon (and only upon) receipt
by the Agent for the account of the Issuing Bank of funds from the Borrower (i)
in reimbursement of any payment made by the Issuing Bank under the Letter of
Credit with respect to which any Bank has theretofore paid the Agent for the
account of the Issuing Bank for such Bank's participation in the Letter of
Credit pursuant to Section 3.03, or (ii) in payment of interest thereon, the
Agent shall pay to each Bank, in the same funds as those received by the Agent
for the account of the Issuing Bank, the amount of such Bank's Pro Rata Share of
such funds, and the Issuing Bank shall receive the amount of the Pro Rata Share
of such funds of any Bank that did not so pay the Agent for the account of the
Issuing Bank. If the Agent or the Issuing Bank is required at any time to return
to the Borrower or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Borrower to the Agent for the account of the Issuing Bank pursuant to subsection
(a) in reimbursement of a
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payment made under the Letter of Credit or interest thereon, each Bank shall, on
demand of the Agent, forthwith return to the Agent or the Issuing Bank the
amount of its Pro Rata Share of any amounts so returned by the Agent or the
Issuing Bank plus interest thereon from the date such demand is made to the date
such amounts are returned by such Bank to the Agent or the Issuing Bank, at a
rate per annum equal to the Federal Funds Rate in effect from time to time.
SECTION 3.05 Role of the Issuing Bank.
(a) No Responsibility of Issuing Bank. Each Bank and the Borrower
agree that, in paying any drawing under a Letter of Credit, the Issuing Bank
shall not have any responsibility to obtain any document (other than any sight
draft and certificates expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. The Borrower
hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. No Agent/IB-Related Person, nor
any of the respective correspondents, participants or assignees of the Issuing
Bank, shall be liable or responsible for any of the matters described in clauses
(i) through (vii) of Section 3.06; provided, however, anything in such clauses
to the contrary notwithstanding, that the Borrower may have a claim against the
Issuing Bank, and the Issuing Bank may be liable to the Borrower, to the extent,
but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the
Issuing Bank's willful misconduct or gross negligence or the Issuing Bank's
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing: (i) the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary; and (ii)
the Issuing Bank shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(b) No Liability of Agent/IB-Related Persons. No Agent/IB-Related
Person nor any of the respective correspondents, participants or assignees of
the Issuing Bank shall be liable to any Bank for: (i) any action taken or
omitted in connection herewith at the request or with the approval of the Banks
(including the Majority Banks, as applicable); (ii) any action taken or omitted
in the absence of gross negligence or willful misconduct; or (iii) the due
execution, effectiveness, validity or enforceability of any L/C-Related
Document.
SECTION 3.06 Obligations of Borrower Absolute. The obligations of the
Borrower under this Agreement and any L/C-Related Document to reimburse the
Issuing Bank for a drawing under a Letter of Credit, and to repay any L/C
Unreimbursed Draw and any drawing under a Letter of Credit converted into
Revolving Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
L/C-Related Document under all circumstances, including the following:
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(i) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Borrower in respect of
any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any transferee
of any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of any Letter of Credit; or any payment made by the Issuing Bank
under any Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of any Letter of Credit, including any arising in connection
with any bankruptcy, reorganization or other insolvency proceeding;
(vi) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the obligations of the Borrower in respect of any
Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower or
a guarantor.
SECTION 3.07 Cash Collateral Pledge. Upon (i) the request of the
Agent, (A) if the Issuing Bank has honored any full or partial drawing request
on any Letter of Credit and such drawing has resulted in an L/C Unreimbursed
Draw hereunder, or (B) if, as of the Revolving Expiry Date, any Letters of
Credit may for any reason remain outstanding and partially or wholly undrawn, or
(ii) the occurrence of the circumstances described in Section 5.03(b) requiring
the Borrower to cash collateralize Letters of Credit, the Borrower shall
immediately pay over cash in an amount equal to the L/C Obligations to the Agent
for the benefit of the Banks, to be held by the Agent as cash collateral subject
to the terms of this Section 3.07. Such amount, together with any amount
received by the Agent in respect of outstanding Letters of Credit pursuant to
Section 11.02, when received by the Agent, shall be held by the Agent in a cash
collateral account opened by the Agent as cash collateral for the reimbursement
obligations of the Borrower under this Agreement in respect of the L/C
Obligations and for the other Obligations. Such cash collateral shall not bear
interest. Amounts held in such cash collateral
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account shall be applied by the Agent to the reimbursement of the Issuing Bank
for any payment made by it of drafts drawn under the outstanding Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
Obligations of the Borrower hereunder. After all such Letters of Credit shall
have expired or been fully drawn upon, all L/C Obligations shall have been
satisfied and all other Obligations of the Borrower hereunder shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower. The Borrower hereby grants the Agent (for itself and
on behalf of and for the ratable benefit of the Issuing Bank and the Banks) a
security interest in all such cash collateral. The Borrower shall execute such
further agreements, documents, instruments or financing statements as the Agent
reasonably deems necessary in connection therewith. This Agreement shall
constitute notice to the Agent of the security interests in such deposit
accounts pursuant to Section 9303(1)(g) of the California UCC.
SECTION 3.08 Letter of Credit Fees.
(a) Certain Letter of Credit Fees. The Borrower shall pay (i) to
the Agent for the account of each of the Banks a letter of credit fee with
respect to the Letters of Credit equal to the Applicable L/C Fee Amount then in
effect of the average daily maximum amount available to be drawn on the
outstanding Letters of Credit, and (ii) upon and after a syndication of this
facility, to the Issuing Bank a letter of credit fronting fee with respect to
the Letters of Credit equal to 1/4% per annum of the average daily maximum
amount available to be drawn of the outstanding Letters of Credit, computed in
each case on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Letters of Credit outstanding for that quarter as
calculated by the Agent. Such letter of credit fees shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter during
which Letters of Credit are outstanding, commencing on the first such quarterly
date to occur after the Closing Date, through the Revolving Expiry Date (or such
later date upon which the outstanding Letters of Credit shall expire), with the
final payment to be made on the Revolving Expiry Date (or such expiration date).
(b) Certain Additional Fees and Charges. The Borrower shall pay
to the Issuing Bank from time to time on demand the normal issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the Issuing Bank relating to standby or commercial letters of credit
as from time to time in effect.
(c) Fees Nonrefundable. All fees and charges payable under this
Section 3.08 shall be nonrefundable.
SECTION 3.09 Uniform Customs and Practice. The Uniform Customs and
Practice for Documentary Credits as most recently published by the International
Chamber of Commerce ("UCP") shall in all respects be deemed a part of this
Article III as if incorporated herein and shall (unless otherwise expressly
stated in the relevant Letters of Credit) apply to the Letters of Credit.
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ARTICLE IV
INTEREST AND FEES; CONVERSION OR CONTINUATION
SECTION 4.01 Interest.
(a) Interest Rate. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date of such Loan until such principal
amount shall be paid in full, at the following rates:
(i) during such periods as such Loan is a Reference Rate
Loan, at a rate per annum equal at all times to the Reference Rate plus the
Applicable Margin;
(ii) during such periods as such Loan is a Eurodollar Rate
Loan, at a rate per annum equal at all times during each Interest Period for
such Eurodollar Rate Loan to the Eurodollar Rate for such Interest Period plus
the Applicable Margin.
(b) Interest Periods for Eurodollar Loans. The initial and each
subsequent Interest Period for the Eurodollar Rate Loans, shall be a period of
one, two, or three months, or such other period as requested by the Borrower and
acceptable to the Banks. The determination of Interest Periods shall be subject
to the following provisions:
(A) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(B) if any Interest Period pertaining to an Eurodollar Rate Loan
would otherwise end on a day which is not a Business Day, that Interest Period
shall be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day;
(C) no Interest Period shall extend beyond the Revolving Expiry
Date;
(D) any Interest Period pertaining to a Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the ending calendar month of
such Interest Period) shall end on the last Eurodollar Business Day of the
ending calendar month of such Interest Period;
(E) there shall be no more than six Interest Periods in effect at
any one time.
(c) Interest Payment Dates. Subject to Section 4.02, interest on
the Loans shall be payable in arrears at the following times:
(i) interest on each Reference Rate Loan shall be payable
quarterly on the last Business Day in each calendar quarter, on the date of any
prepayment or conversion of any such Reference Rate Loan, and at maturity;
(ii) interest on each Eurodollar Rate Loan shall be payable on
the last day of each Interest Period for such Eurodollar Rate Loan, provided
that if any prepayment, conversion,
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or continuation is effected other than on the last day of such Interest Period,
accrued interest on such Eurodollar Rate Loan shall be due on such prepayment,
conversion or continuation date as to the principal amount of such Eurodollar
Rate Loan prepaid, converted or continued.
(d) Notice to the Borrower and the Banks. Each determination by
the Agent hereunder of a rate of interest and of any change therein, including
any changes in (i) the Applicable Margin, (ii) the Reference Rate during any
periods in which Reference Rate Loans shall be outstanding, and (iii) the
Eurodollar Reserve Percentage (if any) during any periods in which Eurodollar
Rate Loans shall be outstanding, in the absence of manifest error shall be
conclusive and binding on the parties hereto and shall be promptly notified by
the Agent to the Borrower and the Banks. Such notice shall set forth in
reasonable detail the basis for any such determination or change. The failure of
the Agent to give any such notice specified in this subsection shall not affect
the Borrower's obligation to pay such interest or fees.
SECTION 4.02 Default Rate of Interest. Notwithstanding Section 4.01,
during the existence of any Event of Default or after acceleration, the Borrower
shall pay interest (after as well as before any entry of judgment to the extent
permitted by law) on the unpaid principal amount of all Obligations, (i) in the
case of any Loans, at a rate per annum equal to the applicable Reference Rate or
Eurodollar Rate, as the case may be, plus the Applicable Margin for such Loans,
plus 2% per annum, and (ii) in the case of any other Obligations, at a rate per
annum equal at all times to the Reference Rate plus the then applicable
Applicable Margin plus 2% per annum; provided, however, that, on and after the
expiration of any Interest Period applicable to any Eurodollar Rate Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the Borrower shall pay interest on the principal amount of such Loan, during the
continuation of such Event of Default or after acceleration, at a rate per annum
equal at all times to the Reference Rate plus the then applicable Applicable
Margin plus 2% per annum.
SECTION 4.03 Fees.
(a) Commitment Fee. The Borrower agrees to pay to the Agent for
the account of each Bank a commitment fee on the average daily unused portion of
such Bank's Revolving Commitment as in effect from time to time from the Closing
Date until the Revolving Expiry Date at a rate per annum equal to the Applicable
Commitment Fee Amount, payable quarterly in arrears on the last Business Day of
each calendar quarter in each year, commencing on the first such date after the
Closing Date, and on the earlier of the date such Revolving Commitment is
terminated hereunder or the Revolving Expiry Date; and
(b) Other Fees. The Borrower agrees to pay to the Agent for its
own account such fees as shall be specified in the Fee Letter.
(c) Fees Nonrefundable. All fees payable under this Section 4.03
shall be nonrefundable.
SECTION 4.04 Computations. All computations of interest based upon the
Reference Rate (unless accruing based on the Federal Funds Rate) shall be made
on the basis of a year of 365 or 366 days, as the case may be, for the actual
number of days occurring in the
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period for which such interest is payable. All computations of commitment fee,
letter of credit fee, interest based upon the Federal Funds Rate and Eurodollar
Rate shall be made on the basis of a year of 360 days for the actual number of
days occurring in the period for which such commitment fee, Letter of Credit fee
or interest is payable, which results in more interest being paid than if
computed on the basis of a 365-day year. Notwithstanding the foregoing, if any
Loan is repaid on the same day on which it is made, such day shall be included
in computing interest on such Loan.
SECTION 4.05 Conversion or Continuation.
(a) Election. The Borrower may elect (i) to convert all or any
part of (A) outstanding Reference Rate Loans into Eurodollar Rate Loans, or (B)
outstanding Eurodollar Rate Loans into Reference Rate Loans; or (ii) to continue
all or any part of a Loan with one type of interest rate as such; provided,
however, that if the aggregate amount of Eurodollar Rate Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than $5,000,000, such Eurodollar Rate Loans shall
automatically convert into Reference Rate Loans, and on and after such date the
right of the Borrower to continue such Loans as, and convert such Loans into,
Eurodollar Rate Loans, as the case may be, shall terminate. The continued or
converted Reference Rate and Eurodollar Rate Loans shall be allocated to the
Banks ratably in accordance with their Pro Rata Shares. Any conversion or
continuation of Eurodollar Rate Loans shall be made on the last day of the
current Interest Period for such Eurodollar Rate Loans. No outstanding Loan may
be converted into or continued as a Eurodollar Rate Loan if any Default has
occurred and is continuing.
(b) Automatic Conversion. On the last day of any Interest Period
for any Eurodollar Rate Loans, such Eurodollar Rate Loans shall, if not repaid,
automatically convert into Reference Rate Loans unless the Borrower shall have
made a timely election to continue such Eurodollar Rate Loans as such for an
additional Interest Period or to convert such Eurodollar Rate Loans, in each
case as provided in subsection (a) .
(c) Notice to the Agent. The conversion or continuation of any
Loans contemplated by subsection (a) shall be made upon written or telephonic
notice (in the latter case to be confirmed promptly in writing) from the
Borrower to the Agent, which notice shall be received by the Agent not later
than 10:00 A.M. (California time) on the Required Notice Date. Each such notice
shall be in substantially the form of Exhibit C (a "Notice of Conversion or
Continuation") shall, except as provided in Sections 6.01 and 6.04, be
irrevocable and binding on the Borrower, shall refer to this Agreement and shall
specify: (i) the proposed date of the conversion or continuation, which shall be
a Business Day (or a Eurodollar Business Day, for conversions into or
continuations of Eurodollar Rate Loans); (ii) the outstanding Loans (or parts
thereof) to be converted into or continued as Reference Rate or Eurodollar Rate
Loans; (iii) the aggregate amount of the Loans which are the subject of such
continuation or conversion, which shall be in a Minimum Amount; (iv) if the
conversion or continuation consists of any Eurodollar Rate Loans, the duration
of the Interest Period with respect thereto; and (v) that no Default exists
hereunder.
(d) Notice to the Banks. The Agent shall give each Bank prompt
notice by telephone (confirmed promptly in writing) or by facsimile of (i) the
proposed conversion or
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continuation of any Loans, specifying the information contained in the
Borrower's Notice and such Bank's Pro Rata Share thereof or (ii), if timely
notice was not received from the Borrower, the details of any automatic
conversion under subsection 4.05(b).
SECTION 4.06 Replacement of Reference Banks. If the Loan of any
Eurodollar Reference Bank is prepaid in full or its Commitment shall terminate
(otherwise than on termination of all the Commitments), or if a Eurodollar
Reference Bank transfers its Loans in full to an unaffiliated Person or
otherwise shall cease to be a Bank hereunder, the Agent shall, in consultation
with the Borrower and with the approval of the Majority Banks, appoint another
similarly situated Bank to replace such Bank as a Eurodollar Reference Bank, as
the case may be.
SECTION 4.07 Highest Lawful Rate. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the applicable interest rate, together with all fees, charges and other payments
which are treated as interest under applicable law, as provided for herein or in
any other Loan Document, would exceed the maximum rate of interest which may be
charged, contracted for, reserved, received or collected by any Bank in
connection with this Agreement under applicable law (the "Maximum Rate"), the
Borrower shall not be obligated to pay, and such Bank shall not be entitled to
charge, collect, receive, reserve or take, interest in excess of the Maximum
Rate, and during any such period the interest payable hereunder shall be limited
to the Maximum Rate.
ARTICLE V
REDUCTION OF COMMITMENTS;
REPAYMENT; PREPAYMENT
SECTION 5.01 Reduction or Termination of the Commitments.
(a) Optional Reduction or Termination. The Borrower may, upon
prior notice to the Agent as provided herein, terminate in whole or reduce
ratably in part, as of the date specified by the Borrower in such notice, any
then unused portion of the respective Revolving Commitments (including the L/C
Commitments); provided, however, that each partial reduction shall be in a
Minimum Amount; and provided further, however, that no such reduction or
termination shall be permitted if the Effective Amount of Revolving Loans and
L/C Obligations would exceed the amount of the aggregate Revolving Commitments
thereafter in effect; and provided further, however, that once reduced in
accordance with this Section 5.01, the Revolving Commitment of any Bank may not
be increased. The amount of any such Revolving Commitment reductions shall not
be applied to the L/C Commitments unless otherwise specified by the Borrower.
All accrued commitment and letter of credit fees to, but not including, the
effective date of any such reduction or termination shall be payable on the
effective date of such reduction or termination.
(b) Mandatory Termination. The Revolving Commitments shall
terminate on the Revolving Expiry Date.
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SECTION 5.02 Repayment of the Loans. The Borrower shall repay to the
Banks in full on the Revolving Expiry Date the aggregate principal amount of the
Revolving Loans outstanding on such date.
SECTION 5.03 Prepayments.
(a) Optional Prepayments. Subject to Section 6.02, Borrower may,
upon prior notice to the Agent not later than the Required Notice Date, prepay
the outstanding amount of the Loans in whole or ratably in part, without premium
or penalty. Partial prepayments shall be in Minimum Amounts. The Borrower shall
not be entitled to make any prepayments of Eurodollar Rate Loans other than on
the last day of the applicable Interest Period without the prior consent of the
Banks.
(b) Mandatory Prepayments. (i) Subject to Section 6.02, if on any
date the Effective Amount of all Revolving Loans plus the Effective Amount of
all L/C Obligations shall exceed the aggregate Revolving Commitments, the
Borrower shall immediately, and without notice or demand, prepay the outstanding
principal amount of the Loans by an amount equal to the applicable excess. Any
such prepayment shall be applied first to the L/C Advances, secondly to the
Reference Rate Loans and thirdly to Eurodollar Rate Loans. Additionally, if on
any date the aggregate outstanding amount of L/C Obligations shall exceed the
aggregate L/C Commitments, the Borrower shall cash collateralize on such date
the outstanding Letters of Credit in an amount equal to the excess of the
maximum amount then available to be drawn under the Letters of Credit over the
aggregate L/C Commitments.
(ii) Upon the sale, transfer or other disposition of any
Substantial Assets, the Borrower shall, within one Business Day of the
Borrower's or such Subsidiary's receipt of the proceeds thereof, prepay the
outstanding principal amount of the Loans, in an amount equal to the Net Cash
Proceeds therefrom.
(c) Notice; Application. The notice given of any prepayment (a
"Notice of Prepayment") shall specify the date and amount of the prepayment and
whether the prepayment is of Reference Rate or Eurodollar Rate Loans or a
combination thereof, and if of a combination thereof the amount of the
prepayment allocable to each. Such Notice of Prepayment shall also specify
whether the prepayment is of L/C Advances, Revolving Loans or a combination
thereof. Upon receipt of the Notice of Prepayment the Agent shall promptly
notify each Bank thereof. If the Notice of Prepayment is given, the Borrower
shall make such prepayment and the prepayment amount specified in such Notice
shall be due and payable on the date specified therein, with accrued interest to
such date on the amount prepaid and any amounts payable pursuant to Section
6.02. Except as otherwise provided herein, prepayments of Loans to be applied
pursuant to this subsection 5.03(c) shall be applied (i) first, to L/C Advances,
(ii) secondly, to the Reference Rate Loans and (iii) thirdly, to the Eurodollar
Rate Loans.
ARTICLE VI
YIELD PROTECTION AND ILLEGALITY
SECTION 6.01 Inability to Determine Rates. If the Agent shall determine
that adequate and reasonable means do not exist to ascertain the Eurodollar
Rate, or the Majority
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Banks shall determine that the Eurodollar Rate does not accurately reflect the
cost to the Banks of making or maintaining Eurodollar Rate Loans, then the Agent
shall give telephonic notice (promptly confirmed in writing) to the Borrower and
each Bank of such determination. Such notice shall specify the basis for such
determination and shall, in the absence of manifest error, be conclusive and
binding for all purposes. Thereafter, the obligation of the Banks to make or
maintain Eurodollar Rate Loans hereunder shall be suspended until the Agent
(upon the instructions of the Majority Banks) revokes such notice. Upon receipt
of such notice, the Borrower may revoke any Notice then submitted by it. If the
Borrower does not revoke such Notice, the Banks shall make, convert or continue
Loans, as proposed by the Borrower, in the amount specified in the Notice
submitted by the Borrower, but such Loans shall be made, converted or continued
as Reference Rate Loans instead of Eurodollar Rate Loans, as the case may be.
SECTION 6.02 Funding Losses. In addition to such amounts as are required
to be paid by the Borrower pursuant to Section 6.03, the Borrower shall
compensate each Bank, promptly upon receipt of such Bank's written request made
to the Borrower (with a copy to the Agent), for all losses, costs and expenses
(including any loss or expense incurred by such Bank in obtaining, liquidating
or re-employing deposits or other funds to fund or maintain its Eurodollar Rate
Loans), if any, which such Bank sustains: (i) if the Borrower repays, converts
or prepays any Eurodollar Rate Loan on a date other than the last day of an
Interest Period for such Eurodollar Rate Loan (whether as a result of an
optional prepayment, mandatory prepayment, a payment as a result of acceleration
or otherwise); (ii) if the Borrower fails to borrow a Eurodollar Rate Loan after
giving its Notice (other than as a result of the operation of Section 6.01 or
6.04); (iii) if the Borrower fails to convert into or continue a Eurodollar Rate
Loan after giving its Notice (other than as a result of the operation of Section
6.01 or 6.04); or (iv) if the Borrower fails to prepay a Eurodollar Rate Loan
after giving its Notice. Any such request for compensation shall set forth the
basis for requesting such compensation and shall, in the absence of manifest
error, be conclusive and binding for all purposes.
SECTION 6.03 Regulatory Changes.
(a) Increased Costs. If after the date hereof, the adoption of,
or any change in, any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration thereof
(a "Regulatory Change"), or compliance by any Bank (or its Lending Office) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including any such requirement imposed
by the FRB, but excluding with respect to any Eurodollar Rate Loan any such
requirement included in the calculation of the Eurodollar Rate) against assets
of, deposits with or for the account of, or credit extended by, any Bank's
Lending Office or shall impose on any Bank (or its Lending Office) or on the
interbank eurodollar market any other condition affecting any Bank's Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Loans or its other
obligations hereunder, and the result of any of the foregoing is to increase the
cost to such Bank (or its Lending Office) of agreeing to make or making, funding
or maintaining any Loan or participating in any L/C Obligations, or increase the
cost to the Issuing Bank of agreeing to issue or issuing or maintaining any
Letter of Credit or of agreeing to make or making, funding or maintaining any
unpaid drawing under any Letter of
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Credit, or to reduce the amount of any sum received or receivable by such Bank
(or its Lending Office) or the Issuing Bank under this Agreement with respect
thereto, by an amount deemed by such Bank to be material, then from time to
time, within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amounts as shall compensate such
Bank for such increased cost or reduction.
(b) Capital Requirements. If any Bank shall have determined that
any Regulatory Change regarding capital adequacy, or compliance by such Bank (or
any corporation controlling such Bank), with any request, guideline or directive
regarding capital adequacy (whether or not having the force of law) of any
Governmental Authority, has or shall have the effect of reducing the rate of
return on such Bank's, the Issuing Bank's or such corporation's capital as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank, the Issuing Bank or such corporation would have achieved but for such
adoption, change or compliance (taking into consideration such Bank's, the
Issuing Bank's or corporation's policies with respect to capital adequacy), by
an amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent), the Borrower shall
pay to such Bank such additional amounts as shall compensate such Bank for such
reduction.
(c) Requests. Any such request for compensation by a Bank under
this Section 6.03 shall set forth the basis of calculation thereof and shall, in
the absence of manifest error, be conclusive and binding for all purposes. In
determining the amount of such compensation, such Bank may use any reasonable
averaging and attribution methods.
SECTION 6.04 Illegality. If any Bank shall determine that it has become
unlawful, as a result of any Regulatory Change, for such Bank to make, convert
into or maintain Eurodollar Rate Loans as contemplated by this Agreement, such
Bank shall promptly give notice of such determination to the Borrower (through
the Agent), and (i) the obligation of such Bank to make or convert into
Eurodollar Rate Loans, shall be suspended until such Bank gives notice that the
circumstances causing such suspension no longer exist; and (ii) each of such
Bank's outstanding Eurodollar Rate Loans shall, if requested by such Bank, be
converted into a Reference Rate Loan not later than upon expiration of the
Interest Period related to such Eurodollar Rate Loan, or, if earlier, on such
date as may be required by the applicable Regulatory Change, as shall be
specified in such request. Any such determination shall, in the absence of
manifest error, be conclusive and binding for all purposes.
SECTION 6.05 Funding Assumptions. Solely for purposes of calculating
amounts payable by the Borrower to the Banks under this Article VI, each
Eurodollar Rate Loan made by a Bank (and any related reserve, special deposit or
similar requirement) shall be conclusively deemed to have been funded at the
Interbank Rate used in determining the Eurodollar Rate for such Eurodollar Rate
Loan by a matching deposit or other borrowing in the interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan is in fact so funded.
SECTION 6.06 Obligation to Mitigate. Each Bank agrees that as promptly
as practicable after it becomes aware of the occurrence of an event that would
entitle it to give notice pursuant to Section 6.03(a) or 6.04, and in any event
if so requested by the Borrower, each
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Bank shall use reasonable efforts to make, fund or maintain its affected
Eurodollar Rate Loans through another Lending Office if as a result thereof the
increased costs would be avoided or materially reduced or the illegality would
thereby cease to exist and if, in the reasonable opinion of such Bank, the
making, funding or maintaining of such Eurodollar Rate Loans through such other
Lending Office would not in any material respect be disadvantageous to such Bank
or contrary to such Bank's normal banking practices.
ARTICLE VII
PAYMENTS
SECTION 7.01 Pro Rata Treatment. Except as otherwise provided in this
Agreement, each Borrowing hereunder, each Commitment reduction, each payment
(including each prepayment) by the Borrower on account of the principal,
interest drawings under Letters of Credit, fees and other amounts required
hereunder shall be made without set-off or counterclaim and, except as otherwise
expressly provided with respect to drawings under Letters of Credit, shall be
made ratably in accordance with the Pro Rata Shares. Each conversion or
continuation of Loans shall also be made ratably in accordance with the
respective Pro Rata Shares of the Banks.
SECTION 7.02 Payments.
(a) Payments. The Borrower shall make each payment under the Loan
Documents, unconditionally in full without set-off, counterclaim or other
defense, not later than 11:00 A.M. (California time) on the day when due to the
Agent in Dollars and in same day or immediately available funds, to the Agent's
Account. The Agent shall promptly thereafter distribute like funds relating to
the payment on account of principal, interest, drawings under Letters of Credit,
letter of credit fee or commitment fee or any other amounts payable to the Banks
or to the Issuing Bank, as the case may be, ratably (except as a result of the
operation of Article V) to the Banks in accordance with their Pro Rata Shares,
or to the Issuing Bank, as the case may be.
(b) Authorization to Agent. To effectuate any payment of
principal and interest by the Borrower hereunder, the Agent shall, and the
Borrower hereby authorizes the Agent to, charge any deposit account of the
Borrower with the Agent for the amount of such payment on the due date thereof.
If the collected credit balance of such account on such date shall be
insufficient to cover the full payment due, the Borrower shall immediately upon
demand remit to the Agent the full amount of such deficiency. The Agent may (but
shall not be obligated to), and the Borrower hereby authorizes the Agent to,
charge any such account of the Borrower for the amount of any other payment
which is not made by the time specified in subsection (a). The Agent shall
promptly notify the Borrower after charging any such account.
(c) Authorization to Banks. The Borrower hereby authorizes each
Bank, if and to the extent the Borrower has failed to pay amounts due hereunder
and as a result payment owed to such Bank is not made when due hereunder, to
charge from time to time any or all of the Borrower's accounts with such Bank
for any amount so due. Each Bank receiving any payment
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as a result of charging any such account shall promptly notify the Borrower
thereof (through the Agent).
(d) Application. (i) Unless the Agent shall receive a timely
election by the Borrower with respect to the application of any principal
payments, each payment of principal by the Borrower shall be applied (A) first,
to the Reference Rate Loans then outstanding and (B) secondly, to the Eurodollar
Rate Loans then outstanding (in such manner as the Agent shall determine in its
sole discretion). Additionally, unless specified in such election or otherwise
provided herein, payments of principal shall be applied first to the L/C
Advances, and secondly to Revolving Loans. (ii) Each payment by or on behalf of
the Borrower hereunder shall, unless a specific determination is made by the
Agent and the Majority Banks with respect thereto, be applied in the following
order: (A) first, to any fees, costs, expenses and other amounts due the Agent;
(B) secondly, to any fees, costs, expenses and other amounts (other than
principal and interest) due the Banks; (C) thirdly, to accrued and unpaid
interest due the Banks; and (D) fourthly, to principal due the Banks.
(e) Extension. Whenever any payment hereunder shall be stated to
be due, or whenever any Interest Payment Date or any other date specified
hereunder would otherwise occur, on a day other than a Business Day, then,
except as otherwise provided herein, such payment shall be made, and such
Interest Payment Date or other date shall occur, on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest, letter of credit fee or commitment fee
hereunder.
SECTION 7.03 Taxes.
(a) No Reduction of Payments. The Borrower shall pay all amounts
of principal, interest, fees and other amounts due under the Loan Documents free
and clear of, and without reduction for or on account of, any present and future
taxes, levies, imposts, duties, fees, assessments, charges, deductions or
withholdings and all liabilities with respect thereto excluding, in the case of
each Bank and the Agent, income and franchise taxes imposed on it by the
jurisdiction under the laws of which such Bank or the Agent is organized or in
which its principal executive offices may be located or any political
subdivision or taxing authority thereof or therein, and by the jurisdiction of
such Bank's Lending Office and any political subdivision or taxing authority
thereof or therein (all such nonexcluded taxes, levies, imposts, duties, fees,
assessments, charges, deductions, withholdings and liabilities being hereinafter
referred to as "Taxes"). If any Taxes shall be required by law to be deducted or
withheld from any payment, the Borrower shall increase the amount paid so that
the respective Bank or the Agent receives when due (and is entitled to retain),
after deduction or withholding for or on account of such Taxes (including
deductions or withholdings applicable to additional sums payable under this
Section 7.03), the full amount of the payment provided for in the Loan
Documents.
(b) Deduction or Withholding; Tax Receipts. If the Borrower makes
any payment hereunder in respect of which it is required by law to make any
deduction or withholding, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time allowed for
such payment under applicable law and promptly thereafter shall furnish to the
Agent (for itself or for redelivery to the Bank to or for the account of which
such payment was made) an original or certified copy of a receipt evidencing
payment
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thereof, together with such other information and documents as the Agent or any
Bank (through the Agent) may reasonably request.
(c) Indemnity. If any Bank or the Agent is required by law to
make any payment on account of Taxes, or any liability in respect of any Tax is
imposed, levied or assessed against any Bank or the Agent, the Borrower shall
indemnify the Agent and the Banks for and against such payment or liability,
together with any incremental taxes, interest or penalties, and all costs and
expenses, payable or incurred in connection therewith, including Taxes imposed
on amounts payable under this Section 7.03, whether or not such payment or
liability was correctly or legally asserted. A certificate of the Agent or any
Bank as to the amount of any such payment shall, in the absence of manifest
error, be conclusive and binding for all purposes.
(d) Lender Representations. (i) Each Bank represents and warrants
that it is entitled to receive any payments hereunder without the withholding of
any tax and will furnish to Agent such forms, certificates, statements and other
documents as Agent may request from time to time to evidence such Bank's
exemption from the withholding of any tax imposed by any jurisdiction or to
enable Agent to comply with any applicable laws or regulations relating thereto.
(ii) Without limiting the effect of the foregoing, if a Bank is not created or
organized under the laws of the United States or any state thereto, such Bank
further represents and warrants either (A) that it is engaged in the conduct of
a business within the United States and that the payments made hereunder are or
are reasonably expected to be effectively connected with the conduct of the
trade or business and are or will be includible to its gross income or, (B) if
Bank is not engaged in a U.S. trade or business with which such payments are
effectively connected, that such Bank is entitled to the benefits of a tax
convention which exempts the income from U.S. withholding tax and that it has
satisfied all requirements to qualify for the exemption from tax.
(e) Form 1001 and 4224. Each Bank agrees that it will,
immediately upon the request of Agent, furnish to Agent Form 4224 or Form 1001
of the Internal Revenue Service, or such other forms, certificates, statements
or documents, duly executed and completed by such Bank as evidence of such
Bank's exemption from the withholding of U.S. tax with respect thereto. If a
Bank determines that, as a result of any change in applicable law, regulation,
or treaty or in any official application or interpretation thereof, it ceases to
qualify for exemption from any tax imposed by any jurisdiction with respect to
payments made hereunder, such Bank shall promptly notify Agent of such fact and
Agent may, but shall not be required to withhold the amount of any such
applicable tax from amounts paid to such Bank hereunder. Agent shall not be
obligated to make any payments hereunder to a Bank in respect of such Bank's Pro
Rata Share of any payments hereunder until such Bank shall have furnished to
Agent the requested form, certification, statement or document and may withhold
the amount of such applicable tax from amounts paid to such Bank hereunder.
(f) Bank's Indemnity. Each Bank shall reimburse, indemnify and
hold Agent harmless for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed upon, incurred by or asserted
against Agent due to the Agent's reliance upon the representation hereby made by
such Bank that it is exempt form withholding of tax. Unless Agent receives
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written notice to the contrary, each Bank shall be deemed to have made the
representations contained in this Section on the Closing Date and in each
subsequent tax year of such Bank.
(g) Mitigation. Each Bank agrees that as promptly as practicable
after it becomes aware of the occurrence of an event that would cause the
Borrower to make any payment in respect of Taxes to such Bank or a payment in
indemnification with respect to any Taxes, and in any event if so requested by
the Borrower following such occurrence, each Bank shall use reasonable efforts
to make, fund or maintain its affected Loan (or relevant part thereof) through
another Lending Office if as a result thereof the additional amounts so payable
by the Borrower would be avoided or materially reduced and if, in the reasonable
opinion of such Bank, the making, funding or maintaining of such Loan (or
relevant part thereof) through such other Lending Office would not in any
material respect be disadvantageous to such Bank or contrary to such Bank's
normal banking practices.
SECTION 7.04 Non-Receipt of Funds. Unless the Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any of
the Banks hereunder that the Borrower shall not make such payment in full, the
Agent may assume that the Borrower has made such payment in full to the Agent on
such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Borrower shall not have so made such payment
in full to the Agent, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate.
SECTION 7.05 Sharing of Payments. If any Bank shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Loans made by it (other than pursuant to a
provision hereof providing for non-pro rata treatment) in excess of its Pro Rata
Share of payments on account of the Loans obtained by all the Banks, such Bank
shall forthwith advise the Agent of the receipt of such payment, and within five
Business Days of such receipt purchase from the other Banks (through the Agent),
without recourse, such participations in the Loans made by them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably with
each of them in accordance with the respective Pro Rata Shares of the Banks;
provided, however, that if all or any portion of such excess payment is
thereafter recovered by or on behalf of the Borrower from such purchasing Bank,
the purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrower agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section 7.05 may
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation. No documentation other than
notices and the like referred to in this Section 7.05 shall be required to
implement the terms of this Section 7.05. The Agent shall keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased pursuant to this Section 7.05 and shall in each case
notify the Banks following any such purchases.
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ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.01 Conditions Precedent to the Initial Credit Extensions. The
obligation of each Bank to make its initial Credit Extension shall be subject to
the satisfaction of each of the following conditions precedent on or before the
Closing Date:
(a) Fees and Expenses. The Borrower shall have paid (i) all fees
then due in accordance with Section 4.03 and (ii) all invoiced costs and
expenses then due in accordance with Section 13.04(a).
(b) Loan Documents. The Agent shall have received the following
Loan Documents: (i) the Revolving Notes, executed by the Borrower, for any Banks
requesting Revolving Notes; (ii) (in sufficient copies for each of the Agent,
the Banks and the Borrower) counterparts of this Agreement, and (iii) the
Collateral Documents, executed by each of the respective parties thereto.
(c) Documents and Actions Relating to Collateral. The Agent shall
have received the following, in form and substance satisfactory to it and the
Banks, the results, dated as of a recent date prior to the Closing Date, of
searches conducted in the UCC filing records in each of the governmental offices
in California, Delaware, Arizona and New York, which shall have revealed no
Liens with respect to any of the Collateral except Permitted Liens.
(d) Additional Closing Documents and Actions. The Agent shall
have received the following, in form and substance satisfactory to it and the
Banks:
(i) a copy of the issued BABC Letter of Credit and evidence of
the acceptance of such Letter of Credit by Bank of America National Trust and
Savings Association.
(ii) a copy of a pay off letter from BankAmerica Business Credit,
Inc. to Borrower in form and substance satisfactory to Agent and the Banks;
(iii) evidence of completion to the satisfaction of the Agent and
the Banks of such investigations, reviews and audits with respect to the
Borrower and its operations as the Agent or any Bank may deem appropriate;
(iv) evidence that all insurance required under this Agreement
and the Collateral Documents is in full force and effect and all endorsements
thereto required under this Agreement and the Collateral Documents;
(v) evidence that all (A) authorizations or approvals of any
Governmental Authority and (B) approvals or consents of any other Person,
required in connection with the execution, delivery and performance of the Loan
Documents shall have been obtained;
(vi) (in sufficient copies for the Banks) the audited
consolidated balance sheet of the Borrower and its Subsidiaries as at June 30,
1998, and the related consolidated statements of income, shareholders' equity
and cash flows for the fiscal year then ended, and the unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at September 30, 1998, and
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the related consolidated statements of income, shareholders' equity and cash
flows, for the fiscal quarter then ended;
(vii) a completed Compliance Certificate, dated the Closing Date,
as of the end of the immediately preceding fiscal quarter; and
(viii) a certificate of a Responsible Officer of the Borrower,
dated the Closing Date, stating that (A) the representations and warranties
contained in Section 9.01 and in the other Loan Documents are true and correct
on and as of the date of such certificate as though made on and as of such date
and (B) on and as of the Closing Date, no Default shall have occurred and be
continuing or shall result from the initial Credit Extension.
(e) Corporate Documents. The Agent shall have received the
following, in form and substance satisfactory to it:
(i) certified copies of the certificate of incorporation of the
Borrower, together with certificates as to good standing, from the Secretary of
State or other Governmental Authority, as applicable, of the state of Delaware
and certificates from the Secretary of State or other Governmental Authority, as
applicable, of the states of Arizona, California, Georgia, Maryland,
Massachusetts, New Jersey, New York, Texas and Virginia as to the Borrower's
status as a foreign corporation, each dated as of a recent date prior to the
Closing Date;
(ii) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, certifying (A) copies of the bylaws of the
Borrower and the resolutions of the Board of Directors of the Borrower
authorizing the execution, delivery and performance of the Loan Documents and
(B) the incumbency, authority and signatures of each officer of the Borrower
authorized to execute and deliver the Loan Documents and act with respect
thereto, upon which certificate the Agent and the Banks may conclusively rely
until the Agent shall have received a further certificate of the Secretary or an
Assistant Secretary of the Borrower canceling or amending such prior
certificate.
(f) Legal Opinions. The Agent shall have received the opinion of
Howard, Rice, Nemerovski, Canady, ▇▇▇▇ & ▇▇▇▇▇▇, a professional corporation,
counsel to the Borrower, dated the Closing Date, in substantially the form of
Exhibit J.
SECTION 8.02 Conditions Precedent to All Credit Extensions. The
obligation of each Bank to make any Credit Extension to be made by it hereunder
(including its initial Credit Extension) is subject to the satisfaction of the
following conditions precedent on the relevant Credit Extension date:
(a) Notice. The Agent shall have received a Notice of Borrowing;
or in the case of any issuance, amendment or renewal of any Letter of Credit,
the Issuing Bank and the Agent shall have received an L/C Application or L/C
Amendment Application, as required under Section 3.02.
(b) Material Adverse Effect. On and as of the date of such Credit
Extension, there shall have occurred no Material Adverse Effect since the date
of this Agreement (in the
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case of the initial Credit Extension) or the date of the most recent Credit
Extension (in the case of any subsequent Credit Extension), as the case may be.
(c) Representations and Warranties; No Default. On the date of
such Credit Extension, both before and after giving effect thereto and to the
application of proceeds therefrom: (i) the representations and warranties
contained in Section 9.01 and in the other Loan Documents shall be true, correct
and complete on and as of the date of such Credit Extension date as though made
on and as of such date; and (ii) no Default shall have occurred and be
continuing or shall result from such Credit Extension. For purposes of this
Section 8.02(c), clause (i) shall be deemed instead to refer to the last day of
the most recent quarter and year for which financial statements have then been
delivered in respect of the representation and warranty made in Section 9.01(p);
clause (i) and shall not be deemed to refer to any other representations and
warranties which relate solely to an earlier date (provided that such other
representations and warranties shall be true, correct and complete as of such
earlier date); and clause (i) shall take into account any amendments to the
Schedules and other disclosures made in writing by the Borrower to the Agent and
the Banks after the Closing Date and approved by the Agent and the Majority
Banks. The giving of any Notice of Borrowing, the submission of any L/C
Application or L/C Amendment Application, and the acceptance by the Borrower of
the proceeds of each Borrowing following the Closing Date, shall each be deemed
a certification to the Agent and the Banks that on and as of the date of such
Credit Extension such statements are true.
(d) Perfection of Collateral Documents. Should the Agent and the
Banks be authorized to perfect their security interests granted pursuant to the
Collateral Document pursuant to Section 11.03, such security interests shall
have been perfected to the satisfaction of the Agent and Majority Banks.
(e) Additional Documents . The Agent shall have received, in form
and substance satisfactory to it, such additional approvals, opinions, documents
and other information as the Agent or any Bank (through the Agent) may
reasonably request.
(f) Post-Closing Conditions . Unless and until the covenants set
forth in Section 10.02(m)(i) shall have been fulfilled to the satisfaction of
the Agent and the Banks, no Bank shall be required to make any Credit Extension
if the amount of such Credit Extension when aggregated with all other Credit
Extensions then outstanding would exceed $14,398,743.02.
(g) Government Division Disposal . If the Borrower disposes of
the Government Division without the prior written consent of Agent, no Bank
shall be required to make any Credit Extension unless and until the terms of
such disposal have been approved, in its sole discretion, by the Agent.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
SECTION 9.01 Representations and Warranties. The Borrower represents and
warrants to each Bank and the Agent that:
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(a) Organization and Powers. Each of the Borrower and its
Subsidiaries is a corporation or partnership duly organized or formed, as the
case may be, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do business and
is in good standing in each jurisdiction in which the failure so to qualify or
be in good standing would result in a Material Adverse Effect and has all
requisite power and authority to own its assets and carry on its business and,
with respect to the Borrower, to execute, deliver and perform its obligations
under the Loan Documents.
(b) Authorization; No Conflict. The execution, delivery and
performance by the Borrower and each Subsidiary of each of the Loan Documents to
which they are respectively party has been duly authorized by all necessary
corporate action of the Borrower and such Subsidiaries and does not and will not
(i) contravene the terms of the certificate of incorporation and the bylaws of
the Borrower and such Subsidiaries or result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower or any such Subsidiary (as the case
may be) is a party or by which they or their properties may be bound or
affected; (ii) violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree or the like binding on or affecting the Borrower or
any such Subsidiary (as the case may be); or (iii) except as contemplated by
this Agreement, result in, or require, the creation or imposition of any Lien
upon or with respect to any of the properties of the Borrower or any such
Subsidiary (as the case may be).
(c) Binding Obligation. The Loan Documents constitute, or when
delivered under this Agreement will constitute, legal, valid and binding
obligations of the Borrower and each Subsidiary party to any Loan Document,
enforceable against the Borrower and any such Subsidiary in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to the enforcement of
remedies.
(d) Consents. No authorization, consent, approval, license,
exemption of, or filing or registration with, any Governmental Authority, or
approval or consent of any other Person, is required for the due execution,
delivery or performance by the Borrower or any Subsidiary of any of the Loan
Documents, except for recordings or filings in connection with the perfection of
the Liens on the Collateral in favor of the Agent on behalf of the Banks and the
consent of BankAmerica Business Credit in connection with the termination of the
Existing BABC Credit.
(e) No Defaults. Neither the Borrower nor any of its Subsidiaries
is in material default under any contract, lease, agreement, judgment, decree or
order to which it is a party or by which it or its properties may be bound.
(f) Title to Properties; Liens. The Borrower and its Subsidiaries
have good and marketable title to, or valid and subsisting leasehold interests
in, their properties and assets, including all property forming a part of the
Collateral, and there is no Lien upon or with respect to any of such properties
or assets, including any of the Collateral, except for Permitted Liens.
(g) Litigation. Except to the extent specifically disclosed in
Schedule 7, there are no actions, suits or proceedings pending or, to the best
of the Borrower's knowledge,
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threatened against or affecting the Borrower or any of its Subsidiaries or the
properties of the Borrower or any of its Subsidiaries before any Governmental
Authority or arbitrator which if determined adversely to the Borrower or any
such Subsidiary would result in a Material Adverse Effect.
(h) Compliance with Environmental Laws. Each of the Borrower and
its Subsidiaries is in full compliance with all Environmental Laws, whether in
connection with the ownership, use, maintenance or operation of its Premises or
the conduct of any business thereon, or otherwise except where the failure to be
in such compliance would not, individually or in the aggregate, have a Material
Adverse Effect. Neither the Borrower, any of its Subsidiaries nor, to the best
of the Borrower's knowledge, any previous owner, tenant, occupant, user or
operator of the Premises, or any present tenant or other present occupant, user
or operator of the Premises has used, generated, manufactured, installed,
treated, released, stored or disposed of any Hazardous Substances on, under, or
at the Premises, except in compliance with all applicable Environmental Laws
except where failure to be in such compliance would not, individually or in the
aggregate, have a Material Adverse Effect. To the best of the Borrower's
knowledge, no Hazardous Substances have at any time been spilled, leaked,
dumped, deposited, discharged, disposed of or released on, under, at or from the
Premises, nor have any of the Premises been used at any time by any Person as a
landfill or waste disposal site. There are no actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending or, to the best of
the Borrower's knowledge, threatened against or affecting the Borrower or any of
its Subsidiaries or with respect to the ownership, use, maintenance and
operation of the Premises, relating to Environmental Laws or Hazardous
Substances which, if adversely determined to the Borrower or any Subsidiary
would result in a Material Adverse Effect.
(i) Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Investment Company Act of 1940, the
Interstate Commerce Act, any state public utilities code or any other federal or
state statute or regulation limiting its ability to incur Indebtedness.
(j) ERISA.
(i) The Borrower and all ERISA Affiliates have satisfied all
applicable contribution requirements under Section 412(c)(11) of the Internal
Revenue Code and have never sought a waiver under Section 412(d) of the Internal
Revenue Code;
(ii) no Termination Event has occurred and is continuing, or is
reasonably expected to occur;
(iii) the aggregate amount of Unfunded Accrued Benefits under all
Pension Plans (excluding in such computation Pension Plans with assets greater
than accrued benefits) does not exceed $500,000;
(iv) there is no condition or event under which the Borrower, any
ERISA Affiliate, or any Plan maintained by the Borrower or any ERISA Affiliate
could be subject to any
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risk of material liability under ERISA or the Internal Revenue Code, regardless
of whether the Borrower or any ERISA Affiliate engaged in a transaction giving
rise to the liability;
(v) neither the Borrower nor any ERISA Affiliate has any unfunded
or contingent liability that exceeds $500,000 with respect to Plans that provide
post-retirement welfare benefits;
(vi) all Plans maintained by, or contributed to by, the Borrower
or any ERISA Affiliate comply in all material respects, and have been
administered in material compliance with, the requirements of applicable law
(including, if applicable, foreign law, ERISA and the Internal Revenue Code),
and in accordance with each Plan's terms.
(k) Subsidiaries. The name, capital structure and ownership of
each Subsidiary of Borrower as at the date of this Agreement is as set forth in
Schedule 6. All of the outstanding capital stock of, or other interest in, each
such Subsidiary has been validly issued, and is fully paid and nonassessable.
Except as set forth in such Schedule, on the date of this Agreement the Borrower
has no equity interest in any Person.
(l) Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying "margin
stock" (within the meaning of Regulations G or U of the FRB). No part of the
proceeds of the Loans will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(m) Taxes. Each of the Borrower and its Subsidiaries has duly
filed all tax and information returns required to be filed, and has paid all
taxes, fees, assessments and other governmental charges or levies that have
become due and payable, except to the extent such taxes or other charges are
being contested in good faith and are adequately reserved against in accordance
with GAAP.
(n) Patents and Other Rights. Each of the Borrower and its
Subsidiaries possesses all permits, franchises, licenses, patents, trademarks,
trade names, service marks, copyrights and all rights with respect thereto, free
from burdensome restrictions, that are necessary for the ownership, maintenance
and operation of its business and neither the Borrower nor any such Subsidiary
is in violation of any rights of others with respect to the foregoing which
violation could reasonably be expected to result in a Material Adverse Effect.
(o) Insurance. The properties of the Borrower and its
Subsidiaries are insured, with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the Borrower or such Subsidiary
operates.
(p) Financial Statements and Projections. (i) The audited
consolidated balance sheet of the Borrower and its Subsidiaries as at June 30,
1998, and the related consolidated statements of income, shareholders' equity
and cash flows for the fiscal year then ended, and the unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at September 30, 1998, and
the related consolidated statements of income, shareholders' equity and
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cash flows for the quarter then ended fairly present the financial condition of
the Borrower and its Subsidiaries as at such dates and the results of operations
of the Borrower and its Subsidiaries for the periods covered by such statements,
in each case in accordance with GAAP consistently applied, subject, in the case
of the September 30, 1998 financial statements, to normal year-end adjustments.
(ii) Since June 30, 1998, there has been no Material Adverse Effect. (iii) The
pro forma financial statements of the Borrower and its Subsidiaries previously
supplied to the Agent were prepared in accordance with GAAP, and as of the date
of their delivery to Agent fairly presented the pro forma financial condition of
the Borrower and its Subsidiaries, and the financial projections previously
supplied to the Agent, as of the date of their delivery to Agent, represented
the Borrower's best estimates and assumptions as to future performance, which
the Borrower believes to be fair and reasonable as of the time made in the light
of then-current and reasonably foreseeable business conditions.
(q) Liabilities. Neither the Borrower nor any of its Subsidiaries
has any material liabilities, fixed or contingent, that are not reflected in the
financial statements referred to in subsection 9.01(p)(i), the notes thereto or
otherwise disclosed in writing to the Banks, other than liabilities arising in
the ordinary course of business since June 30, 1998.
(r) Labor Disputes, Etc. There are no strikes, lockouts or other
labor disputes against the Borrower or any of its Subsidiaries, or, to the best
of the Borrower's knowledge, threatened against or affecting the Borrower or any
of its Subsidiaries, and no Event of Loss has occurred with respect to any
assets or property of the Borrower or any of its Subsidiaries, which may result
in a Material Adverse Effect.
(s) Solvency. Each of the Borrower and its Subsidiaries is
Solvent.
(t) Disclosure. None of the representations or warranties made by
the Borrower or any of its Subsidiaries in the Loan Documents as of the date of
such representations and warranties, and none of the statements contained in
each exhibit, report, certificate or written statement furnished by or on behalf
of the Borrower or any of its Subsidiaries to the Agent or the Banks in
connection with the Loan Documents, contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under which
they are made, not misleading, as of the time made or delivered.
(u) Collateral Documents. The provision of each of the Collateral
Documents are effective to create in favor of the Agent, for the benefit of
itself and the Banks, a legal, valid and enforceable security interest in all
right, title and interest of the Company in the Collateral described therein.
Upon filing of duly signed UCC financing statements, Patent and Trademark Office
filings and Copyright Office filings, the Agent will have a perfected security
interest in the Collateral, subject only to Permitted Liens.
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ARTICLE X
COVENANTS
SECTION 10.01 Reporting Covenants. So long as any of the Obligations
shall remain unpaid, any Letter of Credit shall remain outstanding or any Bank
shall have any Commitment, the Borrower agrees that:
(a) Financial Statements and Other Reports. The Borrower shall
furnish to the Agent in sufficient copies for distribution to the Banks:
(i) as soon as available and in any event within 45 days after
the end of the first three fiscal quarters of each fiscal year or 90 days (in
the case of the fourth fiscal quarter), a consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such quarter, and the related
consolidated statements of income, shareholders' equity and cash flows of the
Borrower and its Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, prepared in accordance with GAAP
consistently applied, all in reasonable detail and setting forth in comparative
form the figures for the corresponding period in the preceding fiscal year,
together with a certificate of a Responsible Officer of the Borrower stating
that such financial statements fairly present the financial condition of the
Borrower and its Subsidiaries as at such date and the results of operations of
the Borrower and its Subsidiaries for the period ended on such date and have
been prepared in accordance with GAAP consistently applied, subject to changes
resulting from normal, year-end audit adjustments and except for the absence of
notes;
(ii) as soon as available and in any event within 90 days after
the end of each fiscal year, a consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such fiscal year, and the related consolidated
statements of income, shareholders' equity and cash flows of the Borrower and
its Subsidiaries for such fiscal year, prepared in accordance with GAAP
consistently applied, all in reasonable detail and setting forth in comparative
form the figures for the previous fiscal year, accompanied by a report thereon
of Ernst & Young LLP or another firm of independent certified public accountants
of recognized national standing acceptable to the Majority Banks, which report
shall be unqualified as to scope of audit or the status of the Borrower and its
Subsidiaries as a going concern and the Borrower shall use its best efforts to
ensure that such report shall be delivered to the Agent pursuant to a reliance
agreement between the Agent and Banks and such independent public accountants in
form and substance satisfactory to the Agent;
(iii) together with the financial statements required pursuant to
clauses (i) and (ii), a Compliance Certificate of a Responsible Officer as of
the end of the applicable accounting period;
(iv) promptly upon receipt thereof, copies of all reports
submitted to the Borrower by its independent certified public accountants in
connection with each annual, interim or special audit examination of the
Borrower and its Subsidiaries made by such accountants, including the
"management letter" submitted by such accountants to the Borrower in connection
with their annual audit;
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(v) as soon as available and in any event not less than 30 days
prior to the start of each fiscal year, a consolidated financial forecast for
the Borrower and its Subsidiaries for the following three fiscal years,
including forecasted consolidated balance sheets, consolidated statements of
income, shareholders' equity and cash flows of the Borrower and its
Subsidiaries, which forecast shall (A) state the assumptions used in the
preparation thereof, (B) contain such other information as requested by any Bank
and (C) be in form satisfactory to the Majority Banks;
(vi) promptly after the same are released, copies of all press
releases; and
(vii) promptly after the giving, sending or filing thereof,
copies of all reports, if any, which the Borrower or any of its Subsidiaries
sends to the holders of its respective capital stock or other securities and of
all reports or filings, if any, by the Borrower or any of its Subsidiaries with
the SEC or any national securities exchange.
As to any information contained in materials furnished pursuant to clause (vii),
the Borrower shall not be separately required to furnish such information under
clause (i) or (ii), but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described in
clauses (i) and (ii) at the times specified therein.
(b) Additional Information. The Borrower will furnish to the
Agent:
(i) promptly after the Borrower has knowledge or becomes aware
thereof, notice of the occurrence of any Event of Loss with respect to its
property or assets aggregating $1,000,000 (or its equivalent in another
currency) or more;
(ii) promptly after the Borrower has knowledge or becomes aware
thereof, notice of the occurrence or existence of any Default;
(iii) prompt written notice of (A) any proposed acquisition of
stock, assets or property by the Borrower or any of its Subsidiaries that could
reasonably be expected to result in environmental liability under Environmental
Laws, and (B)(1) any spillage, leakage, discharge, disposal, leaching, migration
or release of any Hazardous Substances required to be reported to any
Governmental Authority under applicable Environmental Laws, and (2) all actions,
suits, claims, notices of violation, hearings, investigations or proceedings
pending, or to the best of the Borrower's knowledge, threatened against or
affecting the Borrower or any of its Subsidiaries or with respect to the
ownership, use, maintenance and operation of the Premises, relating to
Environmental Laws or Hazardous Substances which could reasonably be expected to
result in a Material Adverse Effect;
(iv) prompt written notice of all actions, suits and proceedings
before any Governmental Authority or arbitrator pending, or to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries which (A) if adversely determined would involve an aggregate
liability of $1,000,000 (or its equivalent in another currency) or more, or (B)
otherwise may have a Material Adverse Effect;
(v) promptly after the Borrower has knowledge or becomes aware
thereof, (A) notice of the occurrence of any Termination Event, together with a
copy of any notice of such
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Termination Event to the PBGC, and (B) the details concerning any action taken
or proposed to be taken by the IRS, PBGC, Department of Labor or other Person
with respect thereto;
(vi) the information regarding insurance maintained by the
Borrower and its Subsidiaries as required under Section 10.03(c);
(vii) within 30 days of the date thereof, or, if earlier, on the
date of delivery of any financial statements pursuant to subsection (a), notice
of any material change in accounting policies or financial reporting practices
by the Borrower or any of its Subsidiaries;
(viii) promptly after the occurrence thereof, notice of any labor
controversy resulting in or threatening to result in any strike, work stoppage,
boycott, shutdown or other material labor disruption against or involving the
Borrower or any of its Subsidiaries which could result in a Material Adverse
Effect;
(ix) prompt written notice of any other condition or event which
has resulted, or that could reasonably be expected to result, in a Material
Adverse Effect; and
(x) such other information respecting the operations, properties,
business or condition (financial or otherwise) of the Borrower or its
Subsidiaries (including with respect to the Collateral) as any Bank (through the
Agent) may from time to time reasonably request.
Each notice pursuant to this subsection (b) shall be accompanied by a written
statement by a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein, and stating what action the Borrower proposes to
take with respect thereto.
SECTION 10.02 Financial Covenants. So long as any of the Obligations
shall remain unpaid, any Letter of Credit shall remain outstanding or any Bank
shall have any Commitment, the Borrower agrees that:
(a) Leverage Ratio. The Borrower shall at all times maintain a
ratio of Funded Debt to Consolidated EBITDA of not more than 3.0 to 1.0;
(b) Minimum Consolidated Tangible Net Worth. The Borrower shall
at all times maintain a Consolidated Tangible Net Worth of not less than
$35,000,000, plus the net proceeds received by the Borrower or any Subsidiary
from the sale or issuance of equity securities to any Person other than the
Borrower or any Subsidiary, plus 75% of positive Consolidated Net Income, if
any, for each fiscal year (or portion thereof) elapsed after June 30, 1998, it
being understood that at any date of determination which is not the end of a
fiscal year positive Consolidated Net Income, if any, shall be determined on a
cumulative basis for the portion of such fiscal year then elapsed and that at
the end of each fiscal year positive Consolidated Net Income, if any, for such
entire fiscal year shall be permanently added to the minimum required amount of
Consolidated Tangible Net Worth; minus an amount equal to non-cash charges
related to write-offs of in process research and development costs in connection
with Permitted Acquisitions and repurchases of stock pursuant to Section
10.04(i)(C), provided that any such non-cash charges and stock repurchases must
be realized in the fiscal quarter when such acquisitions are made and provided,
further, that the total aggregate amount of any such adjustments for such
non-cash charges and repurchases shall not exceed $8,000,000.
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(c) Quick Ratio. The Borrower shall at all times maintain a ratio
of Consolidated Quick Assets to Consolidated Current Liabilities of not less
than 0.90 to 1.0;
(d) Fixed Charge Coverage Ratio. The Borrower shall at all times
maintain a ratio of (A) Consolidated EBITDA plus rental expense incurred in
respect of Operating Leases to (B) Consolidated Fixed Charges, of the Borrower
and its Subsidiaries, for any period of four consecutive fiscal quarters of not
less than 1.15 to 1.0.
SECTION 10.03 Additional Affirmative Covenants. So long as any of the
Obligations shall remain unpaid, any Letter of Credit shall remain outstanding
or any Bank shall have any Commitment, the Borrower agrees that:
(a) Preservation of Existence, Etc. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain and preserve its legal existence,
its rights to transact business and all other rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and
the ownership of its properties, except in connection with transactions
permitted by Section 10.04.
(b) Payment of Obligations. The Borrower shall, and shall cause
each of its Subsidiaries to, pay and discharge (i) all taxes, fees, assessments
and governmental charges or levies imposed upon it or upon its properties or
assets prior to the date on which penalties attach thereto, and all lawful
claims for labor, materials and supplies which, if unpaid, might become a Lien
upon any properties or assets of the Borrower or any Subsidiary, except to the
extent such taxes, fees, assessments or governmental charges or levies, or such
claims, are being contested in good faith by appropriate proceedings and are
adequately reserved against in accordance with GAAP; (ii) all lawful claims
which, if unpaid, would by law become a Lien upon its property not constituting
a Permitted Lien; and (iii) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
(c) Maintenance of Insurance. The Borrower shall, and shall cause
each of its Subsidiaries to, carry and maintain in full force and effect, at its
own expense and with financially sound and reputable insurance companies,
insurance in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in the same or similar businesses and
owning similar properties in the localities where the Borrower or such
Subsidiary operates, including fire, extended coverage, business interruption,
public liability, property damage and worker's compensation. Insurance on the
Collateral shall name the Agent, for the ratable benefit of the Banks, as
additional insured and as loss payee. Upon the request of the Agent or any Bank,
the Borrower shall furnish the Agent from time to time with full information as
to the insurance carried by it and, if so requested, copies of all such
insurance policies. The Borrower shall also furnish to the Agent from time to
time upon the request of the Agent or any Bank a certificate of the Borrower's
insurance broker or other insurance specialist stating that all premiums then
due on the policies relating to insurance on the Collateral have been paid, that
such policies are in full force and effect and that such insurance coverage and
such policies comply with all the requirements of this subsection. All insurance
policies required under this subsection 10.03(c) shall provide that they shall
not be terminated or cancelled nor shall any such policy be materially changed
without at least 30 days' prior written notice to the
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Borrower and the Agent. Receipt of notice of termination or cancellation of any
such insurance policies or reduction of coverages or amounts thereunder shall
entitle the Agent to renew any such policies, cause the coverages and amounts
thereof to be maintained at levels required pursuant to the first sentence of
this subsection (c) or otherwise to obtain similar insurance in place of such
policies, in each case at the expense of the Borrower.
(d) Keeping of Records and Books of Account. The Borrower shall,
and shall cause each of its Subsidiaries to, keep adequate records and books of
account, in which complete entries shall be made in accordance with GAAP,
reflecting all financial transactions of the Borrower and its Subsidiaries.
(e) Inspection Rights. The Borrower shall at any reasonable time
and from time to time and, at any time prior to and during the continuance of an
Event of Default, upon reasonable advance notice to Borrower, permit the Agent
and the Banks or any of their respective agents or representatives to visit and
inspect any of the properties of the Borrower and its Subsidiaries and to
examine and make copies of and abstracts from the records and books of account
of the Borrower and its Subsidiaries, and to discuss the business affairs,
finances and accounts of the Borrower and any such Subsidiary with any of the
officers, employees or accountants of the Borrower or such Subsidiary.
(f) Compliance with Laws, Etc. The Borrower shall, and shall
cause each of its Subsidiaries to, comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including all Environmental Laws) and the terms of any
indenture, contract or other instrument to which it may be a party or under
which it or its properties may be bound.
(g) Maintenance of Properties, Etc. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain and preserve all of its properties
necessary or useful in the proper conduct of its business in good working order
and condition in accordance with the general practice of other corporations of
similar character and size, ordinary wear and tear excepted.
(h) Licenses. The Borrower shall, and shall cause each of its
Subsidiaries to, obtain and maintain all licenses, authorizations, consents,
filings, exemptions, registrations and other governmental approvals necessary in
connection with the execution, delivery and performance of the Loan Documents,
the consummation of the transactions therein contemplated or the operation and
conduct of its business and ownership of its properties.
(i) Action Under Environmental Laws. The Borrower shall, and
shall cause each of its Subsidiaries to, upon becoming aware of the presence of
any Hazardous Substance or the existence of any environmental liability under
applicable Environmental Laws with respect to the Premises, take all actions, at
their cost and expense, as shall be necessary or advisable to investigate and
clean up the condition of the Premises, including all removal, containment and
remedial actions, and restore the Premises to a condition in compliance with
applicable Environmental Laws except where the failure to take such action would
not result in a Material Adverse Effect.
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(j) Use of Proceeds. The Borrower shall use the proceeds of the
Loans solely for capital expenditures permitted pursuant to Section 10.04(g),
Permitted Acquisitions, stock and publicly issued debt repurchases permitted
pursuant to this Agreement and other general corporate purposes.
(k) Year 2000. The Borrower shall review (and cause each of its
Subsidiaries to review) the areas within their respective businesses and
operation (including, without limitation, computer systems and equipment
containing embedded software) which could be adversely affected by, and develop
and implement (and cause each of its Subsidiaries to develop and implement) a
comprehensive and detailed program to address on a timely basis (and in any
event by October 1, 1999), including where necessary reprogramming and replacing
affected systems and equipment, the "Year 2000 problem" (that is, the risk that
computer applications used by the Borrower or its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31, 1999). Borrower and its
Subsidiaries will (prior to June 30, 1999) also make inquiry and monitor each
supplier, vendor and customer of Borrower and its Subsidiaries that is of
material importance to the financial well-being of Borrower and its
Subsidiaries, taken as a whole, with a view to successfully resolving on a
timely basis the Year 2000 problem. Borrower and its Subsidiaries hereby
represent and warrant that they will not suffer a Material Adverse Effect in
resolving the Year 2000 problem.
(l) Further Assurances and Additional Acts. The Borrower shall
execute, acknowledge, deliver, file, notarize and register at its own expense
all such further agreements, instruments, certificates, documents and assurances
and perform such acts as the Agent or the Majority Banks shall deem necessary or
appropriate to effectuate the purposes of the Loan Documents, and promptly
provide the Agent with evidence of the foregoing satisfactory in form and
substance to the Agent or the Majority Banks.
(m) Post-Closing Actions.
(i) By the date 15 days after the Closing Date, the Borrower
shall cause to be (A) delivered to the Agent (in sufficient copies for the
Banks) a legal opinion from counsel to ABL substantially in the form of Exhibit
K; (B) executed by BABC and filed with the appropriate filing offices, the
Patent and Trademark Office and the Copyright Office, termination statements or
termination agreements (as appropriate) terminating the security interests of
BABC and releasing all financing statements and other filings in respect
thereof; (C) delivered to the Agent searches conducted in the UCC filing records
in the governmental offices in each jurisdiction (other than those referred to
in Section 8.01(c)) in which personal property and fixture Collateral is
located, in form and substance satisfactory to Agent; (D) delivered to the Agent
searches conducted of the records maintained by the U.S. Patent and Trademark
Office and Copyright Office in form and substance satisfactory to the Agent; (E)
deliver to the Agent copies of all insurance policies required under this
Agreement; (F) delivered to the Agent a certificate of the Secretary of ABL
certifying (1) copies of resolutions of ABL authorizing the execution, delivery
and performance of the Loan Documents to which ABL is party and (2) the
incumbency, authority and signatures of each officer of ABL authorized to
execute and deliver the Loan Documents to which ABL is, or may pursuant to
Section 11.04 be required to become a party (upon which certificate Agent and
Banks may conclusively rely until the Agent receives a
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further certificate canceling or amending such prior certificate); (G) delivered
to the Agent, certified copies of the memorandum and articles of association and
certificates of incorporation of ABL and certificates of good standing from the
Secretary of State or other Governmental Authority, as applicable, of each state
where ABL conducts business or holds property, as to ABL's status as a foreign
corporation and tax status; (H) provide to the Agent a detailed listing of the
assets located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇; and (I) delivered to
the Agent an updated Schedule 2 to the Security Agreement detailing foreign
intellectual property rights and intellectual property rights of Subsidiaries;
(ii) By the date 60 days after the Closing Date the Borrower shall
cause to be (A) delivered to the Agent (in sufficient copies for the Banks) the
pro forma financial statements of the Borrower and its Subsidiaries, on a
consolidated basis prepared in accordance with GAAP, for the next succeeding
three fiscal years (including forecasted consolidated balance sheets,
consolidated statements of income, shareholders' equity and cash flow), which
pro forma financial statements shall state the assumptions used in the
preparation thereof; and (B) delivered to the Agent certificates as to tax
status from each jurisdiction in which the Borrower is qualified to conduct
business;
(iii) By the date 90 days after the Closing Date the Borrower
shall redeem, or otherwise retire, the Industrial Development Bonds relating to
Monroe County, New York, unless agreed otherwise in writing between the Agent
and the Borrower.
SECTION 10.04 Negative Covenants. So long as any of the Obligations
shall remain unpaid, any Letter of Credit shall remain outstanding or any Bank
shall have any Commitment, the Borrower agrees that:
(a) Indebtedness. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume or otherwise become liable for
or suffer to exist any Indebtedness, other than:
(i) Indebtedness of the Borrower to the Banks hereunder;
(ii) Indebtedness of the Borrower and its Subsidiaries existing
on the Closing Date and set forth in Schedule 4 or extensions, renewals and
refinancings of such Indebtedness, provided that the principal amount of such
Indebtedness being extended, renewed or refinanced does not increase;
(iii) accounts payable to trade creditors for goods and services
and current operating liabilities (not the result of the borrowing of money)
incurred in the ordinary course of the Borrower's or such Subsidiary's business
in accordance with customary terms and paid within the specified time, unless
contested in good faith by appropriate proceedings and reserved for in
accordance with GAAP;
(iv) Indebtedness consisting of guarantees resulting from
endorsement of negotiable instruments for collection by the Borrower or any such
Subsidiary in the ordinary course of business;
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(v) Indebtedness of the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding;
(vi) Indebtedness permitted pursuant to subsections 10.04(f)(ii);
or
(vii) Indebtedness incurred pursuant to the RZB Agreement (as in
effect on the date of this Agreement) not to exceed $10,000,000 in the aggregate
or in respect of the deferred payments of insurance premiums.
(viii) Indebtedness with respect to performance, bid or surety
bonds incurred in the ordinary course of business.
(b) Liens; Negative Pledges.
(i) The Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any of its properties, revenues or assets, whether now owned or
hereafter acquired, other than Permitted Liens.
(ii) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into or suffer to exist any agreement (other than this
Agreement or any other Loan Document or the Monroe County Industrial Development
Bonds) prohibiting or conditioning the creation or assumption of any Lien upon
any of its properties, revenues or assets, whether now owned or hereafter
acquired.
(c) Change in Nature of Business. The Borrower shall not, and
shall not permit any of its Subsidiaries to, engage in any material line of
business substantially different from those lines of business carried on by them
at the date hereof.
(d) Restrictions on Fundamental Changes. The Borrower shall not,
and shall not permit any of its Subsidiaries to, merge with or consolidate into,
or acquire all or substantially all of the assets of, any Person, or sell,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets, except that:
(i) any of the Borrower's wholly-owned Subsidiaries may merge
with, consolidate into or transfer all or substantially all of its assets to
another of the Borrower's domestic wholly-owned Subsidiaries or to the Borrower
and in connection therewith such Subsidiary may be liquidated or dissolved;
(ii) the Borrower or any of its Subsidiaries may sell or dispose
of assets in accordance with the provisions of subsection (e); and
(iii) the Borrower or any of its Subsidiaries may make any
investment permitted by subsection (f).
(e) Sales of Assets. The Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, lease, transfer, or otherwise dispose of, or
part with control of (whether in
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one transaction or a series of transactions) any assets (including any shares of
stock in any Subsidiary or other Person), except sales or other dispositions of
any of the following:
(i) any inventory in the ordinary course of business;
(ii) any Permitted Investments;
(iii) any assets which have become worn out or obsolete or which
are promptly being replaced, in the ordinary course of business;
(iv) any assets (A) by any of its domestic or foreign
wholly-owned Subsidiaries to another domestic wholly-owned Subsidiary of
Borrower or to the Borrower or (B) by any of Borrower's foreign wholly-owned
Subsidiaries to another foreign wholly-owned Subsidiary of Borrower;
(v) accounts receivable pursuant to a Permitted Receivables
Financing; and
(vi) any other assets to the extent not otherwise permitted
hereunder; provided that such assets do not constitute Substantial Assets and
such sale or disposition is made for fair value; and provided, further, that (A)
at the time of any such sale or disposition, no Default shall exist or shall
result therefrom, (B) the sales price from such sale or disposition shall be
paid in cash, and (C) no dispositions of accounts receivable or notes receivable
shall be permitted hereunder, except in accordance with subsection 10.04(e)(v).
(vii) assets constituting Substantial Assets; provided that (A)
the prior written consent of Agent is obtained and (B) the proceeds of such sale
or disposition are applied to any prepayment required by Section 5.03(b);
provided, further, that the prior written consent of the Agent shall not be
required for the disposal of the Government Division if (1) the Net Cash
Proceeds of such disposal exceed $30,000,000, (2) the Net Cash Proceeds are
applied as required by Section 5.03(b), and (3) all outstanding Letters of
Credit are cash collateralized with the Net Cash Proceeds of such disposal.
For purposes of clauses (vi) and (vii), a sale, lease, transfer or other
disposition of assets shall be deemed to be of "Substantial Assets" if such
assets, shall have an aggregate fair market value in excess of $3,000,000 or if,
when added to all other assets sold, leased, transferred or otherwise disposed
of during the same fiscal year (other than assets sold in the ordinary course of
business), they shall have an aggregate fair market value in excess of
$10,000,000.
(f) Loans and Investments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, purchase or otherwise acquire the capital
stock, assets (constituting a business unit), obligations or other securities of
or any interest in any Person, or otherwise extend any credit to, guarantee the
obligations of or make any additional investments in any Person, other than in
connection with:
(i) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sales of goods or services in the ordinary
course of business;
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(ii) investments by the Borrower or any Subsidiary and extensions
of Credit by the Borrower or any Subsidiary to ABL in the ordinary course of
business (provided that the aggregate amount of such investments shall not
exceed $10,000,000 in any fiscal year);
(iii) investments incurred to consummate Acquisitions; provided
that the aggregate amount invested in such Acquisitions and transactions
permitted pursuant to subsection 10.04(d) and 10.04(f)(iv) shall not exceed, in
the aggregate, $40,000,000 during the life of this Agreement; and provided,
further, that any such Acquisition shall (A) be of a Person engaged in a similar
line of business to the Borrower and its Subsidiaries (taken as a whole); (B) be
with the prior effective written consent or approval to such Acquisition of the
board of directors or equivalent governing body of acquiree; (C) will result in
an increase in Consolidated EBITDA by the commencement of the next fiscal
quarter succeeding the date of such Acquisition (except that Acquisitions in an
aggregate amount at any time not exceeding $10,000,000 will be permitted
notwithstanding the foregoing provisions of this subparagraph (C), if pro forma
financial statements properly prepared in accordance with GAAP indicate that the
relevant acquired entities will provide positive Consolidated EBITDA within 12
months from the date of the relevant Acquisition); (D) the Borrower, prior to
completion of the Acquisition, delivers to the Agent and the Banks a Compliance
Certificate, in form and substance satisfactory to the Agent demonstrating its
pro forma compliance with the covenants in Section 10.02 after giving effect to
such Acquisition; and (E) immediately prior to and after giving effect to such
Acquisition no Default exists;
(iv) additional purchases of or investments in joint ventures or
capital stock, assets, obligations or other securities of any Person (except a
Subsidiary); provided, that, (A) the aggregate amount of any such investments
shall not exceed $10,000,000 during the life of this Agreement; (B) the
aggregate amount of such investments when aggregated with investments permitted
pursuant to subsection 10.04(d) and 10.04(f)(iii) shall not exceed, in the
aggregate, $40,000,000 during the life of this Agreement; (C) in the case of any
such acquisition or investment the prior, effective written consent or approval
to such acquisition of the board of directors or equivalent governing body of
the acquiree is obtained; and (D) immediately prior to and after giving effect
thereto, no Default exists.
(v) Permitted Investments;
(vi) employee loans and guarantees in accordance with the
Borrower's usual and customary practices with respect thereto not to exceed
$2,000,000 in the aggregate at any time outstanding; or
(vii) Guaranty Obligations permitted under subsection (a).
(g) Capital Expenditures. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any expenditures for fixed or capital
assets, including obligations under Capital Leases, in excess of $20,000,000, on
a consolidated basis, in any fiscal year.
(h) Sales and Leasebacks. The Borrower shall not, and shall not
permit any of its Subsidiaries to, become liable, directly or indirectly, with
respect to any lease, whether an Operating Lease or a Capital Lease, of any
property (whether real, personal or mixed), whether
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now owned or hereafter acquired, (i) which the Borrower or such Subsidiary has
sold or transferred or is to sell or transfer to any other Person or (ii) which
the Borrower or such Subsidiary intends to use for substantially the same
purposes as any other property which has been or is to be sold or transferred by
the Borrower or such Subsidiary to any other Person in connection with such
lease.
(i) Distributions. (i) The Borrower shall not declare or pay
any dividends in respect of the Borrower's capital stock, or purchase, redeem,
retire or otherwise acquire for value any of its capital stock now or hereafter
outstanding, return any capital to its shareholders as such, or make any
distribution of assets to its shareholders as such, or permit any of its
Subsidiaries to purchase, redeem, retire, or otherwise acquire for value any
stock of the Borrower, except that the Borrower may:
(A) declare and deliver dividends and distributions payable only
in common stock of the Borrower;
(B) purchase, redeem, retire, or otherwise acquire shares of its
capital stock with the proceeds received from a substantially concurrent issue
of new shares of its capital stock; and
(C) purchase, redeem, retire or otherwise acquire shares of its
own outstanding capital stock for cash at any time after September 30, 1998 if
(1) after giving effect thereto the aggregate amount of such dividends,
purchases, redemptions, retirements and acquisitions paid or made during the
life of this Agreement when aggregated with purchases of Subordinated Debt
pursuant to Section 10.04(k) is not in excess of $8,000,000, and (2) immediately
prior to and after giving effect thereto, no Default shall have occurred and be
continuing.
(ii) The Borrower shall not permit any Subsidiary of the Borrower
to grant or otherwise agree to or suffer to exist any consensual restrictions on
the ability of such Subsidiary to pay dividends and make other distributions to
the Borrower, or to pay any Indebtedness owed to the Borrower or transfer
properties and assets to the Borrower.
(j) Amendments of Certain Documents. The Borrower shall not, and
shall not permit any of its Subsidiaries to, agree to or permit any amendment,
modification or waiver of:
(i) any provision of any documents relating to the Permitted
Receivables Financings or any agreement related thereto; or
(ii) any provision of any agreement related to any Subordinated
Debt (including any amendment, modification or waiver pursuant to an exchange of
other securities or instruments for outstanding Subordinated Debt).
(k) Redemption of Subordinated Debt. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make any voluntary or optional
payment or repayment on, redemption, exchange or acquisition for value of, or
any sinking fund or similar payment with respect to, any Subordinated Debt;
except that the Borrower may redeem or make sinking fund payments in respect of
Subordinated Debt provided that the aggregate amount of all such
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redemptions when aggregated with the value of all stock repurchases pursuant to
Section 10.04(i)(i)(C) shall not exceed $8,000,000 in the aggregate.
(l) Transactions with Related Parties. The Borrower shall not,
and shall not permit any of its Subsidiaries to, enter into any transaction,
including the purchase, sale or exchange of property or the rendering of any
services, with any Affiliate, any officer or director thereof or any Person
which beneficially owns or holds 5% or more of the equity securities, or 5% or
more of the equity interest, thereof (a "Related Party"), or enter into, assume
or suffer to exist, or permit any Subsidiary to enter into, assume or suffer to
exist, any employment or consulting contract with any Related Party, except a
transaction or contract which is in the ordinary course of the Borrower's or
such Subsidiary's business and which is upon fair and reasonable terms not less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's length transaction with a Person not a Related Party.
(m) Hazardous Substances. The Borrower shall not, and shall not
permit any of its Subsidiaries to, use, generate, manufacture, install, treat,
release, store or dispose of any Hazardous Substances, except in compliance with
all applicable Environmental Laws or except where the failure to so comply would
not have a Material Adverse Effect.
(n) Accounting Changes. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, make any significant change in
accounting treatment or reporting practices, except as required or permitted by
GAAP, or change its fiscal year or that of any of its consolidated Subsidiaries,
except to change the fiscal year of a Subsidiary acquired in connection with an
acquisition to conform its fiscal year to the Borrower's.
(o) Additional Subsidiaries . Promptly and in any event within 30
days after the date the Borrower incorporates, creates or acquires any
additional Subsidiary, the Borrower shall: (i) cause such Subsidiary to execute
and deliver a guaranty and security agreements in form and substance
satisfactory to the Agent; (ii) pledge the capital stock of such Subsidiary to
the Agent pursuant to a stock pledge agreement in form and substance
satisfactory to the Agent; (iii) cause such Subsidiary to have executed and
filed any UCC-1 financing statements or other filings furnished by the Agent in
each jurisdiction in which such filing is necessary to perfect the security
interest of the Agent in the Collateral of such Subsidiary and in which the
Agent requests that such filing be made; and (iv) execute and deliver to the
Agent such other items as reasonably requested by the Agent in connection with
the foregoing, including resolutions, incumbency and officers' certificates,
filings, notices, opinions of counsel, search reports and other certificates and
documents.
(p) Industrial Revenue Bonds . The Borrower shall not, and shall
not permit any of its Subsidiaries to, make any voluntary or optional payment or
repayment on, redemption, exchange or acquisition for value of, or any sinking
fund or similar payment with respect to any Industrial Development Bonds, except
that the Borrower may redeem or repay Industrial Development Bonds provided that
the aggregate amount of all such redemptions or repurchases does not exceed
$3,000,000
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ARTICLE XI
EVENTS OF DEFAULT
SECTION 11.01 Events of Default. Any of the following events which shall
occur shall constitute an "Event of Default":
(a) Payments. The Borrower shall fail to pay (i) when due any
amount of principal of any Loan or Revolving Note or any amount of any L/C
Obligation or (ii) within 5 days after the same becomes due any interest, fee or
other amount payable hereunder or under any of the other Loan Documents.
(b) Representations and Warranties. Any representation or
warranty by the Borrower or any Subsidiary under or in connection with the Loan
Documents shall prove to have been incorrect in any material respect when made
or deemed made.
(c) Failure by Borrower to Perform Certain Covenants. The
Borrower or any Subsidiary shall fail to perform or observe any term, covenant
or agreement contained in Section 10.02, subsections (a), (e), (j) (k) (l) or
(m) of Section 10.03 or Section 10.04 or in the Collateral Documents.
(d) Failure by Borrower to Perform Other Covenants. The Borrower
or any Subsidiary shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Loan Document on its part to
be performed or observed and any such failure shall remain unremedied for a
period of 20 days from the occurrence thereof (unless the Majority Banks
determine that such failure is not capable of remedy).
(e) Insolvency; Voluntary Proceedings. The Borrower or any
Subsidiary (i) ceases or fails to be Solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(f) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any Subsidiary, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the Borrower's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 45 days after commencement, filing or
levy; (ii) the Borrower or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Borrower or any Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a substantial portion
of its property or business; or
(g) Default Under Other Indebtedness. (i) The Borrower or any of
its Subsidiaries shall fail (A) to make any payment of any principal of, or
interest or premium on,
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any Indebtedness (other than in respect of the Loans having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $2,000,000 (or its equivalent in another currency)
when due (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness as of the date of such failure; or (B) to perform or observe any
term, covenant or condition on its part to be performed or observed under any
agreement or instrument relating to any such Indebtedness, when required to be
performed or observed, and such failure shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such failure to perform or observe is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (ii) any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; (iii) any facility or commitment available to the Borrower or
any Subsidiary relating to Indebtedness in an aggregate amount at any one time
of not less than $2,000,000 (or its equivalent in any other currency) is
withdrawn, suspended or cancelled by reason of any default (however described)
of the Borrower or such Subsidiary; or (iv) there occurs under any Rate Contract
an Early Termination Date (as defined in such Rate Contract) resulting from (A)
any event of default under such Rate Contract as to which the Borrower or any
Subsidiary is the Defaulting Party (as defined in such Rate Contract) or (B) any
Termination Event (as so defined) as to which the Borrower or any Subsidiary is
an Affected Party (as so defined), and, in either event, the Swap Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than $2,000,000 (or its equivalent in another currency).
(h) Judgments. (i) A final judgment or order for the payment of
money which is not fully covered by third-party insurance shall be rendered
against the Borrower or any of its Subsidiaries, provided that the Borrower need
not maintain insurance coverage with respect to judgments which in the aggregate
do not exceed $2,000,000; or (ii) any non-monetary judgment or order shall be
rendered against the Borrower or any such Subsidiary which has or would
reasonably be expected to have a Material Adverse Effect; and in each case there
shall be any period of 30 consecutive days during which such judgment continues
unsatisfied or during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
(i) ERISA.
(i) The Borrower or an ERISA Affiliate shall fail to satisfy its
contribution requirements in an amount in excess of $1,000,000 under Section
412(c)(11) of the Internal Revenue Code, whether or not it has sought a waiver
under Section 412(d) of the Internal Revenue Code; (ii) in the case of a
Termination Event involving the withdrawal from a Pension Plan of a "substantial
employer" (as defined in Section 4001(a)(2) or Section 4062(e) of ERISA), the
Borrower's or an ERISA Affiliate's proportionate share of that Pension Plan's
Unfunded Accrued Benefits is more than $1,000,000; (iii) in the case of a
Termination Event involving the complete or partial withdrawal from a
Multiemployer Plan, the Borrower or an ERISA
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Affiliate has incurred a withdrawal liability in an aggregate amount exceeding
$1,000,000; (iv) in the case of a Termination Event not described in clause (ii)
or (iii), the Unfunded Accrued Benefits of the relevant Pension Plan or Plans
exceed $1,000,000; (v) a Plan of the Borrower or an ERISA Affiliate that is
intended to be qualified under Section 401(a) of the Internal Revenue Code shall
lose its qualification, and the loss can reasonably be expected to impose on the
Borrower or an ERISA Affiliate liability (for additional taxes, to Plan
participants, or otherwise) in the aggregate amount of $1,000,000 or more; (vi)
the commencement or increase of contributions to, the adoption of, or the
amendment of a Plan by, the Borrower or an ERISA Affiliate shall result in a net
increase in unfunded liabilities to the Borrower or an ERISA Affiliate in excess
of $1,000,000; or (vii) the occurrence of any combination of events listed in
clauses (ii) through (vi) that involves a net increase in aggregate Unfunded
Accrued Benefits and unfunded liabilities in excess of $1,000,000.
(j) Dissolution, Etc. The Borrower or any of its Subsidiaries
shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or
dissolution), except to the extent expressly permitted by Section 10.04, (ii)
suspend its operations other than in the ordinary course of business, or (iii)
take any corporate action to authorize any of the actions or events set forth
above in this subsection (j).
(k) Material Adverse Effect. A Material Adverse Effect shall
occur.
(l) Change of Control. A Change of Control shall occur.
(m) Subordination Provisions. The provisions of any agreement or
instrument governing the Subordinated Debt shall for any reason be revoked or
invalidated, or otherwise cease to be in full force and effect, any Person shall
contest in any manner the validity or enforceability thereof or deny that it has
any further liability or obligation thereunder, or the Indebtedness hereunder
shall for any reason be subordinated or shall not have the priority contemplated
by this Agreement or such subordination provisions.
(n) Collateral Documents. Any "Event of Default" as defined in
any Collateral Document shall have occurred; or any of the Collateral Documents
after delivery thereof shall for any reason be revoked or invalidated, or
otherwise cease to be in full force and effect, or the Borrower or any other
Person shall contest in any manner the validity or enforceability thereof, or
the Borrower or any other Person shall deny that it has any further liability or
obligation thereunder; or any of the Collateral Documents for any reason, except
to the extent permitted by the terms thereof, shall cease to create a valid Lien
subject only to Permitted Liens in any of the Collateral purported to be covered
thereby; or there shall be any material impairment of the value of the
Collateral or any levy upon, seizure or attachment of any material part of the
Collateral.
(o) Permitted Receivable Financings. There shall occur any event
of default under the terms of any agreement or other document relating to any
Permitted Receivable Financing or the Borrower shall be required to repurchase
or otherwise indemnify any Person in respect of any accounts receivable,
contracts rights or similar rights transferred pursuant to such financings and
the outstanding aggregate value of the accounts receivable, contract rights and
similar rights transferred pursuant to such Permitted Receivable Financing shall
exceed $1,000,000.
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(p) Failure to Perform Subsidiary Guaranty. If ABL shall fail to
perform or observe any term covenant or agreement contained in the Subsidiary
Guaranty beyond any applicable grace period; or the Subsidiary Guaranty shall
for any reason be revoked or invalidated or otherwise cease to be in full force
and effect; or ABL or any other Person shall contest in any manner the validity
or enforceability thereof or deny that it has any liability or obligation
thereunder
SECTION 11.02 Effect of Event of Default. If any Event of Default shall
occur and be continuing, the Agent shall, at the request of, or may, with the
consent of, the Majority Banks, (i) by notice to the Borrower, (A) declare the
Commitments of the Banks (other than their respective L/C Commitments with
respect to outstanding Letters of Credit) and any obligations of the Issuing
Bank to issue, amend or renew Letters of Credit, to be terminated, whereupon the
same shall forthwith terminate, and (B) declare an amount equal to the maximum
aggregate amount that is or at any time thereafter may become available for
drawing under any outstanding Letters of Credit (whether or not any beneficiary
shall have presented, or shall be entitled at such time to present, the drafts
or other documents required to draw under such Letters of Credit) to be
immediately due and payable, and declare the entire unpaid principal amount of
the Loans and the Revolving Notes, all interest accrued and unpaid thereon and
all other Obligations to be forthwith due and payable, whereupon such amount
with respect to Letters of Credit, the Loans and the Revolving Notes, all such
accrued interest and all such other Obligations shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided that if
an event described in Sections 11.01(e) or 11.01(f) shall occur, the result
which would otherwise occur only upon giving of notice by the Agent to the
Borrower as specified in this clause (i) shall occur automatically, without the
giving of any such notice; and (ii) whether or not the actions referred to in
clause (i) have been taken, (A) exercise any or all of the Agent's rights and
remedies under the Collateral Documents, and (B) proceed to enforce all other
rights and remedies available to the Agent and the Banks under the Loan
Documents and applicable law.
SECTION 11.03 Perfection of Collateral. Notwithstanding the provisions
of the Collateral Documents, the Agent and the Banks agree that they will not
take steps to perfect the security interests created by the Collateral Documents
unless and until the occurrence of the earlier of (i) an Event of Default, or
(ii) in the case of any event covered by Section 11.01(d), the failure to remedy
any such event within 10 days of a notice from the Agent or the Banks to remedy
such default. Upon the occurrence of any Event of Default, the Agent may, and at
the direction of the Majority Banks shall, without further notice to, consent or
other action on the part of the Borrower (all of which are hereby waived), and
the Borrower and the Banks hereby authorize the Agent to, take (a) all steps
which the Agent considers are appropriate to perfect the security interest of
the Agent and the Banks in the Collateral including, the filing of UCC financing
statements and fixture filings in any jurisdiction in which any Collateral is
located, the filing with the U.S. Patent and Trademark Office and U.S. Copyright
Office of the Patent and Trademark Security Agreement and Copyright Security
Agreement; and (b) such other action as the Agent deems is appropriate to ensure
the validity, effectiveness or priority of the Collateral Documents or to give
notice of the security interests created thereby. Subject to the foregoing
provisions of this Section 11.03, the Borrower and each Bank hereby agrees upon
request of the Agent to execute, acknowledge, deliver, file and do any and all
such further acts, notices of assignment, transfer, certificates, assurances and
other instruments as Agent may require (i) to
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carry out more effectively the purposes of this Agreement, the Collateral
Documents and other Loan Documents (ii) to subject to the Liens created by the
Collateral Documents any of the properties, rights or interests covered by such
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and Liens intended to be created
thereby and (iv) to better assure, convey, assign, grant, transfer, preserve,
protect and confirm to the Agent and the Banks the rights granted now or
hereafter granted to the Banks or the Agent under any Loan Documents or other
document, certificate, agreement or undertaking in connection therewith.
SECTION 11.04 Foreign Collateral. Upon the occurrence of any Event of
Default the Borrower shall, upon the request of the Agent, cause its
Subsidiaries incorporated outside the United States to; (i) execute and deliver
to the Agent security agreements, in form and substance satisfactory to the
Agent and Majority Banks, granting first priority perfected security interests
in the assets of such Subsidiaries, (ii) execute and deliver to the Agent
guarantees, in form and substance satisfactory to the Agent and the Majority
Banks, guaranteeing the payment and performance of the Obligations, (iii)
deliver to the Agent in form and substance satisfactory to the Agent and the
Majority Banks, a pledge of the stock of all such foreign subsidiaries (together
with original stock certificates and stock powers or stock transfer forms duly
executed in blank), (iv) deliver to the Agent (in sufficient copies for the
Banks) legal opinions, in form and substance satisfactory to the banks from
counsel to the Borrower and such Subsidiaries in relation to such foreign
collateral, (iv) deliver to the Agent certified copies of board resolutions of
the Borrower and such Subsidiaries approving and authorizing the execution,
delivery and performance of such security agreements, guarantees and related
documents and actions, and (v) take such action and execute and deliver such
additional documents, certificates, filings, reports and other agreements as the
Agent may request in connection with the execution and delivery of any of the
foregoing, the perfection of the security interest granted thereby and
notification of the security interest of the Agent and the Banks.
ARTICLE XII
THE AGENT
SECTION 12.01 Authorization and Action. Each Bank hereby appoints UBOC
as Agent and authorizes the Agent to execute the Collateral Documents and to
take such action as agent on its behalf and to exercise such powers and perform
such duties under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto. The duties and obligations of the Agent are
strictly limited to those expressly provided for herein, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Agent. As to any
matters not expressly provided for by the Loan Documents (including enforcement
of the Loan Documents or collection of any amounts due thereunder), 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 Majority Banks,
and such instructions shall be binding upon all Banks; provided, however, that
except for action expressly required of the Agent hereunder, the Agent shall in
all cases be fully justified in failing or refusing to act under any Loan
Document unless it shall be indemnified to its satisfaction by the Banks against
any
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and all liability and expense which may be incurred by reason of taking or
continuing to take any such action, and that the Agent shall not in any event be
required to take any action which exposes the Agent to liability or which is
contrary to any Loan Document or applicable law. Nothing in any Loan Document
shall, or shall be construed to, constitute the Agent a trustee or fiduciary for
any Bank or the Issuing Bank. In performing its functions and duties hereunder,
the Agent shall act solely as the agent of the Banks and does not assume and
shall not be deemed to have assumed any obligation towards or relationship of
agency or trust with or for the Borrower.
SECTION 12.02 Limitation on Liability of Agent; Notices; Closing.
(a) Limitation on Liability of Agent and Issuing Bank. None of
the Agent/IB-Related Persons shall be liable for any action taken or omitted to
be taken by it or them under or in connection with any Loan Document, except for
its or their own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Agent (i) may treat a Bank as the holder of
its Loans for all purposes hereof unless and until such Bank and its assignee
shall have delivered to the Agent and the Borrower an Assignment and Acceptance
Agreement substantially in the form of Exhibit L (an "Assignment and
Acceptance"), and the Agent receives written notice of the assignment in
substantially the form of Schedule 1 to the Assignment and Acceptance and the
other conditions to assignment set forth in Section 13.09 shall have been
satisfied; (ii) may consult with legal counsel (including counsel to the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; and
(iii) shall incur no liability to any Bank under or in respect of any Loan
Document by acting upon any notice, consent, certificate, telegram, facsimile,
telex or teletype message, statement or other instrument or writing believed by
it to be genuine and signed or sent by the proper party or parties or by acting
upon any representation or warranty made or deemed to be made hereunder or under
any other Loan Document. Further, the Agent (A) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for the
accuracy or completeness of any information, exhibit or report furnished under
any Loan Document, for any statements, warranties or representations (whether
written or oral) made or deemed made in or in connection with any Loan
Documents; (B) shall have no duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or any other Loan Document on the part of the Borrower or any other
Person or to inspect the property, books or records of the Borrower or any other
Person; and (C) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency, value or
collectibility of this Agreement or any other Loan Document or any of the
Collateral.
(b) Notices. Promptly upon receipt thereof, the Agent shall
forward to each Bank originals or copies, as specified in this Agreement or any
other Loan Document, of all agreements, instruments, opinions, financial
statements, notices and other documents delivered by the Borrower or any other
Person to the Agent pursuant to any Loan Document for distribution to the Banks.
Except for any of the foregoing expressly required to be furnished to the Banks
by the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower which may
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come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
(c) Closing and Syndication. For purposes of determining
compliance with the conditions specified in Section 8.01 or any post-closing
syndication of this Agreement, each Bank that has executed this Agreement or
otherwise become a Bank shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either sent (or
made available) by the Agent to such Bank prior to its execution hereof or
accession hereto for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory to
such Bank.
SECTION 12.03 Agent and Affiliates. With respect to its Commitment, the
Loans made by it, the Revolving Notes issued to it, Letters of Credit issued by
it, and all other Obligations owing to it as a Bank or Issuing Bank, the Agent
shall have the same rights and powers under the Loan Documents as any other Bank
and may exercise the same as though it were not the Agent; and the term "Bank"
or "Banks" shall, unless otherwise expressly indicated, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits from, lend
money to, issue letters of credit for the account of, act as trustee under
indentures of and generally engage in any kind of business with the Borrower,
and any Affiliate thereof, all as if the Agent were not the Agent hereunder and
without any duty to account therefor to the Banks.
SECTION 12.04 Notice of Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default hereunder (other than
nonpayment of principal of or interest on the Loans or of any fees or any of its
costs and expenses) unless the Agent has actual knowledge thereof or has
received notice in writing from a Bank or the Borrower referring to this
Agreement, describing such event or condition and expressly stating that such
notice is a "notice of default." Should the Agent receive such notice of the
occurrence of a Default, the Agent shall promptly give notice thereof to the
Banks. The Agent thereupon shall take such action with respect to such Default
as shall be reasonably directed by the Majority Banks; 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 as it shall deem advisable in the best interests of the
Banks.
SECTION 12.05 Non-Reliance on Agent and Issuing Bank. Each Bank has
itself been, and will continue to be, based on such documents and information as
it has deemed appropriate, solely responsible for making its own independent
appraisal of and investigations into the financial condition, creditworthiness,
condition, affairs, status and nature of the Borrower or any of its Subsidiaries
and the nature and value of any of the Collateral. Accordingly, each Bank
confirms to the Agent and the Issuing Bank that it has not relied, and will not
hereafter rely, on the Agent or the Issuing Bank (i) to check or inquire on such
Bank's behalf into the adequacy, accuracy or completeness of any information
provided by the Borrower or any other Person under or in connection with the
Loan Documents or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed to such Bank by the Agent or
the Issuing Bank), or (ii) to assess or keep under review on such Bank's behalf
the financial condition, creditworthiness, condition, affairs, status or nature
of the Borrower, any Subsidiary or the nature or value of any of the Collateral.
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SECTION 12.06 Indemnification. The Banks agree to indemnify each
Agent/IB Related Person (to the extent not reimbursed by the Borrower), ratably
in accordance with the respective Pro Rata Shares of the Banks, against and hold
each of them harmless from any and all liabilities, obligations, losses, claims,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including the reasonable fees and
disbursements of counsel to such Agent/IB Related Person (including allocated
costs of internal counsel), which may be imposed on, incurred by, or asserted
against such Agent/IB Related Person, in any way relating to or arising out of
the Loan Documents, the use or intended use of the proceeds of the Loans or the
transactions contemplated hereby or thereby or any action taken or omitted by
such Agent/IB Related Person in connection with any of the foregoing; provided
that no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent they are found by a final decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Agent/IB Related Person. Without limitation of the foregoing,
each Bank agrees to reimburse each Agent/IB Related Person promptly upon demand
for such Bank's Pro Rata Share of any costs and expenses or other charges
incurred by such Agent/IB Related Person and payable by the Borrower pursuant to
Section 13.04(a) or any other Loan Document, to the extent that such Agent/IB
Related Person is not reimbursed for such expenses or charges by the Borrower.
SECTION 12.07 Delegation of Duties. The Agent may, in its discretion,
employ from time to time one or more agents or attorneys-in-fact (including any
of the Agent's Affiliates) to perform any of the Agent's duties under the Loan
Documents. The Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
SECTION 12.08 Successor Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, the Agent may resign at any time by
giving 30 days' written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent from among the Banks, and the Banks shall use their best efforts so to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Majority Banks, and shall have accepted such appointment, prior to the
effective date of the retiring Agent's resignation, the retiring Agent may, on
behalf of the Banks, appoint a successor Agent from among the Banks. Upon the
effectiveness of the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties and obligations of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under the Loan Documents.
SECTION 12.09 Collateral Matters.
(a) Authorization. The Agent is authorized on behalf of all the
Banks, without the necessity of any notice to or further consent from the Banks,
from time to time to take any action with respect to any Collateral or the
Collateral Documents which may be necessary to perfect and maintain perfected
the Liens on the Collateral granted pursuant to the
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Collateral Documents or protect and preserve the Agent's ability to enforce the
Liens or realize upon the Collateral.
(b) Collateral Releases. The Banks irrevocably authorize the
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans and all other Obligations (except inchoate
obligations) known to the Agent and payable under this Agreement or any other
Loan Document; (ii) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition permitted hereunder or under any
Collateral Document; (iii) constituting property in which the Borrower owned no
interest at the time the Lien was granted or at any time thereafter; (iv)
constituting property leased to the Borrower under a lease which has expired or
been terminated in a transaction permitted under this Agreement or is about to
expire and which has not been, and is not intended by the Borrower or such
Subsidiary to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vi) if approved, authorized or ratified in
writing by the Majority Banks or all the Banks, as the case may be, as provided
in Section 13.01. Upon request by the Agent at any time, the Banks shall confirm
in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 12.09, provided that the absence of any such
confirmation for whatever reason shall not affect the Agent's rights under this
Section 12.09.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Amendments and Waivers. Except as otherwise provided
herein or in any other Loan Document, (a) no amendment to any provision of this
Agreement or any of the other Loan Documents shall in any event be effective
unless the same shall be in writing and signed by the Borrower (and/or other
party thereto, as applicable), the Agent and the Majority Banks (or the Agent
with the written consent of the Majority Banks); and (b) no waiver of any
provision of this Agreement or any other Loan Document, or consent to any
departure by the Borrower or other party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Agent and the
Majority Banks (or the Agent with the consent of the Majority Banks). Any such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. Notwithstanding the foregoing
provisions of this Section 13.01:
(i) any term or provision of any such other Loan Document may be
amended without the agreement or consent of, or prior notice to, the Borrower or
other party thereto, to the extent such Loan Document provides for notices
without the agreement or consent of the Borrower or such other party, and any
term or provision of Article XII may be amended without the agreement or consent
of, or prior notice to, the Borrower; and
(ii) unless in writing and signed by all of the Banks (or by the
Agent with the written consent of all the Banks), no amendment, waiver or
consent shall do any of the following:
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(A) increase the amount, or extend the stated expiration or
termination date, of the Commitments of the Banks;
(B) reduce the principal of, or interest on, the Loans or any fee
or other amount payable to the Banks hereunder;
(C) postpone any date fixed for any payment in respect of
principal of, or interest on, the Loans or any fee or other amount payable to
the Banks hereunder (including the date of any mandatory prepayment hereunder);
(D) change the definition of "Majority Banks" or any definition
or provision of this Agreement requiring the approval of Majority Banks or some
other specified amount of Banks;
(E) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under the Loan Documents;
(F) release any material portion of the Collateral except as
contemplated herein and in the Collateral Documents relating thereto;
(G) amend, modify or waive the provisions of Section 7.01, 7.03,
7.05 or 13.07; or
(H) amend, modify or waive the provisions of this Section 13.01;
and
(1) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Banks required hereinabove to take such
action, affect the rights, obligations or duties of the Agent under any Loan
Document; and
(2) no amendment, waiver or consent shall, unless in writing and
signed by the Issuing Bank in addition to the Banks required hereinabove to take
such action, affect the rights or duties of the Issuing Bank under this
Agreement or any L/C-Related Document to which it is a party.
SECTION 13.02 Notices.
(a) Notices. All notices and other communications provided for
hereunder and under the other Loan Documents shall, unless otherwise stated
herein, be in writing (including by facsimile transmission) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth in Schedule 2, or at or to such other address or
facsimile number as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be effective (i)
if delivered by hand, when delivered; (ii) if sent by mail, upon the earlier of
the date of receipt or five Business Days after deposit in certified mail (or
air mail, with respect to communications to be sent to or from the United
States), postage prepaid; and (iii) if sent by facsimile transmission (with a
transmission confirmation), when sent; provided, however, that notices and
communications to the Agent shall not be effective until actually received by
the Agent, and
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notices to the Issuing Bank pursuant to Article III shall not be effective until
actually received by the Issuing Bank.
(b) Facsimile and Telephonic Notice. The Borrower acknowledges
and agrees that the agreement of the Agent and the Banks herein and in any other
Loan Document to receive certain notices by telephone and facsimile is solely
for the convenience and at the request of the Borrower. The Agent and the Banks
shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by the Borrower to give such notice and the Agent and the
Banks shall not have any liability to the Borrower or other Person on account of
any action taken or not taken by the Agent and the Banks in reliance upon such
telephonic or facsimile notice. The obligation of the Borrower to repay the
Loans, the drawings under Letters of Credit and the other Obligations shall not
be affected in any way or to any extent by any failure by the Agent and the
Banks to receive written confirmation of any telephonic or facsimile notice or
the receipt by the Agent and the Banks of a confirmation which is at variance
with the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
SECTION 13.03 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Bank to exercise, and no delay in exercising, any right,
remedy, power or privilege under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, remedy,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights and remedies
under the Loan Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges that may otherwise be available to the Agent or
any Bank.
SECTION 13.04 Costs and Expenses; Indemnification.
(a) Costs and Expenses. The Borrower agrees to pay on demand,
whether or not the transactions contemplated hereby shall be consummated:
(i) the reasonable out-of-pocket costs and expenses of the Agent,
the Issuing Bank and any of their respective Affiliates, and the reasonable fees
and disbursements of counsel to the Agent and the Issuing Bank (including
allocated costs of internal counsel), in connection with the negotiation,
preparation, execution, delivery and administration of the Loan Documents, and
any amendments, modifications or waivers of the terms thereof and any
post-closing syndication costs and expenses;
(ii) all reasonable title, appraisal (including the allocated
cost of internal appraisal services), survey, audit, environmental inspection,
consulting, search, recording, filing and similar costs, fees and expenses
incurred or sustained by the Agent or any of its Affiliates in connection with
the Loan Documents or the Collateral; and
(iii) all costs and expenses of the Agent, the Issuing Bank,
their respective Affiliates and the Banks, and fees and disbursements of counsel
(including allocated costs of internal counsel), in connection with (A) any
Default, (B) the enforcement or attempted enforcement of, and preservation of
any rights or interests under, the Loan Documents, (C) any out-of-court workout
or other refinancing or restructuring or any bankruptcy case, and (D) the
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preservation of and realization upon any of the Collateral, including any
losses, costs and expenses sustained by the Agent, the Issuing Bank and any Bank
as a result of any failure by the Borrower to perform or observe its obligations
contained in the Loan Documents.
(b) Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Borrower hereby agrees to indemnify each
Agent/IB Related Person, each Bank and any Affiliates, directors, officers,
employees, agents, counsel and other advisors (collectively, the "Related
Persons") of any Bank (each an "Indemnified Person") against, and hold each of
them harmless from, any and all liabilities, obligations, losses, claims,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including the reasonable fees and
disbursements of counsel to an Indemnified Person (including allocated costs of
internal counsel), which may be imposed on, incurred by, or asserted against any
Indemnified Person, (i) by any Governmental Authority or other third party in
any way relating to or arising out of any of the Loan Documents, the Letters of
Credit, the use or intended use of the proceeds of the Loans, or the
transactions contemplated hereby or thereby, (ii) with respect to any
investigation, litigation or other proceeding relating to any of the foregoing,
irrespective of whether the Indemnified Person shall be designated a party
thereto, or (iii) in any way relating to or arising out of the use, generation,
manufacture, installation, treatment, storage or presence, or the spillage,
leakage, leaching, migration, dumping, deposit, discharge, disposal or release,
at any time, of any Hazardous Substances on, under, at or from any Premises,
including any personal injury or property damage suffered by any Person, and any
investigation, site assessment, environmental audit, feasibility study,
monitoring, clean-up, removal, containment, restoration, remedial response or
remedial work undertaken by or on behalf of the any Indemnified Person at any
time, voluntarily or involuntarily, with respect to the Premises (the
"Indemnified Liabilities"); provided that the Borrower shall not be liable to
any Indemnified Person for any portion of such Indemnified Liabilities to the
extent they are found by a final decision of a court of competent jurisdiction
to have resulted from such Indemnified Person's gross negligence or willful
misconduct. If and to the extent that the foregoing indemnification is for any
reason held unenforceable, the Borrower agrees to make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law; provided that the Borrower shall not be liable
to contribute in respect of any such Indemnified Liabilities to the extent that
they are found by a final decision of a court of competent jurisdiction to have
resulted from the relevant Indemnified Person's gross negligence or willful
misconduct.
(c) Other Charges. The Borrower agrees to indemnify the Agent and
each of the Banks against and hold each of them harmless from any and all
present and future stamp, transfer, documentary and other such taxes, levies,
fees, assessments and other charges made by any jurisdiction by reason of the
execution, delivery, performance and enforcement of the Loan Documents.
SECTION 13.05 Right of Set-Off. Upon the occurrence and during the
continuance of any Event of Default each Bank hereby is authorized at any time
and from time to time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), 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 Bank to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter
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existing under this Agreement and the other Loan Documents, irrespective of
whether or not such Bank shall have made any demand under this Agreement or any
such other Loan Document and although such Obligations may be unmatured. Each
Bank agrees promptly to notify the Borrower (through the Agent) after any such
set-off and application made by such Bank; provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 13.05 are in addition to other rights and
remedies (including other rights of set-off) which such Bank may have.
SECTION 13.06 Survival. All covenants, agreements, representations and
warranties made in any Loan Documents shall, except to the extent otherwise
provided therein, survive the execution and delivery of this Agreement, the
making of the Credit Extensions and the execution and delivery of the Revolving
Notes, and shall continue in full force and effect so long as the Banks have any
Commitments, any Loans or Letters of Credit remain outstanding or any other
Obligations remain unpaid or any obligation to perform any other act under any
Loan Document remains unsatisfied. Without limiting the generality of the
foregoing, the obligations of the Borrower under Sections 6.02, 6.03, 7.03 and
13.04, and of the Banks under Sections 7.03 and 12.06, and all similar
obligations under the other Loan Documents (including all obligations to pay
costs and expenses and all indemnity obligations), shall survive the repayment
of the Loans, the termination of the Letters of Credit and the termination of
the Commitments.
SECTION 13.07 Obligations Several. The obligations of the Banks under
the Loan Documents are several. The failure of any Bank or the Agent to carry
out its obligations thereunder shall not relieve any other Bank or the Agent of
any obligation thereunder, nor shall any Bank or the Agent be responsible for
the obligations of, or any action taken or omitted by, any other Person
hereunder or thereunder. Nothing contained in any Loan Document shall be deemed
to cause any Bank or the Agent to be considered a partner of or joint venturer
with any other Bank or Banks, the Agent or the Borrower.
SECTION 13.08 Benefits of Agreement. The Loan Documents are entered into
for the sole protection and benefit of the parties hereto and their successors
and assigns, and no other Person (other than any Agent/IB Related Persons and
any Related Persons of the Banks) shall be a direct or indirect beneficiary of,
or shall have any direct or indirect cause of action or claim in connection
with, any Loan Document.
SECTION 13.09 Binding Effect; Assignment.
(a) Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower, the Issuing Bank and the Agent and
when the Agent shall have been notified by each Bank that such Bank has executed
it and thereafter shall be binding upon, inure to the benefit of and be
enforceable by the Borrower, the Issuing Bank, the Agent and each Bank and their
respective successors and assigns.
(b) Assignment. The Borrower shall not have the right to assign
its rights and obligations hereunder or under the other Loan Documents or any
interest herein or therein without the prior written consent of the Banks. Each
Bank may sell, assign, transfer or grant participations in all or any portion of
such Bank's rights and obligations hereunder and under the
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other Loan Documents to any Bank or Eligible Assignee on the basis set forth
below in this subsection.
(i) Any Bank may, with the written consent of the Borrower, the
Agent and the Issuing Bank (which in each case shall not be unreasonably
withheld), at any time assign and delegate to one or more Eligible Assignees
all, or any ratable part of all, of the Loans, the Commitments and the other
rights and obligations of such Bank hereunder; provided, however, that (i) no
written consent of the Borrower shall be required during the existence of a
Default; (ii) no written consent of the Borrower or the Agent shall be required
in connection with any assignment and delegation by a Bank to an Eligible
Assignee that is another Bank or an Affiliate of such Bank; and (iii) except in
connection with an assignment of all of a Bank's rights and obligations with
respect to its Commitment and Loans, any such assignment to an Eligible Assignee
that is not a Bank hereunder shall be equal to or greater than $5,000,000.
(ii) In the event of any such assignment, unless and until (A) an
Assignment and Acceptance and notice of assignment shall have been delivered
pursuant to clause (i) of Section 12.02(a), (B) the Agent shall have received
payment of an administrative transfer charge in the amount of $5,000 from the
assigning Bank (unless the assignee shall otherwise agree to pay such charge),
and (C) the Agent and the Borrower shall have received all tax forms and
documents required under Section 7.03(e), such assignee shall not be entitled to
exercise the rights of a Bank under this Agreement and the other Loan Documents
with respect to such assignment and the Agent shall not be obligated to make
payment of any amount to which such assignee may become entitled thereunder
other than to the assigning Bank. Subject to satisfaction of the foregoing
conditions in connection with any assignment, upon the effectiveness of such
assignment the assignee shall be deemed a "Bank" for all purposes of this
Agreement and the other Loan Documents with respect to the rights and
obligations assigned to it, and the other Loan Documents with respect to the
rights and obligations assigned to it, and the assigning Bank shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents;
provided, however, that the assigning Bank shall not relinquish its rights under
Article VI or under Sections 7.03 and 13.04 to the extent such rights relate to
the time prior to the effective date of the Assignment and Acceptance.
(iii) In connection with any partial assignment, upon the request
of the assigning Bank or the assignee, (A) the Borrower shall execute and
deliver substitute Revolving Notes to the assigning Bank or the assignee, dated
the effective date of such assignment, setting forth the respective Revolving
Commitments of such assigning Bank and assignee as the maximum principal amount
thereof (in the case of substitute Revolving Notes), and containing other
appropriate insertions, and the assigning Bank shall thereupon return the
Revolving Notes previously held by it; and (B) Schedules 1 and 2 shall be deemed
amended to reflect the adjustment of the Commitments and Pro Rata Shares of the
Banks resulting therefrom and the Lending Office, if any, and address for
notices of the assignee.
(iv) In the event of any grant of a participation, the granting
Bank shall remain a "Bank" for purposes of this Agreement, the Borrower, the
other Banks, the Issuing Bank and the Agent shall continue to deal solely and
directly with such Bank in connection with this
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Agreement and the other Loan Documents, and no Bank shall transfer or grant any
participating interest under which the participant shall have rights to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent as described in the second proviso to Section
13.01. In the case of any such participation, the participant shall not have any
of the rights of a Bank under this Agreement or the other Loan Documents, except
that the participant shall (A) be deemed to have a right of setoff under Section
13.05 in respect of its participation to the same extent as if it were a "Bank"
hereunder, provided that such participant shall also be considered a "Bank" for
purposes of Section 7.05; and (B) such participant shall also be entitled to the
benefits of Sections 6.02, 6.03, 7.03 and 13.04.
(v) The Borrower agrees that in connection with any such grant or
assignment, such Bank may deliver to the prospective participant or assignee
financial statements and other relevant information relating to the Borrower and
its Subsidiaries.
SECTION 13.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA EXCEPT, IN THE
CASE OF LETTERS OF CREDIT, TO THE EXTENT THAT SUCH LAWS ARE INCONSISTENT WITH
THE UCP.
SECTION 13.11 Submission to Jurisdiction.
(a) Submission to Jurisdiction. The Borrower hereby (i) submits
to the non-exclusive jurisdiction of the courts of the State of California and
the Federal courts of the United States sitting in the State of California for
the purpose of any action or proceeding arising out of or relating to the Loan
Documents, (ii) agrees that all claims in respect of any such action or
proceeding may be heard and determined in such courts, (iii) irrevocably waives
(to the extent permitted by applicable law) any objection which it now or
hereafter may have to the laying of venue of any such action or proceeding
brought in any of the foregoing courts, and any objection on the ground that any
such action or proceeding in any such court has been brought in an inconvenient
forum and (iv) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner permitted by law.
(b) No Limitation. Nothing in this Section 13.11 shall affect the
right of the Agent or the Banks to serve legal process in any other manner
permitted by law or limit the right of the Agent or the Banks to bring any
action or proceeding against the Borrower or its property in the courts of other
jurisdictions.
SECTION 13.12 Waiver of Jury Trial. THE BORROWER, THE BANKS AND THE
AGENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS,
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OR OTHERWISE. THE BORROWER, THE BANKS AND THE AGENT HEREBY AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
IN ANY WAY LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS. A COPY OF THIS SECTION 13.12 MAY BE FILED WITH ANY
COURT AS WRITTEN EVIDENCE OF THE WAIVER OF THE RIGHT TO TRIAL BY JURY AND
CONSENT TO TRIAL BY COURT. THIS SECTION 13.12 MAY NOT BE AMENDED, MODIFIED,
TERMINATED OR WAIVED EXCEPT BY A WRITING WHICH MAKES SPECIFIC REFERENCE TO THIS
SECTION 13.12.
SECTION 13.13 Limitation on Liability. No claim shall be made by the
Borrower or its Affiliates against any Agent/IB Related Person, or the Banks or
any of their respective Related Persons, for any special, indirect, exemplary,
consequential or punitive damages in respect of any breach or wrongful conduct
(whether or not the claim therefor is based on contract, tort or duty imposed by
law), in connection with, arising out of or in any way related to the
transactions contemplated by the Loan Documents or any act or omission or event
occurring in connection therewith; and the Borrower hereby waives, releases and
agrees not to ▇▇▇ upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
SECTION 13.14 Confidentiality. Each Bank, the Issuing Bank and the Agent
shall hold all non-public information relating to the Borrower and its
Subsidiaries obtained by it under this Agreement and the Collateral Documents in
confidence in accordance with its customary procedures for handling confidential
information of this nature, except for: (i) disclosure to its Affiliates or to
its counsel or to any agent or advisor acting on its behalf in connection with
the negotiation, execution or performance of the Loan Documents; (ii) disclosure
as reasonably required in connection with a transfer to a prospective assignee
or participant of all or part of its Loans or any participation therein;
provided that such prospective assignee or participant agrees to abide by the
confidentiality obligations of this Section 13.14; (iii) disclosure as may be
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process; (iv) disclosure to any Person and in any proceeding
necessary in such Bank's, the Issuing Bank's or the Agent's judgment to protect
its interests in connection with any claim or dispute involving such Bank, the
Issuing Bank or the Agent; and (v) any other disclosure with the prior written
consent of the Borrower. Prior to any disclosure by any Bank, the Issuing Bank
or the Agent of such non-public information permitted under clause (iii) (other
than in connection with an examination of the financial condition of such Bank,
the Agent or any of their Affiliates by any Governmental Authority), it shall,
if permitted by applicable laws or judicial order, notify the Borrower of such
pending disclosure. In no event shall any Bank, the Issuing Bank or the Agent be
obligated or required to return any materials furnished by the Borrower or its
Subsidiaries. Notwithstanding the foregoing, such obligation of confidentiality
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shall not apply if the information or substantially similar information (A) is
rightfully received by any Bank, the Issuing Bank or the Agent from a Person
other than the Borrower or any of its Affiliates without such Bank, the Issuing
Bank or the Agent being under an obligation to such Person not to disclose such
information, or (B) is or becomes part of the public domain.
SECTION 13.15 Entire Agreement. The Loan Documents reflect the entire
agreement among the Borrower, the Banks and the Agent with respect to the
matters set forth herein and therein and supersede any prior agreements,
commitments, drafts, communications, discussions and understandings, oral or
written, with respect thereto.
SECTION 13.16 Severability. Whenever possible, each provision of the
Loan Documents shall be interpreted in such manner as to be effective and valid
under all applicable laws and regulations. If, however, any provision of any of
the Loan Documents shall be prohibited by or invalid under any such law or
regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed
modified to conform to the minimum requirements of such law or regulation, or,
if for any reason it is not deemed so modified, it shall be ineffective and
invalid only to the extent of such prohibition or invalidity without affecting
the remaining provisions of such Loan Document, or the validity or effectiveness
of such provision in any other jurisdiction.
SECTION 13.17 Senior Debt. The Borrower hereby designates the Loan
Documents and all Obligations, and the Loan Documents and all Obligations shall
be considered, as "Senior Debt" for the purposes of all Subordinated Debt.
SECTION 13.18 Counterparts. This Agreement 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 but one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
THE BORROWER
CALIFORNIA MICROWAVE, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Executive Vice President
Chief Financial Officer
THE AGENT
UNION BANK OF CALIFORNIA, N.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Vice President
THE ISSUING BANK
UNION BANK OF CALIFORNIA, N.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Vice President
THE BANKS
UNION BANK OF CALIFORNIA, N.A.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Vice President
[COUNTERPART SIGNATURE PAGE TO CREDIT AGREEMENT]