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Exhibit 10.1
CREDIT AND GUARANTEE AGREEMENT,
DATED AS OF MAY 21, 1998,
BY AND AMONG
ANTEC CORPORATION,
THE SUBSIDIARY GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS COLLATERAL AGENT
AND
THE BANK OF NEW YORK, AS ADMINISTRATIVE AGENT
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BNY CAPITAL MARKETS, INC.,
AS ARRANGER
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CREDIT AND GUARANTEE AGREEMENT, dated as of May 21, 1998, by and among
ANTEC CORPORATION, a Delaware corporation (the "BORROWER"), the Subsidiary
Guarantors (as defined below), the several banks and other parties from time to
time parties hereto (the "LENDERS"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("BANK OF AMERICA"), as collateral agent (in such capacity, the
"COLLATERAL AGENT") and THE BANK OF NEW YORK ("BNY"), as administrative agent
for each of the other Credit Parties hereto (in such capacity, the
"ADMINISTRATIVE AGENT" and, together with the Collateral Agent, the "AGENTS").
ARTICLE 1. DEFINITIONS AND RULES OF INTERPRETATION
1.1. DEFINITIONS
As used in this Agreement, terms defined in the preamble have the
meanings therein indicated, and the following terms have the following
meanings:
"ABR ADVANCES" means the Revolving Loans (or any portions thereof), at
such time as they (or such portions) are made and/or being maintained at a
rate of interest based upon the Alternate Base Rate.
"ACCOUNT DEBTOR" means a party that is obligated to the Borrower or a
Subsidiary Guarantor on or in respect of a Receivable.
"ACCOUNTANTS" means Ernst & Young, LLP (or any successor thereto), or
such other firm of certified public accountants of recognized national
standing selected by the Borrower and reasonably satisfactory to Required
Lenders.
"ACQUISITION" has the meaning set forth in Section 8.5.
"ACQUISITION CONSIDERATION" means with respect to any Acquisition, the
sum of (i) the cash consideration paid or agreed to be paid in connection
therewith, plus (ii) the fair market value of all non-cash consideration paid
or agreed to be paid in connection therewith, plus (iii) an amount equal to the
principal or stated amount of all liabilities assumed or incurred in connection
therewith during the fiscal year in which such Acquisition is made.
"ADDITIONAL PLEDGE AGREEMENT" has the meaning set forth in Section 7.9.
"ADJUSTED NET CASH PROCEEDS" means, with respect to any Disposition as
of any date of determination, the amount equal to the difference between
(i) the Net Cash Proceeds from such Disposition, and (ii) the Reinvested
Proceeds in connection with such Disposition.
"ADVANCE" means an ABR Advance or a Eurodollar Advance.
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"AFFECTED PRINCIPAL AMOUNT" means, in the event that (i) the Borrower
shall fail for any reason to borrow or convert after it shall have notified
the Administrative Agent of its intent to do so in any instance in which it
shall have requested a Eurodollar Advance pursuant to Section 2.2 or 3.3, an
amount equal to the principal amount of such Eurodollar Advance; (ii) a
Eurodollar Advance shall terminate for any reason prior to the last day of the
Interest Period applicable thereto, an amount equal to the principal amount of
such Eurodollar Advance; and (iii) the Borrower shall prepay or repay all or
any part of the principal amount of a Eurodollar Advance prior to the last day
of the Interest Period applicable thereto, an amount equal to the principal
amount of such Eurodollar Advance so prepaid or repaid.
"AFFILIATE" means as to any Person any other Person at the time
directly or indirectly controlling, controlled by or under direct or
indirect common control with such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (i)
vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (ii) direct or cause the direction of
the management and policies of such Person, whether by contract or otherwise.
"AGGREGATE REVOLVING COMMITMENT" means, at any time, the sum at such
time of the Revolving Commitments of all Lenders.
"AGGREGATE CREDIT EXPOSURE" means, at any time, the sum at such time
of (i) the outstanding principal balance of the Revolving Loans of all
Lenders, plus (ii) an amount equal to the Letter of Credit Exposure of all
Lenders.
"AGREEMENT" means this Credit and Guarantee Agreement.
"ALTERNATE BASE RATE" means on any date, a rate of interest per annum
equal to the higher of (i) the Federal Funds Effective Rate in effect on
such date plus 1/2 of 1% or (ii) the Prime Rate in effect on such date.
"ANIXTER REPURCHASE AGREEMENT" means the Stock Purchase Agreement,
dated as of April 2, 1998, between the Borrower and Anixter International, Inc.
"APPLICABLE MARGIN" means:
(A) For the period from the Effective Date through and including September
30, 1998, (i) in respect of ABR Advances, 1.00%, (ii) in respect of Eurodollar
Advances
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and Letter of Credit Fees, 2.00%, and (iii) in respect of Commitment
Fees, 0.500%.
(B) Subject to clause (d) below, after September 30, 1998, at all times
during which the applicable Pricing Level set forth below is in effect: (i)
with respect to ABR Advances, the percentage set forth below under the heading
"ABR Margin" and adjacent to such Pricing Level, (ii) with respect to
Eurodollar Advances and Letter of Credit Fees, the percentage set forth below
under the heading "Eurodollar and LC Margin" and adjacent to such Pricing
Level, and (iii) with respect to the Commitment Fee, the percentage set forth
below under the heading "Commitment Fee" and adjacent to such Pricing Level:
Eurodollar
Pricing ABR and LC Commitment
Level Margin Margin Fee
------- ------ ------ ---
I 0% 0.875% 0.200%
II 0% 1.000% 0.250%
III 0.250% 1.250% 0.300%
IV 0.500% 1.500% 0.350%
V 0.750% 1.750% 0.400%
VI 0.875% 1.875% 0.450%
VII 1.000% 2.000% 0.500%;
provided, however, that if as of the last day of any fiscal quarter (commencing
with the fiscal quarter ending December 31, ▇▇▇▇), ▇▇▇▇▇▇ for the Four Quarter
Trailing Period is less than $45,000,000, each of the Applicable Margins for
ABR Advances, Eurodollar Advances and Letter of Credit Fees set forth in this
clause (b) will be increased by 0.375%, such increase to be in effect for the
period from the date of delivery of the Compliance Certificate to the
Administrative Agent and the Lenders for such fiscal quarter until the fifth
day following the delivery of such Compliance Certificate to the Administrative
Agent and the Lenders (or if such fifth day is not a Business Day on
the immediately preceding Business Day) demonstrating that EBITDA for the
Four Quarter Trailing Period is greater than or equal to $45,000,000, such
increase to again become applicable if as of the last day of any fiscal quarter
thereafter, EBITDA for the Four Quarter Trailing Period ending on such date is
less than $45,000,000.
(C) Subject to clause (d) below after September 30, 1998, the Pricing
Level shall be based upon the Compliance Certificate most recently received by
the Administrative Agent. Thereafter any changes in the Applicable Margin
resulting from a change in the applicable Pricing Level shall be based upon the
Compliance Certificate most recently delivered pursuant to Section 7.1(c) and
shall become effective on the fifth day following the delivery of such
Compliance Certificate to the Administrative Agent and the Lenders (or if such
fifth day is not a Business Day on
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the immediately preceding Business Day).
(D) Notwithstanding anything to the contrary contained in this
definition, if the Borrower shall fail to deliver a Compliance Certificate to
the Administrative Agent on or prior to any date required hereby, Pricing
Level VII shall be in effect from and including such date to the fifth day
following the delivery of such Compliance Certificate to the Administrative
Agent and the Lenders (or if such fifth day is not a Business Day on the
immediately preceding Business Day).
"APPLICABLE PROCEEDS" means any and all proceeds of casualty insurance or
condemnation held by the Administrative Agent pursuant to the Loan Documents in
connection with a casualty or condemnation event for which the conditions for
use thereof by the Borrower or any Subsidiary, as set forth in the Loan
Documents, shall not have been satisfied.
"ARRIS" means Arris Interactive, L.L.C. (formerly Products Venture,
L.L.C.), a joint venture of the Borrower and Nortel in which the Borrower holds
a 25% equity interest on the Effective Date.
"ARRIS LOAN DOCUMENTS" means, collectively (i) the Secured Loan Agreement,
dated as of November 17, 1995, among Nortel, the Borrower and Arris, (ii) the
Pledge Agreement, dated as of November 17, 1995, between Nortel and the
Borrower, (iii) the Security Agreement, dated as of November 17, 1995, between
Nortel and Arris, (iv) and all other agreements, instruments and documents
executed or delivered in connection therewith.
"ARRIS OBLIGATIONS" means the obligations of the Borrower under the Arris
Loan Documents to participate (in an aggregate amount not in excess of
$10,000,000) in loans made by Nortel to Arris.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an assignment and acceptance
agreement substantially in the form of Exhibit F.
"BOARD OF GOVERNORS" means the Board of Governors of the Federal Reserve
System of the United States.
"BORROWER OBLIGATIONS" means, collectively, all of the obligations and
liabilities of the Borrower under the Loan Documents (including Reimbursement
Obligations), in each case whether fixed, contingent, now existing or hereafter
arising, created, assumed, incurred or acquired, and whether before or after
the occurrence of any Event of Default under Section 9.1(h) or (i) and
including any obligation or liability in respect of any breach of any
representation or warranty and all
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post-petition interest and funding losses, whether or not allowed as a
claim in any proceeding arising in connection with such an event.
"BORROWING BASE AMOUNT" means, on any date of determination, an amount
equal to the sum of (i) 85% of Eligible Receivables and (ii) 60% of Eligible
Inventory, provided, however, that at no time shall the amount of Eligible
Inventory included in the Borrowing Base Amount exceed an amount equal to 50%
of the Aggregate Credit Exposure (after giving effect to any Extensions of
Credit and prepayments made on such date).
"BORROWING BASE CERTIFICATE" means a certificate substantially in the form
of Exhibit I.
"BORROWING DATE" means any Business Day on which (i) the Lenders make
Revolving Loans or (ii) the Issuer issues a Letter of Credit.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which commercial banks located in New York City are authorized or required by
law or other governmental action to be closed, provided that when used in
connection with a Eurodollar Advance, the term shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"CAPITAL EXPENDITURES" means, for any period, the sum of the aggregate of
all expenditures (whether paid in cash or other consideration or accrued as a
liability) by the Borrower and the Subsidiaries on a consolidated basis in
accordance with GAAP during such period for fixed or capital assets (excluding
any capitalized interest and any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations and
excluding any replacement assets acquired with the proceeds of insurance).
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, (a) which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP, or (b) which lease does not qualify as a
Tax Operating Lease. For purposes of this definition, "TAX OPERATING LEASE"
means any "synthetic lease", and any other lease (i) that is treated as a lease
for purposes of the Code, and (ii) the lessor under which is treated as the
owner of the assets subject to the lease for purposes of the Code.
"CAPITAL STOCK" means, as to any Person, all shares, interests,
partnership interests, limited liability company interests, participations,
rights in or other equivalents (however designated) of such Person's equity
(however designated) and any rights, warrants or options exchangeable for or
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convertible into such shares, interests, participations, rights or other equity.
"CASH COLLATERAL" has the meaning set forth in Section 2.7.
"CASH COLLATERAL ACCOUNT" has the meaning set forth in Section 2.7.
"CASH EQUIVALENTS" means Dollar denominated investments in (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in full support thereof) having maturities of not
more than one year from the date of acquisition, (ii) time deposits,
certificates of deposit and bankers acceptances maturing within 180 days from
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank having a combined capital surplus and undivided profits of not
less than $100,000,000 and whose (or whose parent company's) unsecured
non-credit supported short-term debt or commercial paper rating at the time of
such acquisition (x) from Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto ("S&P") is at least A-1,
or the equivalent thereof, or (y) from ▇▇▇▇▇'▇ Investors Service, Inc. or
any successor thereto ("▇▇▇▇▇'▇") is at least P-1, or the equivalent thereof,
(iii) commercial paper maturing within 90 days from the date of acquisition
thereof and having, at such date of acquisition (x) from S&P is at least A-1,
or the equivalent thereof, or (y) from ▇▇▇▇▇'▇ is at least P-1, or the
equivalent thereof, (iv) marketable direct obligations issued by any state of
the United States or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's, (v) normal business banking accounts,
and (vi) investments in money market funds substantially all the assets of
which are comprised of securities of the types described in clauses (i) through
(iv) above.
"CHANGE IN LAW" means (i) the adoption of any law, rule or regulation
after the Effective Date, (ii) the issuance or promulgation after the Effective
Date of any directive, guideline or request from any Governmental Authority
(whether or not having the force of law), or (iii) any change after the
Effective Date in the interpretation of any existing law, rule, regulation,
directive, guideline or request by any Governmental Authority charged with the
administration thereof.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(A) any person or group shall have become the beneficial owner of
voting shares entitled to exercise more than 25% of the total voting
power of all outstanding voting shares of the Borrower (including any
voting shares which are not then outstanding of
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which such person or group is deemed the beneficial owner);
(B) a change in the composition of the Managing Person of the
Borrower shall have occurred in which the individuals who constituted the
Managing Person of the Borrower at the beginning of the two year period
immediately preceding such change (together with any other director whose
election by the Managing Person of the Borrower or whose nomination for
election by the shareholders of the Borrower was approved by a vote of at
least a majority of the members of such Managing Person then in office who
either were members of such Managing Person at the beginning of such period
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the members of such Managing
Person then in office; or
(C) a "change of control", as such term is defined in the
Subordinated Indenture, and any similar circumstance which, under the
documentation evidencing or governing any Indebtedness of the Borrower of
$15,000,000 or more, results in an obligation of the Borrower to prepay,
purchase, offer to purchase, redeem or defease such Indebtedness.
For purposes of this definition, (i) the terms "person" and "group" shall
have the respective meanings ascribed thereto in Sections 13(d) and 14(d)(2) of
the Exchange Act, (ii) the term "beneficial owner" shall have the meaning
ascribed thereto in Rule 13d-3 under the Exchange Act, and (iii) the term
"voting shares" shall mean all outstanding shares of any class or classes
(however designated) of Capital Stock of the Borrower entitled to vote
generally in the election of members of the Managing Person thereof.
"CODE" means the Internal Revenue Code of 1986, as the same may be amended
from time to time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect.
"COLLATERAL" means any and all "Collateral", as defined in any Security
Document.
"COMMITMENT FEE" has the meaning set forth in Section 3.2(a).
"COMMITMENT PERCENTAGE" means, as of any date and with respect to each
Lender, the percentage equal to a fraction (i) the numerator of which is the
Revolving Commitment of such Lender on such date (or, if there are no Revolving
Commitments on such date, on the last date upon which one or more Revolving
Commitments were in effect), and (ii) the denominator of which is sum of the
Revolving Commitments of all Lenders on such date (or, if there are no
Revolving Commitments on such date, on the last date upon which one or more
Revolving Commitments were in effect).
"COMMITMENTS" means, collectively, the Revolving Commitments and the
Letter of
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Credit Commitment, each, a "COMMITMENT".
"COMMITMENT TERMINATION DATE" means May 21, 2002, or such earlier date
upon which either the Revolving Commitments shall terminate or the Aggregate
Revolving Commitment shall otherwise equal zero.
"COMPLIANCE CERTIFICATE" has the meaning set forth in Section 7.1(c).
"CONVERSION DATE" means the date on which: (i) a Eurodollar Advance is
converted to an ABR Advance, (ii) an ABR Advance is converted to a Eurodollar
Advance or (iii) a Eurodollar Advance is converted to, or continued as, a new
Eurodollar Advance.
"CREDIT EXPOSURE" means, with respect to any Lender as of any date, the
sum as of such date of (i) the outstanding principal balance of such Lender's
Revolving Loans, plus (ii) such Lender's Letter of Credit Exposure.
"CREDIT PARTY" means the Administrative Agent, the Issuer, the Collateral
Agent or a Lender, as the case may be.
"CREDIT REQUEST" means a request for Revolving Loans or a Letter of Credit
substantially in the form of Exhibit B.
"CUSTOMARY LIEN" means any of the following: (i) any Lien imposed by law
for Taxes that are not yet due or are being contested in compliance with
Section 7.4, provided that enforcement of such Lien is stayed pending such
contest; (ii) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 7.4, provided that enforcement of each
such Lien is stayed pending such contest; (iii) pledges and deposits made in
the ordinary course of business in compliance with workers' compensation,
unemployment insurance and other social security laws or regulations; (iv)
deposits and pledges to secure the performance of bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business; (v) judgment liens in respect of judgments that
would not cause an Event of Default under Section 9.1(j); (vi) zoning
ordinances, easements, rights of way, minor defects, irregularities, and other
similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the Borrower or any Subsidiary; and (vii)
Liens created under the Loan Documents.
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"DEFAULT" means any event or condition which constitutes an Event of
Default or which, with the giving of notice, the lapse of time, or any other
condition, would, unless cured or waived, become an Event of Default.
"DISPOSITION" has the meaning set forth in Section 8.6.
"DISQUALIFIED STOCK" means any Capital Stock of any Person that, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, provided, however, that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof
have the right to require such Person to repurchase such Capital Stock upon the
occurrence of certain events shall not constitute Disqualified Stock if the
terms of such Capital Stock provide that the Borrower may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with Section 8.7 of this Agreement.
"DOLLARS" and "$" mean lawful currency of the United States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is not a Foreign
Subsidiary.
"EBITA" means, for any period, an amount equal to (i) net income of the
Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP for such period, plus (ii) the sum of, without duplication, each of
the following with respect to the Borrower and its Subsidiaries to the extent
utilized in determining such net income for such period, (a) interest expense,
(b) income tax expense, (c) amortization, and (d) extraordinary losses from
sales, exchanges and other dispositions of property not in the ordinary course
of business, minus (iii) the sum of, without duplication, each of the following
with respect to the Borrower and its Subsidiaries, to the extent utilized in
determining such net income for such period: (a) interest income, (b) income
tax benefits and (c) extraordinary gains from sales, exchanges and other
dispositions of property not in the ordinary course of business; provided,
however, that, notwithstanding anything to the contrary contained herein, such
amount shall be subject to such adjustments (including adjustments with respect
to specific items referred to in clauses (i), (ii) and (iii) of this
definition) as the Borrower may request and the Administrative Agent, with the
consent of Required Lenders, shall approve.
"EBITDA" means, for any period, an amount equal to EBITA for such period
plus depreciation and other non-cash charges to the extent utilized in
determining such EBITA for such period.
"EFFECTIVE DATE" means the date on which the conditions set forth in
Article 5 have
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been satisfied (or waived in accordance with Section 11.1).
"ELIGIBLE INSTITUTION" means (i) any commercial bank, trust company,
banking association, insurance company, financial institution, mutual fund or
pension fund acceptable to the Administrative Agent, (ii) any Lender or any
Affiliate or Subsidiary thereof, or (iii) any commercial bank, trust company or
banking association having undivided capital surplus and retained earnings
exceeding $100,000,000.
"ELIGIBLE INVENTORY" means Inventory which is held for sale or lease or
furnished under any contract of service by the Borrower or any Subsidiary
Guarantor and which is at all times and shall continue to be acceptable to the
Agents in all respects in accordance with their reasonable credit judgment.
Standards of eligibility may be established and revised from time to time (upon
notice to the Lenders) by the Agents in their reasonable credit judgment,
provided, however, in general and without limiting the foregoing, the following
Inventory shall not be Eligible Inventory:
(A) Inventory which is obsolete, not in good condition, or not either
currently usable or currently salable in the ordinary course of the business of
the Borrower or such Subsidiary Guarantor, as the case may be;
(B) Inventory which the Agents determine, in the exercise of reasonable
discretion and in accordance with their customary business practices, to be
unacceptable due to age, type, category and/or quantity;
(C) Inventory which is not located on the Borrower's or such Subsidiary
Guarantor's, as the case may be, owned or leased premises in the United States;
and
(D) Inventory which is not subject to a perfected first priority
security interest in favor of the Administrative Agent.
"ELIGIBLE RECEIVABLE" means a Receivable payable in Dollars which is a
good and valid account representing an undisputed bona fide indebtedness
incurred by an Account Debtor for a fixed sum as set forth in the invoice
relating thereto with respect to an absolute sale and delivery upon the stated
terms of goods sold or services rendered and which is and at all times shall
continue to be acceptable to the Agents in all respects in accordance with
their reasonable credit judgment. Standards of eligibility may be established
and revised from time to time (upon notice to the Lenders) by the Agents in
their reasonable credit judgment, provided, however, in general and without
limiting the foregoing, the following Receivables shall not be Eligible
Receivables:
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(A) Receivables which remain unpaid ninety (90) days after the original
date of the applicable invoice;
(B) Receivables owing by a single Account Debtor if 50% of the balance
owing by such Account Debtor remains unpaid 90 days after the original date of
the applicable invoice;
(C) Receivables with respect to which the Account Debtor is a director,
officer, employee, Subsidiary or Affiliate of the Borrower or such Subsidiary
Guarantor, as applicable (other than Telecommunications, Inc. and its
Subsidiaries);
(D) Receivables with respect to which the Account Debtor is not a resident
of the United States unless (i) such Account Debtor has supplied the Borrower
or such Subsidiary Guarantor, as applicable, with an irrevocable letter of
credit, issued by a financial institution satisfactory to the Agents,
sufficient to cover such Receivable, in form and substance satisfactory to the
Agents or (ii) the Borrower has requested the inclusion of such a Receivable
and has provided the Agents with a description of such Receivable and such
other information with respect thereto as the Agents shall reasonably request,
and the Agents and Required Lenders shall have consented to such inclusion;
(E) Receivables with respect to which the Account Debtor has (i) disputed
such Receivable or asserted a counterclaim or any other claim or defense or
(ii) a right of setoff, but only to the extent of such counterclaim or setoff;
(F) Receivables with respect to which the Account Debtor is the subject of
bankruptcy or a similar insolvency proceeding or has made an assignment for the
benefit of creditors or whose assets have been conveyed to a receiver or
trustee;
(G) Receivables with respect to which the Account Debtor's obligation to
pay is conditional upon the Account Debtor's approval or is otherwise subject
to any repurchase obligation or return right, as with sales made on a
▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on approval (except with
respect to Receivables in connection with which Account Debtors are entitled to
return Inventory on the basis of the quality of such Inventory) or consignment
basis;
(H) Receivables not subject to a fully perfected first priority security
interest in favor of the Credit Parties or subject to any security interest or
Lien in favor of any Person other than the Lien of the Credit Parties;
(I) Receivables, the Account Debtor of which is a Governmental Authority;
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(J) Receivables with respect to which the Account Debtor's obligation
does not constitute its legal, valid and binding obligation, enforceable
against it in accordance with its terms;
(K) Receivables with respect to which the Borrower or pertinent
Subsidiary Guarantor has not yet shipped the applicable goods or performed the
applicable service; and
(L) Receivables which the Agents, exercising reasonable discretion, have
determined to be unacceptable.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.7.
"EQUITY ISSUANCE" means the issuance of any equity securities or the
receipt of any capital contribution, in each case by the Borrower, other than
(i) any issuance of equity securities to, or receipt of any such capital
contribution from, the Borrower, (ii) the issuance of stock in connection with
an Acquisition, (iii) the issuance of common stock pursuant to a stock option
plan, an employee stock purchase plan, or for executive compensation, in either
case in the ordinary course of business or (iv) the issuance of common stock in
connection with a conversion of Subordinated Notes pursuant to the conversion
provisions thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"ERISA AFFILIATE" means any Person which is a member of any group of
organizations within the meaning of Sections 414(b) or (c) of the Code (or,
solely for purposes of potential liability under Section 302(c)(11) of ERISA
and Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, Sections 414(m) or (o) of the Code) of
which the Borrower or any Subsidiary is a member.
"ERISA EVENT" means (i) a "reportable event", as defined in Section 4043
of ERISA with respect to a Pension Plan (other than an event for which the
30-day notice period is waived), (ii) the existence with respect to any Pension
Plan of an "accumulated funding deficiency" (as defined in Section 412 of the
Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant
to Section 412(d) of the Code or Section 303(d) of ERISA of an application for
a waiver of the minimum funding standard with respect to any Pension Plan; (iv)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the
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15
termination of any Pension Plan; (v) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer any Pension Plan; (vi) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Pension Plan or Multiemployer Plan; or (vii) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURODOLLAR ADVANCES" means, collectively, the Revolving Loans (or any
portions thereof), at such time as they (or such portions) are made and/or
being maintained at a rate of interest based upon the Eurodollar Rate.
"EURODOLLAR RATE" means, with respect each Eurodollar Advance, a rate of
interest per annum, as determined by the Administrative Agent, obtained by
dividing (and then rounding to the nearest 1/16 of 1% or, if there is no
nearest 1/16 of 1%, then to the next higher 1/16 of 1%):
(A) the average (rounded upward, if necessary, to the next 1/16th of 1%)
of the respective rates per annum as reported by each Reference Lender to the
Administrative Agent, as quoted by such Reference Lender to leading banks in
the interbank eurodollar market as the rate at which such Reference Lender is
offering Dollar deposits in immediately available funds in an amount equal
approximately to the Eurodollar Advance of such Reference Lender to which such
Interest Period shall apply for a period equal to such Interest Period, as
quoted at approximately 11:00 a.m. London time, two Business Days prior to the
first day of such Interest Period, by
(B) a number equal to 1.00 minus the aggregate of the then stated
maximum rates during such Interest Period of all reserve requirements (including
marginal, emergency, supplemental and special reserves), expressed as a
decimal, established by the Board of Governors and any other banking authority
to which BNY and other major money center banks chartered under the laws of the
United States or any State thereof are subject, in respect of
eurocurrency funding (currently referred to as "eurocurrency liabilities" in
Regulation D) without benefit of credit for proration, exceptions or offsets
which may be available from time to time to BNY.
"EVENT OF DEFAULT" has the meaning set forth in Section 9.1.
"EVOLVE" means Evolve, Inc., a manufacturer of a remote control unit for
televisions.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time.
16
"EXCLUDED TAX" means as to any Person, a Tax imposed by one of the
following jurisdictions or by any political subdivision or taxing authority
thereof: (i) the United States, (ii) the jurisdiction in which such Person is
organized, (iii) the jurisdiction in which such Person's principal office is
located, (iv) in the case of each Credit Party, any jurisdiction in which such
Credit Party is deemed to be doing business, (v) in the case of any Foreign
Credit Party, any withholding tax that is imposed on amounts payable to such
Foreign Credit Party at the time such Foreign Credit Party becomes a party to
this Agreement (or designates a new lending office) or is attributable to such
Foreign Credit Party's failure to comply with Section 3.7(c), except to the
extent that such Foreign Credit Party (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 3.7; which Tax (a) is any income tax or franchise tax
imposed on all or part of the net income or net profits of such Person or (b)
represents interest, fees or penalties for payment of any such income tax or
franchise tax.
"EXISTING HEDGING AGREEMENTS" means, collectively, (i) the ISDA Master
Agreement, dated June 1, 1995, entered into by the Borrower and Bank of
America, and (ii) the ISDA Master Agreement, dated May 31, 1995, entered into
by the Borrower and The Chase Manhattan Bank (formerly, Chemical Bank).
"EXTENSIONS OF CREDIT" means, collectively, the Revolving Loans, the
Letters of Credit and any participations therein pursuant to Section 2.5(c).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day, provided that (i) if the
day for which such rate is to be determined is not a Business Day, the Federal
Funds Effective Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Effective Rate for such day shall be the average of the quotations for such day
on such transactions received by BNY as determined by BNY and reported to the
Administrative Agent.
"FEDERAL RESERVE FORM" means a FR Form U-1 or FR Form G-3, as applicable,
duly completed by the Administrative Agent and executed by the Borrower, the
statements made in which shall be such, in the reasonable opinion of the
Administrative Agent, as to permit the transactions contemplated hereby in
accordance with Regulation U, together with all instruments,
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17
certificates and other documents executed or delivered in connection therewith
or attached thereto.
"FEES" has the meaning set forth in Section 2.6(a).
"FINANCIAL OFFICER" means, as to any Person, the chief financial officer
of such Person or such other officer as shall be satisfactory to the
Administrative Agent.
"FIXED CHARGE COVERAGE RATIO" means, at any date of determination, the
ratio of (i) the sum of (x) EBITA plus (y) Rent Expense to (ii) the sum of (x)
interest expense of the Borrower and the Subsidiaries determined on a
consolidated basis in accordance with GAAP (including the interest component of
Capital Lease Obligations) plus (y) Rent Expense, in each case for Four Quarter
Trailing Period. Notwithstanding the foregoing, for purposes of calculating
the Fixed Charge Coverage Ratio for the fiscal quarter ending June 30, 1998,
EBITA shall be increased by the amount (not in excess of $12,000,000) of the
restructuring charge taken by the Borrower for the fiscal quarter ending March
31, 1998.
"FOREIGN CREDIT PARTY" means any Credit Party that is organized under the
laws of a jurisdiction other than the United States or any State thereof.
"FOREIGN SUBSIDIARY" means any Subsidiary that is a "controlled foreign
corporation" within the meaning of Section 957 of the Code.
"FOUR QUARTER TRAILING PERIOD" means, at any date of determination, the
period of the four fiscal quarters ending on such date, or, if such date is not
the last day of a fiscal quarter, the period of the most immediately completed
four fiscal quarters.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state, municipal or
other government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof, or any court or arbitrator.
"GUARANTEE" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or in effect
guaranteeing any return on any investment made by another Person, or any
Indebtedness, lease, dividend or other obligation (a "primary obligation") of
any other Person (a "primary obligor") in any manner, whether directly or
indirectly, including any obligation of the guarantor, direct or indirect (i)
to purchase any primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of a
18
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the beneficiary of any primary obligation
of the ability of a primary obligor to make payment of a primary obligation,
(iv) otherwise to assure or hold harmless the beneficiary of a primary
obligation against loss in respect thereof, and (v) in respect of the
liabilities of any partnership in which a secondary obligor is a general
partner, except to the extent that such liabilities of such partnership are
nonrecourse to such secondary obligor and its separate property, provided,
however, that the term "Guarantee" shall not include the endorsement of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee shall be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guarantor in good faith.
"GUARANTEE SUPPLEMENT" means a Guarantee Supplement in the form of Exhibit
H hereto.
"GUARANTOR OBLIGATIONS" means, with respect to each Subsidiary Guarantor,
all of the obligations and liabilities of such Subsidiary Guarantor under the
Loan Documents, whether fixed, contingent, now existing or hereafter arising,
created, assumed, incurred or acquired.
"HEDGING AGREEMENT" means any interest rate swap, cap or collar
arrangement or any other derivative product customarily offered by banks or
other financial institutions to their customers in order to reduce the exposure
of such customers to interest rate fluctuations.
"INDEBTEDNESS" means, as to any Person, at a particular time, all items
which constitute, without duplication, (i) indebtedness for borrowed money,
(ii) indebtedness in respect of the deferred purchase price of property (other
than trade payables incurred in the ordinary course of business), (iii)
indebtedness evidenced by notes, bonds, debentures or similar instruments, (iv)
obligations with respect to any conditional sale or title retention agreement,
(v) indebtedness arising under acceptance facilities and the amount available
to be drawn under all letters of credit issued for the account of such Person
and, without duplication, all drafts drawn thereunder to the extent such Person
shall not have reimbursed the issuer in respect of the issuer's payment
thereof, (vi) liabilities secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned by such Person (other than carriers',
warehousemen's, mechanics', repairmen's or other like non-consensual statutory
Liens arising in the ordinary course of business), even though such Person has
not assumed or otherwise become liable for the payment thereof, (vii) Capital
Lease Obligations, (viii) all obligations of such Person in respect of
Disqualified Stock, and (x) all Guarantees by such Person of Indebtedness of
others. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such
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19
Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"INDEMNIFIED TAX" means as to any Person, any Tax, except (i) an Excluded
Tax imposed on such Person and (ii) any interest, fees or penalties for late
payment thereof imposed on such Person.
"INSOLVENT" means, with respect to any Person, (a) the sum of the assets,
at a fair valuation, of such Person does not exceed its debts, (b) such Person
has incurred debts beyond its ability to pay such debts as such debts mature,
(c) such Person believes that, in the ordinary course of its business during
the reasonably foreseeable future, it will incur debts beyond its ability to
pay such debts as such debts mature, and (d) such Person has insufficient
capital with which to conduct its business. For purposes of this definition
only, "debt" means any liability on a claim, and "claim" means any (i) right to
payment, whether such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured, or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, unsecured, liquidated or unliquidated.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, trade secrets, confidential or proprietary technical and business
information and other similar property and all licenses related thereto.
"INTEREST PERIOD" means, as to each Eurodollar Advance, the period
commencing on, as the case may be, the Borrowing Date or Conversion Date with
respect thereto and ending one, two, three or six months thereafter, as
selected by the Borrower in its Credit Request or Notice of Conversion.
"INVENTORY" means inventory of the Borrower or any Subsidiary Guarantor
consisting of first quality finished products held for sale to customers in the
ordinary course of business, valued at the lower of average cost or market
value which approximates a first-in-first-out basis.
"INVESTMENTS" has the meaning set forth in Section in Section 8.4.
"ISSUER" means The First National Bank of Chicago and its successors and
assigns.
"LETTER OF CREDIT" has the meaning set forth in Section 2.5.
"LETTER OF CREDIT FEES" has the meaning set forth in Section 3.2(b).
20
"LETTER OF CREDIT COMMITMENT" means the commitment of the Issuer to issue
Letters of Credit having an aggregate outstanding face amount up to $5,000,000.
"LETTER OF CREDIT EXPOSURE" means in respect of any Lender at any time, an
amount equal to (i) the sum (without duplication) at such time of (x) the
aggregate undrawn face amount of the outstanding Letters of Credit, (y) the
aggregate amount of unpaid drafts drawn on all Letters of Credit, and (z) the
aggregate unpaid Reimbursement Obligations, multiplied by (ii) such Lender's
Commitment Percentage at such time.
"LIEN" means any mortgage, pledge, hypothecation, assignment, encumbrance,
lien (statutory or other), or other security agreement or security interest of
any kind or nature whatsoever, including any conditional sale or other title
retention agreement and any capital or financing lease having substantially the
same economic effect as any of the foregoing.
"LINE OF BUSINESS" means the manufacture and distribution of
telecommunications and cable products and any business reasonably similar,
complimentary, ancillary or related thereto.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Security Documents, each Secured Hedging Agreement and all other agreements,
instruments and documents executed or delivered in connection herewith.
"LOAN PARTIES" means, collectively, the Borrower, and each Subsidiary
Guarantor.
"MANAGING PERSON" means, with respect to any Person that is (i) a
corporation, its board of directors, (ii) a limited liability company, its
board of control, managing member or members, (iii) a limited partnership, its
general partner, (iv) a general partnership or a limited liability partnership,
its managing partner or executive committee or (v) any other Person, the
managing body thereof or other Person analogous to the foregoing.
"MARGIN STOCK" has the meaning set forth in Regulation U.
"MATERIAL ADVERSE" means, with respect to any change or effect, a material
adverse change in, or effect on, as the case may be, (i) the business, assets,
operations, prospects or condition, financial or otherwise, of (x) the Borrower
or (y) the Borrower and the Subsidiaries taken as a whole, (ii) the ability of
any Loan Party to perform its obligations under the Loan Documents to which it
is a party, (iii) the rights of, or benefits available to, the Credit Parties
under the Loan Documents, (iv) the legality or enforceability of any Loan
Document or (v) the perfection or priority of any Lien granted under any of the
Security Documents.
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21
"MATERIAL AGREEMENTS" means, collectively, (i) the Anixter Repurchase
Agreement, (ii) the ▇▇▇▇ of Sale and General Conveyance and Assumption of
Liabilities, dated as of June 1, 1993, between Anixter Bros., Inc. and the
Borrower, (iii) the Tax Allocation Agreement, dated as of July 16, 1993,
between Itel Corporation, the Borrower and certain of its Subsidiaries, (iv)
the Limited Liability Company Agreement of Products Venture L.L.C. (now Arris),
(v) the Products Distributor Agreement, dated November 15, 1995, between
Products Venture L.L.C. and the Borrower, and (vi) the Agreement, dated
February 27, 1998, among Nortel, the Borrower and Arris.
"MATERIAL FOREIGN SUBSIDIARY" means a Foreign Subsidiary as to which any
of the following tests are or have at any time on or after the Effective Date
been met: (i) the Borrower's and the other Subsidiaries' investments in and
advances to such Foreign Subsidiary are greater than
or equal to 5% of the total assets of the Borrower and the Subsidiaries on a
consolidated basis as of the last day of the most recently completed fiscal
year of the Borrower, (ii) such Foreign Subsidiary's proportionate share of the
total assets (after intercompany eliminations) of the Borrower and the
Subsidiaries on a consolidated basis is greater than or equal to 5% of the
total assets of the Borrower and the Subsidiaries on a consolidated basis as of
the last day of the most recently completed fiscal year of the Borrower, or
(iii) the income from continuing operations before income taxes, extraordinary
items and the cumulative effect of a change in accounting principles of such
Foreign Subsidiary is greater than or equal to 5% of such income of the
Borrower and the Subsidiaries on a consolidated basis as of the last day of the
most recently completed fiscal year of the Borrower.
"MATERIAL LIABILITIES" means, on any date, with respect to the Borrower,
any Subsidiary, or any combination thereof: (i) Indebtedness (other than
Indebtedness under the Loan Documents), (ii) the net termination obligations in
respect of one or more Hedging Agreements (calculated as if such Hedging
Agreements were terminated as of such date), and (iii) other liabilities, in
each case whether as principal, guarantor, surety or other obligor, in an
aggregate principal amount exceeding $500,000.
"MATURITY DATE" means May 21, 2002, or such earlier date on which the
Notes shall become due and payable, whether by acceleration or otherwise.
"MEXICAN SUBSIDIARY" means Texscan de Mexico, S.A. de C.V.
"MINIMUM AMOUNT" means in respect of (i) ABR Advances, $1,000,000 or such
amount plus a whole multiple of $500,000 in excess thereof, and (ii) Eurodollar
Advances, $2,500,000 or such amount plus a whole multiple of $1,000,000 in
excess thereof.
"MORTGAGE" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations, as the case may be. Each
Mortgage shall be satisfactory in form and substance to the
22
Administrative Agent.
"MORTGAGE DOCUMENT" has the meaning set forth in Section 7.11.
"MORTGAGED PROPERTY" means each parcel of real property and improvements
thereto owned or leased by a Loan Party with respect to which a Mortgage is
granted pursuant to Section 7.11.
"MULTIEMPLOYER PLAN" means a Pension Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means, cash proceeds received from a Disposition, an
Equity Issuance, a casualty loss or a condemnation after deduction of taxes
payable in cash in connection therewith and net of reasonable transaction
expenses.
"NET WORTH" means on any date of determination, all amounts which would,
in conformity with GAAP, be included under "shareholders' equity" (or any like
caption) on a consolidated balance sheet of the Borrower and the Subsidiaries
as at such date.
"NON-GUARANTOR SUBSIDIARY" at any time, any Subsidiary that is not a
Subsidiary Guarantor at such time.
"NORTEL" means Northern Telecom Inc.
"NOTES" means with respect to each Lender in respect of such Lender's
Revolving Loans, a promissory note, substantially in the form of Exhibit A,
payable to the order of such Lender, each such promissory note having been made
by the Borrower and dated the Effective Date, including all replacements
thereof and substitutions therefor.
"NOTICE OF CONVERSION" has the meaning set forth in Section 3.3(a).
"OBLIGATIONS means, collectively, the Borrower Obligations and the
Guarantor Obligations.
"ORGANIZATIONAL DOCUMENTS" means as to any Person which is (i) a
corporation, the certificate or articles of incorporation and by-laws of such
Person, (ii) a limited liability company, the limited liability company
agreement or similar agreement of such Person, (iii) a partnership, the
partnership agreement or similar agreement of such Person, or (iv) any other
form of entity or
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23
organization, the organizational documents analogous to the foregoing.
"OTHER TAXES" means any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or from the execution, delivery,
registration or enforcement of, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, the Loan Documents or
otherwise with respect to, the Loan Documents.
"PAYMENT OFFICE" means the office of the Administrative Agent set forth in
Section 11.2(b).
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to
the functions thereof.
"PENSION PLAN" means, at any date of determination, any employee pension
benefit plan (other than a Multiemployer Plan), the funding requirements of
which (under Section 302 of ERISA or Section 412 of the Code) are, or at any
time within the six years immediately preceding such date, were in whole or in
part, the responsibility of the Borrower or any ERISA Affiliate.
"PERFECTION CERTIFICATE" means a certificate in the form of Annex A to the
Security Agreement or any other form approved by the Administrative Agent.
"PERMITTED LIENS" has the meaning set forth in Section 8.2.
"PERMITTED TRANSACTION AMOUNT" means, for any period, an amount equal to
the sum without duplication of the following paid during such period: the
aggregate fair market value of all consideration paid by the Borrower or any
Subsidiary in connection with any one or more of the following (including in
the case of an Acquisition, the Acquisition Consideration therefor): (i) each
sale, assignment, lease, transfer or other disposition permitted by Section
8.6(b) (including each merger permitted by Section 8.3(b) which shall be
treated as such), (ii) each Acquisition permitted by Section 8.5(b) (including
each merger permitted by Section 8.3(b) which shall be treated as such) or
Section 8.5(c), (iii) each Investment permitted by Section 8.4(c) or (e), and
(iv) each Restricted Payment permitted by Section 8.7(c). For purposes of this
definition, any transaction or other event described in clauses (i), (ii),
(iii) or (iv) of the definition that is between the Borrower and any Subsidiary
or any two or more Subsidiaries, shall count only once.
"PERMITTED TRANSACTION ANNUAL LIMITATION" means, in respect of any fiscal
year, (i) from the Effective Date until the Fixed Charge Coverage Ratio has
been maintained at greater than or equal to 2.00:1.00 for two consecutive
fiscal quarters, an amount equal to the greater of (x) $5,000,000 and (y) the
Arris Obligations for such fiscal year; and (ii) thereafter for so long as the
Fixed Charge Coverage Ratio is greater than or equal to 2.00:1.00 as of the
last day of a fiscal
24
quarter, an amount equal to $15,000,000, it being understood that if as of the
last day of any fiscal quarter, the Fixed Charge Coverage Ratio is less than
2.00:1.00, the dollar limitation set forth in clause (i) will again apply until
such time as the Fixed Charge Coverage Ratio has been maintained at greater
than or equal to 2.00:1.00 for two consecutive fiscal quarters.
Notwithstanding the foregoing, if during a fiscal year a decrease in the
Permitted Transaction Annual Limitation becomes effective:
(A) if the amount of the Permitted Transaction Annual Limitation
utilized by the Borrower on or before the effectiveness of such decrease
is less than the amount of the Permitted Transaction Annual Limitation as so
decreased, the Permitted Transaction Annual Limitation for the balance of
such fiscal year shall be an amount equal to the amount of the Permitted
Transaction Annual Limitation as so decreased minus the amount of the
Permitted Transaction Annual Limitation utilized by the Borrower on or before
the effectiveness of such decrease, and
(B) if the amount of the Permitted Transaction Annual Limitation
utilized by the Borrower on or before the effectiveness of the decrease
equals or exceeds the amount of the Permitted Transaction Annual Limitation
as so decreased, (1) the Permitted Transaction Annual Limitation for the
balance of such fiscal year shall be zero and (2) such excess shall be deemed
a utilization of the Permitted Transaction Annual Limitation in each
succeeding fiscal year until such excess shall have been fully utilized.
"PERMITTED TRANSACTION AGGREGATE LIMITATION" means, for the period from
the Effective Date through the Maturity Date, $35,000,000.
"PERSON" means a natural person, firm, partnership, limited liability
company, joint venture, corporation, association, business enterprise, joint
stock company, unincorporated association, trust, Governmental Authority or any
other entity, whether acting in an individual, fiduciary, or other capacity,
and for the purpose of the definition of "ERISA Affiliate", a trade or
business.
"PRICING LEVEL" means Pricing Level I, Pricing Level II, Pricing Level
III, Pricing Level IV, Pricing Level V, Pricing Level VI or Pricing Level VII,
as applicable.
"PRICING LEVEL I" means the applicable Pricing Level at any time when the
Fixed Charge Coverage Ratio is greater than 3.50:1.00.
"PRICING LEVEL II" means the applicable Pricing Level at any time when the
Fixed Charge Coverage Ratio is greater than 3.00:1.00 but less than or equal to
3.50:1.00.
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25
"PRICING LEVEL III" means the applicable Pricing Level at any time when
the Fixed Charge Coverage Ratio is greater than 2.50:1.00 but less than or
equal to 3.00:1.00.
"PRICING LEVEL IV" means the applicable Pricing Level at any time when the
Fixed Charge Coverage Ratio is greater than 2.00:1.00 but less than or equal to
2.50:1.00.
"PRICING LEVEL V" means the applicable Pricing Level at any time when the
Fixed Charge Coverage Ratio is greater than 1.50:1.00 but less than or equal to
2.00:1.00.
"PRICING LEVEL VI" means the applicable Pricing Level at any time when the
Fixed Charge Coverage Ratio is greater than 1.25:1.00 but less than or equal to
1.50:1.00.
"PRICING LEVEL VII" means the applicable Pricing Level at any time when
the Fixed Charge Coverage Ratio is less than or equal to 1.25:1.00.
"PRIME RATE" means the rate of interest per annum publicly announced in
New York City by BNY from time to time as its prime commercial lending rate,
such rate to be adjusted automatically (without notice) on the effective date
of any change in such publicly announced rate.
"RECEIVABLE" means the right to payment arising as a result of, or in
connection with, a sale of Inventory or the performance of services by, and in
the ordinary course of business of, the Borrower or any Subsidiary Guarantor.
"REFERENCE LENDERS" means, collectively, BNY and Bank of America.
"REGULATION D, T, U AND X" means Regulations D, T, U and X, respectively,
of the Board of Governors as from time to time in effect and all official
rulings and interpretations thereunder or thereof.
"REIMBURSEMENT OBLIGATION" means, collectively, the obligation of the
Borrower to the Issuer with respect to each Letter of Credit and all documents,
instruments and other agreements related thereto, including the obligation of
the Borrower to reimburse the Issuer for amounts drawn under such Letter of
Credit.
"REINVESTED PROCEEDS" means, with respect to any Disposition as of any
date of determination, the amount of Net Cash Proceeds from such Disposition
that is used by the Borrower or any Subsidiary to acquire, during the
Reinvestment Period with respect to such Disposition, property that is to be
used in the Line of Business.
"REINVESTMENT PERIOD" means the period beginning on the date that proceeds
from a Disposition are received by the Borrower or any Subsidiary, as the case
may be, and ending on the
26
earlier of (i) 365 days after the receipt of such proceeds, and (ii) the
occurrence of an Event of Default.
"RELATED PARTIES" means, with respect to any Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"REMAINING INTEREST PERIOD" means, in the event that (i) the Borrower
shall fail for any reason to borrow a Revolving Loan in respect of which it
shall have requested a Eurodollar Advance or convert an Advance to a Eurodollar
Advance after it shall have notified the Administrative Agent of its intent to
do so pursuant to Section 2.2 or 3.3, a period equal to the Interest Period
that the Borrower elected in respect of such Eurodollar Advance; (ii) a
Eurodollar Advance shall terminate for any reason prior to the last day of the
Interest Period applicable thereto, a period equal to the remaining portion of
such Interest Period if such Interest Period had not been so terminated; or
(iii) the Borrower shall prepay or repay all or any part of the principal
amount of a Eurodollar Advance prior to the last day of the Interest Period
applicable thereto, a period equal to the period from and including the date of
such prepayment or repayment to but excluding the last day of such Interest
Period.
"RENT EXPENSE" means, for any period, the aggregate rental expense
(including any contingent or percentage rental expense) of the Borrower and the
Subsidiaries on a consolidated basis paid or accrued during such period in
respect of all rent obligations under all operating leases for real or personal
property.
"REQUIRED LENDERS" means, at any time, one or more Lenders having the sum
of unused Revolving Commitments and Credit Exposures greater than or equal to
51% of the sum of the unused Aggregate Revolving Commitment and the Aggregate
Credit Exposure.
"RESTRICTED PAYMENT" has the meaning set forth in Section 8.7.
"REVOLVING COMMITMENT" means, in respect of any Lender, the maximum amount
of such Lender's Credit Exposure as set forth on the signature page of such
Lender adjacent to the heading "Revolving Commitment" or in an Assignment and
Acceptance Agreement or other document pursuant to which it became a Lender, as
such amount may be adjusted from time to time in accordance herewith.
"REVOLVING LOAN" and "REVOLVING LOANS" have the meaning set forth in
Section 2.1.
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"SALE AND LEASEBACK TRANSACTION" has the meaning set forth in Section 8.9.
"SEC" means the Securities and Exchange Commission or any Governmental
Authority succeeding to the functions thereof.
"SECURED HEDGING AGREEMENT" means, collectively, (i) the Existing Hedging
Agreements and (ii) any Hedging Agreement entered into by the Borrower with a
counterparty that was a Lender (or an Affiliate thereof) at the time such
Hedging Agreement was entered into.
"SECURED PARTIES" has the meaning set forth in the Security Agreement.
"SECURITY AGREEMENT" means the Security Agreement, by and among the Loan
Parties party thereto and the Administrative Agent, substantially in the form
of Exhibit G.
"SECURITY DOCUMENTS" means, collectively, (i) upon the execution and
delivery thereof, the Security Agreement and each Mortgage Document, (ii) each
Additional Pledge Agreement, if any, executed and delivered pursuant to Section
7.9(b) and 7.14, and (iii) all other instruments and documents delivered
pursuant to Section 7.9, 7.10 or 7.11 to secure any of the Obligations.
"SPECIAL COUNSEL" means ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, as, or such other
counsel selected by the Administrative Agent as, special counsel to the
Administrative Agent hereunder.
"STOCK RETIREMENT RESOLUTIONS" has the meaning set forth in Section
5.1(a).
"SUBSIDIARY" means, with respect to any Person (the "parent") at any date,
any other Person (i) the accounts of which would be consolidated with those of
the parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with
GAAP as of such date, (ii) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests or more than 50% of the profits or losses of which are,
as of such date, owned, controlled or held by the parent or one or more
subsidiaries of the parent. Unless otherwise qualified, all references to
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTOR" means each Subsidiary party to this Agreement.
"SUBORDINATED INDENTURE" means the Indenture, dated as of May 8, 1998,
between the Borrower and The Bank of New York, as Trustee, pursuant to which
the Subordinated Notes were issued.
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"SUBORDINATED NOTES" means the 4 1/2% Convertible Subordinated Notes, due
2003, issued by the Borrower pursuant to the Subordinated Indenture.
"TAX" means any present or future tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature and whatever called, by a Governmental
Authority, on whomsoever and wherever imposed, levied, collected, withheld or
assessed.
"TEXSCAN" means Texscan Corporation, a Delaware corporation and a Wholly
Owned Subsidiary of the Borrower.
"TOTAL DEBT" means, on any date of determination, the aggregate amount of
all indebtedness for borrowed money and Capital Lease Obligations of the
Borrower and the Subsidiaries determined on a consolidated basis in accordance
with GAAP.
"TOTAL PERCENTAGE" means, as of any date and with respect to each Lender,
the percentage equal to a fraction (i) the numerator of which is the sum of the
Revolving Commitment of such Lender on such date (or, if there are no Revolving
Commitments on such date, such Lender's Credit Exposure on such date), and (ii)
the denominator of which is the Aggregate Revolving Commitment on such date
(or, if there are no Revolving Commitments on such date, the Aggregate Credit
Exposure on such date).
"TRANSACTIONS" means, collectively, the transactions contemplated by the
Loan Documents and the Subordinated Indenture.
"UNCONSOLIDATED INVESTMENT" means, as of any date, any investment made by
the Borrower or any Subsidiary in any other Person that, pursuant to GAAP as in
effect on such date, would not be consolidated with the Borrower for financial
reporting purposes immediately after giving effect to such investment.
"UNITED STATES" means the United States of America.
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person, 100%
of the outstanding Capital Stock of such Subsidiary is owned, directly or
indirectly, by such Person.
"WITHDRAWAL LIABILITY" means, with respect to any Person, liability of
such Person to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
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1.2. ACCOUNTING TERMS
As used in the Loan Documents and in any certificate, opinion or
other document made or delivered pursuant thereto, accounting terms not
defined in Section 1.1, and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP. If any change in GAAP would affect the computation of any financial
ratio or requirement set forth in this Agreement, the Credit Parties and the
Borrower shall negotiate in good faith to amend such ratio or requirement to
reflect such change in GAAP (subject to the approval of the Required Lenders),
provided that, until so amended, (i) such ratio or requirement shall continue
to be computed in accordance with GAAP prior to such change and (ii) the
Borrower shall provide to the Credit Parties financial statements and other
documents required under this Agreement (or such other items as the
Administrative Agent may reasonably request) setting forth a reconciliation
between calculations of such ratio or requirement before and after giving
effect to such change.
1.3. RULES OF INTERPRETATION
(A) Unless expressly provided in a Loan Document to the contrary,
(i) the words "hereof", "herein", "hereto" and "hereunder" and similar words
when used in each Loan Document shall refer to such Loan Document as a whole
and not to any particular provision thereof, (ii) section, subsection, schedule
and exhibit references contained therein shall refer to section, subsection,
schedule and exhibit thereof or thereto, (iii) the words "include" and
"including", shall mean that the same shall be "included, without limitation",
(iv) any definition of, or reference to, any agreement, instrument, certificate
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified, (v) any reference herein to any Person shall be construed
to include such Person's successors and assigns, (vi) the words "asset" and
"property" shall be construed to have the same meaning and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, (vii) words in the singular number include the
plural, and words used therein in the plural include the singular, (viii) any
reference to a time shall refer to such time in New York, (ix) in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding", and (x) references therein to a fiscal period shall
refer to that fiscal period of the Borrower.
(B) Article and Section headings have been inserted in the Loan
Documents for convenience only and shall not be construed to be a part thereof.
ARTICLE 2. AMOUNT AND TERMS OF EXTENSIONS OF CREDIT
2.1. REVOLVING LOANS
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Subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans in Dollars (each a "REVOLVING LOAN" and,
as the context may require, collectively with all other Revolving Loans of such
Lender and with the Revolving Loans of all other Lenders, the "REVOLVING
LOANS") to the Borrower from time to time on any Business Day during the period
from the Effective Date to the Commitment Termination Date, provided that after
giving effect thereto (i) such Lender's Credit Exposure would not exceed such
Lender's Revolving Commitment, and (ii) the Aggregate Credit Exposure would not
exceed the lesser of (x) Aggregate Revolving Commitment and (y) the Borrowing
Base Amount. During such period, the Borrower may borrow, prepay in whole or
in part and reborrow under the Revolving Commitments, all in accordance with
the terms and conditions of this Agreement. The outstanding principal balance
of each Revolving Loan shall be due and payable on the Maturity Date.
2.2. PROCEDURE FOR BORROWING
(A) CREDIT REQUEST. To request a Revolving Loan, the Borrower shall
notify the Administrative Agent by the delivery of a Credit Request, which
shall be sent by facsimile and shall be irrevocable (confirmed promptly, and in
any event within five Business Days, by the delivery to the Administrative
Agent of a Credit Request manually signed by the Borrower), no later than 11:00
a.m., three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Advances, and 11:00 a.m., on the requested Borrowing Date, in the
case of ABR Advances, specifying (A) the aggregate principal amount to be
borrowed, (B) the requested Borrowing Date, (C) whether such borrowing is to
consist of one or more Eurodollar Advances, ABR Advances, or a combination
thereof and (D) if the Revolving Loan is to consist of one or more Eurodollar
Advances, the amount and length of the Interest Period for each Eurodollar
Advance. The amount of each (i) Eurodollar Advance to be made on a Borrowing
Date, when aggregated with all amounts to be converted to, or continued as, a
Eurodollar Advance on such date and having the same Interest Period as such
first Eurodollar Advance, shall equal the Minimum Amount and (ii) each ABR
Advance made on each Borrowing Date shall equal the Minimum Amount or, if less,
the unused portion of the Aggregate Revolving Commitment.
(B) FUNDING BY LENDERS. Upon receipt of each Credit Request, the
Administrative Agent shall promptly notify each Lender thereof. Subject to its
receipt of the notice referred to in the preceding sentence, each Lender will
make the amount of its Commitment Percentage of the requested Revolving Loans
available to the Administrative Agent for the account of the Borrower at the
Payment Office not later than 1:00 p.m. on the relevant Borrowing Date
requested by the Borrower, in funds immediately available to the Administrative
Agent at such office. The amounts so made available to the Administrative
Agent on such Borrowing Date will then,
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subject to the satisfaction of the terms and conditions of this Agreement,
be made available on such date to the Borrower by the Administrative Agent at
the Payment Office by crediting the account of the Borrower on the books of the
Administrative Agent at such office with the aggregate of said amounts (in like
funds) received by the Administrative Agent.
(C) FAILURE TO FUND. Unless the Administrative Agent shall have
received notice prior to a proposed Borrowing Date (or, in the case of a
borrowing of ABR Advances, prior to 1:00 p.m. on such Borrowing Date) from a
Lender (by telephone or otherwise, such notice to be promptly confirmed by
facsimile or other writing) that such Lender will not make available to the
Administrative Agent such Lender's share of the requested Revolving Loans, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the Borrowing Date in accordance with this
Section and, in reliance upon such assumption, make available to the Borrower
on such Borrowing Date a corresponding amount. If and to the extent such
Lender shall not have so made such share available to the Administrative Agent,
such Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount (to the extent not previously
paid by the other), together with interest thereon for each day from the date
such amount is made available to the Borrower to the date such amount is paid
to the Administrative Agent, at a rate per annum equal to, in the case of the
Borrower, the interest rate otherwise applicable to such Revolving Loan, and,
in the case of such Lender, at a rate of interest per annum equal to the
greater of the Federal Funds Effective Rate and a rate reasonably determined by
the Administrative Agent in accordance with banking industry rates on interbank
compensation. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's
Revolving Loan as part of the relevant borrowing for purposes of this
Agreement. The failure of any Lender to provide such Lender's share of the
requested Loans shall not relieve any other Lender of its obligations hereunder
to provide its share of the requested Revolving Loans.
2.3. TERMINATION AND REDUCTION OF REVOLVING COMMITMENTS
(A) VOLUNTARY TERMINATION OR REDUCTIONS. The Borrower may, upon at
least three Business Days' prior written notice to the Administrative Agent,
(A) at any time when the Aggregate Credit Exposure shall be zero, terminate all
of the Commitments, and (B) at any time and from time to time when the
Aggregate Revolving Commitment shall exceed the Aggregate Credit Exposure
(after giving effect to any contemporaneous payment or payment of Revolving
Loans or Reimbursement Obligations), permanently reduce the Aggregate Revolving
Commitment by a sum not greater than the amount of such excess, provided,
however, that each such partial reduction shall be in the amount of $5,000,000
or such amount plus a whole multiple of $1,000,000 in excess thereof. Upon
receipt of each notice of a termination or reduction of the Commitments under
this Section 2.3(a), the Administrative Agent shall promptly notify each Lender
thereof.
(B) OTHER MANDATORY REDUCTIONS. The Aggregate Revolving Commitment
shall
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be permanently reduced at the times and in the amounts required by Section
2.4(b).
(C) REDUCTIONS OF LETTER OF CREDIT COMMITMENT. The Letter of Credit
Commitment shall not be reduced until such time as the Aggregate Revolving
Commitment shall equal such Letter of Credit Commitment, and thereafter shall
in each case be reduced, automatically, by a sum equal to the amount of each
such reduction in the Aggregate Revolving Commitment.
(D) REDUCTIONS IN GENERAL. Each reduction of the Aggregate Revolving
Commitment shall be made by reducing each Lender's Revolving Commitment by an
amount equal to such Lender's Commitment Percentage of such reduction.
Simultaneously with each reduction of the Aggregate Revolving Commitment, the
Borrower shall pay the Commitment Fee accrued on the amount by which the
Aggregate Revolving Commitment has been reduced.
2.4. PREPAYMENTS OF THE REVOLVING LOANS
(A) VOLUNTARY PREPAYMENTS. The Borrower shall have the right at any
time and from time to time to prepay all or any portion of the Revolving Loans
without premium or penalty (but subject to Section 3.5), by delivering to the
Administrative Agent an irrevocable written notice thereof no later than 11:00
a.m. on the proposed prepayment date, in the case of Revolving Loans consisting
of ABR Advances, and at least three Business Days prior to the proposed
prepayment date, in the case of Revolving Loans consisting of Eurodollar
Advances, specifying whether the Revolving Loans to be prepaid consist of ABR
Advances, Eurodollar Advances, or a combination thereof, the amount to be
prepaid and the date of prepayment, whereupon the amount specified in such
notice shall be due and payable on the date specified. Upon receipt of each
such notice, the Administrative Agent shall promptly notify each Lender
thereof. Each partial prepayment of the Revolving Loans pursuant to this
subsection shall be in an amount equal to the Minimum Amount, or, if less, the
outstanding principal balance of the Revolving Loans. After giving effect to
any partial prepayment with respect to Eurodollar Advances which were made
(whether as the result of a borrowing, a conversion or a continuation) on the
same date and which had the same Interest Period, the outstanding principal
balance of such Eurodollar Advances shall equal or exceed (subject to Section
3.3) the Minimum Amount.
(B) MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS RELATING TO
DISPOSITIONS, EQUITY ISSUANCES AND THE RECEIPT OF APPLICABLE PROCEEDS. On or
before each date set forth below, the Aggregate Revolving Commitment shall be
permanently reduced and the Borrower shall prepay the aggregate unpaid
principal amount of the Revolving Loans and make deposits into the Cash
Collateral Account in the amounts set forth below and applicable to the date
specified:
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(I) on the last day of the Reinvestment Period for each Disposition
described in Section 8.6(c), by an amount equal to 100% of the Adjusted
Net Cash Proceeds with respect to such Disposition,
(II) upon receipt by the Borrower of Net Cash Proceeds attributable
to any Equity Issuance, by an amount equal to 100% of such Net Cash
Proceeds, and
(III) in an amount equal to all Applicable Proceeds (A) in excess of
amounts used to replace or repair any properties or (B) which are not
used or designated to replace or repair properties within six months
after receipt thereof, provided that the Borrower or the applicable
Subsidiary Guarantor shall have commenced the restoration or
replacement process (including the making of appropriate filings and
requests for approval) within 45 days after such casualty or after the
receipt of any such condemnation proceeds, as the case may be, and
diligently pursues the same through completion,
provided, however, that if on the date of such a reduction of the Aggregate
Revolving Commitment, the Aggregate Credit Exposure exceeds the Aggregate
Revolving Commitment after giving effect to such reduction and, if the
Revolving Loans have been paid in full and the Letter of Credit Exposure of all
Lenders is greater than zero, the Borrower shall deposit into the Cash
Collateral Account an amount in cash which would cause the balance on deposit
in the Cash Collateral Account to equal or exceed the Letter of Credit Exposure
of all Lenders.
(C) MANDATORY BORROWING BASE PREPAYMENT OF REVOLVING LOANS. If on any
day the Aggregate Credit Exposure exceeds the Borrowing Base Amount, the
Borrower shall, within one Business Day of such day, prepay the
Revolving Loans in an amount equal to the lesser of (i) such excess and (ii)
the Aggregate Credit Exposure. Until such excess has been prepaid, the
Borrower shall not be entitled to borrow additional Revolving Loans.
(D) OTHER MANDATORY PREPAYMENTS; CONTRIBUTION TO CASH COLLATERAL
ACCOUNT. Simultaneously with each reduction of the:
(I) Aggregate Revolving Commitment, (1) in the event that the
Letter of Credit Commitment shall exceed the Aggregate Revolving
Commitment as so reduced or terminated, the Letter of Credit Commitment
shall be automatically reduced by an amount equal to such excess, and (2)
the Borrower shall prepay the Revolving Loans by an amount equal to the
lesser of (A) the aggregate outstanding principal balance of the
Revolving Loans, or (B) the excess of the aggregate outstanding principal
balance of the Revolving Loans over the Aggregate Revolving Commitment as
so reduced or terminated; and
(II) Letter of Credit Commitment (including pursuant to clause (i)
above), in the event the aggregate Letter of Credit Exposure of all
Lenders exceeds the Letter of Credit Commitment as so reduced or
terminated, the Borrower shall immediately deposit
34
into the Cash Collateral Account such amount, in cash, as would cause
the balance on deposit in the Cash Collateral Account to equal or exceed
the aggregate Letter of Credit Exposure of all Lenders.
(E) IN GENERAL. Simultaneously with each prepayment of a Eurodollar
Advance, the Borrower shall prepay all accrued interest on the amount prepaid
through the date of prepayment together with amounts due under Section 3.5.
2.5. LETTERS OF CREDIT
(A) AVAILABILITY; PROCEDURE. The Borrower may request the Issuer to
issue standby letters of credit (the "LETTERS OF CREDIT"; each, individually,
a "LETTER OF CREDIT") during the period from the Effective Date to the
fifteenth Business Day prior to the Maturity Date, provided that (i)
immediately after the issuance of each Letter of Credit the Letter of Credit
Exposure of all Lenders would not exceed the Letter of Credit Commitment, (ii)
the Aggregate Credit Exposure would not exceed the lesser of (x) the Aggregate
Revolving Commitment and (y) the Borrowing Base Amount, and (iii) no more than
20 Letters of Credit shall be outstanding. To request the issuance of a Letter
of Credit, the Borrower shall notify the Administrative Agent and the Issuer by
the delivery of a Credit Request, which shall be sent by facsimile and shall be
irrevocable (confirmed promptly, and in any event within five Business Days, by
the delivery to the Administrative Agent of a Credit Request manually signed by
the Borrower), at least three Business Days prior to the requested date of
issuance, specifying (A) the beneficiary of such Letter of Credit, (B) the
Borrower's proposal as to the conditions under which a drawing may be made
under such Letter of Credit and the documentation to be required in respect
thereof, (C) the maximum amount to be available under such Letter of Credit,
and (D) the requested dates of issuance and expiration. Such Credit Request
shall be accompanied by a duly completed application for such Letter of Credit
on such forms as may be made available from time to time by the Issuer and such
other certificates, documents (including a reimbursement agreement) and other
information as may be required by the Issuer in accordance with its customary
procedures (collectively, the "LETTER OF CREDIT DOCUMENTATION"). Upon receipt
of such Credit Request from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Subject to the satisfaction of the terms
and conditions of this Agreement, the Issuer shall issue each requested Letter
of Credit, it being understood that unless the Issuer has been notified in
writing by another Credit Party prior to the issuance of a Letter of Credit
that the terms and conditions of this Agreement shall not have been satisfied,
the Issuer may assume that such terms and conditions have been satisfied. In
the event of any conflict between the provisions of this Agreement and any
Letter of Credit Documentation, the provisions of this Agreement shall control.
(B) TERMS OF LETTERS OF CREDIT. Each Letter of Credit shall (i) be
denominated in
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Dollars, (ii) be issued for the account of the Borrower and in support of
obligations, contingent or otherwise, of the Borrower or any Subsidiary arising
in the ordinary course of business, and (iii) have an expiration date which
shall be not later than the earlier of (A) twelve months after the date of
issuance thereof or (B) five Business Days before the Maturity Date, provided
that the expiration date of such Letter of Credit may be extended or such
Letter of Credit may be renewed, provided, further, that any renewal, or any
extension of any expiry date, of a Letter of Credit shall constitute the
issuance of such Letter of Credit for all purposes of this Agreement.
(C) LETTER OF CREDIT PARTICIPATIONS. Immediately upon the issuance of a
Letter of Credit, the Issuer shall be deemed to have sold and transferred to
each Lender, and each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from the Issuer, without recourse or
warranty, an undivided interest and participation, to the extent of such
Lender's Commitment Percentage thereof, in such Letter of Credit and the
obligations of the Borrower with respect thereto and any security therefor and
any guaranty pertaining thereto at any time existing.
(D) DRAWINGS ON LETTERS OF CREDIT. The Issuer shall promptly notify (i)
the Administrative Agent (which shall promptly notify each Lender) of the
Issuer's receipt of a drawing request under any Letter of Credit, stating the
amount of such Lender's Commitment Percentage of such drawing request and the
date on which such request will be honored and (ii) the Administrative Agent
and the Borrower of the amount of such drawing request and the date on which
such request will be honored. Any failure of the Issuer to give or any delay
in the Issuer's giving any such notice shall not release or diminish the
obligations of the Borrower or any Lender hereunder. In determining whether to
pay under any Letter of Credit, the Issuer shall have no obligation to any
Lender or the Borrower other than to confirm that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. In the
absence of gross negligence or willful misconduct on the part of the Issuer,
the Issuer shall have no liability to any Lender or the Borrower for any action
taken or omitted to be taken by it under or in connection with any Letter of
Credit, including any such action negligently taken or negligently omitted to
be taken by it.
(E) REIMBURSEMENT. The Borrower shall pay to the Administrative Agent for
the account of the Issuer on demand therefor, in Dollars in immediately
available funds, the amount of all Reimbursement Obligations owing to the
Issuer under any Letter of Credit, together with interest thereon as provided
in Section 3.1, irrespective of any claim, setoff, defense or other right which
the Borrower may have at any time against the Issuer or any other Person. In
the event that the Issuer makes any payment under any Letter of Credit and the
Borrower shall not have repaid such amount to the Issuer when due, the Issuer
shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Administrative Agent, for the account
of the Issuer, the amount of such Lender's Commitment Percentage of such
payment in Dollars in immediately available funds on the Business Day the
Issuer so notifies such Lender if such notice is given prior to 12:00 Noon or,
if such notice is given after 12:00 Noon, such Lender shall make its
Commitment
36
Percentage of such payment available to the Issuer prior to 12:00 Noon on
the next succeeding Business Day.
(F) LENDERS' OBLIGATIONS. If and to the extent any Lender shall not make
such Lender's Commitment Percentage of any Reimbursement Obligations available
to the Issuer when due in accordance with Section 2.5(e), such Lender agrees to
pay interest to the Issuer on such unpaid amount for each day from the date
such payment is due until the date such amount is paid in full to the Issuer at
the Federal Funds Effective Rate until (and including) the third Business Day
after the date due and thereafter at the Alternate Base Rate. The obligations
of the Lenders under this Section 2.5(f) are several and not joint or joint and
several, and the failure of any Lender to make available to the Issuer its
Commitment Percentage of any Reimbursement Obligations when due in accordance
with Section 2.5(e) shall not relieve any other Lender of its obligation
hereunder to make its Commitment Percentage of such Reimbursement Obligations
so available when so due, but no Lender shall be responsible for the failure of
any other Lender to make such other Lender's Commitment Percentage of such
Reimbursement Obligations so available when so due.
(G) RESCISSION. Whenever the Issuer receives a payment of a Reimbursement
Obligation from or on behalf of the Borrower as to which the Issuer has
received any payment from a Lender pursuant to Section 2.5(e), the Issuer shall
promptly pay to such Lender an amount equal to such Lender's Commitment
Percentage of such payment from or on behalf of the Borrower. If any payment
by or on behalf of the Borrower and received by the Issuer with respect to any
Letter of Credit is rescinded or must otherwise be returned by the Issuer for
any reason and the Issuer has paid to any Lender any portion thereof, each such
Lender shall forthwith pay over to the Issuer an amount equal to such Lender's
Commitment Percentage of the amount which must be so returned by the Issuer.
(H) EXPENSES. Each Lender, upon the demand of the Issuer, shall reimburse
the Issuer, to the extent the Issuer has not been reimbursed by the Borrower
after demand therefor, for the reasonable costs and expenses (including
reasonable attorneys' fees) incurred by the Issuer in connection with the
collection of amounts due under, and the preservation and enforcement of any
rights conferred by, any Letter of Credit or the performance of the Issuer's
obligations as issuer of the Letters of Credit under this Agreement in respect
thereof, to the extent of such Lender's Commitment Percentage of the amount of
such costs and expenses provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent the same result solely from the gross negligence or willful misconduct
of the Issuer. The Issuer shall refund any costs and expenses reimbursed by
such Lender that are subsequently recovered from the Borrower in an amount
equal to such Lender's Commitment Percentage thereof.
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(I) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
reimburse the Issuer pursuant to this Section 2.5, and the obligation of each
Lender to make available to the Issuer the amounts set forth in this Section
2.5 shall be absolute, unconditional and irrevocable under any and all
circumstances, shall be made without reduction for any set-off, counterclaim or
other deduction of any nature whatsoever, may not be terminated, suspended or
delayed for any reason whatsoever, shall not be subject to any qualification or
exception and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including any of the following
circumstances: (1) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents, (2) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Issuer, any
Lender or any other Person, whether in connection with this Agreement, any
other Loan Document, any Letter of Credit, the transactions contemplated in the
Loan Documents or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such Letter
of Credit), (3) any draft, certificate or any 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, (4) the surrender or impairment of any Collateral for the performance
or observance of any of the terms of any of the Loan Documents, or (5) the
occurrence of any Default or Event of Default. Nothing contained in this
Section 2.5(i), however, shall require the Borrower or any Lender to reimburse
the Issuer for any amounts that become due by reason of the Issuer's gross
negligence or wilful misconduct.
2.6. PAYMENTS; PRO RATA TREATMENT AND SHARING OF SET-OFFS
(A) PAYMENTS GENERALLY. (I) Except as provided below, all payments,
including prepayments, of principal and interest on the Revolving Loans, of the
Commitment Fee, the Letter of Credit Fees and of all other amounts to be paid
by the Borrower under the Loan Documents (the Commitment Fee, the Letter of
Credit Fees together with all of such other fees, being sometimes hereinafter
collectively referred to as the "FEES") shall be made to the Administrative
Agent, prior to 1:00 p.m. on the date such payment is due, for the account of
the applicable Credit Parties at the Payment Office, in Dollars and in
immediately available funds, without set-off, offset, recoupment or
counterclaim. The failure of the Borrower to make any such payment by such
time shall not constitute a Default, provided that such payment is made on such
due date, but any such payment made after 1:00 p.m. on such due date shall be
deemed to have been made on the next Business Day for the purpose of
calculating interest on amounts outstanding on the Revolving Loans. As between
the Borrower and each Credit Party, any payment by the Borrower to the
Administrative Agent for the account of such Credit Party shall be deemed to be
payment by the Borrower to such Credit Party. Notwithstanding the foregoing,
all payments pursuant to Sections 3.5, 3.6, 3.7, and 11.4 shall be paid
directly to the Credit Party entitled thereto. If any payment under the Loan
Documents shall be due and payable on a day which is not a Business Day, the
due date thereof (except as otherwise provided
38
with respect to Interest Periods) shall be extended to the next Business Day
and (except with respect to payments in respect of the Fees) interest shall be
payable at the applicable rate specified herein during such extension,
provided, however, that if such next Business Day would be after the Maturity
Date, such payment shall instead be due on the immediately preceding Business
Day.
(II) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (A) first, towards payment
of interest and fees then due under the Loan Documents, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (B) second, towards payment of principal then due
under the Loan Documents, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(B) SET-OFF. In addition to any rights and remedies of the Credit Parties
provided by law, upon and after the acceleration of all the obligations of the
Borrower under the Loan Documents to which it is a party, or at any time upon
the occurrence and during the continuance of an Event of Default under Sections
9.1(a) or (b), each Credit Party shall have the right, without prior notice to
any Loan Party, any such notice being expressly waived by each Loan Party to
the extent not prohibited by applicable law, to set-off and apply against any
indebtedness, whether matured or unmatured, of such Loan Party to such Credit
Party any amount owing from such Credit Party to such Loan Party, at, or at any
time after, the happening of any of the above-mentioned events. To the extent
not prohibited by applicable law, the aforesaid right of set-off may be
exercised by any Credit Party against such Loan Party or against any trustee in
bankruptcy, custodian, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor of such Loan
Party, or against anyone else claiming through or against such Loan Party, or
such trustee in bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Credit Party prior to the making, filing or issuance, or
service upon such Credit Party of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or
warrant. Each Credit Party agrees promptly to notify the Borrower and the
Administrative
Agent after any such set-off and application made by such Credit Party,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
(C) ADJUSTMENTS. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in respect of the principal of or interest on its Revolving Loans,
resulting in such Lender receiving payment of a greater proportion of the
aggregate principal amount of, or accrued interest on, such Revolving Loans
than the proportion
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received by any other Lender, then the Lender receiving such greater proportion
shall promptly purchase, at face value for cash, participations in the
Revolving Loans to the extent necessary so that the benefit of such payment
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans,
provided, however, that (i) if all or any portion of such payment is thereafter
recovered, such participations shall be rescinded and the purchase price
returned, in each case to the extent of such recovery, and (ii) the provisions
of this Section 2.6(c) shall not be construed to apply to any payment made by
the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Revolving Loans to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this Section 2.6(c) shall
apply). The Borrower agrees that any Lender that purchased a participation
pursuant to this subsection may exercise such rights to payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
2.7. CASH COLLATERAL ACCOUNT
At, or at any time before, the time the Borrower shall be required
to make a deposit into the Cash Collateral Account, the Administrative Agent
shall establish and maintain at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ in the name of the Borrower but under the sole dominion and control of the
Administrative Agent, a cash collateral account designated as "ANTEC
Corporation/Cash Collateral Account" (the "CASH COLLATERAL ACCOUNT"). The
Borrower may from time to time make one or more deposits into the Cash
Collateral Account and shall from time to time make such deposits as are
required by this Agreement. The Borrower hereby pledges to the Administrative
Agent for the benefit of the Credit Parties, a Lien on and security interest in
the Cash Collateral Account and all sums at any time and from time to time on
deposit therein (the Cash Collateral Account, together with all sums on deposit
therein, being sometimes hereinafter collectively referred to as the "CASH
COLLATERAL"), as collateral security for the prompt payment in full when due,
whether at stated maturity, by acceleration or otherwise, of the Borrower
Obligations. The Borrower agrees that at any time and from time to time at its
expense, it will promptly execute and deliver to the Administrative Agent any
further instruments and documents, and take any further actions, that may be
necessary or that the Administrative Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to any Cash Collateral. The Borrower
agrees that it will not (i) sell or otherwise dispose of any of the Cash
Collateral, or (ii) create or permit to exist any Lien upon any of the Cash
Collateral, except for Permitted Liens. The Borrower hereby authorizes the
Administrative Agent, promptly after each drawing under any Letter of Credit
shall become due and payable, to apply any and all cash on deposit in the Cash
Collateral Account towards the reimbursement of the Issuer for all sums paid in
respect of such drawing, and all other Borrower Obligations which shall then be
due and owing.
40
ARTICLE 3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
3.1. INTEREST RATE AND PAYMENT DATES
(A) ADVANCES. Each (i) ABR Advance shall bear interest at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin and (ii)
Eurodollar Advance shall bear interest at a rate per annum equal to the
Eurodollar Rate for the applicable Interest Period plus the Applicable Margin.
(B) EVENT OF DEFAULT; LATE CHARGES. Notwithstanding the foregoing,
after the occurrence and during the continuance of an Event of Default, the
outstanding principal balance of the Revolving Loans shall bear interest at a
rate per annum equal to 2% plus the rate otherwise applicable to such Revolving
Loans as provided in subsection (a) above. If any interest, Reimbursement
Obligation, Fee or other amount payable under the Loan Documents is not paid
when due (whether at the stated maturity thereof, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal
to the Alternate Base Rate plus 2%, from the date of such nonpayment until paid
in full (whether before or after the entry of a judgment thereon). All such
interest shall be payable on demand.
(C) PAYMENT OF INTEREST. Except as otherwise provided in subsection
(b) above, interest shall be payable in arrears on the following dates:
(I) in the case of an ABR Advance, on the last Business Day
of each March, June, September and December commencing on the first of
such days to occur after such ABR Advance is made or any Eurodollar
Advance is converted to an ABR Advance;
(II) in the case of a Eurodollar Advance, (A) on the last day
of the Interest Period applicable thereto and, if such Interest Period
is longer than three months, the last Business Day of each three month
interval occurring during such Interest Period and (B) on any prepayment
thereof; and
(III) in the case of all Advances and all Revolving Loans, the
Maturity Date.
(D) COMPUTATIONS. Interest on (i) ABR Advances to the extent based
on the Prime Rate shall be calculated on the basis of a 365 or 366- day year
(as the case may be), and (ii) ABR Advances to the extent based on the Federal
Funds Effective Rate and on Eurodollar Advances
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shall be calculated on the basis of a 360-day year, in each case, for the
actual number of days elapsed. The Administrative Agent shall, as soon as
practicable, notify the Borrower and the Lenders of the effective date and the
amount of each such change in the Prime Rate, but any failure to so notify
shall not in any manner affect the obligation of the Borrower to pay interest
on the Revolving Loans in the amounts and on the dates required. Each
determination of a rate of interest by the Administrative Agent pursuant to the
Loan Documents shall be conclusive and binding on all parties hereto absent
manifest error. The Borrower acknowledges that to the extent interest payable
on ABR Advances is based on the Prime Rate, such rate is only one of the bases
for computing interest on loans made by the Lenders, and by basing interest
payable on ABR Advances on the Prime Rate, the Lenders have not committed to
charge, and the Borrower has not in any way bargained for, interest based on a
lower or the lowest rate at which the Lenders may now or in the future make
loans to other borrowers.
(E) REFERENCE LENDERS. If any Reference Lender shall for any reason no
longer be a Lender, such Reference Lender shall thereupon cease to be a
Reference Lender. If there shall be only one Reference Lender, the Borrower
(with the consent of the Administrative Agent) shall, by notice to the Lenders,
designate another Lender as a Reference Lender so that there shall at all times
be at least two Reference Lenders. Each Reference Lender shall use its best
efforts to furnish quotations of rates to the Administrative Agent on a timely
basis as contemplated hereby. If either of the Reference Lenders shall fail to
supply such rates to the Administrative Agent upon request, the rate of
interest shall, subject to the other provisions of this Agreement, be
determined on the basis of the quotations of the remaining Reference Lender or
Reference Lenders.
3.2. FEES
(A) COMMITMENT FEE. The Borrower agrees to pay to the Administrative
Agent, for the account of the Lenders in accordance with each Lender's
Commitment Percentage, a fee (the "COMMITMENT FEE"), during the period from the
Effective Date through the Commitment Termination Date, at a rate per annum
equal to the Applicable Margin on the average daily unused Aggregate Revolving
Commitment. The Commitment Fee shall be payable (i) quarterly in arrears on
the last Business Day of each March, June, September and December during such
period, commencing on the first such day following the Effective Date, (ii) on
the date of any reduction in the Aggregate Revolving Commitment (to the extent
of such reduction) and (iii) on the Maturity Date. The Commitment Fee shall be
calculated on the basis of a 360-day year, as the case may be, for the actual
number of days elapsed.
(B) LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Administrative Agent, for the account of the Lenders in accordance with each
Lender's Commitment Percentage, commissions (the "LETTER OF CREDIT FEES") with
respect to the Letters of Credit for the period from and including the date of
issuance of each thereof through the expiration date thereof, at a rate per
annum equal to the Applicable Margin on the average daily maximum amount
available under any
42
contingency to be drawn under such Letter of Credit. The Letter of
Credit Fees shall be (i) calculated on the basis of a 360-day year for the
actual number of days elapsed and (ii) payable quarterly in arrears on the last
Business Day of each March, June, September and December of each year,
commencing on the first such day following the Effective Date, and on the date
that the Revolving Commitments shall expire. In addition to the Letter of
Credit Fees, the Borrower agrees to pay to the Issuer, for its own account, its
standard fees and charges customarily charged to customers similar to the
Borrower with respect to any Letter of Credit.
(C) ADMINISTRATIVE AGENT'S AND ISSUER'S FEES. The Borrower agrees to
pay to the Administrative Agent and the Issuer, for their own respective
accounts, such other fees as have been agreed to in writing by the Borrower, the
Administrative Agent and the Issuer.
3.3. CONVERSIONS
(A) The Borrower may elect from time to time to convert one or more
Eurodollar Advances to ABR Advances by giving the Administrative Agent at least
one Business Day's prior irrevocable notice of such election, specifying the
amount to be converted, provided, that any such conversion of Eurodollar
Advances shall only be made on the last day of the Interest Period applicable
thereto. In addition, the Borrower may elect from time to time to (i) convert
ABR Advances comprising all or a portion of Revolving Loans to Eurodollar
Advances and (ii) continue Eurodollar Advances as new Eurodollar Advances by
selecting a new Interest Period therefor, in each case by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election, in the case of a conversion to, or continuation of, Eurodollar
Advances, specifying the amount to be so converted or continued and the initial
Interest Period relating thereto, provided that any such conversion of ABR
Advances to Eurodollar Advances shall only be made on a Business Day and any
such continuation of Eurodollar Advances as new Eurodollar Advances shall only
be made on the last day of the Interest Period applicable to the Eurodollar
Advances which are to be continued as such new Eurodollar Advances. Each such
notice (a "NOTICE OF CONVERSION") shall be substantially in the form of Exhibit
C, shall be irrevocable and shall be given by facsimile (confirmed promptly,
and in any event within five Business Days, by the delivery to the
Administrative Agent of a Notice of Conversion manually signed by the
Borrower). The Administrative Agent shall promptly provide the Lenders with
notice of each such election. Advances may be converted or continued pursuant
to this Section 3.3 in whole or in part, provided that the amount to be
converted to, or continued as, each Eurodollar Advance, when aggregated with
any Eurodollar Advance to be made on such date in accordance with Section 2.2
and having the same Interest Period as such first Eurodollar Advance, shall
equal the Minimum Amount.
(B) Notwithstanding anything in this Agreement to the contrary, upon
the
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occurrence and during the continuance of an Event of Default, the Borrower
shall have no right to elect to convert any existing ABR Advance to a new
Eurodollar Advance or to continue any existing Eurodollar Advance as a new
Eurodollar Advance. In such event, all ABR Advances shall be automatically
continued as ABR Advances and all Eurodollar Advances shall be automatically
converted to ABR Advances on the last day of the current Interest Period
applicable to such Eurodollar Advance.
(C) Each conversion or continuation shall be effected by each Lender
by applying the proceeds of its new ABR Advance or Eurodollar Advance, as
the case may be, to its Advances (or portion thereof) being converted (it being
understood that any such conversion or continuation shall not constitute a
borrowing for purposes of Articles 4, 5 or 6).
3.4. CONCERNING INTEREST PERIODS
(A) No Interest Period selected shall end after the Commitment
Termination Date.
(B) With respect to Eurodollar Advances, any Interest Period which
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corre sponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a calendar month.
(C) If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day.
(D) If the Borrower shall have failed to timely elect a Eurodollar
Advance under Section 2.2 or 3.3, as the case may be, in connection with any
borrowing of, conversion to, or continuation of, a Eurodollar Advance, such
borrowing or such Advance requested to be converted to, or continued as, a
Eurodollar Advance shall thereafter be an ABR Advance until such time, if any,
as the Borrower shall elect a new Eurodollar Advance pursuant to Section 3.3.
(E) The Borrower shall not be permitted to have more than eight
Eurodollar Advances outstanding at any one time, it being agreed that each
borrowing of a Eurodollar Advance pursuant to a single Credit Request shall
constitute the making of one Eurodollar Advance for the purpose of calculating
such limitation.
3.5. FUNDING LOSS
Notwithstanding anything contained herein to the contrary, if the
Borrower shall fail to borrow, convert or continue a Eurodollar Advance
on a Borrowing Date or Conversion Date after
44
it shall have given notice to do so in which it shall have requested a
Eurodollar Advance, or if a Eurodollar Advance shall be terminated for any
reason prior to the last day of the Interest Period applicable thereto, or if,
while a Eurodollar Advance is outstanding, any repayment or prepayment of such
Eurodollar Advance is made for any reason (including as a result of
acceleration or illegality) on a date which is prior to the last day of the
Interest Period applicable thereto, the Borrower agrees to indemnify each
Lender against, and to pay on demand directly to such Lender, any loss or
expense suffered by such Lender as a result of such failure to borrow or
convert, termination or repayment, including, without limitation, an amount, if
greater than zero, equal to:
A x (B-C) x D
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where:
"A" equals such Lender's pro rata share of the Affected Principal Amount;
"B" equals the Eurodollar Rate (expressed as a decimal) applicable to such
Eurodollar Advances;
"C" equals the applicable Eurodollar Rate (expressed as a decimal) in effect on
or about the first day of the applicable Remaining Interest Period, based on
the applicable rates offered or bid, as the case may be, on or about such date,
for deposits in an amount equal approximately to such Lender's pro rata share
of the Affected Principal Amount with an Interest Period equal approximately to
the applicable Remaining Interest Period, as determined by such Lender; and
"D" equals the number of days from and including the first day of the
applicable Remaining Interest Period to but excluding the last day of such
Remaining Interest Period;
and any other out-of-pocket loss or expense (including any internal processing
charge customarily charged by such Lender) suffered by such Lender in
connection with such Eurodollar Advance, including, without limitation, in
liquidating or employing deposits acquired to fund or maintain the funding of
its pro rata share of the Affected Principal Amount, or redeploying funds
prepaid or repaid, in amounts which correspond to its pro rata share of the
Affected Principal Amount. Each determination by the Administrative Agent or a
Lender pursuant to this Section shall be conclusive and binding on the Borrower
absent manifest error. A statement setting forth the calculations of any
additional amounts payable pursuant to this Section submitted by a Lender to
the Borrower shall be conclusive absent manifest error.
3.6. INCREASED COSTS; ILLEGALITY, ETC.
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(A) INCREASED COSTS. If any Change in Law shall impose, modify or make
applicable any reserve, special deposit, compulsory loan, assessment, increased
cost or similar requirement against assets held by, or deposits of, or advances
or loans by, or other credit extended by, or any other acquisition of funds by,
any office of any Credit Party in respect of its Eurodollar Advances which is
not otherwise included in the determination of a Eurodollar Rate or against any
Letters of Credit issued hereunder and the result thereof is to increase the
cost to any Credit Party of making, renewing, converting or maintaining its
Eurodollar Advances or its commitment to make such Eurodollar Advances, or to
reduce any amount receivable under the Loan Documents in respect of its
Eurodollar Advances, or to increase the cost to any Credit Party of issuing or
maintaining the Letters of Credit or participating therein, as the case may be,
or the cost to any Credit Party of performing its respective functions
hereunder with respect to the Letters of Credit, then, in any such case, the
Borrower shall pay such Credit Party such additional amounts as is sufficient
to compensate such Credit Party for such additional cost or reduction in such
amount receivable which such Credit Party deems to be material as determined by
such Credit Party.
(B) CAPITAL ADEQUACY. If any Credit Party determines that any Change in
Law relating to capital requirements has or would have the effect of reducing
the rate of return on such Credit Party's capital or on the capital of such
Credit Party's holding company, if any, on the Extensions of Credit to a level
below that which such Credit Party (or its holding company) would have achieved
or would thereafter be able to achieve but for such Change in Law (after taking
into account such Credit Party's (or such holding company's) policies regarding
capital adequacy), the Borrower shall pay to such Credit Party (or such holding
company) such additional amount or amounts as will compensate such Credit Party
(or such holding company) for such reduction.
(C) ILLEGALITY. Notwithstanding any other provision hereof, if any Lender
shall reasonably determine that any law, regulation, treaty or directive, or
any change therein or in the interpretation or application thereof, shall make
it unlawful for such Lender to make or maintain any Eurodollar Advance as
contemplated by this Agreement, such Lender shall promptly notify the Borrower
and the Administrative Agent thereof, and (i) the commitment of such Lender to
make such Eurodollar Advances or convert ABR Advances to Eurodollar Advances
shall forthwith be suspended, (ii) such Lender shall fund its portion of each
requested Eurodollar Advance as an ABR Advance and (iii) such Lender's
Revolving Loans then outstanding as such Eurodollar Advances, if any, shall be
converted automatically to ABR Advances on the last day of the then current
Interest Period applicable thereto or at such earlier time as may be required
by law. The commitment of any such Lender with respect to Eurodollar Advances
shall be suspended until such Lender shall notify the Administrative Agent and
the Borrower that the circumstances causing such suspension no longer exist.
Upon receipt of such notice by each of the Administrative Agent and the
Borrower, such Lender's commitment to make or maintain Eurodollar Advances
shall be reinstated.
(D) SUBSTITUTED INTEREST RATE. In the event that (i) the Administrative
Agent shall
46
have determined (which determination shall be conclusive and binding upon
the Borrower) that by reason of circumstances affecting the interbank
eurodollar market either adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate applicable pursuant to Section 3.1 or (ii) the
Required Lenders shall have notified the Administrative Agent that they have
determined (which determination shall be conclusive and binding on the
Borrower) that the applicable Eurodollar Rate will not adequately and fairly
reflect the cost to such Lenders of maintaining or funding loans bearing
interest based on such Eurodollar Rate, with respect to any portion of the
Revolving Loans that the Borrower has requested be made as Eurodollar Advances
or Eurodollar Advances that will result from the requested conversion or
continuation of any portion of the Advances into or of Eurodollar Advances
(each, an "AFFECTED ADVANCE"), the Administrative Agent shall promptly notify
the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination, on or, to the extent practicable,
prior to the requested Borrowing Date or Conversion Date for such Affected
Advances. If the Administrative Agent shall give such notice, (a) any Affected
Advances shall be made as ABR Advances, (b) the Advances (or any portion
thereof) that were to have been converted to Affected Advances shall be
converted to ABR Advances and (c) any outstanding Affected Advances shall be
converted, on the last day of the then current Interest Period with respect
thereto, to ABR Advances. Until any notice under clauses (i) or (ii), as the
case may be, of this subsection (d) has been withdrawn by the Administrative
Agent (by notice to the Borrower promptly upon either (x) the Administrative
Agent having determined that such circumstances affecting the interbank
eurodollar market no longer exist and that adequate and reasonable means do
exist for determining the Eurodollar Rate pursuant to Section 3.1 or (y) the
Administrative Agent having been notified by such Required Lenders that
circumstances no longer render the Advances (or any portion thereof) Affected
Advances), no further Eurodollar Advances shall be required to be made by the
Lenders, nor shall the Borrower have the right to convert all or any portion of
the Revolving Loans to or as Eurodollar Advances.
(E) PAYMENT; CERTIFICATES. Each payment pursuant to subsections (a)
or (b) above shall be made within 10 days after demand therefor, which demand
shall be accompanied by a certificate of the Credit Party demanding such
payment setting forth the calculations of the additional amounts payable
pursuant thereto. Each such certificate shall be conclusive absent manifest
error. No failure by any Credit Party to demand, and no delay in demanding,
compensation for any increased cost shall constitute a waiver of its right to
demand such compensation at any time.
3.7. TAXES
(A) PAYMENTS FREE OF TAXES. All payments by or on account of the
Borrower under any Loan Document to or for the account of a Credit Party
shall be made free and clear of, and without any deduction or withholding for
or on account of, any and all present or future Indemnified
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Taxes or Other Taxes, provided that if the Borrower or any other Person is
required by any law, rule, regulation, order, directive, treaty or guideline to
make any deduction or withholding in respect of such Indemnified Tax or Other
Tax from any amount required to be paid by the Borrower to or on behalf of any
Credit Party under any Loan Document (each, a "REQUIRED PAYMENT"), then (i) the
Borrower shall notify the Administrative Agent and such Credit Party of any
such requirement or any change in any such requirement as soon as the Borrower
becomes aware thereof, (ii) the Borrower shall pay such Indemnified Tax or
Other Tax prior to the date on which penalties attach thereto, such payment to
be made (to the extent that the liability to pay is im posed on the Borrower)
for its own account or (to the extent that the liability to pay is imposed on
such Credit Party) on behalf and in the name of such Credit Party, (iii) the
Borrower shall pay to such Credit Party an additional amount such that such
Credit Party shall receive on the due date therefor an amount equal to the
Required Payment had no such deduction or withholding been made or required,
and (iv) the Borrower shall, within 30 days after paying such Indemnified Tax
or Other Tax, deliver to the Administrative Agent and such Credit Party
satisfactory evidence of such payment to the relevant Governmental Authority.
(B) REIMBURSEMENT FOR TAXES AND OTHER TAXES PAID BY CREDIT PARTY. The
Borrower shall reimburse each Credit Party, within ten days after written
demand therefor, for the full amount of all Indemnified Taxes or Other Taxes
paid by such Credit Party on or with respect to any payment by or on account of
any obligation of the Borrower under the Loan Documents (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section 3.7) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto (other than any such penalties,
interest or expenses that are incurred by such Credit Party's unreasonably
taking or omitting to take action with respect to such Indemnified Taxes or
Other Taxes), whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Credit Party shall be conclusive absent manifest
error. In the event that any Credit Party determines that it received a refund
or credit for Indemnified Taxes or Other Taxes paid by the Borrower under this
Section 3.7, such Credit Party shall promptly notify the Borrower of such fact
and shall remit to the Borrower the amount of such refund or credit.
(C) FOREIGN CREDIT PARTIES. Any Foreign Credit Party that is entitled
to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under the Loan Documents
shall deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law (including Internal Revenue
Form 4224 or Form 1001) or reasonably requested by the Borrower as will permit
such payments to be made without withholding or at a reduced rate.
3.8. REGISTER
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The Administrative Agent will maintain a register for the
recordation of the names and addresses of the Lenders and the Revolving
Commitments of, and principal amount of the Revolving Loans owing to, each
Lender, and the Letters of Credit outstanding, from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and each Loan Party and each Credit Party
may treat each party whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Credit Parties to enter into this Agreement and
extend or participate in the Extensions of Credit provided herein, the Borrower
makes the following representations and warranties to the Credit Parties:
4.1. ORGANIZATION AND POWER
Except as provided on Schedule 4.1, each of the Borrower and each
Subsidiary (i) is duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has all
requisite power and authority to own its property and to carry on its business
as now conducted, and (iii) is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of the business conducted
therein or the property owned by it therein makes such qualification necessary,
except where such failure to qualify or be in good standing, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
effect.
4.2. AUTHORIZATION; ENFORCEABILITY
The Transactions are within the corporate, partnership or other
analogous powers of each of the Borrower and each Subsidiary party
thereto and have been duly authorized by its Managing Person and, if required,
by any other Person including holders of its Capital Stock. Each Loan Document
has been validly executed and delivered by each Loan Party party thereto and
constitutes a legal, valid and binding obligation of each such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
4.3. APPROVALS; NO CONFLICTS
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The Transactions (i) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
or any other Person, except such as have been obtained or made and are in full
force and effect, (ii) will not violate any applicable law, rule or regulation
or the Organizational Documents of the Borrower or any Subsidiary or any order
of any Governmental Authority, (iii) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any Subsidiary or their assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any Subsidiary, and (iv) will not
result in the creation or imposition of any Lien on any asset of the Borrower
or any Subsidiary other than Permitted Liens.
4.4. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE
(A) The Borrower has heretofore furnished to each Credit Party a
copy of its (A) Form 10-K for the fiscal year ending December 31, 1997,
containing the audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as of December 31, 1996 and December 31, 1997, and
the related consolidated statements of operations, stockholder's equity and
cash flows for the periods then ended, and (B) Form 10-Q for the fiscal quarter
ended March 31, 1998, containing its unaudited consolidated balance sheet for
such fiscal quarter, together with the related statements of operations and
cash flows for the fiscal quarter then ended. Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the quarterly
statements referred to above. Except as fully reflected in such financial
statements, there are no material liabilities or obligations with respect to
the Borrower or any Subsidiary of any nature whatsoever (whether absolute,
contingent or otherwise and whether or not due).
(B) Since December 31, 1997, except for the Transactions and the
restructuring charge taken by the Borrower in the quarter ended March 31, 1998
in an amount not in excess of $12,000,000, each of the Borrower and each
Subsidiary has conducted its business only in the ordinary course and there has
been no Material Adverse change.
4.5. PROPERTIES
(A) Each of the Borrower and each Subsidiary has good and marketable
title to, or valid leasehold interests in, all of its property, real and
personal, material to its business, subject to no Liens, except Permitted Liens
and except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(B) Each of the Borrower and each Subsidiary owns or is licensed to
use all Intellectual Property material to its business, and the use thereof by
the Borrower or any Subsidiary
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does not conflict with or infringe upon the valid rights of others, except
for any such conflicts or infringements that individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse effect.
4.6. LITIGATION
There are no actions, suits or proceedings at law or in equity or by
or before any Governmental Authority (whether purportedly on behalf of the
Borrower or any Subsidiary) pending or, to the knowledge of the Borrower,
threatened against the Borrower or any Subsidiary, or maintained by the
Borrower or any Subsidiary or which may affect the property of the Borrower or
any Subsidiary, (i) that, in the good faith opinion of the Borrower, would
reasonably be expected to have an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse effect or (ii) that involve any of the
Transactions.
4.7. ENVIRONMENTAL MATTERS
Except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
effect, neither the Borrower nor any Subsidiary has (i) received written notice
or otherwise learned of any claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual liability which
individually or in the aggregate could reasonably be expected to result in a
Material Adverse effect, arising in connection with any non-compliance with or
violation of the requirements of any applicable laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Substance (as defined below) or to health and safety matters (collectively,
"ENVIRONMENTAL LAWS"), (ii) to the best knowledge of the Borrower, any
threatened or actual liability in connection with the release or threatened
release of any Hazardous Substance into the environment which individually or
in the aggregate could reasonably be expected to result in a Material Adverse
effect, (iii) received notice of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release or
threatened release of any Hazardous Substance into the environment for which
the Borrower or any of its Subsidiaries is or would be liable, which liability
could reasonably be expected to result in a Material Adverse effect, or (iv)
has received notice that the Borrower or any of its Subsidiaries is or may be
liable to any Person under any Environmental Law, which liability could
reasonably be expected to result in a Material Adverse effect. Each of the
Borrower and each of its Subsidiaries is in compliance with the financial
responsibility requirements of Environmental Laws to the extent applicable,
except in those cases in which
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the failure so to comply would not reasonably be expected to result in a
Material Adverse effect. For purposes hereof, "HAZARDOUS SUBSTANCE" shall mean
any hazardous or toxic substance, material, waste or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes,
radioactive materials or any other substance or waste regulated pursuant to any
Environmental Law.
4.8. COMPLIANCE WITH LAWS AND AGREEMENTS; NO DEFAULT
Each of the Borrower and each Subsidiary is in compliance with all
laws, regulations and orders of any Governmental Authority applicable to it
or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
effect. No Default has occurred and is continuing or would result from the
incurrence of the obligations of Loan Parties under the Loan Documents or from
the grant or perfection of the Liens under the Security Documents.
4.9. INVESTMENT COMPANIES AND OTHER REGULATED ENTITIES
None of the Borrower, any Subsidiary nor any Person controlled by,
controlling, or under common control with, the Borrower or any Subsidiary, is
(i) an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, (ii) a "holding company" as defined
in, or subject to regulation under, the Public Utility Holding Company Act of
1935 or the Federal Power Act, as amended, or (iii) subject to any statute or
regulation which prohibits or restricts the incurrence of Indebtedness for
borrowed money, including statutes or regulations relative to common or
contract carriers or to the sale of electricity, gas, steam, water, telephone,
telegraph or other public utility services.
4.10. FEDERAL RESERVE REGULATIONS
(A) Neither the Borrower nor any Subsidiary is engaged principally,
or as one of its important activities, in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. After giving
effect to each Transaction and the making of each Extension of Credit, Margin
Stock will constitute less than 25% of the assets (as determined by any
reasonable method) of the Borrower and the Subsidiaries.
(B) No part of the proceeds of any Extension of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of Regulation U or X.
4.11. ERISA
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Each Pension Plan is in compliance with ERISA and the Code, where
applicable, in all material respects and no ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse effect. The present
value of all accumulated benefit obligations under each Pension Plan (based on
the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $500,000 the fair
market value of the assets of such Pension Plan, and the present value of all
accumulated benefit obligations of all underfunded Pension Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the assets of all such underfunded Pension Plans.
4.12. TAXES
Each of the Borrower and each Subsidiary has timely filed or caused
to be filed all Federal, State and local income and franchise tax returns and
all other material tax returns required to have been filed by it, and has paid,
or caused to be paid, all Taxes required to have been paid by it, including
Taxes, which, if unpaid, could reasonably be expected to result in a Material
Adverse effect, except Taxes, the validity or amount thereof is being contested
in good faith by appropriate proceedings diligently conducted and for which the
Borrower or such Subsidiary, as applicable, has set aside on its books adequate
reserves, so long as the failure to make payment of which pending any such
contest, could not reasonably be expected to result in a Material Adverse
effect.
4.13. SUBSIDIARIES
As of the Effective Date, (i) the Borrower has only the Subsidiaries
set forth on, and the authorized, issued and outstanding Capital Stock of the
Borrower and the Subsidiaries is as set forth on, Schedule 4.13, (ii) the
Foreign Subsidiaries identified on Schedule 4.13 as Material Foreign
Subsidiaries are the only Material Foreign Subsidiaries, (iii) the ownership
interests in each Subsidiary of the Borrower are duly authorized, validly
issued, fully paid and nonassessable and are owned beneficially and of record
by the Persons set forth on such Schedule 4.13, free and clear of all Liens
(other than Permitted Liens). Except as set forth on Schedule 4.13, neither
the Borrower nor any of its Subsidiaries has issued any securities convertible
into, or options or warrants for, any common or preferred equity securities
thereof and there are no agreements, voting trusts or understandings binding
upon the Borrower or any Subsidiary with respect to the voting securities of
the Borrower or any Subsidiary or affecting in any manner the sale, pledge,
assignment or other disposition thereof, including any right of first refusal,
option, redemption, call or other right with respect
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thereto, whether similar or dissimilar to any of the foregoing.
4.14. ABSENCE OF CERTAIN RESTRICTIONS
No indenture, certificate of designation for preferred stock,
agreement or instrument to which the Borrower or any Subsidiary is a party
(other than this Agreement), prohibits or limits in any way, directly or
indirectly, the ability of any Subsidiary to make Restricted Payments or loans
to, to make any advance on behalf of, or to repay any Indebtedness to, the
Borrower or to another Subsidiary.
4.15. STATUS AS SENIOR INDEBTEDNESS
The Indebtedness of the Borrower under the Loan Documents and in
respect of Hedging Agreements entered into with a counterparty which at the
time thereof was a Lender or an Affiliate of a Lender constitutes "Senior
Indebtedness" as defined in the Subordinated Indenture.
4.16. LABOR RELATIONS
As of the Effective Date, there are no material controversies pending
between the Borrower or any Subsidiary and its employees which might result in
a Material Adverse effect.
4.17. INSURANCE
Schedule 4.17 sets forth a description of all insurance maintained
by or on behalf of the Borrower and the Subsidiaries as of the Effective
Date. As of the Effective Date, all premiums in respect of such insurance that
are due and payable have been paid.
4.18. YEAR 2000
All of the material computer software, computer firmware, computer
hardware (whether general or special purpose) and other similar or related
items of automated, computerized and/or software system(s) that are used or
relied on by the Borrower or any Subsidiary in the conduct of its business will
not malfunction, will not cease to function, will not generate incorrect data,
and will not produce incorrect results when processing, providing and/or
receiving, (i) date-related data into and between the twentieth and
twenty-first centuries and (ii) date-related data in connection with any valid
date in the twentieth and twenty-first centuries where such malfunction,
failure to function, production of incorrect data or production of incorrect
results, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse effect.
4.19. NO MISREPRESENTATION
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The Borrower has disclosed to each Credit Party all agreements,
instruments and corporate or other restrictions to which it or any Subsidiary
is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse effect.
No certificate or report from time to time furnished by any of the Loan
Parties in connection with the Transactions contains or will contain a
misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements therein contained not
misleading in the light of the circumstances under which made, provided that
any projections or pro-forma financial information contained therein are based
upon good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made, it being recognized by the Credit Parties that
such projections as to future events are not to be viewed as facts, and that
actual results during the period or periods covered thereby may differ from the
projected results.
4.20. FINANCIAL CONDITION
On and after each Borrowing Date and each date upon which a
Transaction shall be consummated, neither the Borrower nor any Subsidiary
Guarantor is Insolvent.
4.21. REPRESENTATIONS WITH RESPECT TO THE MORTGAGES
Upon the delivery to the Administrative Agent of each Mortgage and
on and after each Borrowing Date thereafter, (i) each of the representations
and warranties contained in such Mortgage is restated as of such date and (ii)
such Mortgage is effective to create, subject to the exceptions listed in each
title insurance policy covering such Mortgage, in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Loan Parties' right, title and interest in and
to the Mortgaged Properties thereunder and the proceeds thereof, and when such
Mortgage is duly recorded in the applicable governmental offices, such Mortgage
shall constitute a Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Mortgaged Properties and the proceeds
thereof, in each case prior and superior in right to any other Person, other
than with respect to the rights of Persons pursuant to Permitted Liens.
4.22. VALIDITY AND PERFECTION OF SECURITY INTEREST
The Security Documents are effective to create in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral and when (i)
financing statements in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate, (ii) Collateral consisting of
Securities Certificates and Instruments (as defined in the Security Agreement)
are delivered to the Administrative Agent, and (iii) either the Security
Agreement or Grants of Security Interest (as defined in the Security
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Agreement) with respect to Patents, Trademarks and Copyrights (as defined in
the Security Agreement) are filed in the United States Patent and Trademark
Office or the United States Copyright Office, as the case may be, the security
interest granted to the Administrative Agent in the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral, in each case prior
and superior in right to any other Person, other than with respect to Permitted
Liens.
ARTICLE 5. CONDITIONS TO EFFECTIVENESS
The effectiveness of this Agreement and the obligation of each Credit
Party to make the Extensions of Credit to be made by it on the first Business
Day on which Extensions of Credit are made, shall be subject to the
satisfaction of the following conditions precedent (or the waiver thereof in
accordance with Section 11.1):
5.1. EVIDENCE OF ACTION
The Administrative Agent shall have received a certificate, dated the
Effective Date, of the Secretary or Assistant Secretary or other analogous
counterpart of each Loan Party:
(A) attaching a true and complete copy of the (i) resolutions of
its Managing Person and of all other documents evidencing all necessary
corporate, partnership or other action (in form and substance satisfactory to
the Administrative Agent) taken to authorize the Loan Documents to which it is
a party and the transactions contemplated thereby and certifying that such
resolutions are in full force and effect, and (ii) in the case of the
Borrower, the April 7, 1998 resolutions of its Managing Person authorizing the
Anixter Repurchase Agreement and the transactions contemplated thereby and
directing the retirement of the Capital Stock of the Borrower acquired pursuant
thereto (the "STOCK RETIREMENT RESOLUTIONS") and certifying that the Stock
Retirement Resolutions are in full force and effect;
(B) attaching a true and complete copy of its Organizational
Documents;
(C) setting forth the incumbency of its officer or officers (or
other analogous counterpart) who may sign the Loan Documents, including
therein a signature specimen of such officer or officers (or other analogous
counterpart); and
(D) attaching a certificate of good standing of the Secretary of
State of the jurisdiction of its formation and of each other
jurisdiction in which it is qualified to do business, except (i) in the case of
Benefit Connections, Inc. a good standing certificate of the Secretary of State
of the jurisdiction of its formation and (ii) in the case of all Loan Parties
in respect of such other jurisdictions, when the failure to be in good standing
in such jurisdiction would not result in
56
a Material Adverse effect.
5.2. THIS AGREEMENT
The Administrative Agent (or Special Counsel) shall have received, in
respect of each Person listed on the signature pages of this Agreement, either
(i) a counterpart signature page hereof signed on behalf of such Person, or
(ii) written evidence satisfactory to the Administrative Agent (which may
include a facsimile transmission of a signed signature page of this Agreement)
that a counterpart signature page hereof has been signed on behalf of such
Person.
5.3. NOTES
The Administrative Agent shall have received a Note for each Lender,
dated the Effective Date, duly executed by a duly authorized officer of the
Borrower.
5.4. OPINIONS OF COUNSEL TO THE LOAN PARTIES
The Administrative Agent shall have received a favorable opinions of
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Loan Parties, and (ii) ▇▇▇▇▇ ▇. ▇▇▇▇,
General Counsel of the Borrower, addressed to the Credit Parties (and
permitting Special Counsel to rely thereon), dated the Effective Date,
substantially in the forms of Exhibit E-1 and E-2, respectively.
5.5. SECURITY DOCUMENTS, SEARCH REPORTS, ETC.
The Administrative Agent (or Special Counsel) shall have received a
counterpart of the Security Agreement, dated the Effective Date, signed by each
Loan Party party thereto (or a facsimile of a signature page thereof signed by
each Loan Party party thereto) together with the following:
(A) a completed Perfection Certificate, dated the Effective Date and
signed by both a Financial Officer and the general counsel of the Borrower,
together with all attachments contemplated thereby, including the results of a
search of the Uniform Commercial Code (or equivalent) filings and the results
of patent, trademark, tax and judgment lien searches made with respect to the
Borrower and each Subsidiary Guarantor in the jurisdictions contemplated by the
Perfection Certificate and such other jurisdictions as the Administrative Agent
may reasonably request, and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 8.2 or have been released;
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(B) one or more stock certificates, evidencing (i) 100% of the
issued and outstanding Capital Stock of each Domestic Subsidiary owned by
the Borrower or any Subsidiary Guarantor, and (ii) except with respect to the
Capital Stock of the Mexican Subsidiary which is to be pledged as provided in
Section 7.14, not less than 65% of the issued and outstanding Capital Stock of
each Material Foreign Subsidiary, in each case, together with undated stock
powers with respect thereto, executed in blank by the Borrower or such
Subsidiary Guarantor, as the case may be, and bearing a signature guarantee in
all respects satisfactory to the Administrative Agent;
(C) Instruments (as defined in the Security Agreement) constituting
Collateral, duly indorsed in blank by the Borrower or such Subsidiary
Guarantor, as the case may be;
(D) Grants of Security Interest with respect to Copyrights, Patents
and Trademarks (as defined in the Security Agreement), substantially in the
form of Annexes ▇-▇, ▇-▇ and B-3, respectively, to the Security Agreement;
(E) such Uniform Commercial Code Financing Statements, executed by the
appropriate Loan Party, as shall be reasonably requested by the Administrative
Agent; and
(F) such other documents as the Administrative Agent may require in
connection with the creation and perfection of the security interests intended
to be granted under the Security Documents.
5.6. APPROVALS AND CONSENTS
All approvals and consents of all Persons required to be obtained in
connection with the consummation of the Transactions have been obtained, all
required notices have been given and all required waiting periods have expired.
5.7. OFFICER'S CERTIFICATE
The Administrative Agent shall have received a certificate of the
President, a Vice President or a Financial Officer of the Borrower, dated the
Effective Date, in all respects satisfactory to the Administrative Agent:
(A) certifying that as of the Effective Date (i) no Default exists,
and (ii) the representations and warranties contained in the Loan Documents
are true and correct, and
(B) certifying that all approvals and consents of all Persons
required to be obtained in connection with the consummation of the
Transactions have been obtained, all required notices have been given and all
required waiting periods have expired.
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5.8. FINANCIAL OFFICER'S CERTIFICATE
The Administrative Agent shall have received a certificate signed by a
Financial Officer of the Borrower, in all respects reasonably satisfactory to
the Administrative Agent, dated the Effective Date, and (i) stating that the
Borrower is in compliance with all covenants on a pro-forma basis after giving
effect to the Transactions, and (ii) attaching a copy of a pro-forma ▇▇▇▇▇▇▇
dated balance sheet of the Borrower utilized for purposes of preparing such
certificate, which pro- forma consolidated balance sheet presents the
Borrower's good faith estimate of its pro-forma consolidated financial
condition at the date thereof, after giving effect to the Transactions.
5.9. COLLATERAL AUDIT
The Agents shall have received and be satisfied in all respects with
an audit of the Collateral.
5.10. CERTAIN AGREEMENTS
The Administrative Agent shall have received a fully executed copy
of (i) the Subordinated Indenture, (ii) the Anixter Repurchase Agreement, and
(iii) each of the Arris Loan Documents, in each case certified to be a true and
complete copy thereof by the Secretary or Assistant Secretary of the Borrower,
each of which shall be in form and substance satisfactory to the Administrative
Agent.
5.11. PROPERTY, PUBLIC LIABILITY AND OTHER INSURANCE
The Administrative Agent shall have received a certificate of all
insurance maintained by the Borrower and its Subsidiaries in form and substance
reasonably satisfactory to the Administrative Agent, together with the
endorsements required by Section 5.4 of the Security Agreement.
5.12. EVIDENCE OF TRANSFER OF ASSETS AND LIABILITIES OF HOME SATELLITE
SYSTEMS
The Administrative Agent shall have received such documents (each
in form and substance satisfactory to it) evidencing the transfer of all assets
and liabilities of Home Satellite Systems to one or more of the Borrower and
the Subsidiary Guarantors.
5.13. FEDERAL RESERVE FORMS
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The Administrative Agent shall have received a Federal Reserve Form
for each Lender.
5.14. FEES
The Administrative Agent shall have received all fees and other
amounts due and payable to the Administrative Agent under the Loan Documents on
or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of the fees and disbursements of Special Counsel and
all other out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
5.15. OTHER DOCUMENTS
The Administrative Agent shall have received such other documents,
each in form and substance reasonably satisfactory to it, as it shall reasonably
request.
The Administrative Agent shall notify the Borrower and each Credit Party of the
date upon which each of the conditions precedent set forth in this Section 5.1
have been satisfied (or waived in accordance with Section 11.1), and such
notice shall be conclusive and binding. Notwithstanding the foregoing, this
Agreement shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 11.1) on or before June 30, 1998.
ARTICLE 6. CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT
The obligation of each Credit Party to make any Extension of Credit (other
than a participation in a Letter of Credit) under this Agreement are subject to
the satisfaction on the Effective Date of the Conditions to Effectiveness set
forth in Article 5 and shall be subject to the satisfaction of the following
conditions precedent as of the date thereof:
6.1. COMPLIANCE
On each Borrowing Date and after giving effect to the Extensions of
Credit thereon (i) no Default shall have occurred or be continuing and (ii)
the representations and warranties contained in the Loan Documents (other than
representations and warranties contained in Section 4.4(a)) shall be true and
correct with the same effect as though such representations and warranties had
been made on such Borrowing Date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such earlier date. Each Extension of Credit and each Credit Request therefor
shall constitute a certification by the Borrower as of such Borrowing Date that
(i) each of the foregoing matters is true and correct in all respects and (ii)
in the case of a requested Revolving Loan, the proceeds of which are to be used
to repurchase shares of Capital Stock of the Borrower pursuant to
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the Anixter Repurchase Agreement, that the Stock Retirement Resolutions are in
full force and effect and have not be amended or modified in any way.
6.2. CREDIT REQUEST
With respect to each Extension of Credit, the Administrative Agent
shall have received a Credit Request, executed by a duly authorized officer of
the Borrower.
6.3. LAW
Such Extension of Credit shall not be prohibited by any applicable
law, rule or regulation.
ARTICLE 7. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as any Commitment is in effect and until
the principal of, and interest on, each Revolving Loan, all Reimbursement
Obligations, all Fees and all other amounts payable under the Loan Documents
shall have been paid in full:
7.1. FINANCIAL STATEMENTS AND INFORMATION
The Borrower shall furnish or cause to be furnished to the
Administrative Agent and each Lender:
(A) within 90 days after the end of each fiscal year, a copy of
the audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all reported on by the Accountants (without (x) a "going concern" or like
qualification or exception, (y) any qualification or exception as to the scope
of such audit or (z) any exception or qualification which relates to the
treatment or classification of any item and which, as a condition to the
removal of such qualification, would require an adjustment to such item, the
effect of which would be to cause the Borrower to be in default of any of its
obligations under Section 8.16) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, it being
understood that the Borrower may satisfy its obligations under this subsection
(a) by furnishing copies of the Borrower's annual report on Form 10-K in
respect of such fiscal year, together with the financial statements required
to be attached thereto;
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(B) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of its consolidated balance sheet and the
related consolidated statements of operations and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, it being
understood that the Borrower may satisfy its obligations under this subsection
(b) by furnishing copies of the Borrower's quarterly report on Form 10-Q in
respect of such fiscal quarter, together with the financial statements required
to be attached thereto;
(C) concurrently with any delivery of financial statements under
subsections (a) or (b) above, a certificate (a "COMPLIANCE CERTIFICATE") of a
Financial Officer of the Borrower, substantially in the form of Exhibit D, (i)
certifying as to whether a Default has occurred and, if so, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Section 8.16 and (iii) stating whether any change in GAAP or in
the application thereof has occurred since the date of the audited financial
statements referred to in Section 4.4 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such Compliance Certificate;
(D) concurrently with any delivery of financial statements under
subsection (a) above, a certificate of the Accountants stating whether they
obtained knowledge during the course of their examination of such financial
statements of any Default in the covenants contained in Section 8.16 (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(E) concurrently with any delivery of financial statements under
subsection (a) above, a certificate executed by a Financial Officer and the
general counsel of the Borrower (i) setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that there
has been no change in such information since the date of such certificate or
the date of the most recent certificate delivered pursuant to this subsection
(e), (ii) certifying that all Uniform Commercial Code financing
statements or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and re-registrations, containing a description of
the Collateral have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified pursuant to clause (i)
above to the extent necessary to protect and perfect the security interest of
the Administrative Agent for a period of not less than 18 months after the date
of such certificate (except as noted therein with respect to any continuation
statements to be filed within such period) and (iii) identifying in the format
of Schedules 5, 6 and 8, as applicable, Equity
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Interests (as defined in the Security Agreement), Instruments (as defined in
the Security Agreement) and Intellectual Property of the Borrower and each
Subsidiary Guarantor in existence on the date thereof and not then listed on
such Schedules or previously so identified to the Administrative Agent;
(F) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the SEC or with any national securities
exchange, or distributed by the Borrower to its shareholders generally, as the
case may be;
(G) not later than the 25th day of each month (or if such day is not a
Business Day, on the immediately preceding Business Day, a Borrowing Base
Certificate, signed by a Financial Officer of the Borrower, calculated as of
the last day of the preceding month;
(H) concurrently with the delivery of the Borrowing Base Certificate
pursuant to subsection (g) above, the following information as of the end of
the month for which such Borrowing Base Certificate is delivered, for each of
the Borrower and each Subsidiary or on a combined basis and in a format
acceptable to the Agents: (i) summary of the aging of all accounts receivables,
and (ii) a list of accounts payable and inventory (raw material, work in
process and finished goods); and
(I) promptly following any request therefor, such other information
regarding the Borrower or any Subsidiary, or compliance with the terms of this
Agreement, as any Credit Party may reasonably request.
7.2. NOTICE OF MATERIAL EVENTS
The Borrower shall furnish to the Administrative Agent and each
Lender, prompt written notice of the following together with a statement of a
Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and, if applicable,
any action taken or proposed to be taken with respect thereto:
(A) the occurrence of any Default;
(B) the filing or commencement of any action, suit or proceeding
by or before any Governmental Authority against or affecting the Borrower or any
Subsidiary that, if adversely determined, could in the good faith opinion of
the Borrower reasonably be expected to result in a Material Adverse effect;
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(C) any lapse, refusal to renew or extend or other termination of any
material license, permit, franchise or other authorization issued to the
Borrower or any Subsidiary by any Person or Governmental Authority, which
lapse, refusal or termination, could reasonably be expected to result in a
Material Adverse effect;
(D) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result
in a Material Adverse effect;
(E) the occurrence of any Equity Issuance resulting in Net Cash
Proceeds;
(F) the occurrence of any insured damage to any portion of any
Collateral or the commencement of any action or proceeding for the taking of any
Collateral or any part thereof or interest therein under power of eminent
domain or by condemnation or similar proceeding; or
(G) the occurrence of a Change of Control; or
(H) the occurrence of any other development that has or could
reasonably be expected to result in, a Material Adverse effect.
7.3. EXISTENCE; CONDUCT OF BUSINESS
The Borrower shall, and shall cause each Subsidiary to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect (i) its legal existence (provided that the foregoing shall not prohibit
any merger, consolidation or dissolution not prohibited by Section 8.3), and
(ii) all rights, licenses, permits, privileges and franchises the absence of
which would reasonably be expected to have a Material Adverse effect.
7.4. PAYMENT OF OBLIGATIONS
The Borrower shall, and shall cause each Subsidiary to, pay and
discharge when due, its obligations, including obligations with respect to
Taxes, which, if unpaid, could reasonably be expected to result in a Material
Adverse effect, except where (i) the validity or amount thereof is being
contested in good faith by appropriate proceedings diligently conducted, (ii)
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (iii) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse effect.
7.5. MAINTENANCE OF PROPERTIES
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The Borrower shall, and shall cause each Subsidiary to, maintain,
protect and keep in good repair, working order and condition (ordinary wear and
tear excepted) at all times, all of its property other than property, the loss
of which would not reasonably be expected to have a Material Adverse effect.
7.6. INSURANCE
The Borrower shall, and shall cause each Subsidiary to, maintain with
financially sound and reputable insurance companies, (i) insurance in at least
such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption coverage) as are usually
insured against in the same general area by companies engaged in the same or a
similar business and (ii) such other insurance as is required pursuant to the
terms of any Security Document, and furnish to the Administrative Agent, upon
written request, full information as to the insurance carried.
7.7. BOOKS AND RECORDS: INSPECTION RIGHTS
The Borrower shall, and shall cause each Subsidiary to, keep proper
books of record and account in which full, true and correct entries are made
of all dealings and transactions in relation to its business and activities
and, at all reasonable times upon reasonable prior notice, permit
representatives of the Credit Parties to (i) visit the offices of the Borrower
and each Subsidiary, (ii) examine such books and records and Accountants'
reports relating thereto, (iii) make copies or extracts therefrom, (iv) discuss
the affairs of the Borrower and each such Subsidiary with the respective
officers thereof, (v) to examine and inspect the property of the Borrower and
each such Subsidiary and (vi) meet and discuss the affairs of the Borrower and
each such Subsidiary with the Accountants.
7.8. COMPLIANCE WITH LAWS
The Borrower shall, and shall cause each Subsidiary to, comply with
all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse effect.
7.9. ADDITIONAL SUBSIDIARIES
(A) DOMESTIC SUBSIDIARIES. In the event that on or after the Effective
Date, any Person shall become a Domestic Subsidiary, or any Non-Guarantor
Subsidiary shall at any time be a
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Domestic Subsidiary, the Borrower shall (i) notify the Administrative Agent
in writing thereof within three Business Days thereof, (ii) cause such Person
to execute and deliver to the Administrative Agent a Guarantee Supplement and
to become a party to each applicable Security Document in the manner provided
therein within five Business Days thereafter and to promptly take such actions
to create and perfect Liens on such Person's assets to secure such Person's
obligations under the Loan Documents as the Administrative Agent or the
Required Lenders shall reasonably request, (iii) cause any shares of Capital
Stock of, or promissory notes evidencing Indebtedness of, such new Domestic
Subsidiary owned by or on behalf of any Loan Party to be pledged pursuant to
the Security Agreement within five Business Days thereafter, (iv) cause each
such new Domestic Subsidiary to deliver to the Administrative Agent any shares
of Capital Stock or promissory notes evidencing Indebtedness of any Domestic
Subsidiary or Material Foreign Subsidiary that are owned by or on behalf of
such new Domestic Subsidiary within five Business Days after such Subsidiary is
formed or acquired (except that, if any such Subsidiary is a Material Foreign
Subsidiary, shares of Capital Stock of such Person to be so pledged may be
limited as provided in subsection (b) below and, if requested by the
Administrative Agent with respect to the pledge of Capital Stock of a Material
Foreign Subsidiary, the Administrative Agent shall receive the documents
referred to in subsection (b)(iii) below), and (v) deliver to the
Administrative Agent a Perfection Certificate with respect to such Subsidiary,
such additional Financing Statements, Grants of Security Interest and Powers of
Attorney (as each such term is defined in the Security Agreement) certificates,
instruments and opinions as the Administrative Agent may request.
(B) MATERIAL FOREIGN SUBSIDIARIES. In the event that on or after the
Effective Date, any Person shall become a Material Foreign Subsidiary, the
Borrower shall (i) notify the Administrative Agent in writing thereof within
three Business Days thereof, (ii) cause the lesser of (x) 65% of the
outstanding shares of Capital Stock of such Material Foreign Subsidiary or (y)
all of such shares owned by the Loan Parties, together with all promissory
notes evidencing Indebtedness of such Material Foreign Subsidiary to any Loan
Party to be pledged pursuant to the Security Agreement within five Business
Days thereafter, provided, that if requested by the Administrative Agent with
respect to the pledge of Capital Stock of a Material Foreign Subsidiary,
deliver to the Administrative Agent an additional pledge agreement, in form and
substance reasonably satisfactory to the Administrative Agent (each an
"ADDITIONAL PLEDGE AGREEMENT") and an opinion of counsel (including counsel
practicing under the laws of the jurisdiction under which such Material Foreign
Subsidiary was formed) with respect to the enforceability of such Pledge
Agreement or Additional Pledge Agreement and the validity and perfection of the
Lien granted therein and (iii) deliver to the Administrative Agent such
certificates, instruments and opinions as the Administrative Agent may request.
7.10. ADDITIONAL COLLATERAL
If after the Effective Date, the Borrower or any other Loan Party
acquires any property which would constitute Collateral, the Borrower shall,
and shall cause each such Loan Party
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to, execute any and all documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), that may be required under any applicable law, or which
the Administrative Agent or the Required Lenders may reasonably request, to
effectuate the Transactions or to grant, preserve, protect or perfect the Liens
created or intended to be created by the Security Documents or the validity or
priority of any such Lien, all at the expense of the Loan Parties.
7.11. MORTGAGES ON OWNED AND LEASED PROPERTIES
(A) Upon demand by the Administrative Agent or the Required Lenders,
the Borrower shall cause each Loan Party to execute and deliver to the
Administrative Agent, as applicable, fee or leasehold mortgages or deeds of
trust in favor of the Administrative Agent covering such of the Mortgaged
Properties as the Administrative Agent or the Required Lenders may determine.
(B) In such event, the Borrower shall promptly provide the
Administrative Agent, all at the expense of the Loan Parties, with originals
of the following items, each of which must, unless indicated otherwise, be
acceptable in form and substance to the Administrative Agent and its counsel in
their sole discretion (collectively, the "MORTGAGE DOCUMENTS"): (i)
counterparts of a Mortgage with respect to each Mortgaged Property duly signed
on behalf of the record owner or lessee, as applicable, of such Mortgaged
Property properly acknowledged and in recordable form, (ii) an original policy
or policies of title insurance issued by Chicago Title Insurance Company or
another nationally recognized title insurance company reasonably acceptable to
the Administrative Agent, insuring the Lien of each such Mortgage as a valid
first Lien on the Mortgaged Property described therein, free of any other Liens
except as permitted by Section 8.2, in form and substance reasonably acceptable
to the Administrative Agent, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent or the Required Lenders may reasonably
request, (iii) such surveys as may be required pursuant to such Mortgages or as
the Administrative Agent or the Required Lenders may reasonably request or as
necessary for a title insurance company to "omit" the "survey exception" from
the policies of title insurance required above, (iv) a copy of the original
permanent certificate or temporary certificate of occupancy as the same may
have been amended or issued from time to time, covering each improvement
located upon the Mortgaged Properties, that were required to have been issued
by the appropriate Governmental Authority for such improvement, (v) written
confirmation from the applicable zoning commission or other appropriate
Governmental Authority stating that with respect to each Mortgaged Property as
built it complies with existing land use and zoning ordinances, regulations and
restrictions applicable to such Mortgaged Property, (vi) for each of the
Mortgaged Properties, a current appraisal of the land and the improvements
thereon prepared
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by an appraiser selected by the Administrative Agent, which appraisal must
indicate an appraised value satisfactory to the Administrative Agent and which
must be, in all other respects, satisfactory to the Administrative Agent, (vii)
to the extent requested by the Administrative Agent, an environmental audit
(which shall be a Phase I Audit, unless the initial findings indicate a need
for additional review) in form and substance satisfactory to it from an
environmental consulting firm acceptable to the Administrative Agent with
respect to any environmental hazards, conditions or liabilities (contingent or
otherwise) to which any Loan Party may be subject, (viii) UCC-1 Financing
Statements with respect to each Mortgaged Property duly signed on behalf of the
record owner or lessee, as applicable, of each of the Mortgaged Properties in
recordable form, covering all fixtures and appurtenances situated upon such
Mortgaged Properties, (ix) true and complete fully executed copies of all
leases on the Mortgaged Properties which must be satisfactory to the
Administrative Agent and must be subordinate to the Mortgage, (x) fully
executed original Estoppel Certificates from each existing tenant on the
Mortgaged Properties in form reasonably acceptable to the Administrative Agent,
(xi) certified copies of the current rent roll for each of the Mortgaged
Properties, (xii) Subordination, Non-disturbance and Attornment Agreements from
any tenant whose lease is not by its terms subordinate to the Mortgage, in form
acceptable to the Administrative Agent, (xiii) certificates of insurance
confirming fire, hazard and liability coverage in amounts satisfactory to the
Administrative Agent, naming the Administrative Agent as mortgagee, with true
and complete copies of such policies, (xiv) flood insurance policies or
evidence that the Mortgaged Properties are not located in Federal Flood Hazard
Areas, (xv) an opinion from the Borrower's counsel concerning the execution and
enforceability of the Mortgages and other documents required to be delivered by
the Loan Parties to the Administrative Agent in connection with the Mortgages,
any litigation, judgment or agreement adversely affecting any record owner or
lessee, as applicable, or the ability of such record owner or lessee, as
applicable, to perform their respective obligations under the Mortgages,
compliance of the Mortgaged Properties with all laws and governmental
ordinances, and other matters as may be required by the Administrative Agent or
its counsel, which opinion shall be in form and substance satisfactory to the
Administrative Agent and its counsel, (xvi) for each of the Mortgaged
Properties, a written indemnity from the Loan Parties in favor of the
Administrative Agent and the Required Lenders with respect to environmental
hazards and the Americans with Disabilities Act, (xvii) with respect to any
Mortgage which will be a leasehold mortgage, a certified copy of the ground
lease for such Mortgaged Property (the "GROUND LEASE") duly executed by the
ground landlord and ground tenant, (xviii) with respect to any Mortgage which
will be a leasehold mortgage, a duly executed three party agreement by and
between the ground landlord for such Mortgaged Property, the ground tenant and
the Administrative Agent, which agreement must provide, among other things,
that (1) the Ground Lease is fully subordinated to the Mortgage, (2) the
Administrative Agent receive notices of any default under the Ground Lease and
an opportunity to cure same, (3) the ground landlord is obligated to enter into
a new lease with the Administrative Agent or its assignee upon termination
thereof for any reason (upon the same terms and conditions of the Ground
Lease), (4) the ground landlord is obligated to extend the Ground Lease after
the current term of the Ground Lease if the Revolving Loans have not been fully
repaid and terminated within such current lease term, and (5) such other terms
as the Administrative Agent may reasonably deem appropriate, and (xix) any and
all
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other documents, financing statements, agreements and instruments that may
be required under any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to create and perfect a first mortgage
Lien against the Mortgaged Properties, all at the expense of the Loan Parties.
7.12. MAINTENANCE OF LICENSES
The Borrower shall do, and cause each Subsidiary to do, all things
necessary, to renew, extend and continue in effect all permits, licenses and
authorizations which may at any time and from time to time be necessary to
operate the business of the Borrower and the Subsidiaries in compliance with
all applicable laws and regulations, the failure to comply with which could
reasonably be expected to have a Material Adverse effect.
7.13. COLLATERAL AUDITS
The Borrower shall, and shall cause each Subsidiary to, cooperate
with the Collateral Agent in connection with the performance of collateral
audits which shall be made upon the request of the Collateral Agent or
Required Lenders and which shall be at the Borrower's expense.
7.14. CERTAIN ADDITIONAL PLEDGE AGREEMENTS
Not later than 30 days after the Effective Date, the Borrower shall
deliver or cause to be delivered to the Administrative Agent an Additional
Pledge Agreement, in form and substance satisfactory to the Administrative
Agent, duly executed by Texscan with respect to its interest in the Mexican
Subsidiary, and, if ANTEC International, Inc. has not as yet been dissolved,
its interest therein, together with such legal opinions and other documents set
forth in Section 7.9.
7.15. GOOD STANDING CERTIFICATE FOR BENEFIT CONNECTIONS, INC.
Not later than 120 days after the Effective Date, the Borrower shall
deliver or cause to be delivered to the Administrative Agent a certificate of
good standing with respect to Benefit Connections, Inc. issued by the Secretary
of State of the jurisdiction of its formation unless prior thereto Benefit
Connections, Inc. shall have been dissolved or merged with another Person in a
transaction permitted by Section 7.3 or 8.3, as the case may be, and the
Administrative Agent shall have received satisfactory evidence thereof.
ARTICLE 8. NEGATIVE COVENANTS
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The Borrower agrees that, so long as any Commitment is in effect and until
the principal of, and interest on, each Revolving Loan, all Reimbursement
Obligations, all Fees and all other amounts payable under the Loan Documents
shall have been paid in full:
8.1. INDEBTEDNESS
The Borrower shall not, and shall not permit any Subsidiary to,
create, incur, assume or suffer to exist any liability for Indebtedness, except:
(A) Indebtedness due under the Loan Documents;
(B) Indebtedness due in respect of the Subordinated Notes in a
principal amount not in excess of $115,000,000;
(C) Indebtedness of the Borrower or any Subsidiary existing on the
Effective Date as set forth on Schedule 8.1, but not any extensions, renewals
and replacements of any such Indebtedness;
(D) Indebtedness of the Borrower in respect of the Arris Obligations;
(E) Indebtedness of the Borrower to any Subsidiary Guarantor or of any
Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor; and
(F) other Indebtedness of the Borrower or any Subsidiary in an
aggregate outstanding principal amount not to exceed $20,000,000, of
which not more than $5,000,000 may consist of Capital Lease Obligations and the
proceeds of sale in respect of Sale and Leaseback Transactions.
8.2. NEGATIVE PLEDGE
The Borrower shall not, and shall not permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien upon any of its property,
whether now owned or hereafter acquired, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except for the following (collectively, "PERMITTED LIENS"):
(A) any Customary Lien;
(B) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the Effective Date and set forth on Schedule 8.2,
provided that (i) such Lien shall not apply to any other property or asset of
the Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations that it secures on the Effective Date;
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(C) Liens securing Capital Lease Obligations and Liens on property
(including, in the event such property constitutes Capital Stock of a newly
acquired Subsidiary, Liens on the property of such Subsidiary) acquired after
the Effective Date and either existing on such property when acquired,or
created contemporaneously with such acquisition, to secure the payment or
financing of the purchase price thereof, provided that such Liens attach only
to the property so purchased or acquired and, provided further, that the
Indebtedness secured by such Liens shall not exceed $5,000,000; and
(D) the Lien of Nortel on the interest of the Borrower in Arris,
provided, however, that such Lien shall not apply to any other property
or assets of, nor be recourse to, the Borrower or any Subsidiary.
8.3. FUNDAMENTAL CHANGES
The Borrower shall not, and shall not permit any Subsidiary to,
consolidate or merge into or with any other Person, or permit any other Person
to merge into or consolidate with it or any of the Subsidiaries, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or substantially all of its assets, or all or substantially
all of any class of the Capital Stock of any of the Subsidiaries (in each case,
whether now owned or hereafter acquired), or liquidate or dissolve, or permit
any Subsidiaries to do any of the foregoing, except that, so long as
immediately before and after giving effect thereto, no Default shall or would
exist:
(A) the Borrower may merge with any Subsidiary Guarantor, any
Subsidiary Guarantor may merge with the Borrower or any other Subsidiary
Guarantor, and any Non-Guarantor Subsidiary may merge with any other
Non-Guarantor Subsidiary provided that in connection with any merger involving
the Borrower, the Borrower shall be the survivor thereof;
(B) any Non-Guarantor Subsidiary may merge with any Subsidiary
Guarantor, and any Subsidiary Guarantor may merge with any Non-Guarantor
Subsidiary, provided that, (i) immediately after giving effect to any such
merger in which such Subsidiary Guarantor is the survivor, the Permitted
Transaction Amount (x) for the fiscal year in which such merger occurs shall
not exceed the Permitted Transaction Annual Limitation, and (y) for the period
from the Effective Date through the Maturity Date shall not exceed the
Permitted Transaction Aggregate Limitation, and such merger shall be treated as
an Acquisition for all purposes of Section 8.5(b) or 8.5(c), as the case may
be, and (ii) with respect to any merger in which such Subsidiary Guarantor is
not the survivor, such merger shall be treated as a sale, assignment, transfer
or other disposition for all purposes of Section 8.6(b) or a Disposition for
all purposes of Section 8.6(c), as the case may be;
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(C) the Borrower or any Subsidiary may merge with any Person that is
not a Subsidiary, provided that, (i) in connection with any such merger
involving the Borrower, the Borrower shall be the survivor thereof, (ii) with
respect to any such merger involving a Subsidiary in which, immediately after
giving effect thereto, the surviving Person is not a Subsidiary, such merger
shall be treated as a Disposition for all purposes of Section 8.6(c), and (iii)
with respect to any such merger involving a Loan Party in which, immediately
after giving effect thereto, the surviving Person is a Subsidiary, such merger
shall be treated as an Acquisition for all purposes of Section 8.5(c);
(D) the Borrower and the Subsidiaries may consummate any sale,
assignment, lease, transfer or other disposition permitted by Section 8.6;
(E) any Non-Guarantor Subsidiary may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in
the best interests of the Borrower and is not materially disadvantageous to
the Lenders.
8.4. INVESTMENTS, LOANS, ADVANCES AND GUARANTEES
The Borrower shall not, and shall not permit any Subsidiary to, at any
time, purchase or otherwise acquire (including pursuant to any merger with any
Person that was not a Wholly Owned Subsidiary of the Borrower prior to such
merger), hold or invest in any Capital Stock, evidences of indebtedness or
other securities (including any option, warrant or other right to acquire any
of the foregoing and any derivative product) of, make or permit to exist any
loans to or advances on behalf of, incur any Guarantees in respect of any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person (all of which are sometimes referred to herein as
"INVESTMENTS"), except:
(A) Investments in Cash Equivalents and in normal business banking
accounts or issued by, federally insured institutions in amounts not exceeding
the limits of such insurance;
(B) Investments existing on the Effective Date as set forth on
Schedule 8.4;
(C) Investments by the Borrower in any Subsidiary and Investments by
any Subsidiary in the Borrower or any other Subsidiary, provided that (i)
the proceeds of such Investment in the Borrower or any Subsidiary Guarantor
shall be received by the Borrower or such Subsidiary Guarantor, as the case may
be, (ii) immediately after giving effect to each Investment by the Borrower or
any Subsidiary Guarantor in any Non-Guarantor Subsidiary, the Permitted
Transaction Amount (x) for the fiscal year in which such Investment is made
shall not exceed the Permitted Transaction Annual Limitation, and (y) for the
period from the Effective Date through the Maturity Date shall not exceed the
Permitted Transaction Aggregate Limitation;
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(D) an equity Investment by the Borrower in Evolve in an aggregate
amount not in excess of $2,000,000, provided that, (i) immediately before and
after giving effect thereto, no Default shall or would exist, (ii) immediately
after giving effect thereto, all of the representations and warranties
contained in the Loan Documents shall be true and correct with the same effect
as though then made, (iii) neither the Borrower nor any Subsidiary shall have
any further obligations, contingent or otherwise, to make any other Investments
therein;
(E) Unconsolidated Investments made on or after the Effective Date,
provided that, (i) immediately before and after giving effect thereto, no
Default shall or would exist, (ii) immediately after giving effect thereto, all
of the representations and warranties contained in the Loan Documents shall be
true and correct with the same effect as though then made, (iii) the Person in
which such Unconsolidated Investment is made is engaged in the Line of
Business, and (iv) immediately after giving effect to each such Unconsolidated
Investment, the Permitted Transaction Amount (x) for the fiscal year in which
such Investment is made shall not exceed the Permitted Transaction Annual
Limitation, and (y) for the period from the Effective Date through the Maturity
Date shall not exceed the Permitted Transaction Aggregate Limitation;
(F) Acquisitions permitted by Section 8.5; and
(G) Guarantees permitted by Section 8.1 and Secured Hedging Agreements
permitted by Section 8.8.
8.5. ACQUISITIONS
The Borrower shall not, and shall not permit any Subsidiary to, at any
time, make any purchase or other acquisition (including by way of a dividend
received or otherwise and whether in a single transaction or in a series of
related transactions) of (i) any assets of any other Person that, taken
together, constitute a business unit, (ii) any Capital Stock of any other
Person if, immediately thereafter, such other Person would be a Subsidiary of
the Borrower, (iii) any assets of any other Person otherwise not in the
ordinary course of business, (iv) enter into any binding agreement to perform
any transaction described in clauses (i), (ii) or (iii) above which is not
contingent on obtaining the consent of the Required Lenders (each transaction
described in clauses (i), (ii), (iii) and (iv) above being referred to as an
"ACQUISITION"), or (v) make any deposit in connection with any potential
Acquisition, except:
(H) Acquisitions of Investments permitted by Section 8.4;
(I) Acquisitions by the Borrower or any Subsidiary from any other
Subsidiary
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and Acquisitions by any Subsidiary from the Borrower or any other
Subsidiary, provided that, immediately after giving effect to any Acquisition
between a Loan Party, as purchaser, and a Non-Guarantor Subsidiary, as seller,
the Permitted Transaction Amount (x) for the fiscal year in which such
Acquisition is made shall not exceed the Permitted Transaction Annual
Limitation, and (y) for the period from the Effective Date through the Maturity
Date shall not exceed the Permitted Transaction Aggregate Limitation; and
(J) other Acquisitions, provided that immediately after giving effect
thereto, the Permitted Transaction Amount (x) for the fiscal year in which such
Acquisition is made shall not exceed the Permitted Transaction Annual
Limitation, and (y) for the period from the Effective Date through the Maturity
Date shall not exceed the Permitted Transaction Aggregate Limitation, provided
further that:
(A) immediately before or after giving effect to each such
Acquisition, no Default shall or would exist, and immediately after
giving effect thereto, all of the representations and warranties
contained in the Loan Documents shall be true and correct with the same
effect as though then made,
(B) the Person or business acquired is engaged in the Line of
Business,
(C) the Borrower or Subsidiary Guarantor making the Acquisition
shall have complied with the provisions of Sections 7.9, 7.10, and 7.11
(if and to the extent applicable), and
(D) the Borrower shall have delivered to the Administrative Agent
and each Credit Party (1) notice thereof not less than ten days prior to
the consummation of such Acquisition, and (2) a certificate of a
Financial Officer thereof, in all respects reasonably satisfactory to the
Administrative Agent and dated the date of such consummation, certifying
that no Default has occurred and is continuing, and setting forth
reasonably detailed calculations demonstrating compliance with Section
8.16 on a pro-forma basis (after giving effect to such Acquisition and
based on the most recent financial statements delivered pursuant to
Section 7.1) and such other information, documents and other items as the
Administrative Agent or such Credit Party shall have reasonably
requested.
8.6. DISPOSITIONS
The Borrower shall not, and shall not permit any Subsidiary to, sell,
assign, lease, transfer or otherwise dispose of any property or assets, except:
(A) (i) sales of Inventory in the ordinary course of business, (ii)
sales or other dispositions of Unconsolidated Investments, (iii) sales,
assignments, transfers or other dispositions of
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any property or assets that, in the reasonable opinion of the Borrower or
such Subsidiary, as the case may be, are obsolete or no longer useful in the
conduct of its business, and (iv) sales or other dispositions of Cash
Equivalents;
(B) sales, assignments, transfers or other dispositions of any
property or assets by the Borrower to any Subsidiary or by any Subsidiary
to the Borrower or any other Subsidiary, provided that, immediately after
giving effect to any such transaction between a Loan Party and a Non-Guarantor
Subsidiary, the Permitted Transaction Amount (x) for the fiscal year in which
such sale, assignment, transfer or other disposition occurs shall not exceed
the Permitted Transaction Annual Limitation, and (y) for the period from the
Effective Date through the Maturity Date shall not exceed the Permitted
Transaction Aggregate Limitation; and
(C) sales, assignments, leases, transfers or other dispositions not
otherwise described in this Section 8.6 (each a "DISPOSITION"), provided that,
(i) immediately before and after giving effect to each such Disposition, no
Default shall or would exist, (ii) 75% of the total consideration received or
to be received therefor by the Borrower or any Subsidiary shall be payable in
cash or Cash Equivalents on or before the closing thereof and shall not be less
than the fair market value thereof as reasonably determined by the Managing
Person of the Borrower or such Subsidiary, as the case may be, and (iii) the
Administrative Agent and the Lenders shall have received (A) written notice
thereof not less than ten Business Days prior to each such Disposition, (B) a
certificate in respect thereof signed by a duly authorized officer of the
Borrower identifying the property or other asset subject to such Disposition,
together with estimates of items to be deducted therefrom in arriving at the
Net Cash Proceeds thereof, and (C) for any Disposition involving proceeds in
excess of $5,000,000, a certificate signed by a duly authorized officer of the
Borrower certifying that the consideration received or to be received by the
Borrower or such Subsidiary, as the case may be, for such property has been
determined by the Managing Person thereof to be not less than the fair market
value of such property and certifying as to the total consideration to be paid
in respect of such Disposition.
8.7. RESTRICTED PAYMENTS
The Borrower shall not, and shall not permit any Subsidiary to,
declare, pay or make any dividend or other distribution, direct or
indirect, on account of any Capital Stock issued by such Person now or
hereafter outstanding (other than a dividend payable solely in shares or other
units of such Capital Stock to the holders of such shares or other units) or
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition, direct or indirect, of any shares of any class of its Capital
Stock now or hereafter outstanding (collectively, "RESTRICTED PAYMENTS"),
except:
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(A) Restricted Payments made by any Subsidiary to the Borrower or any
Subsidiary Guarantor;
(B) repurchases by the Borrower of shares of its Capital Stock
pursuant to the Anixter Repurchase Agreement for an amount not in excess of
$64,000,000, provided that (i) immediately before and after giving effect
thereto, no Default shall or would exist and (ii) such repurchase is effected
with the proceeds of (x) the Subordinated Notes not used on the issuance
thereof to repay the Borrower's Indebtedness under its then existing credit
facility or prepay Revolving Loans and (y) Revolving Loans in an aggregate
amount not in excess of the an amount equal to $64,000,000 minus the amount
determined under clause (ii)(x) above; and
(C) other Restricted Payments made by the Borrower or any Subsidiary,
provided that, (i) immediately before and after giving effect thereto, no
Default shall or would exist, and (ii) immediately after giving effect to any
such Restricted Payment the Permitted Transaction Amount (x) for the fiscal
year in which such Restricted Payment is made shall not exceed the Permitted
Transaction Annual Limitation, and (y) for the period from the Effective Date
through the Maturity Date shall not exceed the Permitted Transaction Aggregate
Limitation.
8.8. HEDGING AGREEMENTS
The Borrower shall not, and shall not permit any Subsidiary to,
enter into any Hedging Agreements, other than Hedging Agreements in a
notional principal amount not in excess of the then Aggregate Revolving
Commitment entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities.
8.9. SALE AND LEASE-BACK TRANSACTIONS
The Borrower shall not, and shall not permit any Subsidiary to,
enter into an arrangement with any Person or group of Persons providing
for the renting or leasing by the Borrower or any Subsidiary of any property or
asset which has been or is to be sold or transferred by the Borrower or any
Subsidiary to any such Person (a "SALE AND LEASEBACK TRANSACTION") except to
the extent permitted by Section 8.1(f).
8.10. LINES OF BUSINESS
The Borrower shall not, and shall not permit any Subsidiary to,
engage in any business other than the Line of Business.
8.11. TRANSACTIONS WITH AFFILIATES
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The Borrower shall not, and shall not permit any Subsidiary to,
become a party to any transaction with an Affiliate, unless the
Borrower's or such Subsidiary's Managing Person shall have determined that the
terms and conditions relating thereto are as favorable to the Borrower or such
Subsidiary as those which would be obtainable at the time in a comparable
arms-length transaction with a Person other than an Affiliate.
8.12. AMENDMENTS, ETC. OF CERTAIN AGREEMENTS
The Borrower shall not, and shall not permit any Subsidiary to,
enter into or agree to any amendment, modification or waiver of any term
or condition of any of the Material Agreements or the Arris Loan Documents in
any way which could reasonably be expected to have a Material Adverse effect.
8.13. USE OF PROCEEDS
The Borrower shall not use the proceeds of the Extensions of Credit
for any purpose other than to (i) pay all of the Fees due hereunder, (ii)
pay the reasonable out-of-pocket fees and expenses incurred by the Borrower in
connection with the Loan Documents, (iii) finance working capital not
inconsistent with the provisions hereof, (iv) finance Capital Expenditures, (v)
repurchase shares of its Capital Stock pursuant to the Anixter Repurchase
Agreement so long as such shares are retired and the Administrative Agent shall
have received a certificate of a Financial Officer to such effect, and (vi) to
make Acquisitions and Investments permitted hereby provided, however, that no
part of such proceeds will be used, directly or indirectly, for a purpose which
violates any law, including the provisions of Regulation T, U or X.
8.14. RESTRICTIVE AGREEMENTS
The Borrower shall not, and shall not permit any Subsidiary to,
directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of the Borrower or any such Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets,
or (ii) the ability of any such Subsidiary to pay dividends or other
distributions with respect to any shares of its Capital Stock or to make or
repay loans or advances to the Borrower or any other Subsidiary of the Borrower
or to Guarantee Indebtedness of the Borrower or any other Subsidiary of the
Borrower, provided that the foregoing shall not apply to restrictions and
conditions imposed by applicable law or by this Agreement.
8.15. PREPAYMENTS OF INDEBTEDNESS; PAYMENTS OF SUBORDINATED INDEBTEDNESS
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The Borrower shall not, and shall not permit any Subsidiary to (i)
prepay or obligate itself to prepay, in whole or in part, any Indebtedness
(other than Indebtedness under the Loan Documents) or (ii) make any payment in
respect of principal of, or premium or interest on, or purchase, voluntarily
redeem or otherwise retire, or make any payment in respect of all or any part
of the Subordinated Notes except subject to the applicable subordination
provisions thereof.
8.16. FINANCIAL COVENANTS
(A) FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit the
Fixed Charge Coverage Ratio, as of the last day of any fiscal quarter, to be
less than the ratio set forth below with respect to the applicable period set
forth below:
Effective Date through
December 30, 1998 1.00:1.00
December 31, 1998 through
December 30, 1999 1.50:1.00
December 31, 1999 through
December 30, 2000 2.00:1.00
December 31, 2000 and
thereafter 2.50:1.00.
(B) MINIMUM NET WORTH. The Borrower shall maintain as of the last
day of each fiscal quarter, Net Worth in an amount not less than the sum of (i)
$215,000,000, plus (ii) 50% of the Borrower's consolidated net income (if
positive) for each fiscal year beginning with the fiscal year ending December
31, 1998 to such date of determination plus (iii) any increase to Net Worth
resulting from any Equity Issuance by the Borrower.
(C) RATIO OF TOTAL DEBT TO CAPITAL. The Borrower shall maintain at
all times a ratio of (i) Total Debt to (ii) the sum of (x) Total Debt and
(y) Net Worth of not greater than 0.45:1.00.
(D) CAPITAL EXPENDITURES. The Borrower shall not make any Capital
Expenditures (or incur any obligation to make any Capital Expenditure) or
permit any Subsidiary to do so, in any fiscal year in an aggregate amount in
excess of $12,500,000. Up to $2,500,000 of Capital Expenditures permitted for
a fiscal year may, to the extent not expended in such fiscal year, be carried
over and expended only in the immediately succeeding fiscal year.
8.17. DESIGNATED SENIOR INDEBTEDNESS
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The Borrower shall not designate any Indebtedness as "Designated
Senior Indebtedness" as defined in the Subordinated Indenture.
8.18. EQUITY ISSUANCES
The Borrower shall not permit any Subsidiary to issue Capital Stock.
ARTICLE 9. DEFAULTS
9.1. EVENTS OF DEFAULT
The following shall each constitute an "EVENT OF DEFAULT" hereunder:
(A) the failure of the Borrower to make (i) any payment of
principal on any Revolving Loan or in respect of any Reimbursement
Obligation, when due and payable; or (ii) any deposit into the Cash
Collateral Account when required hereby; or
(B) the failure of the Borrower to make any payment of interest,
Fees, expenses or other amounts payable under any Loan Document or
otherwise to the Administrative Agent with respect to the loan facilities
established hereunder within three Business Days of the date when due and
payable; or
(C) the failure of the Borrower to observe or perform any
covenant or agreement contained in Section 7.3(i), 7.7(i)-(v), 7.9,
7.10, 7.11, 7.14 or Article 8; or
(D) the failure of any Loan Party to observe or perform any other
term, covenant, or agreement contained in any Loan Document to which it
is a party and such failure shall have continued unremedied for a period
of 30 days after such Loan Party shall have obtained knowledge thereof;
or
(E) any representation or warranty made by any Loan Party (or
by an officer thereof on its behalf) in any Loan Document or in any
certificate, report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant thereto, shall prove to
have been incorrect or misleading (whether because of misstatement or
omission) in any material respect when made; or
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(F) (i) the occurrence of an Event of Default under, and as such
term is defined in, the Subordinated Indenture, or (ii) the failure of
any Loan Party to make any payment (whether of principal or interest and
regardless of amount) in respect of Material Liabilities when due or
within any grace period for the payment thereof; or
(G) any event or condition occurs that results in any Material
Liability becoming or being declared to be due and payable prior to the
scheduled maturity thereof, or that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of
any Material Liability or any trustee or agent on its or their behalf to
cause any Material Liability to be due and payable, or to require the
prepayment, repurchase, redemption or defeasance thereof, in each case
prior to the scheduled maturity thereof (in each case after giving effect
to any applicable grace period); or
(H) any Loan Party shall (i) suspend or discontinue its business
(except to the extent permitted by Section 7.3), (ii) make an assignment
for the benefit of creditors, (iii) generally not be paying its debts as
such debts become due, (iv) admit in writing its inability to pay its
debts as they become due, (v) file a voluntary petition in bankruptcy,
(vi) become insolvent (however such insolvency shall be evidenced), (vii)
file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment of debt, liquidation or
dissolution or similar relief under any present or future statute, law or
regulation of any jurisdiction, (viii) petition or apply to any tribunal
for any receiver, custodian or any trustee for any substantial part of
its property, (ix) be the subject of any such proceeding filed against it
which remains undismissed for a period of 45 days, (x) file any answer
admitting or not contesting the material allegations of any such petition
filed against it or any order, judgment or decree approving such petition
in any such proceeding, (xi) seek, approve, consent to, or acquiesce in
any such proceeding, or in the appointment of any trustee, receiver,
sequestrator, custodian, liquidator, or fiscal agent for it, or any
substantial part of its property, or an order is entered appointing any
such trustee, receiver, custodian, liquidator or fiscal agent and such
order remains in effect for 45 days, or (xii) take any formal action for
the purpose of effecting any of the foregoing or looking to the
liquidation or dissolution of the Borrower, such Subsidiary or such other
Loan Party; or
(I) an (i) order or decree is entered by a court having jurisdiction
(A) adjudging any Loan Party bankrupt or insolvent, (B) approving as
properly filed a petition seeking reorganization, liquidation,
arrangement, adjustment or composition of or in respect of any Loan Party
under the bankruptcy or insolvency laws of any jurisdiction, (C)
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of any Loan Party or of any
substantial part of the property of any thereof, or (D) ordering the
winding up or liquidation of the affairs of any Loan Party, and any such
decree or order continues unstayed and in effect for a period of 45 days
or (ii) order for relief is entered under the bankruptcy or insolvency
laws of any jurisdiction or any other; or
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(J) judgments or decrees against the Borrower or any Subsidiary
aggregating in excess of $500,000 (unless adequately insured by a solvent
unaffiliated insurance company which has acknowledged coverage) shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed
for a period of 30 days; or
(K) any Loan Document shall cease, for any reason, to be in full
force and effect (other than in accordance with its terms), or any Loan
Party shall so assert in writing or shall disavow any of its obligations
thereunder; or
(L) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on, and security interest in, any Collateral,
with the priority required by the applicable Security Document, except as
a result of a Disposition thereof to the extent permitted under the Loan
Documents; or
(M) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Borrower and the Subsidiaries in an aggregate amount exceeding (i)
$500,000 in any year or (ii) $1,000,000 for all period; or
(N) the occurrence of a Change of Control.
9.2. CONTRACT REMEDIES
(A) Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof,
(I) in the case of an Event of Default specified in
Section 9.1(h) or 9.1(i), without declaration or notice to the
Borrower, all of the Commitments shall immediately and automatically
terminate, and the Revolving Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents shall
immediately become due and payable, and
(II) in all other cases, upon the direction of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower,
declare all of the Commitments to be terminated forthwith, whereupon such
Commitments shall immediately terminate, and/or declare the Revolving
Loans, all accrued and unpaid interest thereon and all
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other amounts owing under the Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
In the event that the Revolving Loans, all accrued and unpaid interest thereon
and all other amounts owing under the Loan Documents shall have been declared
due and payable pursuant to the provisions of this Section 9.2, (i) the
Administrative Agent (A) upon the direction of the Required Lenders, shall
proceed to enforce the rights of the holders of the Notes and the Reimbursement
Obligations by suit in equity, action at law and/or other appropriate
proceedings, whether for payment or the specific performance of any covenant or
agreement contained in the Loan Documents and (B) may exercise any and all
rights and remedies provided to the Administrative Agent by the Loan Documents
and (ii) the Borrower shall deposit in the Cash Collateral Account, Cash
Collateral in an amount equal to the Letter of Credit Exposure after giving
effect to all payments required under this Section 9.2(a). Except as otherwise
expressly provided in the Loan Documents, the Borrower expressly waives
presentment, demand, protest and all other notices of any kind in connection
with the Loan Documents. The Borrower hereby further expressly waives and
covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, now or at any time hereafter in force which might
delay, prevent or otherwise impede the performance or enforcement of any Loan
Document.
(B) In the event that all of the Commitments shall have been terminated or
the Revolving Loans, all accrued and unpaid interest thereon and all other
amounts owing under the Loan Documents shall have been declared due and payable
pursuant to the provisions of this Section 9.2, any funds received by any
Credit Party from or on behalf of the Borrower (except funds received by any
Lender as a result of a purchase from any other Lender pursuant to Section
2.6(c)) shall be remitted to, and applied by, the Administrative Agent in the
following manner and order:
(I) first, to the payment of interest on, and then the principal
portion of, any Revolving Loans which the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative Agent has
not then been reimbursed by such Lender or any Loan Party;
(II) second, to reimburse the Agents, the Issuer and the Lenders, in
that order, for any expenses due from the Borrower pursuant to the
provisions of Section 11.4,
(III) third, to the payment of interest on, and then the principal
portion of, the Reimbursement Obligations,
(IV) fourth, to the payment of the Fees, pro rata according to the
Fees due and owing the Administrative Agent, the Issuer and the Lenders,
(V) fifth, to the payment of any other fees, expenses or other
amounts
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(other than the principal of and interest on the Revolving Loans)
payable by the Loan Parties to the Credit Parties under the Loan
Documents,
(VI) sixth, to the payment, pro rata according to the Total
Percentage of each Lender, of interest due on the Revolving Loans,
(VII) seventh, to the payment to the Lenders of, and on a pro rata
basis in accordance with, the unpaid principal amount of the Revolving
Loans and each amount then due and payable under each Secured Hedging
Agreement, and
(VIII) eighth, any remaining funds shall be paid to the Borrower or
as a court of competent jurisdiction shall direct.
ARTICLE 10. THE AGENTS
10.1. APPOINTMENT
Each of the Lenders hereby irrevocably appoints BNY as the
Administrative Agent and Bank of America as the Collateral Agent and
authorizes each Agent to take such actions on its behalf and to exercise such
powers as are delegated to it by the terms hereof, together with such actions
and powers as are reasonably incidental thereto.
10.2. INDIVIDUAL CAPACITY
Each Person serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower, any Subsidiary, or any Affiliate of the
Borrower as if it were not an Agent hereunder.
10.3. EXCULPATORY PROVISIONS
Neither Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(1) neither Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (2) neither
Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that such Agent is required to exercise in writing by the
Required Lenders (or such other number or percentage of the
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Lenders as shall be necessary under the circumstances as provided in
Section 11.1), (3) except as expressly set forth herein, neither Agent shall
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any Subsidiary that is communicated
to or obtained by the bank serving as such Agent or any of its Affiliates in
any capacity and (4) the sole responsibility of the Collateral Agent shall be
to conduct collateral audits and monitor the Borrowing Base Amount. Neither
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 11.1) or in the absence of its own gross negligence or willful
misconduct. Neither Agent shall be deemed to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the Borrower
or another Credit Party and neither Agent shall be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreements, instrument or document, or (v) the satisfaction of any condition
set forth in Articles 5 or 6 or elsewhere herein, other than to confirm receipt
of items expressly required to be delivered to such Agent.
10.4. RELIANCE BY AGENTS
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel to the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action, refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Credit Parties.
10.5. DELEGATION
Each Agent may perform any and all of its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by such
Agent, provided that no such delegation
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shall serve as a release of such Agent or waiver by the Borrower of any
rights hereunder. Each Agent and any such sub-agent may perform any and all of
its duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of this Article 10 shall apply to any such
sub-agent and to the Related Parties of the Agents and any such sub-agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as such
Agent.
10.6. RESIGNATION; SUCCESSOR AGENTS
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this Section 10.6, either Agent may resign
at any time by notifying the Lenders and the Borrower. Upon resignation of
Bank of America as Collateral Agent, the Person then serving as Administrative
Agent shall become the Collateral Agent. Upon any resignation of the
Administrative Agent, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After an Agent's resignation
hereunder, the provisions of this Article and Section 11.1 shall continue in
effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or permitted to be
taken by any of them while it was acting as an Agent.
10.7. NON-RELIANCE ON OTHER CREDIT PARTIES; CREDIT DECISION
(A) Each Credit Party acknowledges that it has, independently and
without reliance upon either Agent or any other Credit Party and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon either Agent
or any other Credit Party and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any related
agreement or any document furnished hereunder or thereunder.
(B) Each Credit Party acknowledges that neither of the Agents nor
any of their
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respective Related Persons, has made any representation or warranty to it, and
that no act by either Agent hereinafter taken, including any review of the
affairs of the Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by either Agent or any of their respective Related
Persons, to any other Credit Party.
(C) Except for notices, reports and other documents expressly herein
required to be furnished to the Credit Parties by either Agent, neither Agent
shall have any duty or responsibility to provide any other Credit Party
concerning the business, prospects, operations, property, financial or other
condition or creditworthiness of the Borrower or any of its Subsidiaries which
may come into the possession of either of the Agents or their respective
Related Persons.
ARTICLE 11. OTHER PROVISIONS
11.1. AMENDMENTS AND WAIVERS
(A) No failure to exercise and no delay in exercising, on the part
of any Credit Party, 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 right, remedy, power or privilege under any Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
under the Loan Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law. No waiver of any provision of
any Loan Document or consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same shall be permitted by this Section
11.1, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality
of the foregoing, the making of an Extension of Credit shall not be construed
as a waiver of any Default, regardless of whether any Credit Party may have had
notice or knowledge of such Default at the time.
(B) Notwithstanding anything to the contrary contained in any Loan
Document, with the written consent of the Required Lenders, the Administrative
Agent and the appropriate parties to the Loan Documents (other than the other
Credit Parties) may, from time to time, enter into written amendments,
supplements or modifications thereof and, with the consent of the
Required Lenders, the Administrative Agent on behalf of the other Credit
Parties, may execute and deliver to any such parties a written instrument
waiving or consenting to the departure from, on such terms and conditions as
the Administrative Agent may specify in such instrument, any of the
requirements of the Loan Documents or any Default and its consequences;
provided, however, that no such amendment, supplement, modification, waiver or
consent shall:
(I) increase the Revolving Commitment of any Lender, without
such Lender's consent;
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(II) unless agreed to by each Credit Party affected thereby, (A)
reduce the principal amount of any Extension of Credit, or reduce the
rate of interest thereon, or reduce any fees or other obligations payable
under the Loan Documents, (B) extend any date (including the Revolving
Loan Maturity Date) fixed for the payment of any principal of or interest
on any Extension of Credit, any fees, or any other obligation payable
under the Loan Documents or (C) extend the expiration date of any Letter
of Credit beyond the Revolving Loan Maturity Date;
(III) unless agreed to by all of the Lenders, (A) increase the
Aggregate Revolving Commitment, (B) change the definition of "Required
Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, (C)
change Section 2.6 in a manner that would alter the pro rata sharing of
payments required thereby, (D) consent to any assignment or delegation by
any Loan Party of any of its rights or obligations under any Loan
Document, (E) release any Subsidiary Guarantor from its obligations under
the Subsidiary Guarantee (except as expressly provided herein or as a
result of the termination of the existence of such Subsidiary Guarantor
in a transaction permitted by Sections 8.3, 8.4 or 8.6), or (F) release
any of the Collateral from the Liens of the Security Documents (except as
may be expressly permitted thereunder or in connection with a transaction
permitted by Sections 8.3, 8.4 or 8.6); and
(IV) unless agreed to by all of the Lenders and by each party to a
Secured Hedging Agreement which is no longer a Lender, (A) release any
Subsidiary Guarantor from its obligations under the Subsidiary Guarantee
(except as expressly provided herein or as a result of the termination of
the existence of such Subsidiary Guarantor in a transaction permitted by
Sections 8.3, 8.4 or 8.6), or (B) release any of the Collateral from the
Liens of the Security Documents (except as may be expressly permitted
thereunder or in connection with a transaction permitted by Sections 8.3,
8.4 or 8.6); and
(V) unless agreed to by an Agent or the Issuer, amend, modify or
otherwise affect the rights or duties of such Agent or the Issuer,
respectively, under the Loan Documents.
Any such amendment, supplement, modification, waiver or consent shall
apply equally to each Credit Party and shall be binding upon each Credit Party
and each Loan Party to the applicable Loan Document, and upon all future
holders of the Notes and the Reimbursement Obligations. In the case of any
waiver, the Credit Parties and each Loan Party to the applicable Loan
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Document shall be restored to their former position and rights hereunder and
under the outstanding Notes and other Loan Documents to the extent provided for
in such waiver, and any Default waived shall not extend to any subsequent or
other Default, or impair any right consequent thereon.
11.2. NOTICES
All notices, requests and demands to or upon the respective parties
to the Loan Documents to be effective shall be in writing and, unless
otherwise expressly provided therein, shall be deemed to have been duly given
or made when delivered by hand, one Business Day after having been sent by
overnight courier service, or when deposited in the mail, first-class postage
prepaid, or, in the case of notice by facsimile, when sent, to the last address
(including telephone and facsimile numbers) for such party specified by such
party in a written notice delivered to the Administrative Agent and the
Borrower or, if no such written notice was so delivered, as follows:
(A) in the case of any Loan Party, to such Loan Party c/o ANTEC
Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇;
(B) in the case of the Administrative Agent, to The Bank of New
York, Agency Function Administration, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇ or 6366 or 6367; with a copy to: The Bank of New
York, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile (▇▇▇) ▇▇▇-▇▇▇▇;
(C) in the case of the Collateral Agent, to Bank of America National
Trust and Savings Association, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Telephone: (312)
▇▇▇-▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇;
(D) in the case of the Issuer, to The First National Bank of
Chicago, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile: (312)
732-5296; and
(E) in the case of a Lender, at its address set forth on its
signature page hereto or, in the Assignment or Acceptance Agreement or
other instrument pursuant to which it became a Lender;
provided, however, that any notice, request or demand by the Borrower pursuant
to Sections 2.2, 2.3, 2.4, 2.5 or 3.3 shall not be effective until received.
Any party to a Loan Document may rely on signatures of the parties thereto
which are transmitted by facsimile or other electronic means as fully as if
originally signed.
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11.3. SURVIVAL
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Extensions of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder.
11.4. EXPENSES; INDEMNITY
(A) The Borrower agrees, on demand therefor and whether any
Extension of Credit is made (i) to pay or reimburse each of the Agents, the
Issuer and their respective Related Parties for all reasonable out-of-pocket
expenses incurred thereby, including the reasonable fees, charges and
disbursements of counsel, in connection with the development, preparation,
execution, syndication and administration of, the Loan Documents (including any
amendment, supplement or other modification thereto (whether or not executed or
effective)), any documents prepared in connection therewith and the
consummation of the transactions contemplated thereby, (ii) to pay or reimburse
the Collateral Agent for all reasonable out-of-pocket expenses incurred in
connection with the collateral audits, and (iii) to pay or reimburse each
Credit Party for all of its costs and expenses, including reasonable fees and
disbursements of counsel, incurred in connection with (A) the protection or
enforcement of its rights under the Loan Documents, including any related
collection proceedings and any negotiation, restructuring or "work-out", and
(B) the enforcement of this Section.
(B) The Borrower shall, on demand therefor, indemnify each Credit
Party and each of their respective Related Parties (each, an "INDEMNIFIED
PERSON") against, and hold each Indemnified Person harmless from, any and all
losses, claims, damages, penalties, liabilities and related expenses, including
the fees, charges and disbursements of any counsel, incurred by or asserted
against any Indemnified Person in connection with or in any way arising out of
any Loan Document, any other Transaction Document or any Transaction, including
as a result of (i) any breach by the Borrower of the terms of any Loan
Document, the use of proceeds of any Extension of Credit or any action or
failure to act on the part of the Borrower, (ii) the consummation or proposed
consummation of the Transactions or any other transactions contemplated hereby,
(iii) any Extension of Credit or the use of the proceeds therefrom, (iv) any
actual or alleged presence or release of Hazardous Substance on or from any
property owned or operated by the Borrower or any of its Subsidiaries, or any
liability in respect of any Environmental Law related in any way to the
Borrower or any of its Subsidiaries,
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(v) any action or failure to act on the part of the Borrower or (vi) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnified Person is a party thereto
(collectively, the "INDEMNIFIED LIABILITIES"), provided that such indemnity
shall not, as to any Indemnified Person, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the
gross negligence or wilful misconduct of such Indemnified Person.
(C) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or any of its Affiliates
under subsections (a) or (b) of this Section 11.4, each Lender severally
agrees, on demand therefor, to pay to the Administrative Agent such Lender's
Total Percentage of such amount (determined as of the time that the applicable
unreimbursed expense or Indemnified Liability is sought).
(D) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnified Person for any
special, indirect, consequential or punitive damages (whether accrued and
whether known or suspected to exist in its favor) arising out of, in connection
with, or as a result of, the Loan Documents, the transactions contemplated
thereby or any Extension of Credit or the use of the proceeds thereof.
11.5. SUCCESSORS AND ASSIGNS
(A) The Loan Documents shall be binding upon and inure to the
benefit of each of the parties thereto, and their respective successors
and assigns, except that no Loan Party may assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Credit Party (and any such attempted assignment or transfer without such
consent shall be null and void).
(B) Each Lender may assign all or a portion of its rights and
obligations under the Loan Documents to (i) any Subsidiary or Affiliate of
such Lender, (ii) any other Lender, or (iii) with the consent of the Borrower,
the Administrative Agent and the Issuer (which consents shall not be
unreasonably withheld or delayed and, in the case of the Borrower's consent,
shall not be required during the continuance of an Event of Default), to any
other Eligible Institution, provided that:
(A) each such assignment shall be of a constant, and not a
varying, percentage of all of the assignor Lender's rights and
obligations under the Loan Documents;
(B) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's Revolving Commitment, the amount of the Revolving
Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance Agreement with
respect to such assignment is delivered to the Administrative Agent) shall
not be less
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than $5,000,000; and
(C) the assignor and such assignee shall deliver to the
Administrative Agent three copies of an Assignment and Acceptance
Agreement executed by each of them, along with an assignment fee in the
sum of $3,500 for the account of the Administrative Agent and, if the
assignee is not then a Lender and is a Foreign Credit Party, the
documents required by Section 3.7(c).
Upon receipt of such number of executed copies of each such Assignment and
Acceptance Agreement together with the assignment fee therefor and the consents
required to such assignment, if required, the Administrative Agent shall record
the same and execute not less than two copies of such Assignment and Acceptance
Agreement in the appropriate place, deliver one such copy to the assignor and
one such copy to the assignee, and deliver one photocopy thereof, as executed,
to the Borrower. From and after the Assignment Effective Date specified in,
and as defined in, such Assignment and Acceptance Agreement, the assignee
thereunder shall, unless already a Lender, become a party hereto and shall, for
all purposes of the Loan Documents, be deemed a "Lender" and, to the extent
provided in such Assignment and Acceptance Agreement, the assignor Lender
thereunder shall be released from its obligations under this Agreement and the
other Loan Documents. The Borrower agrees that, if requested, in connection
with each such assignment, it shall at its own cost and expense execute and
deliver to the Administrative Agent or such assignee a Note, each payable to
the order of such assignee and dated the Effective Date. The Administrative
Agent shall be entitled to rely upon the representations and warranties made by
the assignee under each Assignment and Acceptance Agreement.
(C) Each Lender may grant participations in all or any part of its rights
and obligations under the Loan Documents to one or more Eligible Institutions,
provided that (i) such Lender's obligations under this Agreement and the other
Loan Documents shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties to this Agreement and the other Loan Documents
for the performance of such obligations, (iii) the Borrower and the Credit
Parties shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents,
(iv) the granting of such participation does not require that any additional
loss, cost or expense be borne by the Borrower at any time, and (v) the voting
rights of any holder of any participation shall be limited to decisions that in
accordance with Section 11.1 require the consent of all of the Lenders.
(D) Subject to subsection (e) below, any Lender may at any time assign
all or any portion of its rights under any Loan Document to any Federal Reserve
Bank.
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(E) Except to the extent of any assignment pursuant to subsection (b)
above, no Lender shall be relieved of any of its obligations under the Loan
Documents as a result of any assignment of or granting of participations in,
all or any part of its rights and obligations under the Loan Documents.
11.6. COUNTERPARTS; INTEGRATION
Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same document. It shall not be necessary in making proof of any Loan Document
to produce or account for more than one counterpart signed by the party to be
charged. Delivery of an executed counterpart of a signature page of any Loan
Document by facsimile shall be effective as delivery of a manually executed
counterpart of such Loan Document. The Loan Documents and any separate letter
agreements between the Borrower and a Credit Party with respect to fees embody
the entire agreement and understanding among the Loan Parties and the Credit
Parties with respect to the subject matter thereof and supersede all prior
agreements and understandings among the Loan Parties and the Credit Parties
with respect to the subject matter thereof.
11.7. SEVERABILITY
Every provision of the Loan Documents is intended to be severable,
and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction.
11.8. GOVERNING LAW
THE LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
11.9. JURISDICTION; SERVICE OF PROCESS
Each party to a Loan Document hereby irrevocably submits to the
nonexclusive jurisdiction of any New York State or Federal court sitting in the
City of New York over any suit, action or proceeding arising out of or relating
to the Loan Documents. Each party to a Loan Document hereby irrevocably
waives, to the fullest extent permitted or not prohibited by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in such a court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an
inconvenient forum. Each Loan Party hereby agrees that a final judgment in any
such suit, action or proceeding brought in such a court, after all appropriate
appeals,
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shall be conclusive and binding upon it and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that a Credit Party may
otherwise have to bring any action or proceeding relating to Loan Documents
against the Borrower or its properties in the courts of any jurisdiction. Each
party to a Loan Document hereby irrevocably consents to service of process in
the manner provided for notices in Section 11.2. Nothing in this Agreement
will affect the right of any party to a Loan Document to serve process in any
other manner permitted by law.
11.10. WAIVER OF TRIAL BY JURY
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.10.
11.11. CONSENT OF BANK OF AMERICA AS COUNTERPARTY TO EXISTING HEDGING
AGREEMENT
By signing below, Bank of America consents to the termination of the
Terminating Bank Debt, the release of the guarantees and all Liens thereunder
and agrees that the Existing Hedging Agreement to which it is a party shall be
considered a Secured Hedging Agreement under the Loan Documents.
ARTICLE 12. SUBSIDIARY GUARANTEE
The Subsidiary Guarantors agree that, so long as any Commitment is
in effect and until the principal of, and interest on, each Revolving Loan, all
Reimbursement Obligations, all Fees and all other amounts payable under the
Loan Documents shall have been paid in full:
12.1. GUARANTEE
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(A) Subject to Section 12.1(b), each Subsidiary Guarantor hereby
absolutely, irrevocably and unconditionally guarantees the full and prompt
payment when due (whether at stated maturity, by acceleration or otherwise) of
the Borrower Obligations. The agreements of each Subsidiary Guarantor under
this Article 12 constitute a guarantee of payment, and no Credit Party shall
have any obligation to enforce any Loan Document or exercise any right or
remedy with respect to any collateral security thereunder by any action,
including making or perfecting any claim against any Person or any collateral
security for any of the Borrower Obligations prior to being entitled to the
benefits of this Agreement. The Administrative Agent may, at its option,
proceed against the Subsidiary Guarantors, or any one or more of them, in the
first instance, to enforce the Guarantor Obligations without first proceeding
against the Borrower or any other Person, and without first resorting to any
other rights or remedies, as the Administrative Agent may deem advisable. In
furtherance hereof, if any Credit Party is prevented by law from collecting or
otherwise hindered from collecting or otherwise enforcing any Borrower
Obligation in accordance with its terms, such Credit Party shall be entitled to
receive hereunder from the Subsidiary Guarantors after demand therefor, the
sums that would have been otherwise due had such collection or enforcement not
been prevented or hindered.
(B) Notwithstanding anything to the contrary contained herein, the maximum
aggregate amount of the obligations of each Subsidiary Guarantor hereunder
shall not, as of any date of determination, exceed the lesser of (i) the
greatest amount that is valid and enforceable against such Subsidiary Guarantor
under principles of New York State contract law, and (ii) the greatest amount
that would not render such Subsidiary Guarantor's liability hereunder subject
to avoidance as a fraudulent transfer or conveyance under Section 548 of Title
11 of the United States Code or any provisions of applicable state law
(collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving
effect to all other liabilities of such Subsidiary Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liability (A) in respect of intercompany indebtedness
to the Borrower or any affiliate or subsidiary of the Borrower, to the extent
that such intercompany indebtedness would be discharged in an amount equal to
the amount paid by such Subsidiary Guarantor hereunder, and (B) under any
guarantee of (1) senior unsecured indebtedness, or (2) indebtedness
subordinated in right of payment to any Borrower Obligation, in either case
that contains a limitation as to maximum liability similar to that set forth in
this Section 12.1(b) and pursuant to which the liability of such Subsidiary
Guarantor hereunder is included in the liabilities taken into account in
determining such maximum liability) and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights of such Subsidiary Guarantor pursuant to applicable law or any
agreement providing for an equitable allocation among such Subsidiary Guarantor
and other affiliates or subsidiaries of the Borrower of obligations arising
under guarantees by such parties.
(C) Each Subsidiary Guarantor agrees that the Guarantor Obligations may at
any time and from time to time exceed the maximum aggregate amount of the
obligations of such
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Subsidiary Guarantor hereunder without impairing this Agreement or affecting
the rights and remedies of any Credit Party hereunder.
12.2. ABSOLUTE OBLIGATION
Subject to Section 12.5(c), no Subsidiary Guarantor shall be
released from liability hereunder unless and until the Commitments have
terminated and either (i) the Borrower shall have paid in full the outstanding
principal balance of the Revolving Loans, together with all accrued and unpaid
interest thereon, and all other amounts then due and owing under the Loan
Documents, or (ii) the Guarantor Obligations of such Subsidiary Guarantor shall
have been paid in full in cash. Each Subsidiary Guarantor acknowledges and
agrees that (a) no Credit Party has made any representation or warranty to such
Subsidiary Guarantor with respect to the Borrower, any of its Subsidiaries, any
Loan Document, or any agreement, instrument or document executed or delivered
in connection therewith, or any other matter whatsoever, and (b) such
Subsidiary Guarantor shall be liable hereunder, and such liability shall not be
affected or impaired, irrespective of (A) the validity or enforceability of any
Loan Document, or any agreement, instrument or document executed or delivered
in connection therewith, or the collectability of any of the Borrower
Obligations, (B) the preference or priority ranking with respect to any of the
Borrower Obligations, (C) the existence, validity, enforceability or perfection
of any security interest or collateral security under any Loan Document, or the
release, exchange, substitution or loss or impairment of any such security
interest or collateral security, (D) any failure, delay, neglect or omission by
any Credit Party to realize upon or protect any direct or indirect collateral
security, indebtedness, liability or obligation, any Loan Document, or any
agreement, instrument or document executed or delivered in connection
therewith, or any of the Borrower Obligations, (E) the existence or exercise of
any right of set- off by any Credit Party, (F) the existence, validity or
enforceability of any other guarantee with respect to any of the Borrower
Obligations, the liability of any other Person in respect of any of the
Borrower Obligations, or the release of any such Person or any other guarantor
of any of the Borrower Obligations, (G) any act or omission of any Credit Party
in connection with the administration of any Loan Document or any of the
Borrower Obligations, (H) the bankruptcy, insolvency, reorganization or
receivership of, or any other proceeding for the relief of debtors commenced by
or against, any Person, (I) the disaffirmance or rejection, or the purported
disaffirmance or purported rejection, of any of the Borrower Obligations, any
Loan Document, or any agreement, instrument or document executed or delivered
in connection therewith, in any bankruptcy, insolvency, reorganization or
receivership, or any other proceeding for the relief of debtor, relating to any
Person, (J) any law, regulation or decree now or hereafter in effect that might
in any manner affect any of the terms or provisions of any Loan Document, or
any agreement, instrument or document executed or delivered in connection
therewith or any of the Borrower Obligations, or that might cause or permit to
be invoked any alteration in the time, amount, manner or payment or performance
of any of the Borrower's obligations and liabilities
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(including the Borrower Obligations), (K) the merger or consolidation of the
Borrower into or with any Person, (L) the sale by the Borrower of all or any
part of its assets, (M) the fact that at any time and from time to time none of
the Borrower Obligations may be outstanding or owing to any Credit Party, (N)
any amendment or modification of, or supplement to, any Loan Document, or (O)
any other reason or circumstance that might otherwise constitute a defense
available to or a discharge of the Borrower in respect of its obligations or
liabilities (including the Borrower Obligations) or of such Subsidiary
Guarantor in respect of any of the Guarantor Obligations (other than by the
performance in full thereof).
12.3. REPAYMENT IN BANKRUPTCY, ETC.
If, at any time or times subsequent to the payment of all or any
part of the Borrower Obligations or the Guarantor Obligations, any Credit Party
shall be required to repay any amounts previously paid by or on behalf of the
Borrower or any Subsidiary Guarantor in reduction thereof by virtue of an order
of any court having jurisdiction in the premises, including as a result of an
adjudication that such amounts constituted preferential payments or fraudulent
conveyances, the Subsidiary Guarantors unconditionally agree to pay to the
Administrative Agent, within 10 days after demand, a sum in cash equal to the
amount of such repayment, together with interest on such amount from the date
of such repayment by such Credit Party to the date of payment to the
Administrative Agent at the applicable after-maturity rate set forth in Section
3.1(b).
12.4. ADDITIONAL SUBSIDIARY GUARANTORS
Upon the execution and delivery to the Administrative Agent of a
Guarantee Supplement by any Person, appropriately acknowledged, such
Person shall be a Subsidiary Guarantor.
12.5. MISCELLANEOUS
(A) Each Subsidiary Guarantor agrees that any statement of account
with respect to the Borrower Obligations from any Credit Party that binds the
Borrower shall also be binding upon such Subsidiary Guarantor, and that copies
of said statements of account maintained in the regular course of such Credit
Party's business may be used in evidence against such Subsidiary Guarantor in
order to establish its Guarantor Obligations.
(B) Subject to the limitations set forth in Section 12.1(b), the
Guarantor Obligations shall be joint and several.
(C) Notwithstanding anything to the contrary contained herein, on
and as of the date of any merger, consolidation, Acquisition or Disposition
permitted by Section 8.3, 8.5 or 8.6, as the case may be, that shall result in
any Subsidiary Guarantor ceasing to be a Subsidiary, such
96
Subsidiary Guarantor shall, without the consent of any Credit Party, cease to
be a Subsidiary Guarantor and shall have no further liability hereunder.
-115-
97
IN WITNESS WHEREOF, the parties hereto have caused this Credit and
Guarantee Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above written.
ANTEC CORPORATION
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
ANTEC LATIN AMERICA, INC.
ANTEC DIGITAL VIDEO INC.
ELECTRONIC CONNECTOR
CORPORATION OF ILLINOIS
ELECTRONIC SYSTEM PRODUCTS INC.
ENGINEERING TECHNOLOGIES GROUP INC.
ITEL HOLDINGS, INC.
KEPTEL, INC.
REGAL TECHNOLOGIES, LTD.
POWER GUARD, INC.
COMFAB TECHNOLOGIES, INC.
BENEFIT CONNECTIONS, INC.
ANTEC INTERNATIONAL HOLDINGS INC.
ANTEC PACIFIC INC.
ANTEC SPAIN INC.
SCIENTIFIC-ATLANTA LA VENTURE, INC.
TEXSCAN CORPORATION
AS TO EACH OF THE FOREGOING
By:
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
98
ANIXTER CATV INDUSTRIES
MSO SUPPLY COMPANY
TSX CORPORATION
TEXSCAN MSI CORPORATION
TEXSCAN TRADING COMPANY
AS TO EACH OF THE FOREGOING
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
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ANTEC CORPORATION CREDIT AND GUARANTEE AGREEMENT
THE BANK OF NEW YORK,
as Administrative Agent
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address for Notices
The Bank of New York
Agency Function Administration
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or 6366
or 6367
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇;
100
ANTEC CORPORATION CREDIT AND GUARANTEE AGREEMENT
THE BANK OF NEW YORK COMPANY, INC.
By:
-----------------------------------
Name:
Title:
Commitment: $22,500,000
Address for Notices
The Bank of New York Company, Inc.
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
The Bank of New York
Agency Function Administration
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ or 6366
or 6367
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
101
ANTEC CORPORATION CREDIT AND GUARANTEE AGREEMENT
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
------------------------------------
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Collateral Agent
By:
------------------------------------
Name:
Title:
Commitment: $22,500,000
Address for Notices
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
102
ANTEC CORPORATION CREDIT AND GUARANTEE AGREEMENT
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Issuer
By:
------------------------------------
Name:
Title:
Commitment: $20,000,000
Address for Notices
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
103
ANTEC CORPORATION CREDIT AND GUARANTEE AGREEMENT
WACHOVIA BANK, N.A.
By:
------------------------------------
Name:
Title:
Commitment: $10,000,000
Address for Notices
Wachovia Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
104
ANTEC CORPORATION CREDIT AND GUARANTEE AGREEMENT
CREDIT AGRICOLE INDOSUEZ
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Commitment: $10,000,000
Address for Notices
Credit Agricole Indosuez
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇