Exhibit 10.51
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LOAN AND SECURITY AGREEMENT
Dated as of July 13, 1999
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders,
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BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as the Agent
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and
ADVANCED MICRO DEVICES, INC., and
AMD INTERNATIONAL SALES AND SERVICE, LTD.,
collectively, as the Borrower
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Arranged by
BANC OF AMERICA SECURITIES, LLC
as Sole Lead Arranger and Sole Book Runner
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TABLE OF CONTENTS
Section Page
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ARTICLE 1 INTERPRETATION OF THIS AGREEMENT....................................................... 1
1.1 Definitions............................................................................ 1
1.2 Accounting Terms; UCC Terms............................................................ 25
1.3 Interpretive Provisions................................................................ 25
ARTICLE 2 LOANS AND LETTERS OF CREDIT............................................................ 26
2.1 Revolving Facility..................................................................... 26
2.2 Revolving Loans........................................................................ 26
2.3 Bank Products.......................................................................... 34
2.4 Letters of Credit...................................................................... 35
ARTICLE 3 INTEREST AND FEES...................................................................... 41
3.1 Interest............................................................................... 41
3.2 Conversion and Continuation Elections.................................................. 42
3.3 Maximum Interest Rate.................................................................. 43
3.4 Arrangement Fee........................................................................ 44
3.5 Unused Line Fee........................................................................ 44
3.6 Letter of Credit Fee................................................................... 44
ARTICLE 4 PAYMENTS AND PREPAYMENTS............................................................... 44
4.1 Revolving Loans........................................................................ 44
4.2 Termination of Facility................................................................ 45
4.3 Payments by the Borrower............................................................... 45
4.4 Payments as Revolving Loans............................................................ 46
4.5 Apportionment, Application and Reversal of Payments.................................... 46
4.6 Indemnity for Returned Payments........................................................ 47
4.7 Agent's and Lenders' Books and Records; Monthly Statements............................. 47
ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY................................................. 48
5.1 Taxes.................................................................................. 48
5.2 Illegality............................................................................. 49
5.3 Increased Costs and Reduction of Return................................................ 49
5.4 Funding Losses......................................................................... 50
5.5 Inability to Determine Rates........................................................... 50
5.6 Certificates of Lenders................................................................ 50
5.7 Survival............................................................................... 50
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Section Page
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ARTICLE 6 COLLATERAL............................................................................. 51
6.1 Grant of Security Interest............................................................. 51
6.2 Perfection and Protection of Security Interest......................................... 52
6.3 Location of Collateral................................................................. 53
6.4 Title to, Liens on, and Sale and Use of Collateral..................................... 53
6.5 Appraisals............................................................................. 54
6.6 Access and Examination; Confidentiality................................................ 54
6.7 Collateral Reporting................................................................... 55
6.8 Accounts............................................................................... 56
6.9 Collection of Accounts; Payments....................................................... 57
6.10 Inventory; Perpetual Inventory......................................................... 58
6.11 Documents, Instruments, and Chattel Paper.............................................. 58
6.12 Right to Cure.......................................................................... 59
6.13 Power of Attorney...................................................................... 59
6.14 The Agent's and Lenders' Rights, Duties and Liabilities................................ 59
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES...................................... 60
7.1 Books and Records...................................................................... 60
7.2 Financial Information.................................................................. 60
7.3 Notices to the Lenders................................................................. 62
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS................................................. 65
8.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents... 65
8.2 Validity and Priority of Security Interest............................................. 65
8.3 Organization and Qualification......................................................... 65
8.4 Corporate Name; Prior Transactions..................................................... 65
8.5 Subsidiaries and Affiliates............................................................ 65
8.6 Financial Statements and Projections................................................... 66
8.7 Solvency............................................................................... 66
8.8 Debt................................................................................... 66
8.9 Distributions.......................................................................... 66
8.10 Title to Property...................................................................... 66
8.11 Trade Names............................................................................ 66
8.12 Litigation............................................................................. 67
8.13 Restrictive Agreements................................................................. 67
8.14 Labor Disputes......................................................................... 67
8.15 Environmental Laws..................................................................... 67
8.16 No Violation of Law.................................................................... 68
8.17 No Default............................................................................. 68
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Section Page
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8.18 ERISA Compliance....................................................................... 68
8.19 Taxes.................................................................................. 69
8.20 Regulated Entities..................................................................... 69
8.21 Use of Proceeds; Margin Regulations.................................................... 69
8.22 Copyrights, Patents, Trademarks and Licenses, etc...................................... 69
8.23 No Material Adverse Change............................................................. 69
8.24 Full Disclosure........................................................................ 70
8.25 Governmental Authorization............................................................. 70
8.26 Insurance.............................................................................. 70
ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS..................................................... 70
9.1 Taxes and Other Obligations............................................................ 70
9.2 Corporate Existence and Good Standing.................................................. 71
9.3 Compliance with Law and Agreements; Maintenance of Licenses............................ 71
9.4 Maintenance of Property................................................................ 71
9.5 Insurance.............................................................................. 71
9.6 Environmental Laws..................................................................... 72
9.7 Compliance with ERISA.................................................................. 72
9.8 Mergers, Consolidations or Sales....................................................... 72
9.9 Distributions; Capital Change; Restricted Investments.................................. 73
9.10 Transactions Affecting Collateral or Obligations....................................... 74
9.11 Guaranties............................................................................. 74
9.12 Debt................................................................................... 74
9.13 Prepayment............................................................................. 74
9.14 Transactions with Affiliates........................................................... 74
9.15 Investment Banking and Finder's Fees................................................... 75
9.16 Business Conducted..................................................................... 75
9.17 Liens.................................................................................. 75
9.18 Fiscal Year............................................................................ 76
9.19 Adjusted Tangible Net Worth............................................................ 76
9.20 EBITDA................................................................................. 76
9.21 Use of Proceeds........................................................................ 77
9.22 Further Assurances..................................................................... 77
ARTICLE 10 CONDITIONS PRECEDENT................................................................... 78
10.1 Conditions to Effectiveness............................................................ 78
10.2 Conditions of Initial Loans............................................................ 79
10.3 Conditions Precedent to Each Loan...................................................... 81
ARTICLE 11 DEFAULT; REMEDIES...................................................................... 82
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Section Page
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11.1 Events of Default...................................................................... 82
11.2 Remedies............................................................................... 85
ARTICLE 12 TERM AND TERMINATION................................................................... 86
12.1 Term and Termination................................................................... 86
ARTICLE 13 AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS............................ 87
13.1 No Waivers; Cumulative Remedies........................................................ 87
13.2 Amendments and Waivers................................................................. 87
13.3 Assignments; Participations............................................................ 88
ARTICLE 14 THE AGENT.............................................................................. 90
14.1 Appointment and Authorization.......................................................... 90
14.2 Delegation of Duties................................................................... 90
14.3 Liability of Agent..................................................................... 91
14.4 Reliance by Agent...................................................................... 91
14.5 Notice of Default...................................................................... 91
14.6 Credit Decision........................................................................ 92
14.7 Indemnification........................................................................ 92
14.8 Agent in Individual Capacity........................................................... 92
14.9 Successor Agent........................................................................ 93
14.10 Withholding Tax........................................................................ 93
14.11 Collateral Matters..................................................................... 94
14.12 Restrictions on Actions by Lenders; Sharing of Payments................................ 95
14.13 Agency for Perfection.................................................................. 96
14.14 Payments by Agent to Lenders........................................................... 96
14.15 Concerning the Collateral and the Related Loan Documents............................... 96
14.16 Field Audit and Examination Reports; Disclaimer by Lenders............................. 97
14.17 Relation Among Lenders................................................................. 97
ARTICLE 15 MISCELLANEOUS.......................................................................... 97
15.1 Cumulative Remedies; No Prior Recourse to Collateral................................... 97
15.2 Severability........................................................................... 98
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.................. 98
15.4 WAIVER OF JURY TRIAL................................................................... 99
15.5 Survival of Representations and Warranties............................................. 99
15.6 Other Security and Guaranties.......................................................... 99
15.7 Fees and Expenses...................................................................... 100
15.8 Notices................................................................................ 100
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Section Page
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15.9 Waiver of Notices...................................................................... 101
15.10 Binding Effect......................................................................... 101
15.11 Indemnity of the Agent and the Lenders by the Borrower................................. 102
15.12 Limitation of Liability................................................................ 102
15.13 Final Agreement........................................................................ 102
15.14 Counterparts........................................................................... 102
15.15 Captions............................................................................... 103
15.16 Right of Setoff........................................................................ 103
15.17 Joint and Several Liability............................................................ 103
15.18 Contribution and Indemnification among the Borrowers................................... 104
15.19 Agency of the Parent for each other Borrower........................................... 105
15.20 Priority of Obligations................................................................ 105
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EXHIBITS AND SCHEDULES
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EXHIBIT A - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B - FORM OF NOTICE OF BORROWING
EXHIBIT C - FORM OF NOTICE OF CONVERSION/CONTINUATION
EXHIBIT D - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1.1(a) - APPROVED DISTRIBUTORS
SCHEDULE 1.1(b) - ELIGIBLE FOREIGN ACCOUNT DEBTORS
SCHEDULE 6.3 - BORROWER FACILITIES
SCHEDULE 8.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 8.5 - SUBSIDIARIES
SCHEDULE 8.8 - DEBT
SCHEDULE 8.11 - TRADE NAMES
SCHEDULE 8.12 - LITIGATION
SCHEDULE 8.15 - ENVIRONMENTAL LAW
SCHEDULE 8.22 - INTELLECTUAL PROPERTY
SCHEDULE 9.11 - GUARANTIES
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LOAN AND SECURITY AGREEMENT
Loan and Security Agreement, dated as of July 13, 1999, among the
financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), Bank of America National Trust and Savings Association ("the Bank")
with an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, as agent for the
Lenders (in its capacity as agent, the "Agent"), and Advanced Micro Devices,
Inc. (the "Parent"), a Delaware corporation, with offices at ▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and AMD International Sales and Service, Ltd. ("AMDISS"), a
Delaware corporation, as co-borrowers (individually and collectively, the
"Borrower").
W I T N E S S E T H
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WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a revolving line of credit for loans and letters of credit in an
amount not to exceed in the aggregate $200,000,000 and which extensions of
credit the Borrower will use for its working capital needs and general business
purposes;
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
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INTERPRETATION OF THIS AGREEMENT
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.1 Definitions. As used herein:
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"Accounts" means, in respect of each Borrower, all of such Borrower's
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now owned or hereafter acquired or arising accounts, and any other rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.
"Account Debtor" means each Person obligated in any way on or in
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connection with an Account.
"ACH Transactions" means any cash management or related services
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including the automatic clearing house transfer of funds by the Agent for the
account of the Borrower pursuant to agreement or overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to any
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fiscal period of the Parent, the Parent's net income after provision for income
taxes for such fiscal period, as
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determined on a consolidated basis in accordance with GAAP and reported on the
Financial Statements for such period, excluding any and all of the following
included in such net income: (a) gain arising from the sale of any capital
assets; (b) gain arising from any write-up in the book value of any asset; (c)
earnings of any Person, substantially all the assets of which have been acquired
by the Parent or any Subsidiary in any manner, to the extent realized by such
other Person prior to the date of acquisition; (d) earnings of any Person in
which the Parent or any Subsidiary has an ownership interest unless (and only to
the extent) such earnings shall actually have been received by the Parent or any
such Subsidiary in the form of cash distributions; (e) earnings of any Person to
which assets of the Parent or any Subsidiary shall have been sold, transferred
or disposed of, or into which the Parent or any Subsidiary shall have been
merged, or which has been a party with the Parent or any Subsidiary to any
consolidation or other form of reorganization, prior to the date of such
transaction; (f) gain arising from the acquisition of debt or equity securities
of the Parent or any Subsidiary or from cancellation or forgiveness of Debt; (g)
gain arising from extraordinary items, as determined in accordance with GAAP, or
from any other non-recurring transaction; (h) interest income; and (i) non-cash
restructuring charges.
"Adjusted Tangible Assets" means all of the Parent's assets,
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determined on a consolidated basis in accordance with GAAP, except: (a)
deferred assets, other than prepaid insurance and prepaid taxes; (b) patents,
copyrights, trademarks, trade names, franchises, goodwill, and other similar
intangibles; (c) unamortized debt discount and expense; (d) assets of the Parent
or any Subsidiary constituting Intercompany Accounts; and (e) fixed assets to
the extent of any write-up in the book value thereof resulting from a
revaluation effective after the Closing Date.
"Adjusted Tangible Net Worth" means, at any date: (a) the book value
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(after deducting related depreciation, obsolescence, amortization, valuation,
and other proper reserves as determined in accordance with GAAP) at which the
Adjusted Tangible Assets would be shown on a balance sheet of the Parent at such
date prepared on a consolidated basis in accordance with GAAP less (b) the
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amount at which the Parent's liabilities would be shown on such consolidated
balance sheet, including as liabilities all reserves for contingencies and other
potential liabilities which would be required to be shown on such balance sheet.
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, ten percent (10%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent" means the Bank, solely in its capacity as agent for the
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Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i).
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"Agent's Liens" means the Liens in the Collateral granted to the
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Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its Affiliates,
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and the officers, directors, employees, agents and attorneys-in-fact of the
Agent and such Affiliates.
"Aggregate Revolver Outstandings" means, at any time: the sum of (a)
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the unpaid balance of Revolving Loans, and (b) the aggregate amount of Pending
Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn face
amount of all outstanding Letters of Credit, and (d) the aggregate amount of any
unpaid reimbursement obligations in respect of Letters of Credit.
"Agreement" means this Loan and Security Agreement.
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"Anniversary Date" means each anniversary of the Closing Date.
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"Applicable Fee Amount" means, with respect to the Unused Line Fee
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payable hereunder, the amount per annum set forth below opposite the applicable
Level below the heading "Unused Line Fee" and, with respect to the Letter of
Credit Fee, the amount per annum set forth opposite the applicable Level below
the heading "Letter of Credit Fee". The Applicable Fee Amount for any calendar
month shall be based on the Average Loan to Availability Ratio for such calendar
month.
Level Loan to Unused Letter
------------- Availability Ratio Line of Credit
------------------ Fee Fee
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1 Greater than or equal to 0% 0.25% 1.50%
but less than 20%
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2 Greater than or equal to 0.25% 1.625%
20% but less than 40%
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3 Greater than or equal to 0.375% 1.875%
40% but less than 60%
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4 Greater than or equal to 60% 0.375% 2.125%
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"Applicable Margin" means, with respect to Base Rate Loans and LIBOR
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Rate Loans, the amount set forth below opposite the applicable Level below the
heading "Base Rate Spread," or "LIBOR Rate Spread". The Applicable Margin for
any calendar month shall be based on the Average Loan to Availability Ratio for
such calendar month.
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Level Loan to Base LIBOR
------------- Availability Ratio Rate Rate
------------------ Spread Spread
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1 Greater than 0% but less 0% 1.50%
than 20%
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2 Greater than or equal to 0% 1.625%
20% but less than 40%
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3 Greater than or equal to 0.25% 1.875%
40% but less than 60%
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4 Greater than or equal to 60% 0.25% 2.125%
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"Approved Distributor" means any distributor identified on Schedule
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1.1(a), as such Schedule may from time to time be amended by the Borrower with
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the written consent of the Agent.
"Arrangement Fee" has the meaning specified in Section 3.4.
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"Assignee" has the meaning specified in Section 13.3(a).
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"Assignment and Acceptance" has the meaning specified in Section
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13.3(a).
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"Attorney Costs" means and includes all fees, expenses and
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disbursements of any law firm or other counsel engaged by the Agent.
"Availability" means, at any time, (a) the Borrowing Base minus (b)
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the Aggregate Revolver Outstandings.
"Average Loan to Availability Ratio" means, for any calendar month,
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the quotient obtained by dividing (a) the total sum of the Loan to Availability
Ratios as of the close of business on each day during such calendar month on
which Revolving Loans or Letters of Credit were outstanding hereunder by (b) the
number of days during such calendar month that Revolving Loans or Letters of
Credit were outstanding hereunder.
"Bank" means Bank of America National Trust and Savings Association, a
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national banking association, or any successor entity thereto.
"Bank Products" means any one or more of the following types of
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services or facilities extended to the Borrower by the Bank or any Affiliate of
the Bank in reliance on the Bank's agreement to indemnify such Affiliate which
are requested by the Borrower pursuant to
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this Agreement: (i) credit cards; (ii) ACH Transactions; (iii) Rate Protection
Arrangements; and (iv) foreign exchange contracts.
"Bank Product Reserves" means all reserves which the Agent from time
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to time establishes in its reasonable discretion for the Bank Products then
provided and outstanding.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
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(S) 101 et seq.).
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"Base Rate" means, for any day, the rate of interest in effect for
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such day as publicly announced from time to time by the Bank as its "reference
rate" (the "reference rate" being a rate set by the Bank based upon various
factors including the Bank's costs and desired return, general economic
conditions and other factors, and is used as a prime point for pricing some
loans, which may be priced at, above, or below such announced rate). Any change
in the reference rate announced by the Bank shall take effect at the opening of
business on the day specified in the public announcement of such change. Each
Interest Rate based upon the Base Rate shall be adjusted simultaneously with any
change in the Base Rate.
"Base Rate Loan" means a Revolving Loan during any period in which it
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bears interest based on the Base Rate.
"Blocked Account Agreement" means an agreement among the Borrower, the
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Agent and a Clearing Bank, in form and substance satisfactory to the Agent,
concerning the collection of payments which represent the proceeds of Accounts
or of any other Collateral.
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
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made on the same day by the Lenders to the Borrower (or by the Bank in the case
of a Borrowing funded by Non-Ratable Loans) or by the Agent in the case of a
Borrowing consisting of an Agent Advance.
"Borrowing Base" means, at any time, an amount equal to (a) the lesser
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of (i) the Maximum Revolver Amount or (ii) the sum of (A) eighty-five percent
(85%) of the Net Amount of Eligible Accounts of the Parent and AMDISS payable by
original equipment manufacturers plus (B) fifty percent (50%) of the Net Amount
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of Eligible Accounts of the Parent and AMDISS payable by distributors (such
Accounts, the "Distributor Accounts") plus (C) the lesser of (1) $10,000,000 and
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(2) fifty percent (50%) of the Eligible Other Foreign Accounts of AMDISS; minus
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(b) the sum of (i) reserves for accrued interest on the Obligations, (ii) the
Bank Product Reserve, if any, and (iii) all dilution (including dilution
projected or anticipated by the Agent in the exercise of its reasonable
commercial discretion with respect to any deferred revenue related to the
Distributor Accounts) and other reserves which the Agent deems necessary in the
exercise of its reasonable commercial discretion to maintain with respect to the
Borrower's account, including reserves for any amounts which the Agent or any
Lender may be obligated to pay in the future for the account of the Borrower.
"Borrowing Base Certificate" means a certificate by a Responsible
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Officer of the Parent, substantially in the form of Exhibit A (or another form
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acceptable to the Agent) setting
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forth the calculation of the Borrowing Base, including a calculation of each
component thereof, as of the close of business no more than five (5) Business
Days prior to the date of such certificate, all in such detail as shall be
reasonably satisfactory to the Agent. All calculations of the Borrowing Base in
connection with the preparation of any Borrowing Base Certificate shall
originally be made by the Borrower and certified to the Agent; provided, that
the Agent shall at any time have the right to review and adjust, in the exercise
of its reasonable credit judgment, any such calculation (a) to reflect its
reasonable estimate of declines in value of any of the Collateral described
therein, and (b) to the extent that such calculation is not in accordance with
this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
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day on which banks in San Francisco, California or New York, New York are
required or permitted to be closed, and (b) with respect to all notices,
determinations, fundings and payments in connection with the LIBOR Rate or LIBOR
Rate Loans, any day that is a Business Day pursuant to clause (a) above and that
is also a day on which trading in Dollars is carried on by and between banks in
the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not paid) in
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respect of the cost of any fixed asset or improvement, or replacement,
substitution, or addition thereto, which has a useful life of more than one
year, including those costs arising in connection with the direct or indirect
acquisition of such asset by way of increased product or service charges or in
connection with a Capital Lease.
"Capital Lease" means any lease of property by the Parent or any
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Subsidiary which, in accordance with GAAP, should be reflected as a capital
lease on the consolidated balance sheet of the Parent.
"Change of Control" means (a) the direct or indirect acquisition by
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any person (as such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act), or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act), of:
(i) beneficial ownership of issued and outstanding shares of
voting stock of the Parent, the result of which acquisition is that
such person or such group possesses in excess of 35% of the combined
voting power of all then-issued and outstanding voting stock of the
Parent, or
(ii) the power to elect, appoint or cause the election or
appointment of at least a majority of the members of the Board of
Directors of the Parent; or
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(b) any decrease in the Parent's percentage ownership of AMDISS
after the Closing Date.
"Clearing Bank" means the Bank or any other banking institution with
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whom a Payment Account has been established pursuant to a Blocked Account
Agreement.
"Closing Date" means the date of this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended from time
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to time, and any successor statute, and regulations promulgated thereunder.
"Collateral" has the meaning specified in Section 6.1.
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"Commitment" means, at any time with respect to a Lender, the
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principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
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of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.3, as such Commitment
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may be adjusted from time to time in accordance with the provisions of Section
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13.3, and "Commitments" means, collectively, the aggregate amount of the
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commitments of all of the Lenders.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
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substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Credit Support" has the meaning specified in Section 2.4(a).
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"Debt" means all liabilities, obligations and indebtedness of the
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Parent or any Subsidiary to any Person, of any kind or nature, now or hereafter
owing, arising, due or payable, howsoever evidenced, created, incurred, acquired
or owing, whether primary, secondary, direct, contingent, fixed or otherwise,
and including, without in any way limiting the generality of the foregoing: (i)
the Parent's or any Subsidiary's liabilities and obligations to trade creditors;
(ii) all Obligations; (iii) all obligations and liabilities of any Person
secured by any Lien on the Parent's or any Subsidiary's property, even though
the Parent or such Subsidiary shall not have assumed or become liable for the
payment thereof; provided, however, that all such obligations and liabilities
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which are limited in recourse to such property shall be included in Debt only to
the extent of the book value of such property as would be shown on a balance
sheet of the Parent prepared on a consolidated basis in accordance with GAAP;
(iv) all obligations or liabilities created or arising under any Capital Lease
or conditional sale or other title retention agreement with respect to property
used or acquired by the Parent or any Subsidiary, even if the rights and
remedies of the lessor, seller or lender thereunder are limited to repossession
of such property; provided, however, that all such obligations and liabilities
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which are limited in recourse to such property shall be included in Debt only to
the extent of the book value of such property as would be shown on a balance
sheet of the Parent prepared on a consolidated basis in accordance with GAAP;
and (v) all obligations and liabilities under Guaranties. Notwithstanding the
foregoing,
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"Debt" shall exclude all accrued pension fund and other employee benefit plan
obligations and liabilities, all deferred taxes and all obligations and
liabilities in respect of Rate Protection Arrangements.
"Debt For Borrowed Money" means, as to any Person, Debt for borrowed
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money or as evidenced by notes, bonds, debentures or similar evidences of any
such Debt of such Person, the deferred and unpaid purchase price of any property
or business (other than trade accounts payable incurred in the ordinary course
of business and constituting current liabilities) and all obligations under
Capital Leases.
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section 2.2(g)(ii).
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"Default Rate" means a fluctuating per annum interest rate at all
------------
times equal to the sum of (a) the otherwise applicable Interest Rate plus (b)
----
two percent (2%). Each Default Rate shall be adjusted simultaneously with any
change in the applicable Interest Rate. In addition, with respect to Letters of
Credit, the Default Rate shall mean an increase in the Letter of Credit Fee by
two percentage points.
"Distribution" means, in respect of any corporation: (a) the payment
------------
or making of any dividend or other distribution of property in respect of
capital stock (or any options or warrants for such stock) of such corporation,
other than distributions in capital stock (or any options or warrants for such
stock) of the same class; or (b) the redemption or other acquisition by such
corporation of any capital stock (or any options or warrants for such stock) of
such corporation.
"DOL" means the United States Department of Labor or any successor
---
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
------ -
States.
"Domestic Cash" means, as of any date of determination, the amount on
-------------
such date of all unencumbered Dollar-denominated cash and cash equivalents
(determined in accordance with GAAP) of the Borrower and its U.S. Subsidiaries
on deposit or otherwise located in the United States on such date.
"EBITDA" means, with respect to the Parent and its Subsidiaries on a
------
consolidated basis for any period, Adjusted Net Earnings from Operations for
such period plus, to the extent deducted in computing such Adjusted Net Earnings
----
from Operations, the sum of (a) income tax expense, (b) interest expense, and
(c) depreciation and amortization expense.
"Eligible Accounts" means the Accounts which the Agent in the exercise
-----------------
of its reasonable commercial discretion determines to be Eligible Accounts.
Without limiting the
-8-
discretion of the Agent to establish other criteria of ineligibility, Eligible
Accounts shall not, unless the Agent in its reasonable discretion elects,
include any Account:
(a) with respect to which more than 90 days have elapsed since the
date of the original invoice therefor or it is more than 60 days past due;
(b) with respect to which any of the representations, warranties,
covenants, or agreements contained in Section 6.8 are not or have ceased to be
-----------
complete and correct or have been breached;
(c) with respect to which, in whole or in part, a check, promissory
note, draft, trade acceptance or other instrument for the payment of money has
been received, presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined);
for the purposes hereof, "progress billing" means any invoice for goods sold or
leased or services rendered under a contract or agreement pursuant to which the
Account Debtor's obligation to pay such invoice is conditioned upon completion
by the Borrower or any Affiliate of the Borrower, or any third party sub-
contracting with the Borrower, of any further performance under the contract or
agreement;
(e) with respect to which any one or more of the following events
has occurred to the Account Debtor on such Account: death or judicial
declaration of incompetency of an Account Debtor who is an individual; the
filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the appointment
of a receiver, trustee, administrator, or conservator for the Account Debtor or
for any of the assets of the Account Debtor, including the appointment of or
taking possession by a "custodian," as defined in the Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the Bankruptcy Code or otherwise) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against,
or winding up of affairs of, the Account Debtor; the sale, assignment, or
transfer of all or any material part of the assets of the Account Debtor, unless
the Agent otherwise agrees in its reasonable discretion not to exclude such
Account on such basis; the nonpayment generally by the Account Debtor of its
debts as they become due; or the cessation of the business of the Account Debtor
as a going concern;
(f) if fifty percent (50%) or more of the aggregate amount (in
Dollars or other currency) of outstanding Accounts owed at such time by the
Account Debtor thereon is classified as ineligible under subsection (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States or Canada (unless such Account Debtor is
an Eligible Foreign Account Debtor or is the obligor in respect of an Eligible
Other Foreign Account); or (ii)
-9-
is not organized under the laws of the United States or any state thereof
(unless such Account Debtor is an Eligible Foreign Account Debtor or is the
obligor in respect of an Eligible Other Foreign Account); or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof; except to the
extent that such Account is secured or payable by a letter of credit
satisfactory to the Agent in its reasonable discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of
the Borrower or any Affiliate;
(i) except as provided in (k) below, with respect to which either
the perfection, enforceability, or validity of the Agent's Lien in such Account,
or the Agent's right or ability to obtain direct payment to the Agent of the
proceeds of such Account, is governed by any federal, state, or local statutory
requirements other than those of the UCC;
(j) owed by an Account Debtor to which the Borrower or any
Subsidiary is indebted in any way, or which is subject to any right of setoff or
recoupment by the Account Debtor, unless the Account Debtor has entered into an
agreement acceptable to the Agent to waive all such rights; or if the Account
Debtor thereon has disputed liability or made any claim with respect to any
other Account due from such Account Debtor; but in each such case only to the
extent of such indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the Government of the United States of America, or any
department, agency, public corporation, or other instrumentality thereof, unless
the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. (S) 3727 et
--
seq.), and any other steps necessary to perfect the Agent's Lien therein, have
---
been complied with to the Agent's satisfaction with respect to such Account;
(l) owed by any state, municipality, or other political subdivision
of the United States of America, or any department, agency, public corporation,
or other instrumentality thereof and as to which the Agent determines that its
Lien therein is not or cannot be perfected;
(m) which represents a sale on a ▇▇▇▇-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or return
basis;
(n) which is evidenced by a promissory note or other instrument or
by chattel paper;
(o) if the Agent believes, in the exercise of its reasonable
judgment, that the prospect of collection of such Account is impaired or that
the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit the Borrower to seek judicial enforcement in such State of
payment of such Account, unless such
-10-
Borrower has qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current year; or
(q) which arises out of a sale not made in the ordinary course of
the Borrower's business;
(r) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the Borrower,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(s) owed by an Account Debtor which is obligated to the Borrower
respecting Accounts the aggregate unpaid gross balance of which exceeds (i) in
the case of International Business Machines, 15%, (ii) in the case of Compaq
Computer, 10%, (iii) in the case of Gateway, 10%, (iv) in the case of Approved
Distributors, 10%, and (v) in all other cases, 5%, of the aggregate unpaid gross
balance of all Accounts owed to the Parent and AMDISS at such time by all of
their respective Account Debtors, but in each case only to the extent of such
excess;
(t) which arises out of an enforceable contract or order which, by
its terms, forbids, restricts or makes void or unenforceable the granting of a
Lien by the Borrower to the Agent with respect to such Account;
(u) which is not subject to a first priority and perfected security
interest in favor of the Agent for the benefit of the Lenders.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
"Eligible Assignee" means (a) a commercial bank, commercial finance
-----------------
company or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default exists, any
Person reasonably acceptable to the Agent.
"Eligible Foreign Account Debtor" means an Account Debtor (a) that
-------------------------------
does not reside in or have its chief executive office in the United States and
that is identified on Schedule 1.1(b), as such Schedule may from time to time be
---------------
amended by the Borrower with the written consent of the Agent, (b) that is
otherwise satisfactory to the Agent in its sole discretion, or (c) whose
Accounts are fully supported by one or more letters of credit acceptable to the
Agent.
"Eligible Other Foreign Accounts" means Eligible Accounts owing to
-------------------------------
AMDISS by any Account Debtor that does not maintain its chief executive office
in the United States or Canada or is not organized under the laws of the United
States or any state thereof (which Account Debtor need not be an Eligible
Foreign Account Debtor) up to an amount per Account not to exceed the lesser of
(i) $500,000 or (ii) 0.25% of the aggregate unpaid gross balance of all of the
Accounts of AMDISS.
-11-
"Enhanced Covenant Period" means any period of one or more days that
------------------------
Net Domestic Cash is less than $100,000,000.
"Environmental Claims" means all claims, however asserted, by any
--------------------
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
------------------
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
------------------
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"Environmental Property Transfer Act" means any applicable requirement
-----------------------------------
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Environmental Cleanup
Responsibility Acts" or "Responsible Property Transfer Acts."
"Equipment" means all of the Borrower's now owned and hereafter
---------
acquired machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory), including motor vehicles with
respect to which a certificate of title has been issued, aircraft, dies, tools,
jigs, and office equipment, as well as all of such types of property leased by
the Borrower and all of the Borrower's rights and interests with respect thereto
under such leases (including options to purchase); together with all present and
future additions and accessions thereto, replacements therefor, component and
auxiliary parts and supplies used or to be used in connection therewith, and all
substitutes for any of the foregoing, and all manuals, drawings, instructions,
warranties and rights with respect thereto; wherever any of the foregoing is
located.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
-----
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
-----------
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section
-12-
4001(a)(2) of ERISA) or a cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal
by the Borrower or any ERISA Affiliate from a Multi-employer Plan or
notification that a Multi-employer Plan is in reorganization; (d) the filing of
a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multi-employer Plan; (e)
the occurrence of an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multi-employer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 11.1.
---------------- ------------
"Exchange Act" means the Securities Exchange Act of 1934, and
------------
regulations promulgated thereunder.
"Existing Senior Credit Facility" means the Credit Agreement dated as
-------------------------------
of July 19, 1996, as amended, by and among the Parent, the financial
institutions party thereto as "Banks" and Bank of America National Trust and
Savings Association, as administrative agent.
"FASL" means Fujitsu AMD Semiconductor Limited, a joint venture
----
between the Parent and Fujitsu Limited.
"FDIC" means the Federal Deposit Insurance Corporation, and any
----
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
------------------
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
---------------------
Reserve System or any successor thereto.
"Fee Letter" means that certain letter agreement dated July 13, 1999,
----------
between the Parent and the Agent.
"Financial Statements" means, according to the context in which it is
--------------------
used, the financial statements referred to in Section 8.6 or any other financial
statements required to be given to the Lenders pursuant to this Agreement.
-13-
"Fiscal Year" means the Parent's fiscal year for financial accounting
-----------
purposes. The current Fiscal Year of the Borrower will end on December 26,
1999.
"Funding Date" means the date on which a Borrowing occurs.
------------
"GAAP" means generally accepted accounting principles set forth from
----
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the Closing Date.
"General Intangibles" means all of the Borrower's now owned or
-------------------
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrower of every kind and
nature (other than Accounts), including all rights to payment under contracts,
corporate or other business records relating to Accounts and Inventory, tax
refund claims, rights and claims against carriers and shippers, rights to
indemnification, business interruption insurance and proceeds thereof, property,
casualty or any similar type of insurance and any proceeds thereof, and any
letter of credit, guarantee, claim, security interest or other security held by
or granted to the Borrower. Notwithstanding the foregoing, "General
Intangibles" shall exclude (a) any of the foregoing to the extent, but only to
the extent, constituting a proceed of, or otherwise arising in respect of, any
of the Borrower's real property, fixed tangible assets or Equipment or any
collateral pledged as security for the Parent's obligations under the Indenture
under that certain Security Agreement dated as of August 1, 1996, between the
Parent and IBJ ▇▇▇▇▇▇▇▇▇ Bank and Trust Company, as collateral agent, as in
effect on the Closing Date, and (b) any of the Borrower's now owned or hereafter
acquired inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses and
franchises.
"German Subsidiary" means, together, AMD Saxony Manufacturing GmbH, a
-----------------
German corporation, and any company formed under the laws of a jurisdiction
other than one of the United States of America for the purpose of holding 100%
of the equity in AMD Saxony Manufacturing GmbH.
"German Subsidiary Accounts" has the meaning specified in Section
-------------------------- -------
6.1(a).
------
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Grandfathering Rules" means that any actions taken by the Borrower or
--------------------
any of its Subsidiaries and any events or circumstances occurring or arising
during any time that is not an Enhanced Covenant Period, which actions, events
or circumstances were permitted under the
-14-
terms of this Agreement at the time taken, occurring or arising, shall not
constitute a breach of the applicable covenant referencing such Enhanced
Covenant Period during any subsequent Enhanced Covenant Period notwithstanding
that such actions, events or circumstances would not have been permitted under
such covenant, or would have constituted such a breach, had such actions, events
or circumstances been taken, occurred or arisen during such Enhanced Covenant
Period.
"Guaranty" means, with respect to any Person, all obligations of such
--------
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
"Indenture" means the Indenture dated as of August 1, 1996, between
---------
the Parent, as issuer, and United States Trust Company of New York, as trustee,
as supplemented by that certain First Supplemental Indenture dated as of January
13, 1999 and that certain Second Supplemental Indenture dated as of April 8,
1999, as the same may be further amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"Intercompany Accounts" means all assets and liabilities, however
---------------------
arising, which are due to the Borrower from, which are due from the Borrower to,
or which otherwise arise from any transaction by the Borrower with, any
Affiliate.
"Interest Period" means, as to any LIBOR Rate Loan, the period
---------------
commencing on the Funding Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing, or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following 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 preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
-15-
(iii) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates, including the
-------------
Default Rate, set forth in Section 3.1.
-----------
"Inventory" means all of the Borrower's now owned and hereafter
---------
acquired inventory, goods and merchandise, wherever located, to be furnished
under any contract of service or held for sale or lease, all returned goods, raw
materials, other materials and supplies of any kind, nature or description which
are or might be consumed in the Borrower's business or used in connection with
the packing, shipping, advertising, selling or finishing of such goods,
merchandise and such other personal property, and all documents of title or
other documents representing them.
"Investment Property" means all of the Borrower's right, title and
-------------------
interest in and to any and all: (a) securities, whether certificated or
uncertificated; (b) securities entitlements; (c) securities accounts; (d)
commodity contracts; and (e) commodity accounts.
"Investments" has the meaning specified in the definition of
-----------
Restricted Investments.
"IRS" means the Internal Revenue Service and any Governmental
---
Authority succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and thereafter
------------------
until the Agent receives new projections pursuant to Section 7.2(f), the
-------------
projections of the Parent's financial condition, results of operations, and cash
flow, for the period commencing on March 29, 1999, and ending on December 30,
2001, and delivered to the Agent prior to the Closing Date; and (b) thereafter,
the projections most recently received by the Agent pursuant to Section 7.2(f).
--------------
"Lender" and "Lenders" have the meanings specified in the introductory
------ -------
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and the Bank to the extent of any Non-Ratable Loan outstanding;
provided that no such Agent Advance or Non-Ratable Loan shall be taken into
--------
account in determining any Lender's Pro Rata Share.
"Letter of Credit" means any letter of credit issued or caused to be
----------------
issued for the account of the Borrower pursuant to Section 2.4.
"Letter of Credit Fee" has the meaning specified in Section 3.6.
--------------------
"Letter of Credit Issuer" means the Bank, any affiliate of the Bank or
-----------------------
any other financial institution that issues any Letter of Credit pursuant to
this Agreement.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR
----------
Rate Loans in any Borrowing, the rate of interest per annum determined pursuant
to the following formula:
-16-
LIBOR Rate = Offshore Base Rate
---------------------------------------------------------
1.00 -- Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum determined by Agent
------------------
as the rate of interest at which dollar deposits in the approximate
amount of the Agent's LIBOR Rate Loan comprising part of such
Borrowing would be offered by the Agent's London Branch to major banks
in the offshore dollar market at their request at or about 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period.
"Eurodollar Reserve Percentage" means, for any day during any
-----------------------------
Interest Period, the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"). The Offshore Rate for each outstanding
LIBOR Rate Loan shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.
"LIBOR Rate Loan" means a Revolving Loan during any period in which it
---------------
bears interest based on the LIBOR Rate.
"Lien" means: (a) any interest in property securing an obligation owed
----
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes; (b) to the extent not included
under clause (a), any reservation, exception, encroachment, easement, right-of-
way, covenant, condition, restriction, lease or other title exception or
encumbrance affecting property; and (c) any contingent or other agreement to
provide any of the foregoing.
"Loan Account" means the loan account of the Borrower, which account
------------
shall be maintained by the Agent.
"Loan Availability Date" has the meaning specified in Section 10.2.
---------------------- ------------
-17-
"Loan Documents" means this Agreement, the Fee Letter and any other
--------------
agreements, instruments, and documents heretofore, now or hereafter evidencing,
securing, guaranteeing or otherwise relating to the Obligations, the Collateral,
or any other aspect of the transactions contemplated by this Agreement.
"Loan to Availability Ratio" means, at any time, the ratio of (a) the
--------------------------
Aggregate Revolver Outstandings at such time to (b) the Borrowing Base at such
time.
"Loans" means, collectively, all loans and advances provided for in
-----
Article 2.
---------
"Majority Lenders" means at any time Lenders whose Pro Rata Shares
----------------
aggregate more than 66 2/3%, as such percentage is determined under the
definition of Pro Rata Share set forth herein.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the operations, business, properties, or condition
(financial or otherwise) of the Parent and AMDISS taken as a whole or the
Collateral taken as a whole; (b) a material impairment of the ability of the
Borrower to perform under any Loan Document and to avoid any Event of Default;
or (c) a material adverse effect upon (i) the legality, validity, binding effect
or enforceability against the Borrower of any Loan Document, or (ii) the
perfection or priority of any material portion of the Agent's Liens.
"Maximum Rate" has the meaning specified in Section 3.3.
------------ -----------
"Maximum Revolver Amount" means $200,000,000.
-----------------------
"Multi-employer Plan" means a "multi-employer plan" as defined in
-------------------
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.
"Net Domestic Cash" means, at any time, Domestic Cash at such time
-----------------
minus the Aggregate Revolver Outstandings at such time.
-----
"Net Amount of Eligible Accounts" means, in respect of each Borrower
-------------------------------
at any time, the gross amount of Eligible Accounts of such Borrower less sales,
excise or similar taxes, and less returns, discounts, claims, credits and
allowances of any nature at any time issued, owing, granted, outstanding,
available or claimed.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
---------------- -----------------
in Section 2.2(h).
--------------
"Notice of Borrowing" has the meaning specified in Section 2.2(b).
------------------- --------------
"Notice of Conversion/Continuation" has the meaning specified in
---------------------------------
Section 3.2(b).
--------------
-18-
"Obligations" means all present and future loans, advances,
-----------
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from any extension of credit, issuance
of any letter of credit, acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including those acquired by assignment
from others, and any participation by the Agent and/or any Lender in the
Borrower's debts owing to others), absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including all principal,
interest, charges, expenses, fees, attorneys' fees, filing fees and any other
sums chargeable to the Borrower hereunder or under any of the other Loan
Documents. "Obligations" includes, without limitation, all debts, liabilities
and obligations now or hereafter arising from or in connection with Bank
Products.
"Other Taxes" means any present or future stamp or documentary taxes
-----------
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" means any Person who shall have been granted the right
-----------
by any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"Payment Account" means each blocked bank account established pursuant
---------------
to Section 6.9, to which the funds of the Borrower (including proceeds of
-----------
Accounts and other Collateral) are deposited or credited, and which is
maintained in the name of the Agent or the Borrower, as the Agent may determine,
on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
-----------------------
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA which the Borrower sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions, or in the
case of a Multiple-employer Plan has made contributions at any time during the
immediately preceding five (5) plan years.
"Permitted Affiliate Investments" means Investments by the Parent or
-------------------------------
any Subsidiary in the Parent or any Subsidiary, provided that the amount of all
--------
such Permitted Affiliate Investments made by the Parent or any U.S. Subsidiary
during any Enhanced Covenant Period (but subject to the Grandfathering Rules)
may not exceed $25,000,000 in the aggregate.
"Permitted Liens" means:
---------------
-19-
(a) Liens for taxes not delinquent or statutory Liens for taxes
provided that the payment of such taxes which are due and payable is being
contested in good faith and by appropriate proceedings diligently pursued and as
to which adequate financial reserves have been established on Borrower's books
and records and a stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory obligations (other than
liens arising under ERISA or Environmental Liens) or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, provided
--------
that if any such Lien arises from the nonpayment of such claims or demand when
due, such claims or demands shall not result in a Material Adverse Effect;
(e) Liens constituting encumbrances in the nature of
reservations, exceptions, encroachments, easements, rights of way, covenants
running with the land, and other similar title exceptions or encumbrances
affecting any Real Estate; provided that they do not in the aggregate materially
--------
detract from the value of the Real Estate or materially interfere with its use
in the ordinary conduct of the Borrower's business;
(f) Liens arising from judgments and attachments in connection
with court proceedings provided that the attachment or enforcement of such Liens
would not result in an Event of Default hereunder and such Liens are being
contested in good faith by appropriate proceedings, adequate reserves have been
set aside and no material Property is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles);
(g) Liens existing as of the Closing Date, provided that no
--------
such Lien shall encumber any Collateral;
(h) Liens arising solely by virtue of any statutory or common
law provisions relating to banker's liens, rights of setoff or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor
depository institution, provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Borrower or any Restricted Subsidiary in excess of those set forth
by regulations promulgated by the FRB, and (ii) such deposit account is not
intended by the Borrower or any Restricted Subsidiary to provide collateral to
the depository institution;
-20-
(i) Liens on property which is not Collateral in respect of
conditional sales contracts or retention of title agreements in connection with
the acquisition of property permitted under this Agreement, provided that any
--------
such Lien shall attach only to the property so acquired;
(j) Liens on replacement collateral securing the Parent's
obligations under the Indenture, which replacement collateral was acquired
pursuant to Section 9.8(b)(iv), or Liens on the proceeds of an Event of Loss (as
-------------------
defined in the Indenture, as in effect on the Closing Date), and any replacement
collateral acquired with such proceeds, securing the Parent's obligations under
the Indenture; provided that none of such Liens shall attach to any Collateral;
--------
(k) Liens permitted under the Grandfathering Rules under
Section 9.17(b); and
--------------
(l) the renewal, extension or replacement of any Lien that was,
at the time such Lien was incurred or assumed, permitted hereunder, provided
--------
that (i) any such renewal, extension or replacement Lien encumbers the same
property as the Lien being renewed, extended or replaced and shall not extend to
any additional property not encumbered by the prior Lien and (ii) the Debt
secured by such renewal, extension or replacement Lien is then permitted
hereunder.
"Person" means any individual, sole proprietorship, partnership,
------
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which the Borrower sponsors or maintains or to which the Borrower makes,
is making, or is obligated to make contributions and includes any Pension Plan.
"Premises" means the land and all buildings, improvements, and
--------
fixtures thereon and all tenements, hereditaments, and appurtenances belonging
or in any way appertaining thereto, which constitutes all of the real property
in which the Borrower has any interest.
"Pro Rata Share" means, with respect to a Lender, a fraction
--------------
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders.
"Rate Protection Arrangements" means (a) any and all rate swap
----------------------------
transactions, basis swaps, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency
-21-
options, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, or
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Associations,
Inc., or any other master agreement (any such master agreement, together with
any related schedules, as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, a "Master Agreement), including but not
limited to any such obligations or liabilities under any Master Agreement.
"Real Estate" means all of the present and future interests of the
-----------
Borrower, as owner, lessee, or otherwise, in the Premises, including any
interest arising from an option to purchase or lease the Premises or any portion
thereof.
"Release" means a release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Reportable Event" means, any of the events set forth in Section
----------------
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata Shares
----------------
aggregate more than 50% as such percentage is determined under the definition of
Pro Rata Share set forth herein.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, Vice Chairman
-------------------
or the president of the Parent, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with financial
covenants and the preparation of the Borrowing Base Certificate, the chief
financial officer or the treasurer of the Parent, or any other officer having
substantially the same authority and responsibility.
"Restricted Investment" means, as to any Person, any acquisition of
---------------------
property by such Person in exchange for cash or other property, whether in the
form of an acquisition of stock, debt, or other indebtedness or obligation, or
the purchase or acquisition of any other property, or a loan, advance, capital
contribution, or subscription (collectively, "Investments"), except the
following: (a) acquisitions of Equipment in the ordinary course of business to
be used in the business of the Parent or its Subsidiaries; (b) acquisitions of
Inventory in the ordinary course of business; (c) acquisitions of current assets
acquired in the ordinary course of business
-22-
of the Parent or its Subsidiaries; (d) acquisitions of direct obligations of the
United States of America, or any agency thereof, or obligations guaranteed by
the United States of America, provided that such obligations mature within one
--------
year from the date of acquisition thereof; (e) acquisitions of certificates of
deposit maturing within one year from the date of acquisition, bankers'
acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case
issued by, created by, or with a bank or trust company organized under the laws
of the United States or any state thereof having capital and surplus aggregating
at least $100,000,000; (f) acquisitions of commercial paper given a rating of
"A2" or better by Standard & Poor's Corporation or "P2" or better by ▇▇▇▇▇'▇
Investors Service, Inc. and maturing not more than 90 days from the date of
creation thereof; (g) Rate Protection Arrangements; (h) Investments made after
the Closing Date in the German Subsidiary not exceeding $100,000,000 in the
aggregate funded on or prior to December 31, 1999 (minus the fair market value
of all assets transferred or otherwise conveyed to the German Subsidiary by the
Parent or any Subsidiary during such period) and other Investments in the German
Subsidiary to the extent constituting "Restricted Investments" permitted under
Section 4.07 of the Indenture, as in effect as of the Closing Date; (i)
Permitted Affiliate Investments; (j) any Investment made as the result of the
receipt of non-cash consideration from an asset sale permitted under Section
-------
9.8; (k) loans or advances to employees of the Borrower or any Restricted
---
Subsidiary not to exceed $2,000,000 at any time outstanding; and (l) Investments
in replacement collateral to secure the obligations of the Parent under the
Indenture which are made in accordance with the Indenture from the proceeds of
an Event of Loss (as defined in the Indenture, as in effect on the Closing Date)
or as permitted under Section 9.8(b)(iv).
------------------
"Restricted Subsidiary" means any Subsidiary of the Borrower other
---------------------
than the German Subsidiary; provided, however, that the term Restricted
-------- -------
Subsidiaries shall include the German Subsidiary if in respect of any Debt or
obligations of the German Subsidiary there shall exist at any time any
contractual obligation which provides recourse to any assets of, or any
contingent obligations or Debt of, the Parent or any of its Subsidiaries, other
than as permitted hereunder.
"Revolving Loans" has the meaning specified in Section 2.2 and
--------------- -----------
includes each Agent Advance and Non-Ratable Loan.
"Revolving Facility" has the meaning specified in Section 2.1.
------------------ -----------
"Settlement" and "Settlement Date" have the meanings specified in
--------------------------------
Section 2.2(j)(i).
----------------
"Solvent" means when used with respect to any Person that at the time
-------
of determination:
(i) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including contingent
liabilities); and
-23-
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including contingent debts and other commitments) as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means July 14, 2003.
-----------------------
"Subsidiary" of a Person means any corporation, association,
----------
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Parent.
"Swap Termination Value" means, in respect of any one or more Rate
----------------------
Protection Arrangements, after taking into account the effect of any legally
enforceable netting agreement relating to such Rate Protection Arrangement, (a)
for any date on or after the date such Rate Protection Arrangements have been
closed out and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced in
clause (a) the amount(s) determined as the ▇▇▇▇-to-market value(s) for such Rate
Protection Arrangement, as determined by the Parent based upon one or more mid-
market or other readily available quotations provided by any recognized dealer
in such Rate Protection Arrangements (which may include the Bank).
"Taxes" means any and all present or future taxes, levies, imposts,
-----
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by each Lender's
net income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Lender or the Agent, as the case may be, is organized or
maintains a lending office.
"Termination Date" means the earliest to occur of (i) the Stated
----------------
Termination Date, (ii) the date the Revolving Facility is terminated either by
the Borrower pursuant to Section 4.2 or by the Majority Lenders pursuant to
-----------
Section 11.2, and (iii) the date this Agreement is otherwise terminated for any
------------
reason whatsoever.
-24-
"UCC" means the Uniform Commercial Code (or any successor statute) of
---
the State of California or of any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of perfection
of security interests.
"Unfunded Pension Liability" means the excess of a Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Unused Letter of Credit Subfacility" means an amount equal to
-----------------------------------
$10,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with
----
respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 3.5.
--------------- -----------
"U.S. Subsidiary" means any Subsidiary of the Parent that is organized
---------------
under the laws of the United States or any State thereof or that maintains its
chief executive office in the United States.
"Wholly-Owned Subsidiary" means any corporation in which (other than
-----------------------
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Parent, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
.2 Accounting Terms; UCC Terms. (a) Any accounting term used in this
------------------------------
Agreement shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for
inventory valuation as used in the preparation of the Financial Statements. (b)
Subject to the preceding subsection (a), any term used herein which is defined
in the UCC and which is not otherwise defined in this Agreement shall have the
same meaning when used herein as is given to such term in the UCC.
.3 Interpretive Provisions. (a) The meanings of defined terms are equally
--------------------------
applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
-25-
(ii) The term "including" is not limiting and
means "including without limitation."
(iii) In the computation of periods of time from
a specified date to a later specified date, the word
"from" means "from and including," the words "to" and
"until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrower
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lenders' involvement in their preparation.
ARTICLE 2
---------
LOANS AND LETTERS OF CREDIT
---------------------------
.1 Revolving Facility. Subject to all of the terms and conditions of this
----------------------
Agreement, the Lenders severally agree to make available a revolving credit
facility of up to $200,000,000 (the "Revolving Facility") for the Borrower's use
from time to time during the term of this Agreement. The Revolving Facility
shall be composed of a revolving line of credit consisting of Revolving Loans
and Letters of Credit up to the Borrowing Base in effect from time to time, as
described in Section 2.2 and Section 2.4.
----------- -----------
.2 Revolving Loans. (a) Amounts. Subject to the satisfaction of the
------------------- -------
conditions precedent set forth in Article 10, each Lender severally, but not
----------
jointly, agrees, upon the Borrower's request from time to time on any Business
Day during the period from the Loan Availability Date to the Termination Date,
to make revolving loans (the "Revolving Loans") to
-26-
the Borrower in amounts not to exceed (except for the Bank with respect to Non-
Ratable Loans or for the Agent with respect to Agent Advances) such Lender's Pro
Rata Share of the Borrowing Base. The Lenders, however, in their unanimous
discretion, may elect to make Revolving Loans or issue or arrange to have
issued, or participate (as provided for in Section 2.4(f)) in the credit support
or enhancement provided through the Agent to the Letter of Credit Issuer in
excess of the Availability on one or more occasions, but if they do so, neither
the Agent nor the Lenders shall be deemed thereby to have changed the limits of
the Borrowing Base or to be obligated to exceed such limits on any other
occasion. If the Aggregate Revolver Outstandings exceed the Borrowing Base, the
Lenders may refuse to make or otherwise restrict the making of Revolving Loans
as the Lenders determine until such excess has been eliminated, subject to the
Agent's authority, in its sole discretion, to make Agent Advances pursuant to
the terms of Section 2.2(i).
--------------
(b) Procedure for Borrowing. (i) Each Borrowing shall be made
----------------------------
upon the Borrower's irrevocable written notice delivered to the Agent
in the form of a notice of borrowing in the form of Exhibit B
---------
("Notice of Borrowing") together with a Borrowing Base Certificate
reflecting sufficient Availability, (which must be received by the
Agent prior to 11:00 a.m. (Pasadena, California time) (A) three
Business Days prior to the requested Funding Date, in the case of
LIBOR Rate Loans and (B) no later than 11:00 a.m. (Pasadena,
California time) on the requested Funding Date, in the case of Base
Rate Loans, specifying:
(1) the applicable Borrower;
(2) the amount of the Borrowing, which, in the case of
LIBOR Rate Loans, shall be in an amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof;
(3) the requested Funding Date, which shall be a Business
Day;
(4) whether the Revolving Loans requested are to be Base
Rate Loans or LIBOR Rate Loans; and
(5) the duration of the Interest Period if the requested
Revolving Loans are to be LIBOR Rate Loans. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any Borrowing
comprised of LIBOR Rate Loans, such Interest Period shall be one month;
provided, however, that with respect to the Borrowing, if any, to be made on the
-------- -------
Loan Availability Date, such Borrowing will consist of Base Rate Loans only.
(ii) With respect to any request for Base Rate Loans, in
lieu of delivering the above-described Notice of Borrowing the Borrower may
give the Agent telephonic notice of such request by the required time, with
such telephonic notice to be confirmed in
-27-
writing within 24 hours of the giving of such notice,
but the Agent shall be entitled to rely on the telephonic
notice in making such Revolving Loans.
(iii) After giving effect to any Borrowing
of LIBOR Rate Loans, there may not be more than five
different Interest Periods in effect hereunder.
(c) Reliance upon Authority. On or prior to the Closing Date and
----------------------------
thereafter prior to any change with respect to any of the information contained
in the following clauses (i) and (ii), the Borrower shall deliver to the Agent a
writing setting forth (i) the deposit account of the Borrower to which the Agent
is authorized to transfer the proceeds of the Revolving Loans requested pursuant
to this Section 2.2, and (ii) the names of the individuals authorized to request
-----------
Revolving Loans on behalf of the Borrower, and shall provide the Agent with a
specimen signature of each such individual. The Agent shall be entitled to rely
conclusively on such individual's authority to request Revolving Loans on behalf
of the Borrower, the proceeds of which are to be transferred to any of the
accounts specified by the Borrower pursuant to the immediately preceding
sentence, until the Agent receives written notice to the contrary. The Agent
shall have no duty to verify the identity of any individual representing him or
herself as one of the officers authorized by the Borrower to make such requests
on its behalf.
(d) No Liability. The Agent shall not incur any liability to the
-----------------
Borrower as a result of acting upon any notice referred to in Sections 2.2(b)
---------------
and (c), which notice the Agent believes in good faith to have been given by an
---
officer duly authorized by the Borrower to request Revolving Loans on its behalf
or for otherwise acting in good faith under this Section 2.2, and the crediting
-----------
of Revolving Loans to the Borrower's deposit account, or transmittal to such
Person as the Borrower shall direct, shall conclusively establish the obligation
of the Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
------------------
notice in lieu thereof) made pursuant to Section 2.2(b) shall be irrevocable and
--------------
the Borrower shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
----------------
Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.2(b), the
--------------
Agent shall elect, in its discretion, (i) to have the terms of Section 2.2(g)
--------------
apply to such requested Borrowing, or (ii) to request the Bank to make a Non-
Ratable Loan pursuant to the terms of Section 2.2(h) in the amount of the
--------------
requested Borrowing; provided, however, that if the Bank declines in its sole
-------- -------
discretion to make a Non-Ratable Loan pursuant to Section 2.2(h), the Agent
--------------
shall elect to have the terms of Section 2.2(g) apply to such requested
--------------
Borrowing.
(g) Making of Revolving Loans.
-------------------------
(i) In the event that the Agent shall elect to have the
terms of this Section 2.2(g) apply to a requested Borrowing as
--------------
described in Section 2.2(f), then promptly after receipt of a Notice
--------------
-28-
of Borrowing or telephonic notice pursuant to Section 2.2(b), the
--------------
Agent shall notify the Lenders by telecopy, telephone or other
similar form of transmission, of the requested Borrowing. Each Lender
shall make the amount of such Lender's Pro Rata Share of the
requested Borrowing available to the Agent in immediately available
funds, to such account of the Agent as the Agent may designate, not
later than 12:00 noon (Pasadena, California time) on the Funding Date
applicable thereto. After the Agent's receipt of the proceeds of such
Revolving Loans, upon satisfaction of the applicable conditions
precedent set forth in Article 10, the Agent shall make the proceeds
----------
of such Revolving Loans available to the Borrower on the applicable
Funding Date by transferring same day funds equal to the proceeds of
such Revolving Loans received by the Agent to the deposit account of
the Borrower designated in writing by the Borrower and acceptable to
the Agent; provided, however, that the amount of Revolving Loans so
-------- -------
made on any date shall in no event exceed the Availability on such
date, subject to the provisions of subsection 2.2(a).
(ii) Unless the Agent receives notice from a Lender on or
prior to the Loan Availability Date or, with respect to any Borrowing
after the Loan Availability Date, at least one Business Day prior to
the date of such Borrowing, that such Lender will not make available
as and when required hereunder to the Agent for the account of the
Borrower the amount of that Lender's Pro Rata Share of the Borrowing,
the Agent may assume that each Lender has made such amount available
to the Agent in immediately available funds on the Funding Date and
the Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent any Lender shall not have
made its full amount available to the Agent in immediately available
funds and the Agent in such circumstances has made available to the
Borrower such amount, that Lender shall on the Business Day following
such Funding Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such
period. A notice by the Agent submitted to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent
manifest error. If such amount is so made available, such payment to
the Agent shall constitute such Lender's Revolving Loan for all
purposes of this Agreement. If such amount is not made available to
the Agent on the Business Day following the Funding Date, the Agent
will notify the Borrower of such failure to fund and, upon demand by
the Agent, the Borrower shall pay such amount to the Agent for the
Agent's account,
-29-
together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the Interest Rate
applicable at the time to the Revolving Loans comprising such
Borrowing. The failure of any Lender to make any Revolving Loan on
any Funding Date (any such Lender, prior to the cure of such failure,
being hereinafter referred to as a "Defaulting Lender") shall not
relieve any other Lender of any obligation hereunder to make a
Revolving Loan on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving
Loan to be made by such other Lender on any Funding Date.
(iii) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to the Agent for the
Defaulting Lender's benefit; nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts payable to
a Defaulting Lender shall instead be paid to or retained by the
Agent. The Agent may hold and, in its reasonable discretion, re-lend
to Borrower the amount of all such payments received or retained by
it for the account of such Defaulting Lender. Any amounts so re-lent
to the Borrower shall bear interest based on the Base Rate or the
LIBOR Rate, at the election of the Borrower, and for all other
purposes of this Agreement shall be treated as if they were Revolving
Loans, provided, however, that for purposes of voting or consenting
to matters with respect to the Loan Documents and determining Pro
Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro
Rata Share of any Borrowing (A) such Defaulting Lender shall not be
entitled to any portion of the Unused Line Fee and (B) the Unused
Line Fee shall accrue in favor of the Lenders which have funded their
respective Pro Rata Shares of such requested Borrowing and shall be
allocated among such performing Lenders ratably based upon their
relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall
no longer be in default of any of its obligations under this
Agreement. The terms of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, or relieve
or excuse the performance by the Borrower of its duties and
obligations hereunder.
(h) Making of Non-Ratable Loans.
--------------------------------
(i) In the event the Agent shall elect, with the consent
of the Bank, to have the terms of this Section 2.2(h) apply to a
--------------
-30-
requested Borrowing as described in Section 2.2(f), the Bank shall
--------------
make a Revolving Loan in the amount of such Borrowing (any such
Revolving Loan made solely by the Bank pursuant to this Section 2.2(h)
--------------
being referred to as a "Non-Ratable Loan" and such Revolving Loans
being referred to collectively as "Non-Ratable Loans") available to
the Borrower on the Funding Date applicable thereto by transferring
same day funds to a deposit account of the Borrower designated in
writing by the Borrower and acceptable to the Agent. Each Non-Ratable
Loan is a Revolving Loan hereunder and shall be subject to all the
terms and conditions applicable to other Revolving Loans except that
all payments thereon shall be payable to the Bank solely for its own
account (and for the account of the holder of any participation
interest with respect to such Revolving Loan). The Agent shall not
request the Bank to make any Non-Ratable Loan if (A) the Agent shall
have received written notice from any Lender that one or more of the
applicable conditions precedent set forth in Article 10 will not be
----------
satisfied on the requested Funding Date for the applicable Borrowing,
or (B) the requested Borrowing would exceed the Availability on such
Funding Date. The Bank shall not otherwise be required to determine
whether the applicable conditions precedent set forth in Article 10
----------
have been satisfied or the requested Borrowing would exceed the
Availability on the Funding Date applicable thereto prior to making,
in its sole discretion, any Non-Ratable Loan.
(ii) The Non-Ratable Loans shall be secured by the
Agent's Liens in and to the Collateral, shall constitute Revolving
Loans and Obligations hereunder, and shall bear interest at the rate
applicable to the Revolving Loans from time to time.
(i) Agent Advances.
-------------------
(i) Subject to the limitations set forth in the provisos
contained in this Section 2.2(i), the Agent is hereby authorized by
--------------
the Borrower and the Lenders, from time to time in the Agent's sole
discretion, (A) after the occurrence of a Default or an Event of
Default, or (B) at any time that any of the other applicable
conditions precedent set forth in Article 10 have not been satisfied,
----------
to make Base Rate Loans to the Borrower on behalf of the Lenders which
the Agent, in its reasonable business judgment, deems necessary or
desirable (1) to preserve or protect the Collateral, or any portion
thereof, (2) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (3) to pay any other
amount chargeable to the Borrower pursuant to the terms of this
Agreement, including costs, fees and expenses as
-31-
described in Section 15.7 (any of the advances described in this
------------
Section 2.2(i) being hereinafter referred to as "Agent Advances");
--------------
provided, that the Required Lenders may at any time revoke the Agent's
--------
authorization contained in this Section 2.2(i) to make Agent Advances,
--------------
any such revocation to be in writing and to become effective
prospectively upon the Agent's receipt thereof; and provided further
-------- -------
that, subject to the final proviso of Section 13.2, the Agent shall
------------
not intentionally make Agent Advances which would cause the Aggregate
Revolver Outstandings to exceed the Borrowing Base.
(ii) The Agent Advances shall be repayable on demand and
secured by the Agent's Liens in and to the Collateral, shall
constitute Revolving Loans and Obligations hereunder, and shall bear
interest at the Base Rate applicable to the Revolving Loans from time
to time. The Agent shall notify each Lender in writing of each such
Agent Advance.
(j) Settlement. It is agreed that each Lender's funded portion of
----------
the Revolving Loans is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of the outstanding Revolving Loans. Notwithstanding such
agreement, the Agent, the Bank, and the other Lenders agree (which agreement
shall not be for the benefit of or enforceable by the Borrower) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans, the Non-Ratable Loans and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) The Agent shall request settlement ("Settlement")
with the Lenders on at least a weekly basis, or on a more frequent
basis if so determined by the Agent, (A) on behalf of the Bank, with
respect to each outstanding Non-Ratable Loan, (B) for itself, with
respect to each Agent Advance, and (C) with respect to collections
received, in each case, by notifying the Lenders of such requested
Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 10:00 a.m.
(Pasadena, California time) on the date of such requested Settlement
(the "Settlement Date"). Each Lender (other than the Bank, in the case
of Non-Ratable Loans, and the Agent, in the case of Agent Advances)
shall make the amount of such Lender's Pro Rata Share of the
outstanding principal amount of the Non-Ratable Loans and Agent
Advances with respect to which Settlement is requested available to
the Agent, to such account of the Agent as the Agent may designate,
not later than 12:00 noon (Pasadena, California time), on the
Settlement Date applicable thereto, which may occur before or after
the occurrence or during the continuation of a Default or an Event of
Default and whether or
-32-
not the applicable conditions precedent set forth in Article 10 have
----------
then been satisfied. Such amounts made available to the Agent shall be
applied against the amounts of the applicable Non-Ratable Loan or
Agent Advance and, together with the portion of such Non-Ratable Loan
or Agent Advance representing the Bank's Pro Rata Share thereof, shall
constitute Revolving Loans of such Lenders. If any such amount is not
made available to the Agent by any Lender on the Settlement Date
applicable thereto, the Agent shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the
Federal Funds Rate for the first three (3) days from and after the
Settlement Date and thereafter at the Base Rate then applicable to the
Revolving Loans.
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or
after the occurrence of a Default or an Event of Default and
regardless of whether the Agent has requested a Settlement with
respect to a Non-Ratable Loan or Agent Advance), each other Lender (A)
shall irrevocably and unconditionally purchase and receive from the
Bank or the Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such Non-Ratable Loan or Agent
Advance equal to such Lender's Pro Rata Share of such Non-Ratable Loan
or Agent Advance, and (B) if Settlement has not previously occurred
with respect to such Non-Ratable Loans or Agent Advances shall pay to
Bank or Agent, as applicable, as the purchase price of such
participation an amount equal to one-hundred percent (100%) of such
Lender's Pro Rata Share of such Non-Ratable Loans or Agent Advances.
If such amount is not in fact made available to the Agent by any
Lender, the Agent shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the Federal Funds
Rate for the first three (3) days from and after such demand and
thereafter at the Base Rate then applicable to the Revolving Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable
Loan or Agent Advance pursuant to subsection (ii) above, the Agent
shall promptly distribute to such Lender at such address as such
Lender may request in writing, such Lender's Pro Rata Share of all
payments of principal and interest and all proceeds of Collateral
received by the Agent in respect of such Non-Ratable Loan or Agent
Advance.
(iv) Between Settlement Dates, the Agent, to the extent
no Agent Advances or Non-Ratable Loans are outstanding,
-33-
may pay over to the Bank any payments received by the Agent, which in
accordance with the terms of this Agreement would be applied to the
reduction of the Revolving Loans, for application to the Bank's
Revolving Loans. If, as of any Settlement Date, collections received
since the then immediately preceding Settlement Date have been applied
to the Bank's Revolving Loans (other than to Non-Ratable Loans or
Agent Advances in which such Lender has not yet funded its purchase of
a participation pursuant to clause 2.2(j)(ii) above), as provided for
----------------
in the previous sentence, the Bank shall pay to the Agent for the
accounts of the Lenders, to be applied to the outstanding Revolving
Loans of such Lenders, an amount such that each Lender shall, upon
receipt of such amount, have, as of such Settlement Date, its Pro Rata
Share of the Revolving Loans. During the period between Settlement
Dates, the Bank with respect to Non-Ratable Loans, the Agent with
respect to Agent Advances, and each Lender with respect to the
Revolving Loans other than Non-Ratable Loans and Agent Advances, shall
be entitled to interest at the applicable rate or rates payable under
this Agreement on the actual average daily amount of funds employed by
the Bank, the Agent and the other Lenders. Nothing in this Section
-------
2.2(j) is intended to impose any greater obligations on the Borrower
------
to pay interest on the Loans outstanding hereunder than is otherwise
provided for in this Agreement.
(k) Notation. The Agent shall record on its books the principal
--------
amount of the Revolving Loans owing to each Lender, including the Non-Ratable
Loans owing to the Bank, and the Agent Advances owing to the Agent, from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Revolving Loans in its books and records, including computer records, such books
and records constituting presumptive evidence, absent manifest error, of the
accuracy of the information contained therein.
(l) Lenders' Failure to Perform. All Revolving Loans (other than Non-
---------------------------
Ratable Loans and Agent Advances) shall be made by the Lenders simultaneously
and in accordance with their Pro Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Revolving Loans hereunder, nor shall any Commitment of
any Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligation to make any Revolving Loans hereunder, (ii) no
failure by any Lender to perform its obligation to make any Revolving Loans
hereunder shall excuse any other Lender from its obligation to make any
Revolving Loans hereunder, and (iii) the obligations of each Lender hereunder
shall be several, not joint and several.
.3 Bank Products. The Borrower may request and the Bank may, in its sole
-----------------
and absolute discretion, arrange for the Borrower to obtain from the Bank or the
Bank's Affiliates Bank
-34-
Products, although the Borrower is not required to do so. In the event the
Borrower requests the Bank to procure Bank Products, then the Borrower agrees to
indemnify and hold the Bank and the Lenders harmless from any and all
obligations now or hereafter owing to any other Person by the Bank or any of the
Lenders or the Bank's affiliates arising from or related to such Bank Products.
The Borrower acknowledges and agrees that the obtaining of Bank Products from
the Bank or the Bank's Affiliates (a) is in the sole and absolute discretion of
the Bank or the Bank's Affiliates, and (b) is subject to all rules and
regulations of the Bank.
.4 Letters of Credit.
---------------------
(a) Agreement to Issue or Cause To Issue. Subject to the terms and
------------------------------------
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrower herein set forth, the Agent agrees (i) to issue or
cause to be issued for the account of the Borrower one or more
commercial/documentary and standby letters of credit ("Letters of Credit") and
(ii) to provide credit support or other enhancement to a Letter of Credit Issuer
acceptable to Agent, which issues Letters of Credit for the account of the
Borrower (any such credit support or enhancement being herein referred to as a
"Credit Support") in accordance with this Section 2.4 from time to time during
-----------
the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
--------------------------------
obligation to take steps to issue or cause to be issued any Letter of Credit or
to provide Credit Support for any Letter of Credit at any time if: (i) the
maximum undrawn amount of the requested Letter of Credit is greater than the
Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn
amount of the requested Letter of Credit and all commissions, fees, and charges
due from the Borrower in connection with the opening thereof exceed the
Availability of the Borrower at such time; or (iii) such Letter of Credit has an
expiration date later than thirty (30) days prior to the Stated Termination Date
or more than twelve (12) months from the date of issuance.
(c) Other Conditions. In addition to being subject to the
----------------
satisfaction of the applicable conditions precedent contained in Article 10, the
----------
obligation of the Agent to issue or to cause to be issued any Letter of Credit
or to provide Credit Support for any Letter of Credit is subject to the
following conditions precedent having been satisfied in a manner satisfactory to
the Agent:
(1) The Borrower shall have delivered to the Letter of
Credit Issuer, at such times and in such manner as such Letter of Credit
Issuer may prescribe, an application in form and substance satisfactory to
such Letter of Credit Issuer and the Agent for the issuance of the Letter
of Credit and such other documents as may be required pursuant to the terms
thereof, and the form and terms of the proposed Letter of Credit shall be
satisfactory to the Agent and the Letter of Credit Issuer; and
(2) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to enjoin
or restrain money center banks generally from issuing letters of credit of
the type and in the amount of the proposed Letter of Credit, and no law,
rule or regulation applicable to money center
-35-
banks generally and no request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over money
center banks generally shall prohibit, or request that the proposed Letter
of Credit Issuer refrain from, the issuance of letters of credit generally
or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
-----------------------------
(1) Request for Issuance. The Borrower shall give the Agent three
--------------------
(3) Business Days prior written notice of the Borrower's request for the
issuance of a Letter of Credit. Such notice shall be irrevocable and shall
specify the original face amount of the Letter of Credit requested, the
effective date (which date shall be a Business Day) of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of Credit
is to expire (which date shall be a Business Day), the purpose for which such
Letter of Credit is to be issued, and the beneficiary of the requested Letter
of Credit. The Borrower shall attach to such notice the proposed form of the
Letter of Credit.
(2) Responsibilities of the Agent; Issuance. The Agent shall
---------------------------------------
determine, as of the Business Day immediately preceding the requested effective
date of issuance of the Letter of Credit set forth in the notice from the
Borrower pursuant to Section 2.4(d)(1), (A) the amount of the applicable Unused
-----------------
Letter of Credit Subfacility and (B) the Availability as of such date. If (i)
the undrawn amount of the requested Letter of Credit is not greater than the
Unused Letter of Credit Subfacility and (ii) the issuance of such requested
Letter of Credit and all commissions, fees, and charges due from the Borrower in
connection with the opening thereof would not exceed the Availability of the
Borrower, the Agent shall, so long as the other conditions hereof are met, issue
or cause the Letter of Credit Issuer, if not the Bank, to issue the requested
Letter of Credit on such requested effective date of issuance.
(3) Notice of Issuance. On each Settlement Date, the Agent shall
------------------
give notice to each Lender of the issuance of all Letters of Credit issued since
the last Settlement Date.
(4) No Extensions or Amendment. The Agent shall not be obligated to
--------------------------
extend or amend any Letter of Credit issued hereunder unless the requirements of
this Section 2.4 are met as though a new Letter of Credit were being requested
-----------
and issued. With respect to any Letter of Credit which contains any "evergreen"
or automatic renewal provision, each Lender shall be deemed to have consented to
any such extension or renewal unless any such Lender shall have provided to the
Agent, not less than 30 days prior to the last date on which the applicable
issuer can in accordance with the terms of the applicable Letter of Credit
decline to extend or renew such Letter of Credit, written notice that it
declines to consent to any such extension or renewal; provided, that if all of
the requirements of this Section 2.4 are met and no Default or Event of Default
-----------
exists, no Lender shall decline to consent to any such extension or renewal.
-36-
(e) Payments Pursuant to Letters of Credit.
--------------------------------------
(1) Payment of Letter of Credit Obligations. The Borrower agrees to
---------------------------------------
reimburse immediately the Letter of Credit Issuer for any draw under any Letter
of Credit and the Agent for the account of the Lenders upon any payment pursuant
to any Credit Support immediately upon demand, and to pay the Letter of Credit
Issuer the amount of all other obligations and other amounts payable to such
Letter of Credit Issuer under or in connection with any Letter of Credit
immediately when due, irrespective of any claim, setoff, defense or other right
which the Borrower may have at any time against such issuer or any other Person.
(2) Revolving Loans to Satisfy Reimbursement Obligations. In the
------------------------------------------------------
event that the Letter of Credit Issuer of any Letter of Credit honors a draw
under such Letter of Credit or the Agent shall have made any payment pursuant to
any Credit Support and the Borrower shall not have repaid such amount to the
Letter of Credit Issuer of such Letter of Credit or the Agent, as applicable,
pursuant to Section 2.4(e)(1), the Agent shall, upon receiving notice of such
----------------
failure, notify each Lender of such failure, and each Lender shall
unconditionally pay to the Agent, for the account of the Letter of Credit Issuer
or the Agent, as applicable, as and when provided hereinbelow, an amount equal
to such Lender's Pro Rata Share of the amount of such payment in Dollars and in
same day funds. If the Agent so notifies the Lenders prior to 12:00 noon
(Pasadena, California time) on any Business Day, each Lender shall make
available to the Agent the amount of such payment, as provided in the
immediately preceding sentence, on such Business Day. Such amounts paid by the
Lenders to the Agent shall constitute Revolving Loans which shall be deemed to
have been requested by the Borrower pursuant to Section 2.2 as set forth in
-----------
Section 4.7.
(f) Participations.
--------------
(1) Purchase of Participations. Immediately upon issuance of any
--------------------------
Letter of Credit in accordance with Section 2.4(d), each Lender shall be deemed
--------------
to have irrevocably and unconditionally purchased and received without recourse
or warranty, an undivided interest and participation equal to such Lender's Pro
Rata Share of the face amount of such Letter of Credit or the Credit Support
provided through the Agent to the Letter of Credit Issuer, if not the Agent, in
connection with the issuance of such Letter of Credit (including all obligations
of the Borrower with respect thereto, and any security therefor or guaranty
pertaining thereto).
(2) Sharing of Reimbursement Obligation Payments. Whenever the Agent
--------------------------------------------
receives a payment from the Borrower on account of reimbursement obligations in
respect of a Letter of Credit or Credit Support as to which the Agent has
previously received for the account of the Letter of Credit Issuer thereof
payment from a Lender pursuant to Section 2.4(e)(2), the Agent shall promptly
-----------------
pay to such Lender such Lender's Pro Rata Share of such payment from the
Borrower in Dollars. Each such payment shall be made by the Agent on the
Business Day on which the Agent receives
-37-
immediately available funds paid to such Person pursuant to the immediately
preceding sentence, if received prior to 1:00 p.m. (Pasadena, California time)
on such Business Day and otherwise on the next succeeding Business Day.
(3) Documentation. Upon the request of any Lender, the Agent shall
-------------
furnish to such Lender copies of any Letter of Credit, reimbursement agreements
executed in connection therewith, application for any Letter of Credit and
credit support or enhancement provided through the Agent in connection with the
issuance of any Letter of Credit, and such other documentation as may reasonably
be requested by such Lender.
(4) Obligations Irrevocable. The obligations of each Lender to make
------------------------
payments to the Agent with respect to any Letter of Credit or with respect to
any Credit Support provided through the Agent with respect to a Letter of
Credit, and the obligations of the Borrower to make payments to the Agent, for
the account of the Lenders, shall be irrevocable, not subject to any
qualification or exception whatsoever, including any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) 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 or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), any Lender, the Agent, the
issuer of such Letter of Credit, or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transactions
between the Borrower or any other Person and the beneficiary named in any
Letter of Credit);
(iii) any draft, certificate or any other document presented
under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
or
(v) the occurrence of any Default or Event of Default.
(g) Recovery or Avoidance of Payments. In the event any payment by or on
----------------------------------
behalf of the Borrower received by the Agent with respect to any Letter of
Credit or Credit Support provided for any Letter of Credit and distributed by
the Agent to the Lenders on account of their respective participations therein
is thereafter set aside, avoided or recovered from the Agent in connection with
any receivership, liquidation or bankruptcy proceeding, the Lenders shall, upon
demand by the Agent, pay to the Agent their respective Pro Rata Shares of such
-38-
amount set aside, avoided or recovered, together with interest at the rate
required to be paid by the Agent upon the amount required to be repaid by it.
(h) Compensation for Letters of Credit.
----------------------------------
(1) Letter of Credit Fee. The Borrower agrees to pay to the Agent
--------------------
with respect to each Letter of Credit, for the account of the Lenders, the
Letter of Credit Fee specified in, and in accordance with the terms of, Section
--------
3.6.
---
(2) Issuer Fees and Charges. The Borrower shall pay to the Letter of
-----------------------
Credit Issuer of any Letter of Credit, or to the Agent for the account of the
Letter of Credit Issuer of any such Letter of Credit, solely for such Letter of
Credit Issuer's account, such fees and other charges as are charged by such
Letter of Credit Issuer for letters of credit issued by it, including its
standard fees for issuing, administering, amending, renewing, paying and
canceling letters of credit and all other fees associated with issuing or
servicing letters of credit, as and when assessed.
(i) Indemnification; Exoneration; Power of Attorney.
-----------------------------------------------
(1) Indemnification. In addition to amounts payable as elsewhere
---------------
provided in this Section 2.4, in Section 15.11 and pursuant to any indemnity
----------- -------------
agreement contained in any letter of credit agreement between the Borrower and
any Letter of Credit Issuer (whether now existing or hereafter arising), the
Borrower hereby agrees to protect, indemnify, pay and save the Lenders and the
Agent harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees) which any Lender or the Agent (other than the Agent in its capacity as
Letter of Credit Issuer) may incur or be subject to as a consequence, direct or
indirect, of the issuance of any Letter of Credit or the provision of any credit
support or enhancement in connection therewith. The agreement in this Section
-------
2.4(i)(1) shall survive payment of all Obligations. Nothing contained in this
---------
Agreement is intended to limit or waive the Borrower's rights, if any, with
respect to the Letter of Credit Issuer which arise by operation of law or as a
result of the letter of credit application and related documents executed by and
between the Borrower and the Letter of Credit Issuer.
(2) Assumption of Risk by the Borrower. As among the Borrower, the
----------------------------------
Lenders, and the Agent, the Borrower assumes all risks of the acts and omissions
of, or misuse of any of the Letters of Credit by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, the Lenders and the Agent shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any Person in connection with the application for and issuance of
and presentation of drafts with respect to any of the Letters of Credit, even if
it should prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (C) the
failure of the beneficiary of any Letter of
-39-
Credit to comply duly with conditions required in order to draw upon such Letter
of Credit; (D) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document required in
order make a drawing under any Letter of Credit or of the proceeds thereof; (G)
the misapplication by the beneficiary of any Letter of Credit of the proceeds of
any drawing under such Letter of Credit; or (H) any consequences arising from
causes beyond the control of the Lenders or the Agent, including any act or
omission, whether rightful or wrongful, of any present or future de jure or de
-- ---- -- --
facto Governmental Authority. None of the foregoing shall affect, impair or
-----
prevent the vesting of any rights or powers of the Agent or any Lender under
this Section 2.4(i).
--------------
(3) Exoneration. In furtherance and extension, and not in limitation,
-----------
of the specific provisions set forth above, any action taken or omitted by the
Agent or any Lender under or in connection with any of the Letters of Credit or
any related certificates, if taken or omitted in good faith, shall not put the
Agent or any Lender under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such Person.
(4) Indemnification by Lenders. The Lenders agree to indemnify the
--------------------------
Letter of Credit Issuer (to the extent not reimbursed by the Borrower and
without limiting the obligations of Borrower hereunder) ratably in accordance
with their respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against the Letter of Credit
Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter
of Credit Issuer under any Letter of Credit or any Loan Document in connection
therewith; provided that no Lender shall be liable for any of the foregoing to
--------
the extent it arises from the gross negligence or willful misconduct of the
person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Letter of Credit Issuer promptly upon demand for its Pro
Rata Share of any costs or expenses payable by Borrower to the Letter of Credit
Issuer, to the extent that the Letter of Credit Issuer is not promptly
reimbursed for such costs and expenses by Borrower. The agreement contained in
this section shall survive payment in full of all Obligations.
(5) Account Party. The Borrower hereby authorizes and directs any
-------------
Letter of Credit Issuer to name the Borrower as the "Account Party" therein and
to deliver to the Agent all instruments, documents and other writings and
property received by the Letter of Credit Issuer pursuant to the Letter of
Credit, and to accept and rely upon the Agent's instructions and agreements with
respect to all matters arising in connection with the Letter of Credit or the
application therefor.
-40-
(j) Supporting Letter of Credit; Cash Collateral. If, notwithstanding the
--------------------------------------------
provisions of Section 2.4(b) and Section 12.1 any Letter of Credit is
-------------- ------------
outstanding upon the termination of this Agreement, then upon such termination
the Borrower shall deposit with the Agent, for the ratable benefit of the Agent
and the Lenders, with respect to each Letter of Credit then outstanding, as the
Majority Lenders, in their discretion shall specify, either (A) a standby letter
of credit (a "Supporting Letter of Credit") in form and substance satisfactory
to the Agent, issued by an issuer satisfactory to the Agent in an amount equal
to the greatest amount for which such Letter of Credit may be drawn plus any
fees and expenses associated with such Letter of Credit, under which Supporting
Letter of Credit the Agent is entitled to draw amounts necessary to reimburse
the Agent and the Lenders for payments to be made by the Agent and the Lenders
under such Letter of Credit or under any credit support or enhancement provided
through the Agent with respect thereto and any fees and expenses associated with
such Letter of Credit, or (B) cash in amounts necessary to reimburse the Agent
and the Lenders for payments made by the Agent or the Lenders under such Letter
of Credit or under any credit support or enhancement provided through the Agent
with respect thereto and any fees and expenses associated with such Letter of
Credit. Such Supporting Letter of Credit or deposit of cash shall be held by the
Agent, for the ratable benefit of the Agent and the Lenders, as security for,
and to provide for the payment of, the aggregate undrawn amount of such Letters
of Credit remaining outstanding.
ARTICLE 3
---------
INTEREST AND FEES
-----------------
.1 Interest.
------------
(a) Interest Rates. All outstanding Obligations shall bear interest
--------------
on the unpaid principal amount thereof (including, to the extent permitted by
law, on interest thereon not paid when due) from the date made until paid in
full in cash at a rate determined by reference to the Base Rate or the LIBOR
Rate and Sections 3.1(a)(i) or (ii), as applicable, but not to exceed the
----------------- ----
Maximum Rate described in Section 3.3. Subject to the provisions of Section 3.2,
----------- -----------
any of the Loans may be converted into, or continued as, Base Rate Loans or
LIBOR Rate Loans in the manner provided in Section 3.2. If at any time Loans are
-----------
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the interest rate applicable thereto, then those Loans shall be Base Rate Loans
and shall bear interest at a rate determined by reference to the Base Rate until
notice to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise provided
herein, the outstanding Obligations shall bear interest as follows:
(i) For all Base Rate Loans and other Obligations (other than
LIBOR Rate Loans) at a fluctuating per annum rate equal to the Base Rate
plus the Applicable Margin; and
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(ii) For all LIBOR Rate Loans at a per annum rate equal to the
LIBOR Rate plus the Applicable Margin.
----
Each change in the Base Rate shall be reflected in the interest rate described
in clause (i) above as of the effective date of such change. All interest
charges shall be computed on the basis of a year of 360 days and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest accrued on all Loans will be payable in arrears on
the first day of each month hereafter.
(b) Default Rate. If any Default or Event of Default occurs and is
------------
continuing and the Majority Lenders in their discretion so elect, then, while
any such Default or Event of Default is outstanding, all of the Obligations
shall bear interest at the Default Rate applicable thereto.
.2 Conversion and Continuation Elections. (a) The Borrower may, upon
------------------------------------------
irrevocable written notice to the Agent in accordance with Section 3.2(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans
to convert any such Loans (or any part thereof in an amount not less than
$5,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any LIBOR Rate Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than $5,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
--------
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $5,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate.
(b) The Borrower shall deliver a notice of conversion/continuation in
the form of Exhibit C ("Notice of Conversion/Continuation") to be received by
---------
the Agent not later than 11:00 a.m. (Pasadena, California time) at least three
Business Days in advance of the Conversion/Continuation Date, if the Loans are
to be converted into or continued as LIBOR Rate Loans and specifying:
(i) the applicable Borrower;
(ii) the proposed Conversion/Continuation Date;
(iii) the aggregate amount of Loans to be converted or renewed;
-42-
(iv) the type of Loans resulting from the proposed conversion or
continuation; and
(v) the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to LIBOR
Rate Loans, the Borrower has failed to select timely a new Interest Period to be
applicable to LIBOR Rate Loans or if any Default or Event of Default then
exists, the Borrower shall be deemed to have elected to convert such LIBOR Rate
Loans into Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Conversion/Continuation. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) During the existence of a Default or Event of Default, the
Borrower may not elect to have a Loan converted into or continued as a LIBOR
Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
there may not be more than five different Interest Periods in effect hereunder.
.3 Maximum Interest Rate. In no event shall any interest rate provided
-------------------------
for hereunder exceed the maximum rate legally chargeable by any Lender under
applicable law for such Lender with respect to loans of the type provided for
hereunder (the "Maximum Rate"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest paid
hereunder equals the amount of interest which would have been paid if the same
had not been limited by the Maximum Rate. In the event that, upon payment in
full of the Obligations, the total amount of interest paid or accrued under the
terms of this Agreement is less than the total amount of interest which would,
but for this Section 3.3, have been paid or accrued if the interest rates
-----------
otherwise set forth in this Agreement had at all times been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect or (ii) the amount of interest which would
have accrued had the interest rates otherwise set forth in this Agreement, at
all times, been in effect over (b) the amount of interest actually paid or
accrued under this Agreement. In the event that a court of competent
jurisdiction determines that the Agent and/or any Lender has received interest
and other charges hereunder in excess of the Maximum Rate, such excess shall be
deemed received on account of, and shall automatically be applied to reduce, the
Obligations other than interest, in the inverse order of maturity, and if there
are no Obligations outstanding, the Agent and/or such Lender shall refund to the
Borrower such excess.
-43-
.4 Arrangement Fee. The Borrower agrees to pay the Agent, for the account
-------------------
of the Agent and for the account of the Lenders in accordance with their
respective Pro Rata Shares, an arrangement fee (the "Arrangement Fee") as
required by the Fee Letter, which Arrangement Fee shall be fully earned by the
Agent and the Lenders when due as provided in the Fee Letter.
.5 Unused Line Fee. Until the Loans have been paid in full and the
-------------------
Agreement terminated, the Borrower agrees to pay, on the first day of each month
and on the Termination Date, to the Agent, for the account of the Lenders, in
accordance with their respective Pro Rata Shares, an unused line fee (the
"Unused Line Fee") equal to the Applicable Fee Amount times the amount by which
the Maximum Revolver Amount exceeded the sum of the average daily outstanding
amount of Revolving Loans and the average daily undrawn face amount of all
outstanding Letters of Credit during the immediately preceding month, or shorter
period if calculated on the Termination Date. The Unused Line Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall accrue at all times from and after (but not prior to) the Loan
Availability Date. All payments received by the Agent on account of Accounts or
as proceeds of other Collateral shall be deemed to be credited to the Loan
Account immediately upon receipt for purposes of calculating the Unused Line Fee
pursuant to this Section 3.5.
-----------
.6 Letter of Credit Fee. The Borrower agrees to pay to the Agent, for
------------------------
the account of the Lenders, in accordance with their respective Pro Rata Shares,
for each Letter of Credit, a fee (the "Letter of Credit Fee") equal to the
Applicable Fee Amount times the undrawn face amount of each Letter of Credit,
plus all out-of-pocket costs, fees and expenses incurred by the Agent in
----
connection with the application for, processing of, issuance of, or amendment to
any Letter of Credit, which costs, fees and expenses could include a "fronting
fee" payable to such issuer; The Letter of Credit Fee shall be payable monthly
in arrears on the first day of each month following any month in which a Letter
of Credit was issued or deemed issued (in the case of any Existing Letter of
Credit) and/or in which a Letter of Credit remains outstanding. The Letter of
Credit Fee shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
ARTICLE 4
---------
PAYMENTS AND PREPAYMENTS
------------------------
.1 Revolving Loans. The Borrower shall repay the outstanding principal
-------------------
balance of the Revolving Loans, plus all accrued but unpaid interest thereon, on
the Termination Date. The Borrower may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement; provided, however, that with
-------- -------
respect to any LIBOR Rate Loans prepaid by the Borrower prior to the expiration
date of the Interest Period applicable thereto, the Borrower promises to pay to
the Agent for account of the Lenders the amounts described in Section 5.4. In
-----------
addition, and without limiting the generality of the foregoing, upon demand the
Borrower promises to pay to the Agent, for account of the Lenders, the amount,
without duplication, by which the Aggregate Revolver Outstandings exceed the
Borrowing Base.
-44-
.2 Termination of Facility. Effective from and after the Loan
---------------------------
Availability Date, the Borrower may terminate this Agreement upon at least
fifteen (15) Business Days' notice to the Agent and the Lenders, upon (a) the
payment in full of all outstanding Revolving Loans, together with accrued
interest thereon, and the cancellation and return of all outstanding Letters of
Credit, (b) the payment of the early termination fee set forth in the next
sentence, (c) the payment in full in cash of all other Obligations together with
accrued interest thereon, and (d) with respect to any LIBOR Rate Loans prepaid
in connection with such termination prior to the expiration date of the Interest
Period applicable thereto, the payment of the amounts described in Section 5.4.
-----------
If this Agreement is terminated at any time prior to the Stated Termination
Date, whether pursuant to this Section or pursuant to Section 11.2, the Borrower
------------
shall pay to the Agent,for the account of the Lenders, an early termination fee
determined in accordance with the following table:
Period during which Early Termination
early termination Fee
occurs
----------------------------------------- ----------------------------------------
On or prior to the first Anniversary Date 2.0% of the average Loans and Letters of
Credit outstanding during the 180 days
(or lesser period if within 180 days of
the Closing Date) prior to the date of
termination.
After the first Anniversary Date but on or 1.0% of the average Loans and Letters of
prior to the second Anniversary Date Credit outstanding during the 180 days
prior to the date of termination;
provided, however, that in the event this
-------- -------
Agreement is terminated after the first
Anniversary Date in connection with a
refinancing hereof by a credit facility
agented by any unit or division of the
Bank, no early termination fee shall be
charged.
After the second Anniversary Date but sixty 0.5% of the average Loans and Letters of
(60) days prior to the Stated Termination Credit outstanding during the 180 days
Date prior to the date of termination;
provided, however, that in the event this
-------- -------
Agreement is terminated after the first
Anniversary Date in connection with a
refinancing hereof by a credit facility
agented by any unit or division of the
Bank, no early termination fee shall be
charged.
.3 Payments by the Borrower. (a) All payments to be made by the Borrower
---------------------------
shall be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided
-45-
herein, all payments by the Borrower shall be made to the
Agent for the account of the Lenders at the Agent's address set forth in Section
-------
15.8, and shall be made in Dollars and in immediately available funds, no later
----
than 1:00 p.m. (Pasadena, California time) on the date specified herein. Any
payment received by the Agent later than 1:00 p.m. (Pasadena, California time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior to the
date on which any payment is due to the Lenders that the Borrower will not make
such payment in full as and when required, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Borrower has not
made such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
.4 Payments as Revolving Loans. All payments of principal, interest,
--------------------------------
reimbursement obligations in connection with Letters of Credit, fees, premiums
and other sums payable hereunder, including all reimbursement for expenses
pursuant to Section 15.7, may, at the option of the Agent, in its sole
------------
discretion, subject only to the terms of this Section 4.4, be paid from the
-----------
proceeds of Revolving Loans made hereunder, whether made following a request by
the Borrower pursuant to Section 2.2 or a deemed request as provided in this
-------
Section 4.4. The Borrower hereby irrevocably authorizes the Agent to charge the
-----------
Loan Account for the purpose of paying principal, interest, reimbursement
obligations in connection with Letters of Credit, fees, premiums and other sums
payable hereunder, including reimbursing expenses pursuant to Section 15.7, and
------------
agrees that all such amounts charged shall constitute Revolving Loans (including
Non-Ratable Loans and Agent Advances) and that all such Revolving Loans so made
shall be deemed to have been requested by Borrower pursuant to Section 2.2.
-----------
.5 Apportionment, Application and Reversal of Payments. Aggregate
-------------------------------------------------------
principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders. All payments shall be remitted to the
Agent and all such payments not relating to principal or interest of specific
Loans, or not constituting payment of specific fees, and all proceeds of
Accounts or other Collateral received by the Agent, shall be applied, ratably,
subject to the provisions of this Agreement, first, to pay any fees, indemnities
-----
or expense reimbursements then due to the Agent from the Borrower; second, to
------
pay any fees or expense reimbursements then due to the Lenders from the
Borrower; third, to pay interest due in respect of all Revolving Loans,
-----
including Non-Ratable
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Loans and Agent Advances; fourth, to pay or prepay principal of the Non-Ratable
------
Loans and Agent Advances; fifth, to pay or prepay principal of the Revolving
-----
Loans (other than Non-Ratable Loans and Agent Advances) and unpaid reimbursement
obligations in respect of Letters of Credit; sixth to any amounts owing under
-----
any Bank Product; and seventh, to the payment of any other Obligation due to the
-------
Agent or any Lender by the Borrower. Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless an
Event of Default is outstanding, neither the Agent nor any Lender shall apply
any payments which it receives to any LIBOR Rate Loan, except (a) on the
expiration date of the Interest Period applicable to any such LIBOR Rate Loan,
or (b) in the event, and only to the extent, that there are no outstanding Base
Rate Loans. The Agent shall promptly distribute to each Lender, pursuant to the
applicable wire transfer instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay as
provided for in Section 2.2(j). The Agent and the Lenders shall have the
--------------
continuing and exclusive right to apply and reverse and reapply any and all such
proceeds and payments to any portion of the Obligations.
.6 Indemnity for Returned Payments. If, after receipt of any payment of,
----------------------------------
or proceeds applied to the payment of, all or any part of the Obligations, the
Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person, because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continue and this Agreement shall continue in full force as
if such payment or proceeds had not been received by the Agent or such Lender,
and the Borrower shall be liable to pay to the Agent, and hereby does indemnify
the Agent and the Lenders and hold the Agent and the Lenders harmless for, the
amount of such payment or proceeds surrendered. The provisions of this Section
-------
4.6 shall be and remain effective notwithstanding any contrary action which may
---
have been taken by the Agent or any Lender in reliance upon such payment or
application of proceeds, and any such contrary action so taken shall be without
prejudice to the Agent's and the Lenders' rights under this Agreement and shall
be deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this Section 4.6 shall
-----------
survive the termination of this Agreement.
.7 Agent's and Lenders' Books and Records; Monthly Statements. The
--------------------------------------------------------------
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably presumptive proof thereof, irrespective of whether
any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Borrower a monthly statement of Loans, payments, and
other transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Borrower and an account stated (except for
reversals and reapplications of payments made as provided in Section 4.5 and
-----------
corrections of errors discovered by the Agent), unless the Borrower notifies the
Agent in writing to the contrary within thirty (30) days after such statement is
rendered. In the event a timely written notice of objections is given
-47-
by the Borrower, only the items to which exception is expressly made will be
considered to be disputed by the Borrower.
ARTICLE 5
---------
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
.1 Taxes. (a) Any and all payments by the Borrower to each Lender or the
---------
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for any Taxes. In addition, the
Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each Lender
and the Agent for the full amount of Taxes or Other Taxes (including any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by the Lender or the Agent and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days after
the date the Lender or the Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Borrower shall also pay to each Lender or the Agent for
the account of such Lender, at the time interest is paid, all additional
amounts which the respective Lender specifies as necessary to preserve the
after-tax yield the Lender would have received if such Taxes or Other Taxes
had not been imposed.
(d) Within 30 days after the date of any payment by the Borrower of
Taxes or Other Taxes, the Borrower shall furnish the Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
-48-
(e) If the Borrower is required to pay additional amounts to any
Lender or the Agent pursuant to subsection (c) of this Section, then such Lender
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its lending office so as to eliminate any such
additional payment by the Borrower which may thereafter accrue, if such change
in the judgment of such Lender is not otherwise disadvantageous to such Lender.
.2 Illegality. (a) If any Lender determines that the introduction of any
--------------
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by the Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until the Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Rate Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such LIBOR
Rate Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under Section 5.4, either on the last day of the
-----------
Interest Period thereof, if the Lender may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if the Lender may not lawfully
continue to maintain such LIBOR Rate Loan. If the Borrower is required to so
prepay any LIBOR Rate Loan, then concurrently with such prepayment, the Borrower
may, at its option, borrow from the affected Lender, in the amount of such
repayment, a Base Rate Loan.
.3 Increased Costs and Reduction of Return. (a) If any Lender determines
-------------------------------------------
that, due to either (i) the introduction of or any change in the interpretation
of any law or regulation or (ii) the compliance by that Lender with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Rate Loans, or agreeing to issue, issuing, funding or maintaining any
Letter of Credit, then the Borrower shall be liable for, and shall from time to
time, upon demand (with a copy of such demand to be sent to the Agent), pay to
the Agent for the account of such Lender, additional amounts as are sufficient
to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Lender or any corporation or other entity controlling the Lender with any
Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Lender or any corporation or other
entity controlling the Lender and (taking into consideration such Lender's or
such corporation's or other entity's policies with respect to capital adequacy
and such Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitments, loans, credits or
-49-
obligations under this Agreement, then, upon demand of such Lender to the
Borrower through the Agent, the Borrower shall pay to the Lender, from time to
time as specified by the Lender, additional amounts sufficient to compensate the
Lender for such increase.
.4 Funding Losses. The Borrower shall reimburse each Lender and hold each
------------------
Lender harmless from any loss or expense which the Lender may sustain or incur
as a consequence of:
(a) the failure of the Borrower to make on a timely basis any payment
of principal of any LIBOR Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation;
(c) the prepayment or other payment (including after acceleration
thereof) of an LIBOR Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
.5 Inability to Determine Rates. If the Agent determines that for any
--------------------------------
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
.6 Certificates of Lenders. Any Lender claiming reimbursement or
---------------------------
compensation under this Article 5 shall deliver to the Borrower (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Lender hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.
.7 Survival. The agreements and obligations of the Borrower in this
------------
Article 5 shall survive the payment of all other Obligations.
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ARTICLE 6
---------
COLLATERAL
----------
.1 Grant of Security Interest. (a) As security for all Obligations, the
------------------------------
Borrower hereby grants to the Agent, for the benefit of the Agent and the
Lenders, a continuing security interest in, lien on, assignment of and right of
set-off against, all of the following property and assets of the Borrower,
whether now owned or existing or hereafter acquired or arising, regardless of
where located:
(i) all Accounts (including any credit enhancement therefor);
(ii) all Inventory;
(iii) all chattel paper, instruments and documents;
(iv) all General Intangibles;
(v) all money, cash, cash equivalents, securities and other
property of any kind of the Borrower held directly or indirectly by the
Agent or any Lender;
(vi) all of the Borrower's deposit accounts, credits, and balances
with and other claims against the Agent or any Lender or any of their
Affiliates, including any Payment Account;
(vii) all books, records and other property related to or
referring to any of the foregoing, including books, records, account
ledgers, data processing records, computer software and other property and
General Intangibles at any time evidencing or relating to any of the
foregoing; and
(viii) all accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing, including, but not limited
to, proceeds of any insurance policies and claims against third parties
with respect to all or any of the foregoing.
All of the foregoing and all other property of the Borrower in which the Agent
or any Lender may at any time be granted a Lien, is herein collectively referred
to as the "Collateral." Notwithstanding the foregoing provisions of this
Section 6.1, such grant of a security interest shall not extend to, and the term
-----------
"Collateral" shall not include, any General Intangibles of the Borrower
consisting of licenses, leases or other contracts or any Accounts payable to the
Parent by the German Subsidiary (such Accounts, the "German Subsidiary
Accounts"), to the extent that (i) such General Intangibles or German Subsidiary
Accounts are not assignable or capable of
-51-
being encumbered as a matter of law or under the terms of the license, lease or
other agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent of
the licensor or lessor thereof or other applicable party thereto and (ii) such
consent has not been obtained; provided, however, that the foregoing
-------- -------
grant of security interest shall extend to, and the term "Collateral" shall
include (but subject to the exclusions from the definition of General
Intangibles set forth in clauses (a) and (b) of such definition), (A) any
General Intangible which is a proceed of, or otherwise related to the
enforcement or collection of, any Account (other than any German Subsidiary
Account which is excludable as provided above), (B) any and all proceeds of any
General Intangibles and of the German Subsidiary Accounts which are otherwise
excluded to the extent that the assignment or encumbrance of such proceeds is
not so restricted, and (C) upon obtaining the consent of any such licensor,
lessor or other applicable party with respect to any such otherwise excluded
General Intangibles or German Subsidiary Accounts (it being understood by the
parties that the Borrower shall be under no obligation hereunder to obtain any
such consent), such General Intangibles and German Subsidiary Accounts, as well
as any and all proceeds thereof, that might have theretofore have been excluded
from such grant of a security interest and the term "Collateral."
(b) All of the Obligations shall be secured by all of the Collateral.
.2 Perfection and Protection of Security Interest. (a) The Borrower shall,
--------------------------------------------------
at its expense, perform all steps requested by the Agent at any time to perfect,
maintain, protect, and enforce the Agent's Liens, including: (i) executing and
filing financing or continuation statements, and amendments thereof, in form and
substance satisfactory to the Agent; (ii) delivering to the Agent the originals
of all instruments, documents, and chattel paper, and all other Collateral of
which the Agent determines it should have physical possession in order to
perfect and protect the Agent's security interest therein, duly pledged,
endorsed or assigned to the Agent without restriction; (iii) delivering to the
Agent warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued and certificates of title
covering any portion of the collateral for which certificates of title have been
issued; (iv) when an Event of Default exists, transferring Inventory to
warehouses designated by the Agent; (v) placing notations on the Borrower's
books of account to disclose the Agent's security interest; (vii) delivering to
the Agent all letters of credit on which the Borrower is named beneficiary; and
(viii) taking such other steps as are reasonably deemed necessary or desirable
by the Agent to maintain and protect the Agent's Liens. To the extent permitted
by applicable law, the Agent may file, without the Borrower's signature, one or
more financing statements disclosing the Agent's Liens. The Borrower agrees that
a carbon, photographic, photostatic, or other reproduction of this Agreement or
of a financing statement is sufficient as a financing statement.
(b) If any Collateral is at any time in the possession or control of
any warehouseman, bailee or any of the Borrower's agents or processors, then the
Borrower shall notify the Agent thereof and shall, at the request of Agent,
notify such Person of the Agent's security interest in such Collateral and
instruct such Person to hold all such Collateral for the Agent's account subject
to the Agent's instructions. If at any time any Collateral is located on any
operating facility of the Borrower which is not owned by the Borrower, then the
Borrower
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shall, at the request of the Agent, obtain written subordinations, in form and
substance satisfactory to the Agent, of all present and future Liens to which
the owner or lessor of such premises may be entitled to assert against the
Collateral.
(c) From time to time, the Borrower shall, upon the Agent's request,
execute and deliver confirmatory written instruments pledging to the Agent, for
the ratable benefit of the Agent and the Lenders, the Collateral with respect to
the Borrower, but the Borrower's failure to do so shall not affect or limit any
security interest or any other rights of the Agent or any Lender in and to the
Collateral with respect to the Borrower. So long as this Agreement is in effect
and until all Obligations have been fully satisfied, the Agent's Liens shall
continue in full force and effect in all Collateral (whether or not deemed
eligible for the purpose of calculating the Availability or as the basis for any
advance, loan, extension of credit, or other financial accommodation).
.3 Location of Collateral. The Borrower represents and warrants to the
--------------------------
Agent and the Lenders that: (a) Schedule 6.3 is a correct and complete list of
------------
the Borrower's chief executive office, the location of its books and records and
the locations of the Collateral; and (b) Schedule 6.3 correctly identifies any
------------
of such facilities and locations that are not owned by the Borrower. The
Borrower covenants and agrees that it will not (i) maintain any Collateral at
any location other than those locations listed for the Borrower on Schedule 6.3,
------------
(ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified
in Schedule 6.3, unless it gives the Agent at least thirty (30) days' prior
------------
written notice thereof and executes any and all financing statements and other
documents that the Agent reasonably requests in connection therewith. Without
limiting the foregoing, the Borrower represents that all of its Inventory (other
than Inventory in transit) is, and covenants that all of its Inventory will be,
located either (a) on premises owned by the Borrower, (b) on premises leased by
the Borrower, provided that the Agent has, if reasonably requested by the Agent,
received an executed landlord waiver from the landlord of such premises in form
and substance satisfactory to the Agent, or (c) in a warehouse or with a bailee,
provided that the Agent has, if reasonably requested by the Agent, received an
executed bailee letter from the applicable Person in form and substance
reasonably satisfactory to the Agent.
.4 Title to, Liens on, and Sale and Use of Collateral. The Borrower
------------------------------------------------------
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (a) all of the Collateral is and will continue to be owned
by the Borrower free and clear of all Liens whatsoever, except for Permitted
Liens; (b) the Agent's Liens in the Collateral will not be subject to any prior
Lien; (c) the Borrower will use, store, and maintain the Collateral with all
reasonable care and will use such Collateral for lawful purposes only; and (d)
the Borrower will not, without the Agent's prior written approval, sell, or
dispose of or permit the sale or disposition of any of the Collateral except for
sales for scrap of excess or no-movement Inventory and other Inventory in the
ordinary course of business. The inclusion of proceeds in the Collateral shall
not be deemed to constitute the Agent's or any Lender's consent to any sale or
other disposition of the Collateral except as expressly permitted herein.
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.5 Appraisals. Whenever an Event of Default exists, and at such other
--------------
times not more frequently than once a year as the Agent requests, the Borrower
shall, at its expense and upon the Agent's request, provide the Agent with
appraisals or updates thereof of any or all of the Collateral from an appraiser,
and prepared on a basis, reasonably satisfactory to the Agent, such appraisals
and updates to include, without limitation, information required by applicable
law and regulation and by the internal policies of the Lenders.
.6 Access and Examination; Confidentiality. (a) The Agent, accompanied by
-------------------------------------------
any Lender which so elects, may, at Borrower's expense, at all reasonable times
during regular business hours (and at any time when an Event of Default exists
and is continuing) have access to, examine, audit, make extracts from or copies
of and inspect any or all of the Borrower's records, files, and books of account
and the Collateral, and discuss the Borrower's affairs with the Borrower's
officers and management; provided that the Agent and the Lenders agree that,
--------
unless an Event of Default has occurred and is continuing, the Agent shall not
conduct any such examination, audit or other inspection more than (i) two times
in any calendar year at any time prior to the first date, if any, on which the
Loan to Availability Ratio is equal to or greater than 50% for fifteen (15)
consecutive days (such date, a "Trigger Date") and (ii) four times in any
calendar year at any time thereafter; provided, further, that if after any
-------- -------
Trigger Date the Loan to Availability Ratio is less than 50% for 120 consecutive
days (such 120th day, a "Shut-Off Date") then, from and after such Shut-Off
Date, the Agent and the Lenders agree that, unless an Event of Default has
occurred and is continuing, the Agent shall not conduct any such examination,
audit or other inspection more than (x) two times during the portion of the
calendar year then remaining after such Shut-Off Date (and in no event more than
four times in all of such calendar year) and in any calendar year thereafter
until the next Trigger Date, if any, and (y) four times in any calendar year at
any time thereafter until the next Shut-Off Date, if any. The parties agree that
the immediately preceding proviso shall govern the permitted frequency of
examinations, audits and other inspections conducted by the Agent pursuant to
this Section 6.6 in respect of each subsequent Trigger Date and Shut-Off Date
occurring thereafter. The parties further agree that the Agent may conduct
additional examinations, audits or other inspections, at the expense of the
Agent and the Lenders, at all reasonable times during regular business hours, in
addition to those contemplated above in this Section 6.6. The Borrower will
-----------
deliver to the Agent any instrument necessary for the Agent to obtain records
from any service bureau maintaining records for the Borrower. The Agent may, and
at the direction of the Majority Lenders shall, at any time when a Default or
Event of Default exists, and at the Borrower's expense, make copies of all of
the Borrower's books and records relating to the Collateral and all relevant
financial records, or require the Borrower to deliver such copies to the Agent.
The Agent may, without expense to the Agent, use such of the Borrower's
respective personnel, supplies, and premises as may be reasonably necessary for
maintaining or enforcing the Agent's Liens. The Agent shall have the right, at
any time, in the Agent's name or in the name of a nominee of the Agent, to
verify the validity, amount or any other matter relating to the Accounts,
Inventory, or other Collateral, by mail, telephone, or otherwise.
(b) The Borrower agrees that, subject to the Borrower's prior consent
for uses other than in a traditional tombstone, the Agent and each Lender may
use the Borrower's name in advertising and promotional material and in
conjunction therewith disclose the general terms
-54-
of this Agreement. The Agent and each Lender severally agree to take
commercially reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Borrower and provided to the Agent or such Lender by or on behalf of the
Borrower, under this Agreement or any other Loan Document, and neither the
Agent, nor such Lender nor any of their respective Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents, except to the extent that such information (i) was
or becomes generally available to the public other than as a result of
disclosure by the Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Agent or such Lender; provided, however, that the Agent and any Lender may
-------- ------
disclose such information (1) at the request or pursuant to any requirement of
any Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (2) pursuant to subpoena or other court process; (3)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (4) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (6) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (7) to any prospective Participant or Assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or Assignee agrees to keep such information confidential to the same
extent required of the Agent and the Lenders hereunder; (8) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Borrower is party or is deemed party with the Agent
or such Lender, and (9) to its Affiliates, provided that such Affiliates agree
to be bound by the confidentiality provisions of this Section 6.6.
-----------
.7 Collateral Reporting. The Borrower shall provide the Agent with the
------------------------
following documents at the following times in form satisfactory to the Agent:
(a) on a monthly basis, at any time prior to the first date, if any, on which
either (i) the Loan to Availability Ratio is equal to or greater than 40% for
five (5) consecutive Business Days or (ii) Availability as of the close of
Agent's business is less than $50,000,000 (either of such dates, a "Trigger
Date"), and on a weekly basis thereafter, a schedule of the Borrower's Accounts
created since the last such schedule, which schedule shall also identify any
collections, credits and other adjustments in respect of the Borrower's Accounts
since the last such schedule, and a Borrowing Base Certificate; provided,
--------
however, that if after any Trigger Date the Loan to Availability Ratio is less
-------
than 40% for 120 consecutive days (such 120th day, a "Shut-Off Date") then, from
and after such Shut-Off Date, the Agent and the Lenders agree that the Borrower
shall only be required to deliver each such schedule of Borrower's Accounts and
each such Borrowing Base Certificate on a monthly basis until the next Trigger
Date, if any, and on a weekly basis thereafter until the next Shut-Off Date, if
any (the parties agree that the immediately preceding proviso shall govern the
required frequency of the Borrower's delivery of schedules of Borrower's
Accounts and Borrowing Base Certificates pursuant to this Section 6.7 in respect
of each subsequent Trigger Date and Shut-Off Date occurring thereafter); (b) on
a monthly basis, (i) an aging of the
-55-
Borrower's Accounts, together with a reconciliation to the previous month's or
week's, as the case may be, aging of the Borrower's Accounts and to the
Borrower's general ledger; (ii) an aging of the Borrower's accounts payable; and
(iii) Inventory reports by category, with additional detail showing additions to
and deletions from the Inventory; (c) upon request, copies of invoices in
connection with the Accounts, customer statements, credit memos, remittance
advices and reports, deposit slips, shipping and delivery documents in
connection with the Borrower's Accounts and for Inventory and Equipment acquired
by the Borrower, purchase orders and invoices; (d) upon request, a statement of
the balance of each of the Intercompany Accounts; (e) such other reports as to
the Collateral as the Agent shall reasonably request from time to time; and (f)
with the delivery of each of the foregoing, a certificate of the Borrower
executed by an officer thereof certifying as to the accuracy and completeness of
the foregoing. If any of the Borrower's records or reports of the Collateral are
prepared by an accounting service or other agent, the Borrower hereby authorizes
such service or agent to deliver such records, reports, and related documents to
the Agent, for distribution to the Lenders.
.8 Accounts. (a) The Borrower hereby represents and warrants to the Agent
------------
and the Lenders, with respect to the Borrower's Accounts, that: (i) each
existing Account represents, and each future Account will represent, a bona fide
---- ----
sale or lease and delivery of goods by the Borrower, or rendition of services by
the Borrower, in the ordinary course of the Borrower's business; (ii) each
existing Account is, and each future Account will be, for a liquidated amount
payable by the Account Debtor thereon on the terms set forth in the invoice
therefor or in the schedule thereof delivered to the Agent, without any offset,
deduction, defense, or counterclaim except those known to the Borrower and
disclosed to the Agent and the Lenders pursuant to this Agreement; (iii) no
payment will be received with respect to any Account, and no credit, discount,
or extension, or agreement therefor will be granted on any Account, except as
reported to the Agent and the Lenders in accordance with this Agreement; (iv)
each copy of an invoice delivered to the Agent by the Borrower will be a genuine
copy of the original invoice sent to the Account Debtor named therein; and (v)
all goods described in any invoice representing a sale of goods will have been
delivered to the Account Debtor and all services of the Borrower described in
each invoice will have been performed.
(b) The Borrower shall not re-date any invoice or sale or make sales
on extended dating beyond that customary in the Borrower's business or extend or
modify any Account. If the Borrower becomes aware of any matter adversely
affecting the collectability of any Account or Account Debtor involving an
amount greater than $200,000, including information regarding the Account
Debtor's creditworthiness, the Borrower will promptly so advise the Agent.
(c) The Borrower shall not accept any note or other instrument
(except a check or other instrument for the immediate payment of money) with
respect to any Account without the Agent's written consent. If the Agent
consents to the acceptance of any such instrument, it shall be considered as
evidence of the Account and not payment thereof and the Borrower will promptly
deliver such instrument to the Agent, endorsed by the Borrower to the Agent in a
manner satisfactory in form and substance to the Agent. Regardless of the form
of presentment, demand, notice of protest with respect thereto, the Borrower
shall remain liable thereon until such instrument is paid in full.
-56-
(d) The Borrower shall notify the Agent promptly of all disputes and
claims in excess of $1,000,000 with any Account Debtor, and agrees to settle,
contest, or adjust such dispute or claim at no expense to the Agent or any
Lender. No discount, credit or allowance shall be granted to any such Account
Debtor without the Agent's prior written consent, except for discounts, credits
and allowances made or given in the ordinary course of the Borrower's business
when no Event of Default exists hereunder. The Borrower shall send the Agent a
copy of each credit memorandum in excess of $1,000,000 as soon as issued. The
Agent may, and at the direction of the Majority Lenders shall, at all times when
an Event of Default exists hereunder, settle or adjust disputes and claims
directly with Account Debtors for amounts and upon terms which the Agent or the
Majority Lenders, as applicable, shall consider advisable and, in all cases, the
Agent will credit the Borrower's Loan Account with only the net amounts received
by the Agent in payment of any Accounts.
(e) If an Account Debtor returns any Inventory to the Borrower when
no Event of Default exists, then the Borrower shall promptly determine the
reason for such return and shall issue a credit memorandum to the Account Debtor
in the appropriate amount. The Borrower shall immediately report to the Agent
any return involving an amount in excess of $1,000,000. Each such report shall
indicate the reasons for the returns and the locations and condition of the
returned Inventory. In the event any Account Debtor returns Inventory to the
Borrower when an Event of Default exists, the Borrower, upon request of the
Agent, shall: (i) hold the returned Inventory in trust for the Agent; (ii)
segregate all returned Inventory from all of its other property; (iii) dispose
of the returned Inventory solely according to the Agent's written instructions;
and (iv) not issue any credits or allowances with respect thereto without the
Agent's prior written consent. All returned Inventory shall be subject to the
Agent's Liens thereon. Whenever any Inventory is returned, the related Account
shall be deemed ineligible to the extent of the amount owing by the Account
Debtor with respect to such returned Inventory
.9 Collection of Accounts; Payments. (a) The Borrower shall establish a
------------------------------------
service for collections of Accounts at a Clearing Bank acceptable to the Agent
and subject to a Blocked Account Agreement. The Borrower shall instruct all
Account Debtors to make all payments directly to the address established for
such service. If, notwithstanding such instructions, the Borrower receives any
proceeds of Accounts, it shall receive such payments as the Agent's trustee, and
shall immediately deliver such payments to the Agent in their original form duly
endorsed in blank or deposit them into a Payment Account, as the Agent may
direct. All collections received in any such Payment Account or directly by the
Borrower or the Agent, and all funds in any Payment Account or other account to
which such collections are deposited shall be subject to the Borrower's control
at any time prior to the first date, if any, on which the Loan to Availability
Ratio exceeds 50% and to the Agent's sole control thereafter. The Agent or the
Agent's designee may, at any time after the occurrence of an Event of Default,
notify Account Debtors that the Accounts have been assigned to the Agent and of
the Agent's security interest therein, and may collect them directly and charge
the collection costs and expenses to the Loan Account as a Revolving Loan. So
long as an Event of Default has occurred and is continuing, the Borrower, at the
Agent's request, shall execute and deliver to the Agent such documents as the
Agent shall require to grant the Agent access to any post office box in which
collections of Accounts are received.
-57-
(b) If sales of Inventory are made or services are rendered for cash,
the Borrower shall immediately deliver to the Agent or deposit into a Payment
Account the cash which the Borrower receives.
(c) All payments, including immediately available funds received by
the Agent at a bank designated by it, received by the Agent, whether or not on
account of Accounts or as proceeds of other Collateral, will be credited to the
Loan Account (conditional upon final collection) after allowing one (1) Business
Day for collection; provided, however, that such payments shall be deemed to be
-------- -------
credited to the Loan Account immediately upon receipt for purposes of (i)
determining Availability, (ii) calculating the Unused Line Fee pursuant to
Section 3.5, and (iii) calculating the amount of interest accrued thereon solely
-----------
for purposes of determining the amount of interest to be distributed by the
Agent to the Lenders (but not the amount of interest payable by the Borrower).
(d) In the event the Borrower repays all of the Obligations upon the
termination of this Agreement or upon acceleration of the Obligations, other
than through the Agent's receipt of payments on account of the Accounts or
proceeds of the other Collateral, such payment will be credited (conditional
upon final collection) to the Loan Account one (1) Business Day after the
Agent's receipt of such funds.
.10 Inventory; Perpetual Inventory. The Borrower represents and warrants
-----------------------------------
to the Agent and the Lenders and agrees with the Agent and the Lenders that all
of the Inventory owned by the Borrower is and will be held for sale or lease
(including sales for scrap of excess or no-movement Inventory), or to be
furnished in connection with the rendition of services, in the ordinary course
of the Borrower's business, and is and will be fit for such purposes. The
Borrower will keep its Inventory in good and marketable condition, at its own
expense. Borrower will not, without the prior written consent of the Agent,
acquire or accept any Inventory on consignment or approval. The Borrower agrees
that all Inventory produced in the United States will be produced in accordance
with the Federal Fair Labor Standards Act of 1938, as amended, and all rules,
regulations, and orders thereunder. The Borrower will conduct a physical count
of the Inventory at least once per Fiscal Year, and after and during the
continuation of an Event of Default, at such other times as the Agent requests,
but not to exceed four times in any Fiscal Year. The Borrower will maintain a
perpetual inventory reporting system at all times. The Borrower will not,
without the Agent's written consent, sell any Inventory on a ▇▇▇▇-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis.
.11 Documents, Instruments, and Chattel Paper. The Borrower represents and
----------------------------------------------
warrants to the Agent and the Lenders that (a) all documents, instruments, and
chattel paper describing, evidencing, or constituting Collateral, and all
signatures and endorsements thereon, are and will be complete, valid, and
genuine, and (b) all goods evidenced by such documents, instruments, and chattel
paper are and will be owned by the Borrower, free and clear of all Liens other
than Permitted Liens.
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.12 Right to Cure. The Agent may, in its discretion, and shall, at the
------------------
direction of the Majority Lenders, pay any amount or do any act required of the
Borrower hereunder or under any other Loan Document in order to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Agent's
Liens therein, and which the Borrower fails to pay or do, including payment of
any judgment against the Borrower, any insurance premium, any warehouse charge,
any finishing or processing charge, any landlord's or bailee's claim, and any
other Lien upon or with respect to the Collateral. All payments that the Agent
makes under this Section 6.12 and all out-of-pocket costs and expenses that the
------------
Agent pays or incurs in connection with any action taken by it hereunder shall
be charged to the Borrower's Loan Account as a Revolving Loan. Any payment made
or other action taken by the Agent under this Section 6.12 shall be without
------------
prejudice to any right to assert an Event of Default hereunder and to proceed
thereafter as herein provided.
.13 Power of Attorney. The Borrower hereby appoints the Agent and the
----------------------
Agent's designee as the Borrower's attorney, with power: (a) to endorse the
Borrower's name on any checks, notes, acceptances, money orders, or other forms
of payment or security that come into the Agent's or any Lender's possession;
(b) to sign the Borrower's name on any invoice, ▇▇▇▇ of lading, warehouse
receipt or other document of title relating to any Collateral, on drafts against
customers, on assignments of Accounts, on notices of assignment and other public
records; (c) to sign the Borrower's name on any financing statements as may be
reasonably deemed necessary or desirable by Agent or any Lender in order to
perfect or maintain perfected the Agent's Liens on any Collateral and to file
any such financing statements by electronic means with or without a signature as
authorized or required by applicable law or filing procedure; (d) to notify the
post office authorities to change the address for delivery of the Borrower's
mail to an address designated by the Agent and to receive, open and dispose of
all mail addressed to the Borrower; (e) to send requests for verification of
Accounts to customers or Account Debtors; (f) to clear Inventory, through
customs in the Borrower's name, the Agent's name or the name of the Agent's
designee, and to sign and deliver to customs officials powers of attorney in the
Borrower's name for such purpose; and (g) to do all things necessary to carry
out this Agreement; provided, however, that the power of attorney granted under
-------- -------
the preceding clauses (a), (b), (d), (f) and (g) shall only be exercisable while
an Event of Default exists. The Borrower ratifies and approves all acts of such
attorney. None of the Lenders or the Agent nor their attorneys will be liable
for any acts or omissions or for any error of judgment or mistake of fact or law
unless the result of its own bad faith, gross negligence or willful misconduct.
This power, being coupled with an interest, is irrevocable until this Agreement
has been terminated and the Obligations have been fully satisfied.
.14 The Agent's and Lenders' Rights, Duties and Liabilities. The Borrower
------------------------------------------------------------
assumes all responsibility and liability arising from or relating to the use,
sale or other disposition of the Collateral. The Obligations shall not be
affected by any failure of the Agent or any Lender to take any steps to perfect
the Agent's Liens or to collect or realize upon the Collateral, nor shall loss
of or damage to the Collateral release the Borrower from any of the Obligations.
Following the occurrence and continuation of an Event of Default, the Agent may
(but shall not be required to), and at the direction of the Majority Lenders
shall, without notice to or consent from the Borrower, ▇▇▇ upon or otherwise
collect, extend the time for payment of, modify or amend the
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terms of, compromise or settle for cash, credit, or otherwise upon any terms,
grant other indulgences, extensions, renewals, compositions, or releases, and
take or omit to take any other action with respect to the Collateral, any
security therefor, any agreement relating thereto, any insurance applicable
thereto, or any Person liable directly or indirectly in connection with any of
the foregoing, without discharging or otherwise affecting the liability of the
Borrower for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and the Borrower.
ARTICLE 7
---------
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
-------------------------------------------------
.1 Books and Records. The Parent shall maintain, at all times, correct
---------------------
and complete books, records and accounts in which complete, correct and timely
entries are made of its transactions in accordance with GAAP applied
consistently with the audited Financial Statements required to be delivered
pursuant to Section 7.2(a). The Parent shall, by means of appropriate
--------------
entries, reflect in such accounts and in all Financial Statements proper
liabilities and reserves for all taxes and proper provision for depreciation and
amortization of property and bad debts, all in accordance with GAAP. From and
after the Loan Availability Date, the Parent shall maintain at all times books
and records pertaining to the Collateral in such detail, form and scope as the
Agent or any Lender shall reasonably require, including, but not limited to,
records of (a) all payments received and all credits and extensions granted with
respect to the Accounts; (b) the return, rejections, repossession, stoppage in
transit, loss, damage, or destruction of any Inventory; and (c) all other
dealings affecting the Collateral.
.2 Financial Information. The Parent shall promptly furnish to each
-------------------------
Lender, all such financial information as the Agent or any Lender shall
reasonably request, and notify its auditors and accountants that the Agent, on
behalf of the Lenders, is authorized to obtain such information directly from
them. Without limiting the foregoing, the Parent will furnish to the Agent, in
sufficient copies for distribution by the Agent to each Lender, in such detail
as the Agent or the Lenders shall request, the following:
(a) As soon as available, but in any event not later than ninety (90)
days after the close of each Fiscal Year, consolidated audited and consolidating
audited balance sheets, and statements of income and expense, cash flow and of
stockholders' equity for the Parent and its Subsidiaries for such Fiscal Year,
and the accompanying notes thereto, setting forth in each case in comparative
form figures for the previous Fiscal Year, all in reasonable detail, fairly
presenting the financial position and the results of operations of the Parent
and its consolidated Subsidiaries as at the date thereof and for the Fiscal Year
then ended, and prepared in accordance with GAAP. Such statements shall be
examined in accordance with generally accepted auditing standards by and, in the
case of such statements performed on a consolidated basis, accompanied by a
report thereon unqualified as to scope of independent certified public
accountants selected by the Parent and reasonably satisfactory to the Agent. The
Parent, simultaneously with retaining such independent public accountants to
conduct such annual audit, shall send a letter to
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such accountants, with a copy to the Agent and the Lenders, notifying such
accountants that one of the primary purposes for retaining such accountants'
services and having audited financial statements prepared by them is for use by
the Agent and the Lenders. The Parent hereby authorizes the Agent, upon
reasonable prior notice to the Parent, to communicate directly with its
certified public accountants and, by this provision, authorizes those
accountants to disclose to the Agent any and all financial statements and other
supporting financial documents and schedules relating to the Parent or any of
its Subsidiaries and to discuss directly with the Agent the finances and affairs
of the Parent or any of its Subsidiaries.
(b) As soon as available, but in any event not later than fifteen
(15) days after the end of each month, consolidated and consolidating unaudited
balance sheets of the Parent and its consolidated Subsidiaries as at the end of
such month, and consolidated and consolidating unaudited statements of income
and expense for the Parent and its consolidated Subsidiaries for such month and
for the period from the beginning of the Fiscal Year to the end of such month,
each in such form and detail as currently provided to management of the Parent
as of the date of this Agreement.
(c) As soon as available, but in any event not later than forty-five
(45) days after the close of each fiscal quarter other than the fourth quarter
of a Fiscal Year, consolidated and consolidating unaudited balance sheets of the
Parent and its consolidated Subsidiaries as at the end of such quarter, and
consolidated and consolidating unaudited statements of income and expense and
statement of cash flows for the Parent and its Subsidiaries for such quarter and
for the period from the beginning of the Fiscal Year to the end of such quarter,
all in reasonable detail, fairly presenting the financial position and results
of operation of the Parent and its Subsidiaries as at the date thereof and for
such periods, prepared in accordance with GAAP consistent with the audited
Financial Statements required to be delivered pursuant to Section 7.2(a). The
--------------
Parent shall certify by a certificate signed by its chief financial officer that
all such statements have been prepared in accordance with GAAP and present
fairly, subject to normal year-end adjustments, the Parent's financial position
as at the dates thereof and its results of operations for the periods then
ended.
(d) With each of the audited Financial Statements delivered pursuant
to Section 7.2(a), a certificate of the independent certified public accountants
--------------
that examined such statement to the effect that they have reviewed and are
familiar with this Agreement and that, in examining such Financial Statements,
they did not become aware of any fact or condition which then constituted a
Default or Event of Default, except for those, if any, described in reasonable
detail in such certificate.
(e) With each of the annual audited Financial Statements delivered
pursuant to Section 7.2(a), and within forty-five (45) days after the end of
--------------
each fiscal quarter, a certificate of the chief financial officer of the Parent
(i) setting forth in reasonable detail the calculations of the covenants set
forth in Sections 9.19 and 9.20 during the period covered in such Financial
----------------------
Statements and as at the end thereof and demonstrating compliance with such
covenants, if required under the terms of this Agreement, and (ii) stating
that, except as explained in reasonable detail in such certificate, (A) all of
the representations and warranties of the Borrower
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contained in this Agreement and the other Loan Documents are correct and
complete in all material respects as at the date of such certificate as if made
at such time, except for those that speak as of a particular day, (B) the
Borrower is, at the date of such certificate, in compliance in all material
respects with all of its respective covenants and agreements in this Agreement
and the other Loan Documents, (C) no Default or Event of Default then exists or
existed during the period covered by such Financial Statements, (D) describing
and analyzing in reasonable detail all material trends, changes, and
developments in each and all Financial Statements; and (E) explaining the
variances of the figures in the corresponding budgets and prior Fiscal Year
financial statements. If such certificate discloses that a representation or
warranty is not correct or complete, or that a covenant has not been complied
with, or that a Default or Event of Default existed or exists, such certificate
shall set forth what action the Parent has taken or proposes to take with
respect thereto.
(f) No sooner than sixty (60) days and not less than thirty (30)
days prior to the beginning of each Fiscal Year, annual forecasts (to include
forecasted consolidated and consolidating balance sheets, statements of income
and expenses and statements of cash flow) for the Parent and its Subsidiaries as
at the end of and for each month of such Fiscal Year.
(g) Promptly after filing with the PBGC and the IRS, a copy of
each annual report or other filing filed with respect to each Plan of the
Parent.
(h) Promptly upon the filing thereof, copies of all reports, if
any, to or other documents filed by the Parent or any of its Subsidiaries with
the Securities and Exchange Commission under the Exchange Act, and all reports,
notices, or statements sent or received by the Parent or any of its Subsidiaries
to or from the holders of any equity interests of the Parent (other than routine
non-material correspondence sent by shareholders of the Parent to the Parent) or
any such Restricted Subsidiary or of any Debt for Borrowed Money of the Parent
or any of its Restricted Subsidiaries registered under the Securities Act of
1933 or to or from the trustee under any indenture under which the same is
issued.
(i) As soon as available, but in any event not later than 15
days after the Parent's receipt thereof, a copy of all management reports and
management letters prepared for the Parent by any independent certified public
accountants of the Parent.
(j) Promptly after their preparation, copies of any and all
proxy statements, financial statements, and reports which the Parent makes
available to its shareholders.
(k) Promptly after filing with the IRS, a copy of each tax
return filed by the Parent or by any of its Restricted Subsidiaries.
(l) Such additional information as the Agent and/or any Lender
may from time to time reasonably request regarding the financial and business
affairs of the Parent or any Restricted Subsidiary.
.3 Notices to the Lenders. The Parent shall notify the Agent and
--------------------------
the Lenders, in writing of the following matters at the following times:
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(a) Immediately after becoming aware of any Default or Event of
Default.
(b) Immediately after becoming aware of the assertion by the
holder of more than $1,000,000 of any capital stock of the Parent or any
Restricted Subsidiary or of any Debt of the Parent or any Restricted Subsidiary
in excess of $1,000,000 in principal amount that a default exists with respect
thereto or that the Parent or such Restricted Subsidiary is not in compliance
with the terms thereof, or the threat or commencement by such holder of any
enforcement action because of such asserted default or non-compliance.
(c) Immediately after becoming aware of any material adverse
change in the Parent's or any Restricted Subsidiary's property, business,
operations, or condition (financial or otherwise).
(d) Immediately after becoming aware of any pending or
threatened action, suit, proceeding, or counterclaim by any Person, or any
pending or threatened investigation by a Governmental Authority, which may
materially and adversely affect the Collateral, the repayment of the
Obligations, the Agent's or any Lender's rights under the Loan Documents, or the
Parent's or any Restricted Subsidiary's property, business, operations, or
condition (financial or otherwise).
(e) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other labor
dispute affecting the Parent or any of its Restricted Subsidiaries in a manner
which could reasonably be expected to have a Material Adverse Effect.
(f) Immediately after becoming aware of any violation of any
law, statute, regulation, or ordinance of a Governmental Authority affecting the
Parent or any Restricted Subsidiary which could reasonably be expected to have a
Material Adverse Effect.
(g) Immediately after receipt of any notice of any violation by
the Parent or any of its Restricted Subsidiaries of any Environmental Law which
could reasonably be expected to have a Material Adverse Effect or of the
imposition of any Environmental Lien against any property of the Parent or any
of its Restricted Subsidiaries or that any Governmental Authority has asserted
that the Parent or any Restricted Subsidiary is not in compliance with any
Environmental Law or is investigating the Parent's or such Restricted
Subsidiary's compliance therewith, in each case, which could reasonably be
expected to have a Material Adverse Effect.
(h) Immediately after receipt of any written notice that the
Parent or any of its Restricted Subsidiaries is or may be liable to any Person
as a result of the Release or threatened Release of any Contaminant or that the
Parent or any Restricted Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any remedial action is needed to
respond to the Release or threatened Release of any Contaminant which, in either
case, is reasonably likely to have a Material Adverse Effect.
(i) Any change in the Borrower's name, state of organization, or
form of organization, trade names under which the Borrower will sell Inventory
or create Accounts, or to
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which instruments in payment of Accounts may be made payable, in each case at
least thirty (30) days prior thereto.
(j) Within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the DOL or
the PBGC with respect thereto.
(k) Upon request, copies of the following: (i) each annual
report (form 5500 series), including Schedule B thereto, filed with the PBGC,
the DOL or the IRS with respect to each Plan, (ii) a copy of each funding waiver
request filed with the PBGC, the DOL or the IRS with respect to any Plan and all
communications received by the Borrower or any ERISA Affiliate from the PBGC,
the DOL or the IRS with respect to such request, and (iii) a copy of each other
filing or notice filed with the PBGC, the DOL or the IRS, with respect to each
Plan of either Borrower or any ERISA Affiliate.
(l) Of the occurrence of any of the following events affecting
the Parent or any ERISA Affiliate (but in no event more than 10 days after such
event), together with a copy of any notice with respect to such event that is
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to the Parent or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by
the Parent or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability; and
(m) Prior notice of any material change in accounting policies
or financial reporting practices by the Parent or any of its consolidated
Subsidiaries.
Each notice given under this Section shall describe the subject
matter thereof in reasonable detail, and shall set forth the action that the
Parent, its Subsidiary, or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto.
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ARTICLE 8
---------
GENERAL WARRANTIES AND REPRESENTATIONS
--------------------------------------
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
.1 Authorization, Validity, and Enforceability of this Agreement and the
------------------------------------------------------------------------
Loan Documents. The Borrower has the corporate power and authority to execute,
--------------
deliver and perform this Agreement and the other Loan Documents, to incur the
Obligations, and to grant to the Agent Liens upon and security interests in the
Collateral. The Borrower has taken all necessary corporate action (including
obtaining approval of its stockholders if necessary) to authorize its execution,
delivery, and performance of this Agreement and the other Loan Documents to
which it is a party. This Agreement and the other Loan Documents have been duly
executed and delivered by the Borrower, and constitute the legal, valid and
binding obligations of the Borrower, enforceable against it in accordance with
their respective terms without defense, setoff or counterclaim. The Borrower's
execution, delivery, and performance of this Agreement and the other Loan
Documents, including the grant or perfection of the Agent's Liens, do not and
will not conflict with, or constitute a violation or breach of, or constitute a
default under, or result in the creation or imposition of any Lien upon the
property of the Borrower or any of its Restricted Subsidiaries by reason of the
terms of (a) any contract, mortgage, Lien, lease, agreement, indenture, or
instrument to which the Borrower is a party or which is binding upon it, (b) any
Requirement of Law applicable to the Borrower or any of its Restricted
Subsidiaries, or (c) the certificate or articles of incorporation or by-laws of
the Borrower or any of its Restricted Subsidiaries.
.2 Validity and Priority of Security Interest. The provisions of
----------------------------------------------
this Agreement and the other Loan Documents create legal and valid Liens on all
the Collateral in favor of the Agent, for the ratable benefit of the Agent and
the Lenders, and such Liens constitute perfected and continuing Liens on all the
Collateral, having priority over all other Liens on the Collateral, securing all
the Obligations, and enforceable against the Borrower and all third parties.
.3 Organization and Qualification. The Borrower (a) is duly
----------------------------------
incorporated and organized and validly existing in good standing under the laws
of the state of its incorporation, (b) is qualified to do business as a foreign
corporation and is in good standing in the jurisdictions set forth on Schedule
--------
8.3 which are the only jurisdictions in which qualification is necessary in
---
order for it to own or lease its property and conduct its business, and (c) has
all requisite power and authority to conduct its business and to own its
property.
.4 Corporate Name; Prior Transactions. As of the Loan Availability
--------------------------------------
Date, the Borrower has not, during the past five (5) years, been known by or
used any other corporate or fictitious name other than "AMD".
.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and
------------------------------- ------------
complete list of the name and relationship to the Borrower of each of the
Borrower's Subsidiaries as of the Loan
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Availability Date. Each Restricted Subsidiary is (a) duly incorporated and
organized and validly existing in good standing under the laws of its state of
incorporation set forth on Schedule 8.5, and (b) qualified to do business as a
------------
foreign corporation and in good standing in each jurisdiction in which the
failure to so qualify or be in good standing could reasonably be expected to
have a material adverse effect on any such Restricted Subsidiary's business,
operations, property, or condition (financial or otherwise) and (c) has all
requisite power and authority to conduct its business and own its property.
.6 Financial Statements and Projections. (a) The Parent has delivered
----------------------------------------
to the Agent and the Lenders the unaudited balance sheet and related statements
of income and cash flows for the Parent and its consolidated Subsidiaries as of
May 23, 1999. All such financial statements have been prepared in accordance
with GAAP and present accurately and fairly the financial position of the Parent
and its consolidated Subsidiaries as at the dates thereof and their results of
operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders as
required herein represent the Parent's good faith estimate of the future
financial performance of the Parent and its consolidated Subsidiaries for the
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Parent believes are fair
and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lender.
.7 Solvency. The Borrower is Solvent prior to and after
------------
giving effect to the making of the Revolving Loans, if any, to be made on the
Loan Availability Date.
.8 Debt. As of the Loan Availability Date, and after giving effect to
--------
the making of the Revolving Loans, if any, to be made on the Loan Availability
Date, the Borrower and its Restricted Subsidiaries have no Debt, except (a) the
Obligations, (b) Debt described on Schedule 8.8, and (c) trade payables and
------------
other contractual obligations arising in the ordinary course of business.
.9 Distributions. Since March 26, 1999, no Distribution has been
-----------------
declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrower as of the Loan Availability Date.
.10 Title to Property. The Borrower has good and marketable title
----------------------
in fee simple to itsreal property, and the Borrower has good, indefeasible, and
merchantable title to all of its other property (including the assets reflected
on the May 23, 1999 Financial Statements delivered to the Agent and the Lenders,
except as disposed of in the ordinary course of business since the date thereof
or as permitted under this Agreement), and all of such property constituting
Collateral is free of all Liens except Permitted Liens.
.11 Trade Names. All trade names or styles under which the Borrower
----------------
or any of its Subsidiaries will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
--------
8.11.
----
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.12 Litigation. Except as specifically disclosed in Schedule 8.12,
--------------- -------------
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Borrower, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against the Borrower, or
its Restricted Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Borrower or its Restricted
Subsidiaries, would reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
.13 Restrictive Agreements. As of the Loan Availability Date, neither
---------------------------
the Borrower nor any of its Restricted Subsidiaries is a party to any contract
or agreement, or subject to any charter or other corporate or similar
restriction, or any Requirement of Law, which would in any respect reasonably be
expected to cause a Material Adverse Effect.
.14 Labor Disputes. As of the Loan Availability Date, (a) there
-------------------
is no collective bargaining agreement or other labor contract covering employees
of the Borrower or any of its Restricted Subsidiaries, (b) no such collective
bargaining agreement or other labor contract is scheduled to expire during the
term of this Agreement, (c) no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees of
the Borrower or any of its Restricted Subsidiaries or for any similar purpose,
and (d) there is no pending or (to the best of the Borrower's knowledge)
threatened, strike, work stoppage, material unfair labor practice claim, or
other material labor dispute against or affecting the Borrower or its Restricted
Subsidiaries or their employees.
.15 Environmental Laws. Except as specifically disclosed on Schedule
----------------------- --------
8.15, as of the Loan Availability Date:
----
(a) to the best of the Borrower's knowledge, the on-going
operations of the Borrower and each of its Restricted Subsidiaries comply in all
respects with all Environmental Laws, except such non-compliance which would not
(if enforced in accordance with applicable law) result in liability in excess of
$25,000,000 in the aggregate.
(b) the Borrower and each of its Restricted Subsidiaries have
obtained all licenses, permits, authorizations and registrations required under
any Environmental Law ("Environmental Permits") and necessary for their
---------------------
respective ordinary course operations, all such Environmental Permits are in
good standing, and the Borrower and each of its Restricted Subsidiaries are in
compliance with all material terms and conditions of such Environmental Permits;
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(c) none of the Borrower, any of its Restricted Subsidiaries or
any of their respective present property or operations, is subject to any
outstanding written order from or agreement with any Governmental Authority, nor
subject to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Contaminant; and
(d) to the best of the Borrower's knowledge, there are no
Contaminants or other conditions or circumstances existing with respect to any
property of the Borrower or any Restricted Subsidiary, or arising from
operations prior to the Loan Availability Date, of the Borrower or any of its
Restricted Subsidiaries that would reasonably be expected to give rise to
Environmental Claims with a potential liability of the Borrower and its
Restricted Subsidiaries in excess of $25,000,000 in the aggregate for any such
condition, circumstance or property and in addition, (i) neither the Borrower
nor any Restricted Subsidiary has any underground storage tanks (A) that are not
properly registered or permitted under applicable Environmental Laws, or (B)
that are leaking or disposing of Contaminants off-site, and (ii) the Borrower
and its Restricted Subsidiaries have notified all of their employees of the
existence, if any, of any health hazard arising from the conditions of their
employment and have met all notification requirements under Title III of CERCLA
and all other Environmental Laws.
.16 No Violation of Law. Neither the Borrower nor any of its
------------------------
Restricted Subsidiaries is in violation of any law, statute, regulation,
ordinance, judgment, order, or decree applicable to it which violation could
reasonably be expected to have a Material Adverse Effect.
.17 No Default. Neither the Borrower nor any of its Restricted
---------------
Subsidiaries is in default with respect to any note, indenture, loan agreement,
mortgage, lease, deed, or other agreement to which the Borrower or such
Restricted Subsidiary is a party or by which it is bound, which default could
reasonably be expected to have a Material Adverse Effect.
.18 ERISA Compliance. As of the Loan Availability Date:
---------------------
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan is intended to qualify under Section 401(a) of the Code and to the best
knowledge of the Borrower, nothing has occurred which would cause the loss of
such qualification. The Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
-68-
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
.19 Taxes. The Borrower and its Restricted Subsidiaries have
----------
filed all federal and other tax returns and reports required to be filed, and
have paid all federal and other taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable. There is no proposed tax assessment against the
Borrower or any of its Restricted Subsidiaries that would, if made, have a
Material Adverse Effect.
.20 Regulated Entities. None of the Borrower, any Person controlling
-----------------------
the Borrower, or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company Act of 1940. The Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or law, or any other
federal or state statute or regulation limiting its ability to incur
indebtedness.
.21 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
----------------------------------------
to be used solely for working capital or general corporate purposes, not in
contravention of this Agreement. Neither the Borrower nor any Subsidiary is
engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
.22 Copyrights, Patents, Trademarks and Licenses, etc. To the best
-------------------------------------------------------
of the Borrower's knowledge, the Borrower or its Restricted Subsidiaries own or
is licensed or otherwise has the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, licenses, rights
of way, authorizations and other rights that are reasonably necessary for the
operation of its businesses, without conflict with the rights of any other
Person. To the best knowledge of the Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Restricted
Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed on Schedule 8.22, no claim or litigation regarding any
-------------
of the foregoing is pending or, to the best of Borrower's knowledge, threatened,
and no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is, to the best of the Borrower's knowledge,
pending or proposed, which, in either case, could reasonably be expected to have
a Material Adverse Effect.
.23 No Material Adverse Change. No material adverse change has
-------------------------------
occurred in the Borrower's Property, business, operations, or conditions
(financial or otherwise) since the date of the Financial Statements delivered to
the Lender under Section 8.6(a). On the basis of a
--------------
-69-
comprehensive review and assessment undertaken by Borrower of Borrower's
computers and computer applications and inquiry made of Borrower's material
suppliers, vendors and customers Borrower reasonably believes that the "Year
2000 problem" (that is, the risk that computers and computer applications used
by any person may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31, 1999)
will not result in a Material Adverse Effect.
.24 Full Disclosure. None of the representations or warranties made by
--------------------
the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered (it being understood that although any financial projections and
forecasts furnished by the Borrower represent the Borrower's best estimates and
assumptions as to future performance, which the Borrower believes to be fair and
reasonable as of the time made in the light of current and reasonably
foreseeable business conditions, such financial projections and forecasts 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 or forecasted
results).
.25 Governmental Authorization. No approval, consent, exemption,
--- --------------------------
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Borrower or any of its Restricted Subsidiaries of this Agreement or any other
Loan Document.
.26 Insurance. The properties of the Borrower and its
--------------
Restricted Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or each such Restricted Subsidiary operates.
ARTICLE 9
---------
AFFIRMATIVE AND NEGATIVE COVENANTS
----------------------------------
The Borrower covenants to the Agent and each Lender that, effective from
and after the Loan Availability Date, and for so long as any of the Obligations
remains outstanding or this Agreement is in effect:
.1 Taxes and Other Obligations. The Borrower shall, and shall
-------------------------------
cause each of its Restricted Subsidiaries to, (a) file when due all tax returns
and other reports which it is required to file; (b) pay, or provide for the
payment, when due, of all taxes, fees, assessments and other
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governmental charges against it or upon its property, income and franchises,
make all required withholding and other tax deposits, and establish adequate
reserves for the payment of all such items, and provide to the Agent and the
Lenders, upon reasonable request, satisfactory evidence of its timely compliance
with the foregoing; and (c) pay when due all Debt owed by it, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Debt, and all claims of materialmen, mechanics, carriers, warehousemen,
landlords, processors and other like Persons, and all other indebtedness owed by
it and perform and discharge in a timely manner all other obligations undertaken
by it; provided, however, neither the Borrower nor any of its Restricted
-------- --------
Subsidiaries need pay any tax, fee, assessment, or governmental charge, that (i)
it is contesting in good faith by appropriate proceedings diligently pursued,
(ii) the Borrower or its Restricted Subsidiary, as the case may be, has
established proper reserves for as provided in GAAP, and (iii) no Lien (other
than a Permitted Lien) results from such non-payment.
.2 Corporate Existence and Good Standing. The Borrower shall, and
-----------------------------------------
shall cause each of its Restricted Subsidiaries to (subject to the provisions of
Section 9.8), maintain its corporate existence and its qualification
-----------
and good standing in all jurisdictions in which the failure to maintain such
existence and qualification or good standing could reasonably be expected to
have a material adverse effect on the Borrower's or such Restricted Subsidiary's
property, business, operations or condition (financial or otherwise).
.3 Compliance with Law and Agreements; Maintenance of Licenses.
-- -----------------------------------------------------------
The Borrower shall comply, and shall cause each Restricted Subsidiary to comply,
in all material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act) except such as may be contested in good faith by
appropriate proceedings diligently pursued. The Borrower shall, and shall cause
each of its Subsidiaries to, obtain and maintain all licenses, permits,
franchises, and governmental authorizations necessary to own its property and to
conduct its business. The Borrower shall not modify, amend or alter its
certificate or article of incorporation other than in a manner which does not
adversely affect the rights of the Lenders or the Agent.
.4 Maintenance of Property. The Borrower shall, and shall
---------------------------
cause each of its Restricted Subsidiaries to, maintain all of its property
necessary and useful in the conduct of its business, in good operating condition
and repair, ordinary wear and tear excepted, using the standard of care typical
in the industry in the operation and maintenance of its facilities, and preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect. The Borrower shall, and shall cause each Restricted
Subsidiary to, use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill.
.5 Insurance. (a) The Borrower shall maintain, and shall cause each
-------------
of its Restricted Subsidiaries to maintain, with financially sound and reputable
insurers having a rating of at least A-VII or better by Best Rating Guide,
insurance against loss or damage by fire with extended coverage; theft,
burglary, pilferage and loss in transit; public liability and third party
property damage; larceny, embezzlement or other criminal liability; business
interruption; public liability
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and third party property damage; and such other hazards or of such other types
as is customary for Persons engaged in the same or similar business.
(b) The Borrower shall cause the Agent, for the ratable benefit
of the Agent and the Lenders, to be named (i) as secured party and sole loss
payee in respect of each such policy insuring Collateral and (ii) additional
insured in respect of each such liability policy, in each case, in a manner
acceptable to the Agent. Each policy of insurance shall contain a clause or
endorsement requiring the insurer to give not less than thirty (30) days' prior
written notice to the Agent in the event of cancellation of the policy for any
reason whatsoever and a clause or endorsement stating that the interest of the
Agent shall not be impaired or invalidated by any act or neglect of the Borrower
or any of its Subsidiaries or the owner of any premises for purposes more
hazardous than are permitted by such policy. All premiums for such insurance
shall be paid by the Borrower when due, and certificates of insurance and, if
requested by the Agent or any Lender, photocopies of the policies, shall be
delivered to the Agent, in each case in sufficient quantity for distribution by
the Agent to each of the Lenders. If the Borrower fails to procure such
insurance or to pay the premiums therefor when due, the Agent may, and at the
direction of the Majority Lenders shall, do so from the proceeds of Revolving
Loans.
(c) The Borrower shall promptly notify the Agent and the Lenders
of any loss, damage, or destruction to the Collateral in excess of $500,000,
whether or not covered by insurance. During the existence of any Event of
Default, the Agent is hereby authorized to collect all insurance proceeds in
respect of Collateral directly, and to apply or remit them as follows: after
deducting from such proceeds the reasonable expenses, if any, incurred by the
Agent in the collection or handling thereof, ratably, to the reduction of the
Obligations in the order provided for in Section 4.5.
-----------
.6 Environmental Laws. The Borrower shall, and shall cause each
----------------------
of its Restricted Subsidiaries to, conduct its business in compliance with all
Environmental Laws applicable to it, including those relating to the generation,
handling, use, storage, and disposal of any Contaminant. The Borrower shall, and
shall cause each of its Restricted Subsidiaries to, take prompt and appropriate
action to respond to any non-compliance with Environmental Laws.
.7 Compliance with ERISA. The Borrower shall, and shall cause
-------------------------
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) make all required
contributions to any Plan subject to Section 412 of the Code; (d) not engage in
a prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan; and (e) not engage in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
.8 Mergers, Consolidations or Sales. Neither the Borrower nor any of
------------------------------------
its Restricted Subsidiaries shall (a) windup, liquidate or dissolve or agree to
do any of the foregoing, except for any winding-up, liquidation or dissolution
of any Restricted Subsidiary, or any agreement to do so, in which the assets of
such Restricted Subsidiary are distributed to the Borrower or another Restricted
Subsidiary, provided, however, that the assets of any U.S. Subsidiary which is
-------- -------
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the subject of any such wind-up, liquidation or dissolution shall only be
distributed to the Borrower or another U.S. Subsidiary or (b) during any
Enhanced Covenant Period, but subject to the Grandfathering Rules, enter into
any transaction of merger, reorganization, or consolidation, or transfer, sell,
assign, lease, or otherwise dispose of all or any part of its property, or agree
to do any of the foregoing, except (i) sales of Inventory in the ordinary course
of its business; (ii) sales or other dispositions of Equipment in the ordinary
course of business that is obsolete, worn-out or no longer useable by Borrower
in its business; (iii) Permitted Affiliate Investments; (iv) sales by the Parent
for fair market value of assets constituting collateral securing the Parent's
obligations under the Indenture, provided that the proceeds of any such sale
--------
shall be reinvested in replacement assets to be used in the ongoing operation of
the Parent's and its Restricted Subsidiaries' business (it being understood by
the parties that the Indenture may require that such replacement assets be
pledged as replacement collateral to secure the Parent's obligations under the
Indenture); (v) sales of assets having an aggregate book value of (A) not more
than $7,500,000 for all such assets so sold in any Fiscal Year and (B) not more
than $30,000,000 for all such assets so sold after the Closing Date, (vi) sales
of manufacturing facilities which are made for fair market value, provided that
(A) at the time of any such sale, no Event of Default shall exist or would
result from such sale, (B) 75% of the aggregate sales price in respect of such
sale shall be paid in cash, (C) the proceeds of any such sale shall be
reinvested within 24 months of such sale in replacement assets to be used in the
ongoing operation of the Parent's and its Restricted Subsidiaries' business,
and, pending such reinvestment, the cash proceeds of such sale shall be held by
the Parent in the form of cash or cash equivalents, and (D) the aggregate book
value of all assets so sold by the Parent and its Restricted Subsidiaries,
together, shall not exceed $50,000,000; (vii) mergers or consolidations between
the Borrower and any Restricted Subsidiary and between any Restricted Subsidiary
and any other Restricted Subsidiary, provided that, with respect to any
--------
such transaction involving the Borrower, the Borrower shall be the continuing or
surviving corporation; (viii) transfers of the capital stock of the German
Subsidiary pursuant to any Lien encumbering such capital stock, provided that
--------
such Lien is permitted under Section 9.17; and (ix) transfers of Equipment
------------
and Inventory between the Borrower and its Restricted Subsidiaries, and
among Restricted Subsidiaries, permitted under Section 9.14. Notwithstanding
------------
anything to the contrary in this Section 9.8 or elsewhere in this Agreement, (1)
the sale or other disposition of Accounts shall not be permitted at any time
hereunder, and (2) the Borrower shall not at any time consolidate or merge with
or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to any Person except as permitted under the preceding clause (vii).
.9 Distributions; Capital Change; Restricted Investments. Neither
---------------------------------------------------------
the Borrower nor any of its Restricted Subsidiaries shall (a) directly or
indirectly declare or make, or incur any liability to make, any Distribution in
respect of any capital stock of AMDISS, except (i) Distributions to the Parent
and (ii) the repurchase and cancellation by AMDISS on or prior to December 31,
1999, of the outstanding shares of Series A and Series B preferred stock and
common stock of AMDISS held by Atrium Finis Partnership, including any payment
of dividends, for an aggregate amount not to exceed $75,000, and (b) during any
Enhanced Covenant Period, but subject to the Grandfathering Rules (i) directly
or indirectly declare or make, or incur any liability to make, any Distribution,
except (A) Distributions to the Borrower by its Restricted Subsidiaries, (B)
Distributions by any Wholly-Owned Subsidiary to the Borrower or any other
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Wholly-Owned Subsidiary and (C) redemptions, repurchases, retirements or other
acquisitions of any equity interests of the Parent (1) in exchange for other
equity interests of the Parent upon the conversion of such equity interests into
such other equity interests of the Parent, or (2) out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary) of other equity
interests of the Parent; (ii) make any change in its capital structure which
could have a Material Adverse Effect; or (iii) make any Restricted Investment.
.10 Transactions Affecting Collateral or Obligations. Neither the
-----------------------------------------------------
Borrower nor any of its Restricted Subsidiaries shall enter into any transaction
which would be reasonably expected to have a Material Adverse Effect.
.11 Guaranties. Neither the Borrower nor any of its Restricted
---------------
Subsidiaries shall during any Enhanced Covenant Period, but subject to the
Grandfathering Rules, make, issue, become liable on or pay any Guaranty, except
(i) Guaranties of the Obligations in favor of the Agent, (ii) other Guaranties
existing on the Closing Date and described on Schedule 9.11 (including the
-------------
Parent's existing Guaranties of the obligations of the German Subsidiary and
payment of such Guaranties in an amount not to exceed $150,000,000 in the
aggregate), (iii) Guaranties of the obligations of FASL not to exceed in the
aggregate $175,000,000 at any time outstanding (but not the payment of any such
Guaranty unless permitted under the terms of the Indenture) and (iv) Guaranties
by the Borrower or any Restricted Subsidiary guarantying Debt of the Borrower or
any Restricted Subsidiary permitted under Section 9.12.
------------
.12 Debt. Neither the Borrower nor any of its Restricted Subsidiaries
---------
shall during any Enhanced Covenant Period, but subject to the Grandfathering
Rules, incur any Debt, other than: (i) the Obligations; (ii) trade payables and
contractual obligations to suppliers and customers arising in the ordinary
course of business; (iii) Debt described on Schedule 8.8; (iv) Debt constituting
-------------
Permitted Affiliate Investments; (v) any refinancing, renewal or extension of
any Debt the incurrence of which was permitted hereunder at the time such Debt
was so incurred so long as the principal amount thereof is not increased and
such refinancing, renewal or extension is on substantially the same or more
favorable terms (from the perspective of the Borrower and its Restricted
Subsidiaries) as the terms of the Debt being refinanced, renewed or extended,
and (vi) Guaranties permitted under Section 9.11.
------------
.13 Prepayment. Neither the Borrower nor any of its Restricted
---------------
Subsidiaries shall during any Enhanced Covenant Period, but subject to the
Grandfathering Rules, voluntarily prepay any Debt, except (i) the Obligations in
accordance with the terms of this Agreement and (ii) the prepayment of Debt in
connection with a refinancing thereof permitted under clause (v) of Section
-------
9.12.
----
.14 Transactions with Affiliates. Except as set forth below, neither
---------------------------------
the Borrower nor any of its Restricted Subsidiaries shall, sell, transfer,
distribute, or pay any money or property, including, but not limited to, any
fees or expenses of any nature (including, but not limited to, any fees or
expenses for management services), to any Affiliate, or lend or advance money or
property to any Affiliate, or invest in (by capital contribution or otherwise)
or purchase or repurchase any stock or indebtedness, or any property, of any
Affiliate, or become liable on any
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Guaranty of the indebtedness, dividends, or other obligations of any Affiliate.
Notwithstanding the foregoing, the Borrower and its Restricted Subsidiaries may
engage in transactions with Affiliates,including Permitted Affiliate
Transactions, provided that the terms of any such transaction shall be
--------
materially no less favorable to the Borrower and its Restricted Subsidiaries
than would be obtained in a comparable arm's-length transaction with a third
party who is not an Affiliate. The Borrower shall fully disclose to the Agent
and the Lenders the amounts and terms of any such Affiliate transaction
involving consideration in excess of $750,000. The parties acknowledge that the
Borrower and its Restricted Subsidiaries from time to time engage in transfers
among each other of inventory and equipment on an arm's-length basis in the
ordinary course of business, and no further disclosure is required under this
Section 9.14 in that regard. Without limiting the operation of the foregoing
------------
provisions of this Section 9.14 or any other provision of this Agreement, the
------------
parties further acknowledge that (a) pursuant to the Syndicated Loan Agreement
dated March 11, 1997, among AMD Saxony Manufacturing GmbH, Dresdner Bank
Luxembourg S.A. as Agent and Paying Agent, Dresdner Bank AG as Security Agent,
and the lenders party thereto, as amended, and related agreements (copies of
which have been provided to the Agent), the Borrower engages and will engage in
transactions with the German Subsidiary, including support in the form of loans
and guarantees, the purchase of wafers and research, design and development
services (and the license of certain intellectual property rights to the German
Subsidiary in connection therewith), the provision of management services to the
German Subsidiary, and foreign exchange swap transactions, and (b) pursuant to
the Sales and Purchase Agreement of FASL Products among the Parent, Fujitsu
Limited and FASL dated as of September 8, 1995, as amended, and related
agreements (copies of which have been provided to the Agent), the Borrower
engages and will engage in transactions with FASL for the purchase of wafers and
the joint development of technology, and certain joint licenses and cross
licenses and other agreements in connection therewith, and, in each such case,
no further disclosure is required under this Section 9.14 in that regard.
------------
.15 Investment Banking and Finder's Fees. Neither the Borrower nor
-----------------------------------------
any of its Subsidiaries shall pay or agree to pay, or reimburse any other party
with respect to, any investment banking or similar or related fee, underwriter's
fee, finder's fee, or broker's fee to any Person in connection with this
Agreement. The Borrower shall defend and indemnify the Agent and the Lenders
against and hold them harmless from all claims of any Person that the Borrower
is obligated to pay for any such fees, and all costs and expenses (including
attorneys' fees) incurred by the Agent and/or any Lender in connection
therewith.
.16 Business Conducted. The Borrower shall not and shall
-----------------------
not permit any of its Subsidiaries to, engage directly or indirectly, in any
material line of business substantially different from those lines of business
in which the Borrower and its Subsidiaries are engaged on the Closing Date.
.17 Liens.
----------
(a) Collateral. Neither the Borrower nor any of its
---------------
Subsidiaries shall create, incur, assume, or permit to exist any Lien on any
property constituting Collateral now owned or hereafter acquired by any of them,
except Permitted Liens.
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(b) Non-Collateral. Neither the Borrower nor any of its
--------------
Restricted Subsidiaries shall during any Enhanced Covenant Period, but subject
to the Grandfathering Rules, create, incur, or assume any Lien, or permit to
exist any nonconsensual Lien, on any property not constituting Collateral now
owned or hereafter acquired by any of them, except Permitted Liens.
.18 Fiscal Year. The Borrower shall not change its Fiscal Year.
----------------
.19 Adjusted Tangible Net Worth. At any time that the Loan to
--------------------------------
Availability Ratio is equal to or greater than 50% or Net Domestic Cash is less
than $100,000,000, the Parent will maintain Adjusted Tangible Net Worth,
determined as of the last day of each fiscal quarter, of not less than
$1,500,000,000.
.20 EBITDA. At any time that the Loan to Availability Ratio
-----------
is equal to or greater than 50% or Net Domestic Cash is less than $100,000,000,
the Parent will maintain EBITDA as of the last day of each fiscal period set
forth below of not less than the amount set forth below opposite such fiscal
period:
Period Amount
------------------------------------- -------------
1. Fiscal quarter ending $0
September 30, 1999
2. Two fiscal quarters ending $0
December 26, 1999
3. Three fiscal quarters ending $150,000,000
March 26, 2000
4. Four fiscal quarters ending June $300,000,000
25, 2000
5. Four fiscal quarters ending $500,000,000
September 24, 2000
6. Four fiscal quarters ending $800,000,000
December 31, 2000
7. Four fiscal quarters ending March $800,000,000
25, 2001
8. Four fiscal quarters ending June $800,000,000
24, 2001
9. Four fiscal quarters ending $900,000,000
September 30, 2001
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Period Amount
------------------------------------- ----------------
10. Four fiscal quarters ending $1,500,000,000
December 30, 2001 and thereafter
.21 Use of Proceeds. The Borrower shall use the proceeds of
---------------------
the Loans for working capital and other general corporate purposes not in
contravention of any Requirement of Law or of any Loan Document. The Borrower
shall not, and shall not suffer or permit any Subsidiary to, use any portion of
the Loan proceeds, directly or indirectly, (i) to purchase or carry Margin
Stock, (ii) to repay or otherwise refinance indebtedness of the Borrower or
others incurred to purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the Exchange
Act.
.22 Further Assurances. (a) The Borrower shall execute and deliver,
-----------------------
or cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent or any Lender may, from time to time, reasonably request to carry out
the terms and conditions of this Agreement and the other Loan Documents. Without
limiting the generality of the preceding sentence, promptly upon request by the
Agent or the Majority Lenders, the Borrower shall (and shall cause any of its
Subsidiaries to) do, execute, acknowledge, deliver, record, re-record, file, re-
file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments the
Agent or such Lenders, as the case may be, may reasonably require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
or any other Loan Document, (ii) to subject to the Liens created by any of the
Loan Documents any of the properties, rights or interests covered by any of the
Loan Documents, (iii) to perfect and maintain the validity, effectiveness and
priority of any of the Loan Documents and the Liens intended to be created
thereby, and (iv) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Agent and Lenders the rights granted or now or
hereafter intended to be granted to the Agent and the Lenders under any Loan
Document or under any other document executed in connection therewith.
(b) The Borrower shall ensure that all written information,
exhibits and reports furnished to the Agent or the Lenders do not and will not
contain any untrue statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances in which made, and will
promptly disclose to the Agent and the Lenders and correct any defect or error
that may be discovered therein or in any Loan Document or in the execution,
acknowledgement or recordation thereof.
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ARTICLE 10
----------
CONDITIONS PRECEDENT
--------------------
.1 Conditions to Effectiveness. The effectiveness of this Agreement is
-------------------------------
subject to the following conditions precedent having been satisfied in a manner
satisfactory to the Agent and each Lender:
(a) This Agreement and the other Loan Documents shall have been
executed by each party thereto.
(b) The Borrower shall have paid all fees due and payable as of the
Closing Date under the Fee Letter, which fees shall be nonrefundable, and all
fees and expenses of the Agent and the Attorney Costs incurred in connection
with any of the Loan Documents and the transactions contemplated thereby to the
extent invoiced.
(c) The Agent shall have received:
(i) Copies of the resolutions of the board of directors of the
Parent authorizing the transactions contemplated hereby, certified as
of the Closing Date by the Secretary or an Assistant Secretary of the
Borrower;
(ii) A certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, certifying the names, titles and
true signatures of the officer or officers of the Borrower authorized
to execute, deliver and perform, as applicable, this Agreement, and
all other Loan Documents to be delivered by it hereunder;
(iii) the certificate of incorporation and the bylaws of the
Borrower as in effect on the Closing Date, certified by the Secretary
or Assistant Secretary of the Borrower as of the Closing Date; and
(iv) a certificate signed by a Responsible Officer of the Parent,
dated as of the Closing Date, stating that there has occurred since
March 26, 1999, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect;
(v) such other approvals, documents or materials as the Agent or
any Lender may reasonably request.
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(d) All proceedings taken in connection with the execution of this
Agreement and all documents and papers relating thereto shall be reasonably
satisfactory in form, scope, and substance to the Agent and the Lenders.
Execution and delivery to the Agent by a Lender of a counterpart of this
Agreement shall be deemed confirmation by such Lender that (i) all conditions
precedent in this Section 10.1 have been fulfilled to the satisfaction of such
------------
Lender and (ii) the decision of such Lender to execute and deliver to the Agent
an executed counterpart of this Agreement was made by such Lender independently
and without reliance on the Agent or any other Lender as to the satisfaction of
any condition precedent set forth in this Section 10.1.
------------
Notwithstanding anything to the contrary in this Section 10.1 or elsewhere
------------
in this Agreement, the parties acknowledge and agree that (i) no representations
and warranties made or covenants or agreements undertaken or Liens granted under
this Agreement by the Borrower (including all representations or warranties made
or covenants or agreements undertaken or Liens granted by the Borrower under
Articles 6, 8 or 9 of this Agreement) shall be effective until the Loan
Availability Date, excluding the Borrower's covenants and agreements set forth
in Article 12 and Article 15 of this Agreement (other than Section 15.16), all
-------------
of which shall be fully effective as of the Closing Date, and (ii) no event or
circumstance that would otherwise constitute a Default or an Event of Default
hereunder shall constitute such a Default or Event of Default prior to the Loan
Availability Date.
.2 Conditions of Initial Loans. The obligation of the Lenders to make
--------------------------------
the initial Revolving Loans and the obligation of the Agent to issue or cause to
be issued or provide Credit Support for any Letter of Credit are subject to the
following conditions precedent having been satisfied on or prior to July 30,
1999, in a manner satisfactory to the Agent and each Lender (such date on which
all of the following conditions are and remain satisfied, the "Loan Availability
Date"):
(a) All representations and warranties made hereunder and in the other
Loan Documents shall be true and correct as of the Loan Availability Date as if
made on such date.
(b) No Default or Event of Default shall exist on the Loan
Availability Date, or would exist after giving effect to any Loans to be made,
any Letters of Credit to be issued or any Credit Support to be in place on such
date.
(c) The Borrower shall have paid all fees due and payable as of the
Loan Availability Date under the Fee Letter, which fees shall be nonrefundable,
and all fees and expenses of the Agent and the Attorney Costs incurred in
connection with any of the Loan Documents and the transactions contemplated
thereby to the extent invoiced.
(d) a certificate signed by a Responsible Officer of the Parent, dated
as of the Loan Availability Date, stating that:(A) the representations and
warranties contained in Article VIII are true and correct on and as of such
date, (B) no Default or Event of Default exists, and (C) there has occurred
since March 26, 1999, no event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect;
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(e) The Existing Senior Credit Facility shall have been amended on or
prior to the Loan Availability Date in form and substance satisfactory to the
Agent and the Lenders;
(f) The Agent and the Lenders shall have received such opinions of
counsel for the Borrower as the Agent or any Lender shall request, each such
opinion to be in a form, scope, and substance satisfactory to the Agent, the
Lenders, and their respective counsel.
(g) The Agent shall have received:
(i) acknowledgment copies of proper financing statements, duly
filed on or before the Loan Availability Date under the UCC of all
jurisdictions that the Agent may deem necessary or desirable in order
to perfect the Agent's Lien; and
(ii) duly executed UCC-3 Termination Statements and such other
instruments, in form and substance satisfactory to the Agent, as shall
be necessary to terminate and satisfy all Liens on the Collateral
except Permitted Liens.
(h) The Agent and the Lenders shall have examined the books of account
and other records and files of the Borrower and conducted a pre-closing audit
which shall include, without limitation, verification of Inventory, Accounts,
and the Borrowing Base.
(i) The Agent shall have received evidence satisfactory to it that the
outstanding principal of and interest and fees accrued through the Loan
Availability Date on all loans made on or prior to the Loan Availability Date
under the Existing Senior Credit Facility shall have been repaid in full on or
prior to the Loan Availability Date and that the commitments under the Existing
Senior Credit Facility shall have been terminated;
(j) The Agent shall have received evidence, in form, scope, and
substance, reasonably satisfactory to the Agent, of all insurance coverage and
endorsements in favor of the Agent as required by this Agreement;
(k) The Agent shall have received a good standing and tax good
standing certificate for the Borrower from the Secretary of State of Delaware,
California and Texas as of a recent date, together with a bring-down certificate
by facsimile dated the Loan Availability Date, if requested by the Agent;
(l) The Agent and the Borrower shall have agreed on the form of
Borrowing Base Certificate to be attached hereto as Exhibit A, and the Agent
shall have received a completed Borrowing Base Certificate, dated the Loan
Availability Date, calculating the Borrowing Base as of the last day of the
immediately preceding fiscal month of the Borrower;
(m) The Agent shall have received copies of the resolutions of the
board of directors of AMDISS authorizing the transactions contemplated hereby
(and ratifying all actions
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authorized by such resolutions taken by AMDISS prior to the date of such
resolutions), certified by the Secretary or an Assistant Secretary of AMDISS;
(n) The Borrower shall have executed and delivered to the Agent a
Blocked Account Agreement;
(o) The Borrower shall have delivered to the Agent the completed
Schedules to this Agreement in form and substance reasonably satisfactory to the
Agent; and
(p) All proceedings taken in connection with the execution of this
Agreement, all other Loan Documents and all documents and papers relating
thereto shall be reasonably satisfactory in form, scope, and substance to the
Agent and the Lenders.
The acceptance by the Borrower of any Loans made or Letters of Credit
issued on the date of the initial Borrowing hereunder or the date of the initial
issuance of any Letter of Credit hereunder shall be deemed to be a
representation and warranty made by the Borrower to the effect that all of the
conditions precedent to the making of such Loans or the issuance of such Letters
of Credit have been satisfied, with the same effect as delivery to the Agent and
the Lenders of a certificate signed by a Responsible Officer of the Borrower,
dated such date, to such effect.
.3 Conditions Precedent to Each Loan. The obligation of the Lenders to
-------------------------------------
make each Loan, including the initial Revolving Loans, if any, on or after the
Loan Availability Date, and the obligation of the Agent to issue or cause to be
issued or to provide Credit Support for any Letter of Credit, shall be subject
to the further conditions precedent that on and as of the date of any such
extension of credit:
(a) The following statements shall be true, and the acceptance by the
Borrower of any extension of credit shall be deemed to be a statement to the
effect set forth in clauses (i), (ii) and (iii), with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer, dated the date of such extension of credit, stating that:
(i) The representations and warranties contained in this
Agreement and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as though
made on and as of such date, other than any such representation or
warranty which relates to a specified prior date and except to the
extent the Agent and the Lenders have been notified by the Borrower
that any representation or warranty is not correct and the Majority
Lenders have explicitly waived in writing compliance with such
representation or warranty;
(ii) No event has occurred and is continuing, or would result
from such extension of credit, which constitutes a Default or an Event
of Default; and
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(iii) Neither the Agent nor any Lender shall have received from
the Borrower any notice that any Collateral Document will no longer
secure on a first priority basis, subject only to Permitted Liens,
future advances or future Loans to be made or extended under this
Agreement.
(b) The amount of the Borrowing Base shall be sufficient to make such
Revolving Loans or issue such Letters of Credit without exceeding the
Availability, provided, however, that the foregoing conditions precedent are not
-------- -------
conditions to each Lender participating in or reimbursing the Bank or the Agent
for such Lenders' Pro Rata Share of any Non-Ratable Loan or Agent Advance made
in accordance with the provisions of in Sections 2.2(h), (i) and (j).
--------------- --- ---
ARTICLE 11
----------
DEFAULT; REMEDIES
-----------------
.1 Events of Default. It shall constitute an event of default ("Event of
---------------------
Default") if any one or more of the following shall occur for any reason:
(a) any failure by the Borrower to pay (i) when due, the principal of
any of the Obligations or (ii) within three days after the same becomes due
whether upon demand or otherwise, any interest or premium on any of the
Obligations or any fee or other amount owing hereunder;
(b) any representation or warranty made or deemed made by the Borrower
in this Agreement or by the Borrower or any of its Subsidiaries in any of the
other Loan Documents, any Financial Statement, or any certificate furnished by
the Borrower or any of its Subsidiaries at any time to the Agent or any Lender
is incorrect in any material respect as of the date on which made, deemed made,
or furnished;
(c) (i) any default shall occur in the observance or performance of
any of the covenants and agreements contained in Sections 6.9, 9.2 (as to the
Borrower), 9.3, 9.7, 9.8, 9.9 and 9.11 through 9.21; or (ii) any default shall
occur in the observance or performance of any of the covenants and agreements
contained in Sections 7.2 and 7.3 and such default shall continue unremedied for
a period of 10 days after the earlier of (A) the date upon which a Responsible
Officer knew or reasonably should have known of such default or (B) the date
upon which written notice thereof is given to the Borrower by the Agent or any
Lender; or (iii) any default shall occur in the observance or performance of any
of the other covenants and agreements contained in this Agreement, any other
Loan Documents, or any other agreement entered into at any time to which the
Borrower or any Subsidiary and the Agent or any Lender are party (including in
respect of any Bank Product), and such default shall continue unremedied for a
period of 30 days after the earlier of (A) the date upon which a Responsible
Officer knew or reasonably should have known of such default or (B) the date
upon which written notice thereof is given to the Borrower by the Agent or any
Lender), or if any such agreement or document shall terminate (other than in
accordance with its terms or the terms hereof or with the written
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consent of the Agent and the Majority Lenders) or become void or unenforceable,
without the written consent of the Agent and the Majority Lenders;
(d) any default shall occur with respect to any Debt For Borrowed
Money of the Borrower or any of its Restricted Subsidiaries (other than the
Obligations) in an outstanding principal amount which exceeds $2,500,000, or
under any agreement or instrument under or pursuant to which any such Debt For
Borrowed Money may have been issued, created, assumed, or guaranteed by the
Borrower or any of its Restricted Subsidiaries, and such default shall continue
for more than the period of grace, if any, therein specified, if the effect
thereof (with or without the giving of notice or further lapse of time or both)
is to accelerate, or to permit the holders of any such Debt For Borrowed Money
to accelerate, the maturity of any such Debt For Borrowed Money; or any such
Debt For Borrowed Money shall be declared due and payable or be required to be
prepaid (other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof; or there occurs under any Rate Protection Arrangement
an Early Termination Date (as defined in such Rate Protection Arrangement)
resulting from (1) any event of default under such Rate Protection Arrangement
as to which the Borrower or any Restricted Subsidiary is the Defaulting Party
(as defined in such Rate Protection Arrangement) or (2) any Termination Event
(as so defined) as to which the Borrower or any Restricted Subsidiary is an
Affected Party (as so defined), and, in either event, the Swap Termination Value
owed by the Borrower or such Restricted Subsidiary as a result thereof is
greater than $2,500,000.
(e) the Borrower or any of its Restricted Subsidiaries shall (i)
file a voluntary petition in bankruptcy or file a voluntary petition or an
answer or otherwise commence any action or proceeding seeking reorganization,
arrangement or readjustment of its debts or for any other relief under the
federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
act or law, state or federal, now or hereafter existing, or consent to, approve
of, or acquiesce in, any such petition, action or proceeding; (ii) apply for or
acquiesce in the appointment of a receiver, assignee, liquidator, sequestrator,
custodian, monitor, trustee or similar officer for it or for all or any part of
its property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(f) an involuntary petition or proposal shall be filed or an action or
proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower or any of its
Restricted Subsidiaries or for any other relief under the federal Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency act or law, state
or federal, now or hereafter existing and either (i) such petition, proposal,
action or proceeding shall not have been dismissed within a period of sixty (60)
days after its commencement or (ii) an order for relief against the Borrower or
such Restricted Subsidiary shall have been entered in such proceeding;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for the Borrower or any of its Restricted
Subsidiaries or for all or any part of its property shall be appointed or a
warrant of attachment, execution or similar process shall be issued against any
part of the property of the Borrower or any of its Restricted Subsidiaries;
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(h) the Borrower or any of its Restricted Subsidiaries shall file a
certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(i) all or any material part of the property of the Borrower or any of
its Restricted Subsidiaries shall be nationalized, expropriated or condemned,
seized or otherwise appropriated, or custody or control of such property or of
the Borrower or such Restricted Subsidiary shall be assumed by any Governmental
Authority or any court of competent jurisdiction at the instance of any
Governmental Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;
(j) any guaranty of the Obligations shall be terminated, revoked or
declared void or invalid;
(k) one or more non-interlocutory judgments, non-interlocutory orders,
decrees or arbitration awards is entered against the Borrower or any Restricted
Subsidiary involving in the aggregate liability (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage) as to any single or related or unrelated series of transactions,
incidents or conditions, of $2,500,000 or more, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of 30 days after
the entry thereof;
(l) any loss, theft, damage or destruction of any item or items of (i)
Collateral or (ii) other property of the Borrower or any Restricted Subsidiary
occurs which materially and adversely affects the property, business, operation
or condition of the Borrower and its Restricted Subsidiaries taken as a whole
and is not adequately covered by insurance;
(m) there occurs a Material Adverse Effect;
(n) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens, pursuant to
the Loan Documents, any Loan Document ceases to be in full force and effect or
any Lien with respect to any material portion of the Collateral intended to be
secured thereby ceases to be, or is not, valid, perfected and prior to all other
Liens (other than Permitted Liens) or is terminated, revoked or declared void;
(o) (i) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multi-
employer Plan or the PBGC in an aggregate amount in excess of 5% of Adjusted
Tangible Net Worth; (ii) the aggregate amount of Unfunded Pension Liability
among all Pension Plans at any time exceeds 5% of Adjusted Tangible Net Worth;
or (iii) the Borrower or any ERISA Affiliate shall fail to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a Multi-
employer Plan in an aggregate amount in excess of 5% of Adjusted Tangible Net
Worth; or
(p) there occurs a Change of Control; or
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(q) there occurs and is continuing an Event of Default under and as
defined in the Indenture.
.2 Remedies. (a) If an Event of Default exists, the Agent may, in its
------------
discretion, and shall, at the direction of the Majority Lenders, do one or more
of the following at any time or times and in any order, without notice to or
demand on the Borrower: (i) reduce the Maximum Revolver Amount, or the advance
rates against Eligible Accounts used in computing the Borrowing Base, or reduce
one or more of the other elements used in computing the Borrowing Base; and (ii)
restrict the amount of or refuse to make Revolving Loans; and (iii) restrict or
refuse to provide the Letters of Credit or Credit Support. If an Event of
Default exists, the Agent shall, at the direction of the Majority Lenders, do
one or more of the following, in addition to the actions described in the
preceding sentence, at any time or times and in any order, without notice to or
demand on the Borrower: (A) terminate the Commitments and this Agreement; (B)
declare any or all Obligations to be immediately due and payable; provided,
--------
however, that upon the occurrence of any Event of Default described in
-------
Sections 11.1(e), 11.2(f), 11.1(g), or 11.1(h), the Commitments shall
------------------------- ------- -------
automatically and immediately expire and all Obligations shall automatically
become immediately due and payable without notice or demand of any kind; and (C)
pursue its other rights and remedies under the Loan Documents and applicable
law.
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have for the benefit of the Lenders, in addition to all other rights
of the Agent and the Lenders, the rights and remedies of a secured party under
the UCC; (ii) the Agent may, at any time, take possession of the Collateral and
keep it on the Borrower's premises, at no cost to the Agent or any Lender, or
remove any part of it to such other place or places as the Agent may desire, or
the Borrower shall, upon the Agent's demand, at the Borrower's cost, assemble
the Collateral and make it available to the Agent at a place reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any Collateral
at public or private sales, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion, and
may, if the Agent deems it reasonable, postpone or adjourn any sale of the
Collateral by an announcement at the time and place of sale or of such postponed
or adjourned sale without giving a new notice of sale. Without in any way
requiring notice to be given in the following manner, the Borrower agrees that
any notice by the Agent of sale, disposition or other intended action hereunder
or in connection herewith, whether required by the UCC or otherwise, shall
constitute reasonable notice to the Borrower if such notice is mailed by
registered or certified mail, return receipt requested, postage prepaid, or is
delivered personally against receipt, at least five (5) Business Days prior to
such action to the Borrower's address specified in or pursuant to Section 15.8.
------------
If any Collateral is sold on terms other than payment in full at the time of
sale, no credit shall be given against the Obligations until the Agent or the
Lenders receive payment, and if the buyer defaults in payment, the Agent may
resell the Collateral without further notice to the Borrower. In the event the
Agent seeks to take possession of all or any portion of the Collateral by
judicial process, the Borrower irrevocably waives: (A) the posting of any bond,
surety or security with respect thereto which might otherwise be required; (B)
any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (C) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrower agrees that the Agent has no obligation to preserve rights to the
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Collateral or marshal any Collateral for the benefit of any Person. To the
maximum extent permitted by applicable law and by any applicable contract
governing the usage thereof, the Agent is hereby granted a license or other
right to use, without charge, the Borrower's labels, patents, copyrights, name,
trade secrets, trade names, trademarks (subject to the Borrower's right to
police the proper usage of trademarks and the maintenance of product quality
associated therewith), and advertising matter, or any similar property, in
completing production of any Collateral that is work-in-process, advertising or
selling any Collateral, and the Borrower's rights under all licenses and all
franchise agreements shall inure to the Agent's benefit for such purpose. The
proceeds of sale shall be applied first to all expenses of sale, including
attorneys' fees, and then to the Obligations. The Agent will return any excess
to the Borrower and the Borrower shall remain liable for any deficiency.
(c) If an Event of Default occurs, the Borrower hereby waives all rights
to notice and hearing prior to the exercise by the Agent of the Agent's rights
to repossess the Collateral without judicial process or to reply, attach or levy
upon the Collateral without notice or hearing.
ARTICLE 12
----------
TERM AND TERMINATION
--------------------
.1 Term and Termination. The term of this Agreement shall end on the
-------------------------
Stated Termination Date, or on such earlier date as provided in this
Section 12.1. This Agreement shall automatically terminate without any further
------------
action of the parties if the Loan Availability Date shall not have occurred on
or prior to July 30, 1999. The Agent upon direction from the Majority Lenders
may terminate this Agreement at any time after the Loan Availability Date
without notice upon the occurrence of an Event of Default. Subject to Section
4.2, Borrower may terminate this Agreement at any time after the Loan
Availability Date, subject to payment and satisfaction of all Obligations
(including all unpaid principal, accrued interest and any early termination or
prepayment fees or penalties). Upon the effective date of termination of this
Agreement for any reason whatsoever, all Obligations (including all unpaid
principal, accrued interest and any early termination or prepayment fees or
penalties) shall become immediately due and payable and the Borrower shall
immediately arrange for the cancellation and return of Letters of Credit then
outstanding. Notwithstanding the termination of this Agreement, until all
Obligations are indefeasibly paid and performed in full in cash, the Borrower
shall remain bound by the terms of this Agreement and shall not be relieved of
any of its Obligations hereunder, and the Agent and the Lenders shall retain all
their rights and remedies hereunder (including the Agent's Liens in and all
rights and remedies with respect to all then existing and after-arising
Collateral).
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ARTICLE 13
----------
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
-----------------------------------------------------------
.1 No Waivers; Cumulative Remedies. No failure by the Agent or
-----------------------------------
any Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower of any provision of
this Agreement. The Agent's and each Lender's rights under this Agreement will
be cumulative and not exclusive of any other right or remedy which the Agent or
any Lender may have.
.2 Amendments and Waivers. No amendment or waiver of any provision of
--------------------------
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
-------- -------
consent shall,unless in writing and signed by all the Lenders and the Borrower
and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any of
them to take any action hereunder;
(e) increase any of the percentages set forth in the definition of the
Borrowing Base;
(f) amend this Section or any provision of the Agreement providing for
consent or other action by all Lenders;
(g) release Collateral other than as permitted by Section 14.11;
-------------
(h) change the definitions of "Majority Lenders" or "Required
Lenders"; or
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(i) increase the Maximum Revolver Amount or the Unused Letter of
Credit Subfacility.
and, provided further, that (i) no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the Agent, affect the rights or duties of the Agent under
this Agreement or any other Loan Document, (ii) the Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed by the parties
thereto, and (iii) the Agent may, in its sole discretion and notwithstanding the
limitations contained in clauses (e) and (i) above and any other terms of this
Agreement, make Revolving Loans (including Agent Advances) in an amount not to
exceed 5% of the Borrowing Base.
.3 Assignments; Participations.
-------------------------------
(a) Any Lender may, with the written consent of the Agent (which
consent shall not be unreasonably withheld), after consultation with the
Borrower, assign and delegate to one or more Eligible Assignees (provided that
no written consent of the Agent shall be required in connection with any
assignment and delegation by a Lender to an Affiliate of such Lender) (each an
"Assignee") all, or any ratable part of all, of the Loans, the Commitments
--------
and the other rights and obligations of such Lender hereunder, in a minimum
amount of $5,000,000 (provided that, unless an assignor Lender has assigned and
delegated all of its Loans and Commitments, no such assignment and/or delegation
shall be permitted unless, after giving effect thereto, such assignor Lender
retains a Commitment in a minimum amount of $5,000,000); provided, however, that
-------- -------
the Borrower and the Agent may continue to deal solely and directly with such
Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall have been given to
the Borrower and the Agent by such Lender and the Assignee; (ii) such Lender and
its Assignee shall have delivered to the Borrower and the Agent an Assignment
and Acceptance in the form of Exhibit D ("Assignment and Acceptance") and (iii)
--------- -------------------------
the assignor Lender or Assignee has paid to the Agent a processing fee in the
amount of $4,000.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance and payment of
the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations, including, but not
limited to, the obligation to participate in Letters of Credit and Credit
Support have been assigned to it pursuant to such Assignment and Acceptance,
shall have the rights and obligations of a Lender under the Loan Documents, and
(ii) the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance,
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such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document furnished pursuant hereto or the attachment, perfection,
or priority of any Lien granted by the Borrower to the Agent or any Lender in
the Collateral; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto; (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such Assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers,
including the discretionary rights and incidental power, as are reasonably
incidental thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
--- -----
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of the Borrower (a
"Participant") participating interests in any Loans, the Commitment of that
-----------
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
-------- -------
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the performance
of such obligations, (iii) the Borrower and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
and subject to the same limitation as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
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(f) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the FRB or U.S. Treasury Regulation 31
CFR (S)203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
ARTICLE 14
----------
THE AGENT
---------
.1 Appointment and Authorization. Each Lender hereby designates and
----------------------------------
appoints Bank as its Agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this Article 14. The provisions of this
----------
Article 14 are solely for the benefit of the Agent and the Lenders and the
----------
Borrower shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 2.2(i), and (c) the exercise of remedies pursuant to Section 11.2, and
-------------- ------------
any action so taken or not taken shall be deemed consented to by the Lenders.
.2 Delegation of Duties. The Agent may execute any of its duties
------------------------
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
-▇▇-
.▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇. ▇▇▇▇ of the Agent-Related Persons shall (i) be
----------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own bad faith, gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower or any
Subsidiary or Affiliate of the Borrower, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.
.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and shall
---------------------
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
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 Majority 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. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Lenders (or all Lenders if so required by Section 13.2) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 10.1, each Lender that has executed this Agreement shall
------------
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender.
.5 Notice of Default. The Agent shall not be deemed to have knowledge or
---------------------
notice of the occurrence of any Default or Event of Default, unless the Agent
shall have received written notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with Section 11; provided, however, that unless and until the Agent
---------- -------- -------
has received any such request, the
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Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable.
.6 Credit Decision. Each Lender acknowledges that none of the Agent-
-------------------
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Affiliates, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Affiliates, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
.7 Indemnification. Whether or not the transactions contemplated hereby
-------------------
are consummated, the Lenders shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Borrower and
without limiting the obligation of the Borrower to do so), pro rata, from and
against any and all Indemnified Liabilities as such term is defined in Section
15.11; provided, however, that no Lender shall be liable for the payment to
-------- -------
the Agent-Related Persons of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of the Agent.
.8 Agent in Individual Capacity. The Bank and its Affiliates may make
--------------------------------
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though the Bank were not the Agent hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such
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activities, the Bank or its Affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, the Bank shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders"
include the Bank in its individual capacity.
.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice
-------------------
to the Lenders and the Borrower, such resignation to be effective upon the
acceptance of a successor agent to its appointment as Agent. In the event the
Bank sells all of its Commitment and Revolving Loans as part of a sale, transfer
or other disposition by the Bank of substantially all of its loan portfolio, the
Bank shall resign as Agent and such purchaser or transferee shall become the
successor Agent hereunder. If the Agent resigns under this Agreement, subject to
the proviso in the preceding sentence, the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent shall
be reasonably satisfactory to the Borrower. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders, which successor agent shall be reasonably satisfactory
to the Borrower. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 14 shall inure to its benefit as to any actions
----------
taken or omitted to be taken by it while it was Agent under this Agreement.
.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
--------------------
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business
of such Lender, two properly completed and executed copies of IRS
Form 4224 before the payment of any interest is due in the first
taxable year of
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such Lender and in each succeeding taxable year of such Lender
during which interest may be paid under this Agreement, and IRS
Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Borrower to such Lender, such Lender agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Borrower to such Lender. To the extent of such percentage
amount, the Agent will treat such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of the Agent.
.11 Collateral Matters.
-----------------------
(a) The Lenders hereby irrevocably authorize the Agent, at its option
and in its sole discretion, to release any Agent's Lien upon any Collateral (i)
upon the termination of the
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Commitments and payment and satisfaction in full by Borrower of all Loans and
reimbursement obligations in respect of Letters of Credit and Credit Support,
and the termination of all outstanding Letters of Credit (whether or not any of
such obligations are due) and all other Obligations; (ii) constituting property
being sold or disposed of if the Borrower certifies to the Agent that the sale
or disposition is made in compliance with Section 9.9 (and the Agent may rely
-----------
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Borrower owned no interest at the time the
Lien was granted or at any time thereafter; or (iv) constituting property leased
to the Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement. Except as provided above, the Agent
will not release any of the Agent's Liens without the prior written
authorization of the Lenders; provided that the Agent may, in its discretion,
--------
release the Agent's Liens on Collateral valued in the aggregate not in excess of
$10,000,000 during any one year period without the prior written authorization
of the Lenders. Upon request by the Agent or the Borrower at any time, the
Lenders will confirm in writing the Agent's authority to release any Agent's
Liens upon particular types or items of Collateral pursuant to this Section
-------
14.11.
-----
(b) Upon receipt by the Agent of any authorization required pursuant
to Section 14.11(a) from the Lenders of the Agent's authority to release any
----------------
Agent's Liens upon particular types or items of Collateral, and upon at least
five (5) Business Days' prior written request by the Borrower, the Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such documents
as may be necessary to evidence the release of the Agent's Liens upon such
Collateral; provided, however, that (i) the Agent shall not be required to
-------- -------
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
the Borrower in respect of) all interests retained by the Borrower, including
the proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by the Borrower or is
cared for, protected or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Agent pursuant to any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion given the Agent's own interest in the
Collateral in its capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing.
.12 Restrictions on Actions by Lenders; Sharing of Payments. (a) Each of
------------------------------------------------------------
the Lenders agrees that it shall not, without the express consent of all
Lenders, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of all Lenders, set off against the Obligations, any amounts owing
by such Lender to the Borrower or any accounts of the Borrower now or
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hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action to enforce its rights under this Agreement or
against the Borrower, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations of the Borrower to such Lender arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from the Agent pursuant to the
terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
-------- -------
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
.13 Agency for Perfection. Each Lender hereby appoints each other Lender
--------------------------
as agent for the purpose of perfecting the Lenders' security interest in assets
which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefor shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.
.14 Payments by Agent to Lenders. All payments to be made by the Agent
---------------------------------
to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans or otherwise.
.15 Concerning the Collateral and the Related Loan Documents. Each Lender
-------------------------------------------------------------
authorizes and directs the Agent to enter into this Agreement and the other Loan
Documents relating to the Collateral, for the ratable benefit of the Agent and
the Lenders. Each Lender agrees that any action taken by the Agent, Majority
Lenders or Required Lenders, as applicable, in accordance with the terms of this
Agreement or the other Loan Documents relating to the Collateral, and the
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exercise by the Agent, the Majority Lenders, or the Required Lenders, as
applicable, of their respective powers set forth therein or herein, together
with such other powers that are reasonably incidental thereto, shall be binding
upon all of the Lenders.
.16 Field Audit and Examination Reports; Disclaimer by Lenders. By signing
---------------------------------------------------------------
this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by the Agent;
(b) expressly agrees and acknowledges that neither the Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any Report,
or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party performing
any audit or examination will inspect only specific information regarding the
Borrower and will rely significantly upon the Borrower's books and records, as
well as on representations of the Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of the Borrower; and (ii) to pay and protect, and indemnify, defend and
hold the Agent and any such other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses and other
amounts (including Attorney Costs) incurred by the Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
.17 Relation Among Lenders. The Lenders are not partners or co-venturers,
---------------------------
and no Lender shall be liable for the acts or omissions of, or (except as
otherwise set forth herein in case of the Agent) authorized to act for, any
other Lender.
ARTICLE 15
----------
MISCELLANEOUS
-------------
.1 Cumulative Remedies; No Prior Recourse to Collateral. The enumeration
--------------------------------------------------------
herein of the Agent's and each Lender's rights and remedies is not intended to
be exclusive, and such
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rights and remedies are in addition to and not by way of limitation of any other
rights or remedies that the Agent and the Lenders may have under the UCC or
other applicable law. The Agent and the Lenders shall have the right, in their
sole discretion, to determine which rights and remedies are to be exercised and
in which order. The exercise of one right or remedy shall not preclude the
exercise of any others, all of which shall be cumulative. The Agent and the
Lenders may, without limitation, proceed directly against the Borrower to
collect the Obligations without any prior recourse to the Collateral. No failure
to exercise and no delay in exercising, on the part of the Agent or any Lender,
any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
.2 Severability. The illegality or unenforceability of any provision of
----------------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
.3 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
-------------------------------------------------------------------------
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF CALIFORNIA;
PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT AND
THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT AND THE
LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
--------------------
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE
FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY
OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2)
EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM
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THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS ADDRESS SET
FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
------------
FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS TO SERVE
LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
.4 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT EACH
------------------------
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
.5 Survival of Representations and Warranties. All of the Borrower's
----------------------------------------------
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.
.6 Other Security and Guaranties. The Agent, may, without notice or
---------------------------------
demand and without affecting the Borrower's obligations hereunder, from time to
time: (a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
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.7 Fees and Expenses. The Borrower agrees to pay to the Agent, for its
---------------------
benefit, on demand, all costs and expenses that Agent pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) reasonable Attorney Costs; (b) costs and
reasonable expenses (including attorneys' and paralegals' fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with the Loan Documents and the transactions contemplated
thereby; (c) costs and reasonable expenses of lien and title searches and title
insurance; (d) taxes, fees and other charges for filing financing statements and
continuations, and other actions to perfect, protect, and continue the Agent's
Liens (including costs and reasonable expenses paid or incurred by the Agent in
connection with the consummation of Agreement); (e) sums paid or incurred to pay
any amount or take any action required of the Borrower under the Loan Documents
that the Borrower fails to pay or take; (f) costs of appraisals, inspections,
and verifications of the Collateral, including travel, lodging, and meals for
inspections of the Collateral and the Borrower's operations by the Agent plus
the Agent's then customary charge for field examinations and audits and the
preparation of reports thereof (such charge is currently $750 per day (or
portion thereof) for each agent or employee of the Agent with respect to each
field examination or audit); (g) costs and reasonable expenses of forwarding
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining Payment Accounts and lock boxes; (h) costs and reasonable
expenses of preserving and protecting the Collateral; and (i) costs and
reasonable expenses (including attorneys' and paralegals' fees and disbursements
which shall include the allocated cost of Agent's in-house counsel fees and
disbursements) paid or incurred to obtain payment of the Obligations, enforce
the Agent's Liens, sell or otherwise realize upon the Collateral, and otherwise
enforce the provisions of the Loan Documents, or to defend any claims made or
threatened against the Agent arising out of the transactions contemplated hereby
(including preparations for and consultations concerning any such matters). The
foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrower. All of the
foregoing costs and expenses shall be charged to the Borrower's Loan Account as
Revolving Loans as described in Section 4.7.
-----------
.8 Notices. Except as otherwise provided herein, all notices, demands and
-----------
requests that any party is required or elects to give to any other shall be in
writing, or by a telecommunications device capable of creating a written record,
and any such notice shall become effective (a) upon personal delivery thereof,
including, but not limited to, delivery by overnight mail and courier service,
(b) four (4) days after it shall have been mailed by United States mail, first
class, certified or registered, with postage prepaid, or (c) in the case of
notice by such a telecommunications device, when properly transmitted, in each
case addressed to the party to be notified as follows:
-100-
If to the Agent or to the Bank:
Bank of America National Trust & Savings Association
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Account Executive -- AMD
Telecopy No. (▇▇▇)▇▇▇-▇▇▇▇
If to the Borrower:
Advanced Micro Devices, Inc.
AMD International Sales and Service, Ltd.
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Advanced Micro Devices, Inc.
One AMD Place
Mailstop 150
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
.9 Waiver of Notices. Unless otherwise expressly provided herein, the
---------------------
Borrower waives presentment, protest and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the Obligations and
notice of acceleration of the Obligations, as well as any and all other notices
to which it might otherwise be entitled. No notice to or demand on the Borrower
which the Agent or any Lender may elect to give shall entitle the Borrower to
any or further notice or demand in the same, similar or other circumstances.
.10 Binding Effect. The provisions of this Agreement shall be binding upon
-------------------
and inure to the benefit of the respective representatives, successors, and
assigns of the parties hereto; provided, however, that no interest herein may be
-------- -------
assigned by the Borrower without prior written consent of the Agent and each
Lender. The rights and benefits of the Agent and the Lenders
-101-
hereunder shall, if such Persons so agree, inure to any party acquiring any
interest in the Obligations or any part thereof.
.11 Indemnity of the Agent and the Lenders by the Borrower. The Borrower
------------------------------------------------------------
agrees to defend, indemnify and hold the Agent-Related Persons, and each Lender
and each of its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including
reasonable Attorney Costs of counsel mutually acceptable to the Borrower and the
applicable Indemnified Person) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans and the
termination, resignation or replacement of the Agent or replacement of any
Lender) be imposed on, incurred by or asserted against any such Person in any
way relating to or arising out of this Agreement or any document contemplated by
or referred to herein, or the transactions contemplated hereby, or any action
taken or omitted by any such Person under or in connection with any of the
foregoing, including with respect to any investigation, litigation or proceeding
(including any Insolvency Proceeding or appellate proceeding) related to or
arising out of this Agreement, any other Loan Document, or the Loans or the use
of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting solely from
the bad faith, gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment of all other
Obligations.
.12 Limitation of Liability. No claim may be made by the Borrower, any
----------------------------
Lender or other Person against the Agent, any Lender, or the affiliates,
directors, officers, employees, or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement or any other Loan Document, or
any act, omission or event occurring in connection therewith, and the Borrower
and each Lender hereby waive, release and agree not to ▇▇▇ upon any claim for
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
.13 Final Agreement. This Agreement and the other Loan Documents are
--------------------
intended by the Borrower, the Agent and the Lenders to be the final, complete,
and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower and a duly authorized officer of each
of the Agent and the requisite Lenders.
.14 Counterparts. This Agreement may be executed in any number of
-----------------
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages
-102-
may be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
.15 Captions. The captions contained in this Agreement are for convenience
-------------
of reference only, are without substantive meaning and should not be construed
to modify, enlarge, or restrict any provision.
.16 Right of Setoff. In addition to any rights and remedies of the Lenders
--------------------
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such set-
off and application made by such Lender; provided, however, that the failure to
-------- -------
give such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE
BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS
CONSENT OF THE LENDERS.
.17 Joint and Several Liability.
--------------------------------
(a) The Borrower shall be liable for all amounts due to the Agent
and/or any Lender under this Agreement, regardless of which Borrower actually
receives Loans or other extensions of credit hereunder or the amount of such
Loans received or the manner in which the Agent and/or such Lender accounts for
such Loans or other extensions of credit on its books and records. The
Borrower's Obligations with respect to Loans made to it, and the Borrower's
Obligations arising as a result of the joint and several liability of the
Borrower hereunder, with respect to Loans made to the other Borrower hereunder,
shall be separate and distinct obligations, but all such Obligations shall be
primary obligations of the Borrower.
(b) The Borrower's Obligations arising as a result of the joint and
several liability of the Borrower hereunder with respect to Loans or other
extensions of credit made to the other Borrower hereunder shall, to the fullest
extent permitted by law, be unconditional irrespective of (i) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrower or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrower, (ii) the absence of any attempt to
collect the Obligations from the other Borrower, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance or granting of any indulgence
by the Agent and/or any Lender with respect to any provision of any instrument
evidencing the Obligations of the other Borrower, or any part thereof, or any
other agreement
-103-
now or hereafter executed by the other Borrower and delivered to the Agent
and/or any Lender, (iv) the failure by the Agent and/or any Lender to take any
steps to perfect and maintain its security interest in, or to preserve its
rights to, any security or collateral for the Obligations of the other Borrower,
(v) the Agent's and/or any Lender's election, in any proceeding instituted under
the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, (vi) any borrowing or grant of a security interest by the other Borrower,
as debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the
disallowance of all or any portion of the Agent's and/or any Lender's claim(s)
for the repayment of the Obligations of the other Borrower under Section 502 of
the Bankruptcy Code, or (viii) any other circumstances which might constitute a
legal or equitable discharge or defense of a guarantor or of the other Borrower.
With respect to the Borrower's Obligations arising as a result of the joint and
several liability of the Borrower hereunder with respect to Loans or other
extensions of credit made to either of the other Borrower hereunder, the
Borrower waives, until the Obligations shall have been paid in full and the Loan
Agreement shall have been terminated, any right to enforce any right of
subrogation or any remedy which the Agent and/or any Lender now has or may
hereafter have against the Borrower, any endorser or any guarantor of all or any
part of the Obligations, and any benefit of, and any right to participate in,
any security or collateral given to the Agent and/or any Lender to secure
payment of the Obligations or any other liability of the Borrower to the Agent
and/or any Lender.
Upon any Event of Default, the Agent may proceed directly and at once,
without notice, against the Borrower to collect and recover the full amount, or
any portion of the Obligations, without first proceeding against the other
Borrower or any other Person, or against any security or collateral for the
Obligations. The Borrower consents and agrees that the Agent shall be under no
obligation to marshal any assets in favor of the Borrower or against or in
payment of any or all of the Obligations.
.18 Contribution and Indemnification among the Borrowers. Each Borrower is
---------------------------------------------------------
obligated to repay the Obligations as joint and several obligors under this
Agreement. To the extent that any Borrower shall, under this Agreement as a
joint and several obligor, repay any of the Obligations constituting Loans made
to another Borrower hereunder or other Obligations incurred directly and
primarily by any other Borrower (an "Accommodation Payment"), then the Borrower
making such Accommodation Payment shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Borrowers in an
amount, for each of such other Borrowers, equal to a fraction of such
Accommodation Payment, the numerator of which fraction is such other Borrower's
"Allocable Amount" (as defined below) and the denominator of which is the sum of
the Allocable Amounts of all of the Borrowers. As of any date of determination,
the "Allocable Amount" of each Borrower shall be equal to the maximum amount of
liability for Accommodation Payments which could be asserted against such
Borrower hereunder without (a) rendering such Borrower "insolvent" within the
meaning of Section 101 (31) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act ("UFTA") or Section 2 of the Uniform Fraudulent
Conveyance Act ("UFCA"), (ii) leaving such Borrower with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (iii) leaving such Borrower
unable to pay its debts as they become due within the meaning of Section 548 of
the Bankruptcy Code or
-104-
Section 4 of the UFTA, or Section 5 of the UFCA. All rights and claims of
contribution, indemnification and reimbursement under this section shall be
subordinate in right of payment to the prior payment in full of the Obligations.
The provisions of this section shall, to the extent expressly inconsistent with
any provision in any Loan Document, supersede such inconsistent provision.
.19 Agency of the Parent for each other Borrower. AMDISS hereby
-------------------------------------------------
irrevocably appoints the Parent as its agent for all purposes relevant to this
Agreement and each of the other Loan Documents, including the giving and receipt
of notices and execution and delivery of all documents, instruments and
certificates contemplated herein and all modifications hereto. Any
acknowledgement, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by both of the Borrowers
or each acting singly, shall be valid and effective if given or taken only by
the Parent, whether or not AMDISS joins therein.
.20 Priority of Obligations. The parties acknowledge that the Obligations
----------------------------
under this Agreement (a) shall be pari passu in right of payment with the senior
notes issued under the Indenture, and (b) shall be senior to the Convertible
Subordinated Notes issued pursuant to an Indenture dated May 8, 1998 between the
Parent and The Bank of New York, as trustee.
[Signature pages follow.]
-105-
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
"BORROWER"
----------
ADVANCED MICRO DEVICES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Senior Vice President,
----------------------------
Chief Financial Officer
----------------------------
AMD INTERNATIONAL SALES AND
SERVICE, LTD.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: President, Chief Financial
----------------------------
Officer & Treasurer
----------------------------
"AGENT"
-------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as the Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Vice President
----------------------------
"LENDERS"
---------
Commitment: $200,000,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS
Pro Rata Share: 100% ASSOCIATION, as a Lender
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Vice President
----------------------------
-106-
EXHIBIT A
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
-1-
EXHIBIT B
FORM OF NOTICE OF BORROWING
---------------------------
Date:
---------------
To: Bank of America NT&SA as Agent for the Lenders who are parties to the Loan
and Security Agreement dated as of July 13, 1999 (as extended, renewed,
amended or restated from time to time, the "Loan and Security Agreement")
---------------------------
among Advanced Micro Devices, Inc., AMD International Sales and Service,
Ltd., certain Lenders which are signatories thereto and Bank of America
NT&SA, as Agent
Ladies and Gentlemen:
The undersigned, Advanced Micro Devices, Inc. (the "Parent"), refers to the
------
Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the Borrowing
specified below:
1. The applicable Borrower is .
------------------
2. The Business Day of the proposed Borrowing is .
-----------------------
3. The aggregate amount of the proposed Borrowing is $ .
------------------
4. The Borrowing is to be comprised of $ of Base Rate Loans and
----------
$ of LIBOR Rate Loans.
----------------
5. The duration of the Interest Period for the LIBOR Rate Loans, if any,
included in the Borrowing shall be [one][two][three][six] months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained in
the Loan and Security Agreement are true and correct as though made on and as of
such date (except to the extent any such representation and warranty relates
solely to an earlier date, in which case it shall have been true and correct as
of such earlier date);
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
-1-
(c) The proposed Borrowing will not cause the aggregate principal
amount of all outstanding Revolving Loans, plus the aggregate amount available
----
for drawing under all outstanding Letters of Credit to exceed the Availability
or the combined Commitments of the Lenders.
ADVANCED MICRO DEVICES, INC.
By:
------------------------
Title:
---------------------
-2-
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
Date:
---------------
To: Bank of America NT&SA as Agent for the Lenders party to the Loan and
Security Agreement dated as of July 13, 1999 (as extended, renewed, amended
or restated from time to time, the "Loan and Security Agreement") among
---------------------------
Advanced Micro Devices, Inc., AMD International Sales and Service, Ltd.,
certain Lenders which are signatories thereto and Bank of America NT&SA as
Agent
Ladies and Gentlemen:
The undersigned, Advanced Micro Devices, Inc. (the "Parent"), refers to the
------
Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The applicable Borrower is ____________.
2. The Conversion/Continuation Date is ____________.
3. The aggregate amount of the Loans to be [converted] [continued] is
$______________.
4. The Loans are to be [converted into] [continued as] [LIBOR Rate]
[Base Rate] Loans.
5. The duration of the Interest Period for the LIBOR Rate Loans
included in the [conversion] [continuation] shall be
[one][two][three][six] months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed Conversion/Continuation Date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower contained
in the Loan and Security Agreement are true and correct as though made on and as
of such date (except to the extent any such representation and warranty relates
solely to an earlier date, in which case it shall have been true and correct as
of such earlier date);
(b) No Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion] [continuation]; and
-1-
(c) The proposed conversion-continuation will not cause the
aggregate principal amount of all outstanding Revolving Loans plus the aggregate
----
amount available for drawing under all outstanding Letters of Credit to exceed
the Availability or the combined Commitments of the Lenders.
ADVANCED MICRO DEVICES, INC.
By:____________________________
Title:_________________________
-2-
EXHIBIT D
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
-------------------------------------------
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
-------------------------
dated as of ___________________________________________ is made between
______________________________ (the "Assignor") and __________________________
--------
(the "Assignee").
--------
RECITALS
--------
WHEREAS, the Assignor is party to that certain Loan and Security Agreement
dated as of July 13, 1999 (as amended, amended and restated, modified,
supplemented or renewed, the "Loan Agreement") among Advanced Micro Devices,
--------------
Inc., a Delaware corporation (the "Borrower"), the several financial
--------
institutions from time to time party thereto (including the Assignor, the
"Lenders"), and Bank of America NT&SA, as agent for the Lenders (the "Agent").
-------- -----
Any terms defined in the Loan Agreement and not defined in this Assignment and
Acceptance are used herein as defined in the Loan Agreement;
WHEREAS, as provided under the Loan Agreement, the Assignor has
committed to making Loans (the "Committed Loans") to the Borrower in an
---------------
aggregate amount not to exceed $__________ (the "Commitment");
----------
WHEREAS, the Assignor has made Committed Loans in the aggregate
principal amount of $__________ to the Borrower
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Loan Agreement in respect
of its Commitment, together with a corresponding portion of each of its
outstanding Committed Loans, in an amount equal to $__________ (the "Assigned
--------
Amount") on the terms and subject to the conditions set forth herein and the
------
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
-------------------------
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "Assignee's Percentage
---------------------
Share") of (A) the Commitment and the Committed Loans of the Assignor and (B)
-----
all related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Loan Agreement and the Loan Documents.
-1-
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Loan Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Loan Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Agreement are required to be performed by it as a Lender. It is the intent
of the parties hereto that the Commitment of the Assignor shall, as of the
Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Loan Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Sections 15.11 of the Loan Agreement.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
--------
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The Assignee further agrees to pay to the Agent a processing fee
in the amount specified in Section (__) of the Loan Agreement.
3. Reallocation of Payments.
------------------------
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment and Committed Loans shall be for the account of the
Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to which the other party is entitled pursuant to the preceding sentence
and pay to the other party any such amounts which it may receive promptly upon
receipt.
4. Independent Credit Decision.
---------------------------
The Assignee (a) acknowledges that it has received a copy of the Loan
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements of the Borrower, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any
-2-
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit and legal decisions in
taking or not taking action under the Loan Agreement.
5. Effective Date; Notices.
-----------------------
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________ (the "Effective Date");
--------------
provided that the following conditions precedent have been satisfied on or
--------
before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
[(ii) the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee shall have
been duly obtained and shall be in full force and effect as of the Effective
Date;]
(iii) the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with Section 14.10 of the
Loan Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and in
Section 13.3 of the Loan Agreement shall have been paid to the Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached hereto
as Schedule 1.
----------
6. Agent.
-----
(a) The Assignee hereby appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Agreement as are delegated to the Agent by the Lenders pursuant to the terms of
the Loan Agreement.
(b) [INCLUDE ONLY IF ASSIGNOR IS AGENT] [The Assignee shall assume no
duties or obligations held by the Assignor in its capacity as Agent under the
Loan Agreement.]
7. Withholding Tax.
---------------
The Assignee (a) represents and warrants to the Lender, the Agent and the
Borrower that under applicable law and treaties no tax will be required to be
withheld by the Lender with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Borrower prior to the time that the Agent or Borrower is required to make
any
-3-
payment of principal, interest or fees hereunder, duplicate executed originals
of either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein the Assignee claims entitlement to the benefits of a
tax treaty that provides for a complete exemption from U.S. federal income
withholding tax on all payments hereunder) and agrees to provide new Forms 4224
or 1001 upon the expiration of any previously delivered form or comparable
statements in accordance with applicable U.S. law and regulations and amendments
thereto, duly executed and completed by the Assignee, and (c) agrees to comply
with all applicable U.S. laws and regulations with regard to such withholding
tax exemption.
8. Representations and Warranties.
------------------------------
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim; (ii) it is duly
organized and existing and it has the full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Loan Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Borrower, or the performance or observance by the Borrower, of any of its
respective obligations under the Loan Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Loan Agreement, no further action by, or notice to, or
filing with, any
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Person is required of it for such execution, delivery or performance; (iii) this
Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignee, enforceable
against the Assignee in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles; and (iv) it is an Eligible Assignee.
9. Further Assurances.
------------------
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrower or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. Miscellaneous.
-------------
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA. The Assignor and the
Assignee each irrevocably submits to the non-exclusive jurisdiction of any State
or Federal court sitting in California over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such California State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
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TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT,
ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:_______________________________
Title:____________________________
By:_______________________________
Title:____________________________
Address:__________________________
[ASSIGNEE]
By:______________________________
Title:___________________________
By:______________________________
Title:___________________________
Address:_________________________
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SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
-----------------------------------
_______________
Bank of America NT&SA
_____________________________
_____________________________
Attn:________________________
Advanced Micro Devices, Inc.
_____________________________
_____________________________
Attn:________________________
Re: Advanced Micro Devices, Inc.
----------------------------
Ladies and Gentlemen:
We refer to the Loan and Security Agreement dated as of July 13, 1999 (as
amended, amended and restated, modified, supplemented or renewed from time to
time the "Loan Agreement") among Advanced Micro Devices, Inc. and AMD
--------------
International Sales and Service, Ltd. (collectively, the "Borrower"), the
--------
Lenders referred to therein and Bank of America NT&SA, as agent for the Lenders
(the "Agent"). Terms defined in the Loan Agreement are used herein as therein
-----
defined.
1. We hereby give you notice of, and request the Agent's consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
--------
"Assignee") of _____% of the right, title and interest of the Assignor in and to
---------
the Loan Agreement (including the right, title and interest of the Assignor in
and to the Commitments of the Assignor and all outstanding Loans made by the
Assignor pursuant to the Assignment and Acceptance Agreement attached hereto
(the "Assignment and Acceptance"). We understand and agree that the Assignor's
-------------------------
Commitment, as of _____________, is $ ___________, and the aggregate amount of
its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent to
such assignment, the Assignee will be bound by the terms of the Loan Agreement
as fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Loan Agreement.
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3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:_______________________
Address:_____________________________
_____________________________
_____________________________
Attention:___________________________
Telephone: (___)____________________
Telecopier: (___)___________________
Telex (Answerback):__________________
(B) Payment Instructions:
Account No.:_________________________
At: _________________________
_________________________
_________________________
Reference: _________________________
Attention: _________________________
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:__________________________
Title:_______________________
[NAME OF ASSIGNEE]
By:__________________________
Title:_______________________
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ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America NT&SA,
as Agent
By:______________________________
Title:___________________________
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