EXHIBIT 10.01
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CADENCE DESIGN SYSTEMS, INC.
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$100,000,000
CREDIT AGREEMENT
Dated as of September 29, 2000
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ABN AMRO BANK N.V.,
as Agent and as Sole Lead Arranger
BANK ONE, N.A.
KEYBANK NATIONAL ASSOCIATION, AND
UBS AG, STAMFORD BRANCH,
as Co-Agents
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01 Certain Defined Terms....................................................................1
Section 1.02 Accounting Principles...................................................................14
(a) Accounting Terms................................................................14
(b) GAAP Changes....................................................................14
(c) "Fiscal Year" and "Fiscal Quarter"..............................................14
Section 1.03 Interpretation..........................................................................14
ARTICLE II THE LOANS.............................................................................................15
Section 2.01 The Revolving Credit....................................................................15
Section 2.02 Borrowing Procedure.....................................................................15
(a) Notice to the Agent.............................................................15
(b) Notice to the Banks.............................................................16
Section 2.03 Non-Receipt of Funds....................................................................16
Section 2.04 Lending Offices.........................................................................16
Section 2.05 Evidence of Indebtedness................................................................17
Section 2.06 Minimum Amounts.........................................................................17
Section 2.07 Required Notice.........................................................................17
ARTICLE III INTEREST AND FEES; CONVERSION OR CONTINUATION........................................................17
Section 3.01 Interest................................................................................17
(a) Interest Rate...................................................................17
(b) Interest Periods................................................................18
(c) Interest Payment Dates..........................................................18
(d) Notice to the Borrower and the Banks............................................19
Section 3.02 Default Rate of Interest................................................................19
Section 3.03 Fees....................................................................................19
(a) Revolving Commitment Fees.......................................................19
(b) Agency Fee......................................................................19
(c) Fees Nonrefundable..............................................................19
Section 3.04 Computations............................................................................19
Section 3.05 Conversion or Continuation..............................................................19
(a) Election........................................................................19
(b) Automatic Conversion............................................................20
(c) Notice to the Agent.............................................................20
(d) Notice to the Banks.............................................................20
Section 3.06 Replacement of Reference Banks..........................................................20
Section 3.07 Highest Lawful Rate.....................................................................20
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ARTICLE IV REDUCTION OF REVOLVING COMMITMENTS; REPAYMENT; PREPAYMENT.............................................21
Section 4.01 Reduction or Termination of the Revolving Commitments...................................21
(a) Optional Reduction or Termination...............................................21
(b) Mandatory Termination...........................................................21
(c) [Intentionally Omitted.]........................................................21
(d) [Intentionally Omitted.]........................................................21
(e) Notice..........................................................................21
(f) Adjustment of Revolving Commitment Fee; No Reinstatement........................21
Section 4.02 Repayment of Loans......................................................................21
Section 4.03 Prepayments.............................................................................21
(a) Optional Prepayments............................................................21
(b) [Intentionally Omitted.]........................................................21
(c) Notice; Application.............................................................22
ARTICLE V YIELD PROTECTION AND ILLEGALITY........................................................................22
Section 5.01 Inability to Determine Rates............................................................22
Section 5.02 Funding Losses..........................................................................22
Section 5.03 Regulatory Changes......................................................................22
(a) Increased Costs.................................................................22
(b) Capital Requirements............................................................23
(c) Requests........................................................................23
Section 5.04 Illegality..............................................................................23
Section 5.05 Funding Assumptions.....................................................................24
Section 5.06 Obligation to Mitigate..................................................................24
Section 5.07 Substitution of Banks...................................................................24
ARTICLE VI PAYMENTS..............................................................................................24
Section 6.01 Pro Rata Treatment......................................................................24
Section 6.02 Payments................................................................................25
(a) Payments........................................................................25
(b) Application.....................................................................25
(c) Extension.......................................................................25
Section 6.03 Taxes...................................................................................25
(a) No Reduction of Payments........................................................25
(b) Deduction or Withholding; Tax Receipts..........................................25
(c) Indemnity.......................................................................26
(d) Forms W-8BEN and W-8ECI.........................................................26
(e) Mitigation......................................................................26
Section 6.04 Non-Receipt of Funds....................................................................26
Section 6.05 Sharing of Payments.....................................................................27
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ARTICLE VII CONDITIONS PRECEDENT.................................................................................27
Section 7.01 Conditions Precedent to the Initial Loans...............................................27
(a) Fees and Expenses...............................................................27
(b) Loan Documents..................................................................27
(c) Certificate of Responsible Officer..............................................27
(d) Corporate Documents.............................................................27
(e) Legal Opinion...................................................................28
(f) Compliance Certificate..........................................................28
(g) Material Adverse Effect.........................................................28
(h) Existing Credit Agreement.......................................................28
Section 7.02 Conditions Precedent to All Loans.......................................................28
(a) Notice..........................................................................28
(b) Representations and Warranties; No Default......................................28
(c) Additional Documents............................................................29
ARTICLE VIII REPRESENTATIONS AND WARRANTIES......................................................................29
Section 8.01 Representations and Warranties..........................................................29
(a) Organization and Powers.........................................................29
(b) Authorization; No Conflict......................................................29
(c) Binding Obligation..............................................................29
(d) Consents........................................................................29
(e) No Defaults.....................................................................30
(f) Title to Properties; Liens......................................................30
(g) Litigation......................................................................30
(h) Compliance with Environmental Laws..............................................30
(i) Governmental Regulation.........................................................30
(j) ERISA...........................................................................31
(k) Subsidiaries....................................................................31
(l) Margin Regulations..............................................................31
(m) Taxes...........................................................................31
(n) Patents and Other Rights........................................................32
(o) Insurance.......................................................................32
(p) Financial Statements............................................................32
(q) Liabilities.....................................................................32
(r) Labor Disputes, Etc.............................................................32
(s) Solvency........................................................................32
(t) Disclosure......................................................................32
ARTICLE IX COVENANTS.............................................................................................33
Section 9.01 Reporting Covenants.....................................................................33
(a) Financial Statements and Other Reports..........................................33
(b) Additional Information..........................................................34
Section 9.02 Financial Covenants.....................................................................35
(a) Minimum Consolidated EBITDA.....................................................35
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(b) [Intentionally omitted.]........................................................35
(c) Minimum Fixed Charge Coverage Ratio.............................................35
(d) Minimum Current Ratio...........................................................35
(e) Maximum Funded Debt to EBITDA Ratio.............................................35
Section 9.03 Additional Affirmative Covenants........................................................35
(a) Preservation of Existence, Etc..................................................36
(b) Payment of Obligations..........................................................36
(c) Maintenance of Insurance........................................................36
(d) Keeping of Records and Books of Account.........................................36
(e) Inspection Rights...............................................................36
(f) Compliance with Laws, Etc.......................................................37
(g) Maintenance of Properties, Etc..................................................37
(h) Licenses........................................................................37
(i) Action Under Environmental Laws.................................................37
(j) Use of Proceeds.................................................................37
(k) Further Assurances and Additional Acts..........................................37
Section 9.04 Negative Covenants......................................................................37
(a) Liens; Negative Pledges.........................................................38
(b) Change in Nature of Business....................................................38
(c) Restrictions on Fundamental Changes.............................................38
(d) Sales of Assets.................................................................38
(e) Loans and Investments...........................................................39
(f) Transactions with Related Parties...............................................41
(g) Hazardous Substances............................................................41
(h) Accounting Changes..............................................................41
ARTICLE X EVENTS OF DEFAULT......................................................................................41
Section 10.01 Events of Default.......................................................................41
(a) Payments........................................................................41
(b) Representations and Warranties..................................................41
(c) Failure by Borrower to Perform Certain Covenants................................42
(d) Failure by Borrower to Perform Other Covenants..................................42
(e) Insolvency; Voluntary Proceedings...............................................42
(f) Involuntary Proceedings.........................................................42
(g) Default Under Other Indebtedness................................................42
(h) Judgments.......................................................................43
(i) ERISA...........................................................................43
(j) Dissolution, Etc................................................................43
(k) Subordination Provisions........................................................43
(l) Mergers and Acquisitions........................................................44
Section 10.02 Effect of Event of Default..............................................................44
ARTICLE XI THE AGENT.............................................................................................44
Section 11.01 Authorization and Action................................................................44
Section 11.02 Limitation on Liability of Agent; Notices; Closing......................................45
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(a) Limitation on Liability of Agent................................................45
(b) Notices.........................................................................45
(c) Closing.........................................................................46
Section 11.03 Agent and Affiliates....................................................................46
Section 11.04 Notice of Defaults......................................................................46
Section 11.05 Non-Reliance on Agent...................................................................46
Section 11.06 Indemnification.........................................................................47
Section 11.07 Delegation of Duties....................................................................47
Section 11.08 Successor Agent.........................................................................47
Section 11.09 Co-Agents...............................................................................47
ARTICLE XII MISCELLANEOUS........................................................................................48
Section 12.01 Amendments and Waivers..................................................................48
Section 12.02 Notices.................................................................................49
(a) Notices.........................................................................49
(b) Facsimile and Telephonic Notice.................................................49
Section 12.03 No Waiver; Cumulative Remedies..........................................................49
Section 12.04 Costs and Expenses; Indemnification.....................................................49
(a) Costs and Expenses..............................................................49
(b) Indemnification.................................................................50
(c) Other Charges...................................................................50
Section 12.05 Right of Set-Off........................................................................50
Section 12.06 Survival................................................................................51
Section 12.07 Obligations Several.....................................................................51
Section 12.08 Benefits of Agreement...................................................................51
Section 12.09 Binding Effect; Assignment..............................................................51
(a) Binding Effect..................................................................51
(b) Assignment......................................................................51
Section 12.10 Governing Law...........................................................................53
Section 12.11 Submission to Jurisdiction..............................................................53
(a) SUBMISSION TO JURISDICTION......................................................53
(b) NO LIMITATION...................................................................54
Section 12.12 Waiver of Jury Trial....................................................................54
Section 12.13 Limitation on Liability.................................................................54
Section 12.14 Confidentiality.........................................................................54
Section 12.15 Entire Agreement........................................................................55
Section 12.16 Severability............................................................................55
Section 12.17 Counterparts............................................................................55
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SCHEDULES ANNEXES
Annex 1 Pricing Grid
Schedule 1 Revolving Commitments and Pro Rata Shares
Schedule 2 Borrower's Account; Lending Offices; Addresses for Notices
Schedule 8.01(a) Organization and Powers
Schedule 8.01(g) Litigation
Schedule 8.01(h) Environmental Matters
Schedule 8.01(k) Subsidiaries
Schedule 9.04(a) Existing Liens
Schedule 9.04(e) Existing Investments
EXHIBITS
Exhibit A Form of Revolving Note
Exhibit B [Intentionally omitted.]
Exhibit C Form of Notice of Borrowing
Exhibit D Form of Compliance Certificate
Exhibit E Form of Opinion of Counsel to the Borrower
Exhibit F Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of
September 29, 2000, is made among Cadence Design Systems, Inc., a Delaware
corporation (the "Borrower"), the financial institutions listed on the signature
pages of this Agreement under the heading "BANKS" (each a "Bank" and,
collectively, the "Banks"), Bank One, N.A., KeyBank National Association and UBS
AG, Stamford Branch, as co-agents hereunder, and ABN AMRO Bank N.V., as
administrative agent for the Banks hereunder (in such capacity, the "Agent").
The Borrower has requested the Banks to make revolving loans
to the Borrower in an aggregate principal amount of up to $100,000,000 at any
time outstanding. The Banks are severally willing to make such loans to the
Borrower upon the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"364-DAY CREDIT AGREEMENT" means that certain 364-Day Credit
Agreement dated as of September 29, 2000, among the Borrower, the lenders party
thereto and ABN AMRO, as administrative agent, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"ABN AMRO" means ABN AMRO Bank N.V.
"AFFILIATE" means any Person which, directly or indirectly,
controls, is controlled by or is under common control with another Person. For
purposes of the foregoing, "control," "controlled by" and "under common control
with" with respect to any Person shall mean the possession, directly or
indirectly, of the power (i) to vote 10% or more of the securities having
ordinary voting power of the election of directors of such Person, or (ii) to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
"AGENT" has the meaning set forth in the recitals to this
Agreement.
"AGENT'S ACCOUNT" means the account of the Agent set forth on
Schedule 2 or such other account as the Agent from time to time shall designate
in a written notice to the Borrower and the Banks.
"ALCHEMY" means Alchemy Semiconductor, Inc.
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"APPLICABLE FEE AMOUNT" means with respect to the commitment
fee payable hereunder, the amount set forth opposite the indicated Level below
the heading "Commitment Fee" in the pricing grid set forth on Annex I in
accordance with the parameters for calculations of such amount also set forth on
Annex I.
"APPLICABLE MARGIN" means (i) with respect to Base Rate Loans,
0% per annum; and (ii) with respect to Eurodollar Rate Loans, the amount set
forth opposite the indicated Level below the heading "Eurodollar Rate Spread" in
the pricing grid set forth on Annex I in accordance with the parameters for
calculations of such amounts also set forth on Annex I.
"ASSIGNMENT AND ACCEPTANCE" has the meaning set forth in
Section 11.02(a).
"BANK" and "BANKS" each has the meaning set forth in the
recitals to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy."
"BASE RATE" means for any day the higher of: (i) the Federal
Funds Rate, PLUS 1/2 of 1% per annum, and (ii) the prime commercial lending rate
of ABN AMRO as announced from time to time at its Chicago, Illinois, office.
Each change in the interest rate on the Loans or other Obligations bearing
interest at the Base Rate based on a change in the Base Rate shall be effective
as of the effective date of such change in the Base Rate.
"BASE RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Base Rate.
"BORROWER" has the meaning set forth in the recitals to
this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower set
forth on Schedule 2, or such other account as the Borrower from time to time
shall designate in a written notice to the Agent.
"BORROWING" means a borrowing consisting of simultaneous Loans
made at any one time by the Borrower from the Banks pursuant to Article II.
"BUSINESS DAY" means a day (i) other than Saturday or Sunday,
(ii) on which commercial banks are open for business in Chicago, Illinois and
New York, New York, and (iii) if the applicable Business Day relates to any
Eurodollar Rate Loan, that is a Eurodollar Business Day.
"CAPITAL LEASE" means, for any Person, any lease of property
(whether real, personal or mixed) which, in accordance with GAAP, would, at the
time a determination is made, be required to be recorded as a capital lease in
respect of which such Person is liable as lessee.
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"CLOSING DATE" means the date on which all conditions
precedent set forth in Section 7.01 are satisfied or waived by all Banks (or, in
the case of Section 7.01(a), waived by the Person entitled to receive such
payment).
"COMPLIANCE CERTIFICATE" means a certificate of a Responsible
Officer of the Borrower, in substantially the form of Exhibit D, with such
changes thereto as the Agent or any Bank may from time to time reasonably
request.
"CONSOLIDATED CASH FLOW" means, as of any date of
determination for the 12-month period ended on such date, Consolidated Net
Income for such period PLUS depreciation expense, amortization expense and other
non-cash expenses (including write-offs of acquired in-process research and
development costs) which were deducted in determining Consolidated Net Income,
of the Borrower and its Subsidiaries on a consolidated basis, as determined in
accordance with GAAP.
"CONSOLIDATED EBITDA" means, as of any date of determination
for the 12-month period ended on such date, Consolidated Net Income PLUS
Consolidated Interest Expense PLUS income tax expense PLUS depreciation expense,
amortization expense and all other non-cash expenses (including write-offs of
acquired in-process research and development costs) which were deducted in
determining Consolidated Net Income, PLUS the quarterly increase in product
license subscription bookings for any quarter included in such 12-month period
ending on or prior to December 30, 2000, to the extent not included or reflected
in Consolidated Net Income, in each case, of the Borrower and its Subsidiaries
on a consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period,
interest expense (including that attributable to Capital Leases) of the Borrower
and its Subsidiaries on a consolidated basis, including all commissions,
discounts and other fees and charges owed with respect to standby letters of
credit, as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net
income of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period, as determined in accordance with
GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" means, as of any date of
determination, Consolidated Total Assets MINUS Consolidated Total Liabilities;
PROVIDED, HOWEVER, that there shall be excluded from Consolidated Total Assets
the following: (i) all assets which would be classified as intangible assets in
accordance with GAAP, including goodwill, organizational expense, research and
development expense, patent applications, patents, trademarks, trade names,
brands, copyrights, trade secrets, customer lists, licenses, franchises and
covenants not to compete; and (ii) all treasury stock.
"CONSOLIDATED TOTAL ASSETS" means, as of any date of
determination, the total assets of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
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"CONSOLIDATED TOTAL LIABILITIES" means, as of any date of
determination, the total liabilities of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.
"DEFAULT" means an Event of Default or an event or condition
which with notice or lapse of time or both would constitute an Event of Default.
"DOLLARS" and the sign "$" each means lawful money of the
United States.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $5,000,000,000, (ii) a commercial bank organized
under the laws of any other country which is a member of the OECD, or a
political subdivision of any such country, and having a combined capital and
surplus of at least $5,000,000,000, PROVIDED that such bank is acting through a
branch or agency located in the United States and licensed by the United States
or any state thereof; and (iii) a Person that is primarily engaged in the
business of commercial banking and that is (a) a Subsidiary of a Bank, (b) a
Subsidiary of a Person of which a Bank is a Subsidiary, or (c) a Person of which
a Bank is a Subsidiary.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directives, requests, licenses, authorizations
and permits of, and agreements with (including consent decrees), any
Governmental Authorities, in each case relating to or imposing liability or
standards of conduct concerning public health, safety and environmental
protection matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act, the California Hazardous
Waste Control Law, the California Solid Waste Management, Resource Recovery and
Recycling Act, the California Water Code and the California Health and Safety
Code.
"ERISA" means the Employee Retirement Income Security Act of
1974, including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is under common control with the Borrower within the meaning
of Section 4001(a)(14) of ERISA and Sections 414(b), (c) and (m) of the Internal
Revenue Code.
"EURODOLLAR BUSINESS DAY" means a Business Day on which
dealings in Dollar deposits are carried on in the London interbank market.
"EURODOLLAR RATE" means for each Interest Period for each
Eurodollar Rate Loan the rate per annum (rounded upward, if necessary, to the
nearest 1/100 of 1%) determined by the Agent pursuant to the following formula:
Eurodollar Rate = Interbank Rate
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100% - Eurodollar Reserve Percentage
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The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"EURODOLLAR REFERENCE BANK" means ABN AMRO, subject to the
provisions of Section 3.06.
"EURODOLLAR RESERVE PERCENTAGE" means the maximum reserve
requirement percentage (including any ordinary, supplemental, marginal and
emergency reserves), if any, as determined by the Agent, then applicable under
Regulation D in respect of Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities") of a member bank in the Federal Reserve System with
deposits exceeding $1,000,000,000.
"EVENT OF DEFAULT" has the meaning set forth in Section 10.01.
"EXISTING CREDIT AGREEMENT" means that certain Credit
Agreement dated as of September 29, 1998, by and among the Borrower, the lenders
party thereto and ABN AMRO, as administrative agent, as amended.
"FDIC" means the Federal Deposit Insurance Corporation, or
any successor thereto.
"FEE LETTER" means the mandate letter dated August 30, 2000,
by and between the Borrower and the Agent.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100 of 1%), as determined by the
Agent, equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for any day of determination (or if such day of
determination is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FIXED CHARGE COVERAGE RATIO" has the meaning specified in
Section 9.02(c).
"FUNDED DEBT" of any Person means, without duplication, (a)
all interest-bearing Indebtedness of such Person (whether on- or off-balance
sheet), (b) all obligations of such Person in respect of any letter of credit,
and (c) all obligations of such Person with respect to leases which are or
should be capitalized on the balance sheet of such Person in accordance with
GAAP. Notwithstanding the foregoing, for purposes of Section 9.02(c) and Section
9.02(e), Funded Debt shall not include (i) any Indebtedness which is
subordinated to the Obligations on terms and conditions satisfactory to the
Agent and the Majority Banks in their reasonable discretion and for which no
principal payment is due before the 366th day after the Revolving
5
Termination Date, or (ii) any obligations of such Person under any Permitted
Receivables Purchase Facility.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" means generally accepted accounting principles in
the U.S. as in effect from time to time.
"GOVERNMENTAL AUTHORITY" means any federal, state, local or
other governmental department, commission, board, bureau, agency, central bank,
court, tribunal or other instrumentality or authority, domestic or foreign,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTY OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person (i) to purchase, repurchase
or otherwise acquire such primary obligations or any property constituting
direct or indirect security therefor, or (ii) to advance or provide funds (a)
for the payment or discharge of any such primary obligation, or (b) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, or (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (iv) in connection with any synthetic lease or other
similar off balance sheet lease transaction, or (v) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in respect
thereof.
"HAZARDOUS SUBSTANCES" means any toxic or hazardous
substances, materials, wastes, contaminants or pollutants, including asbestos,
PCBs, petroleum products and byproducts, and any substances defined or listed as
"hazardous substances," "hazardous materials," "hazardous wastes" or "toxic
substances" (or similarly identified), regulated under or forming the basis for
liability under any applicable Environmental Law.
"IRS" means the Internal Revenue Service, or any successor
thereto.
"INDEBTEDNESS" means, for any Person: (i) all indebtedness or
other obligations of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (iii) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under Capital Leases; (v) all reimbursement or other obligations
of such Person under or in respect of letters of credit and bankers acceptances,
and all net obligations in respect of Rate Contracts; (vi) all reimbursement or
other obligations of such Person in respect of any bank guaranties, shipside
bonds, surety
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bonds and similar instruments issued for the account of such Person or as to
which such Person is otherwise liable for reimbursement of drawings or
payments; (vii) all Guaranty Obligations; (viii) all indebtedness in respect
of any synthetic lease or other similar off balance sheet lease transaction;
and (ix) all indebtedness of another Person secured by any Lien upon or in
property owned by the Person for whom Indebtedness is being determined,
whether or not such Person has assumed or become liable for the payment of
such indebtedness of such other Person. For all purposes of this Agreement,
the Indebtedness of any Person shall include all recourse Indebtedness of any
partnership or joint venture or limited liability company in which such
Person is a general partner or a joint venturer or a member.
"INSOLVENCY PROCEEDING" means (i) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (ii) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors, in each case undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.
"INTERBANK RATE" means the rate per annum determined by the
Agent, on the basis of quotations furnished to it by the Eurodollar Reference
Bank, to be the average (rounded upward, if necessary, to the nearest 1/16 of
1%) of the rates at which deposits in Dollars are offered to the Eurodollar
Reference Bank by prime banks in the London interbank market at approximately
11:00 A.M. (London time), two Eurodollar Business Days before the first day of
such Interest Period, in an amount substantially equal to the proposed
Eurodollar Rate Loan to be made, continued or converted by the Eurodollar
Reference Bank and for a period of time comparable to such Interest Period.
"INTEREST PAYMENT DATE" means a date specified for the payment
of interest pursuant to Section 3.01(c).
"INTEREST PERIOD" means, with respect to any Eurodollar Rate
Loan, the period determined in accordance with Section 3.01(b) applicable
thereto.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, including (unless the context otherwise requires) any rules or regulations
promulgated thereunder.
"LENDING OFFICE" has the meaning set forth in Section 2.04.
"LIEN" means any mortgage, deed of trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien
(statutory or other), or other preferential arrangement (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing or any agreement
to give any security interest).
"LOAN DOCUMENTS" means this Agreement, the Notes, the Fee
Letter and all other certificates, documents, agreements and instruments
delivered to the Agent and the Banks under or in connection with this Agreement.
"LOANS" means the Revolving Loans.
7
"MAJORITY BANKS" means at any time Banks holding at least 51%
of the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks having at least 51% of the aggregate
Revolving Commitments.
"MATERIAL ADVERSE EFFECT" means any event, matter, condition
or circumstance which has or would reasonably be expected to have a material
adverse effect on the business, properties, results of operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
"MATERIAL SUBSIDIARY" means any Subsidiary the total assets of
which constitute 20% or more of Consolidated Total Assets, measured as of the
last day of the then most recent fiscal quarter.
"MINIMUM AMOUNT" has the meaning set forth in Section 2.06.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined
in Sections 3(37) and 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means when used in respect of any issuance
of any debt or equity securities of the Borrower or any Subsidiary, the gross
proceeds received by the Borrower or such Subsidiary from such issuance less all
direct costs and expenses incurred or to be incurred, and all federal, state,
local and foreign taxes assessed or to be assessed, in connection therewith.
"NOTES" means the Revolving Notes.
"NOTICE" means a Notice of Borrowing, a Notice of
Conversion or Continuation or a Notice of Prepayment.
"NOTICE OF BORROWING" has the meaning set forth in Section
2.02(a).
"NOTICE OF CONVERSION OR CONTINUATION" has the meaning set
forth in Section 3.05(c).
"NOTICE OF PREPAYMENT" has the meaning set forth in Section
4.03.
"OBLIGATIONS" means the indebtedness, liabilities and other
obligations of the Borrower to the Agent or any Bank under or in connection with
the Loan Documents, including all Loans, all interest accrued thereon, all fees
due under this Agreement and all other amounts payable by the Borrower to the
Agent or any Bank thereunder or in connection therewith, whether now or
hereafter existing or arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined.
"OECD" means the Organization for Economic Cooperation and
Development.
"OPERATING LEASE" means, for any Person, any lease of any
property of any kind by that Person as lessee which is not a Capital Lease.
8
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"PENSION PLAN" means any employee pension benefit plan
covered by Title IV of ERISA (other than a Multiemployer Plan) that is
maintained for employees of the Borrower or any ERISA Affiliate or with
regard to which the Borrower or an ERISA Affiliate is a contributing sponsor
within the meaning of Sections 4001(a)(13) or 4069 of ERISA.
"PERMITTED INVESTMENTS" means, in respect of the Borrower or
any Subsidiary, short-term investment grade debt securities of any type
authorized from time to time under an investment policy for short-term cash
investments approved by the Borrower's board of directors or such Subsidiary's
board of directors, as the case may be.
"PERMITTED LIENS" means:
(i) Liens in favor of the Banks or the Agent
for the benefit of the Banks to secure the Obligations;
(ii) the existing Liens listed in Schedule 9.04(a);
(iii) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being
contested in good faith by appropriate proceedings and which are
adequately reserved for in accordance with GAAP;
(iv) Liens of materialmen, mechanics, warehousemen,
carriers or employees or other like Liens arising in the ordinary
course of business and securing obligations either not delinquent or
being contested in good faith by appropriate proceedings which are
adequately reserved for in accordance with GAAP and which do not in the
aggregate materially impair the use or value of the property or risk
the loss or forfeiture of title thereto;
(v) Liens consisting of deposits or pledges to
secure the payment of worker's compensation, unemployment insurance
or other social security benefits or obligations, or to secure the
performance of bids, trade contracts, leases (other than Capital
Leases), public or statutory obligations, surety or appeal bonds or
other obligations of a like nature incurred in the ordinary course
of business (other than for indebtedness or any Liens arising under
ERISA);
(vi) easements, rights of way, servitudes or zoning
or building restrictions and other minor encumbrances on real property
and irregularities in the title to such property which do not in the
aggregate materially impair the use or value of such property or risk
the loss or forfeiture of title thereto;
(vii) statutory landlord's Liens under leases to
which the Borrower or any of its Subsidiaries is a party;
(viii) Liens arising solely by virtue of any
statutory or common law provision relating to banker's liens, rights of
set-off or similar rights and remedies as to
9
deposit accounts or other funds maintained with a creditor
depository institution; PROVIDED that (i) such deposit account is
not a dedicated cash collateral account and is not subject to
restrictions against access by the Borrower in excess of those set
forth by regulations promulgated by the FRB, and (ii) such deposit
account is not intended by the Borrower or any Subsidiary to provide
collateral to the depository institution;
(ix) Liens (a) upon or in any property acquired or
held by the Borrower or any of its Subsidiaries to secure the purchase
price of such property or Indebtedness incurred solely for the purpose
of financing the acquisition of such property, or (b) existing on such
property at the time of its acquisition, PROVIDED that the Lien is
confined solely to the property so acquired and improvements thereon;
(x) Liens on assets of Persons which become
Subsidiaries of the Borrower after the date hereof, PROVIDED that such
Liens existed at the time any such Persons became Subsidiaries of the
Borrower and were not created in anticipation thereof;
(xi) Liens on Receivables and Receivables Related
Assets in connection with any Permitted Receivables Purchase
Facility;
(xii) Leases or subleases and licenses and
sublicenses granted to others in the ordinary course of business and
not interfering in any material respect with the business of the
Borrower and any interest or title of a lessor or licensor under any
lease or license;
(xiii) Liens on equipment leased by the Borrower
pursuant to an operating lease in the ordinary course of business
(including proceeds thereof and accessions thereto) incurred solely for
the purpose of financing the lease of such equipment (including Liens
arising from UCC financing statements regarding leases permitted by
this Agreement);
(xiv) Liens arising from judgments, decrees or
attachments to the extent and only so long as such judgment, decree or
attachment has not caused or resulted in an Event of Default;
(xv) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods;
(xvi) Liens incurred in connection with the
extension, renewal, refunding, refinancing, modification, amendment or
restatement of the Indebtedness secured by Liens of the type described
in clauses (i) through (xv) above, PROVIDED that any extension, renewal
or replacement Lien shall be limited to the property encumbered by the
existing Lien, the principal amount of Indebtedness being extended,
renewed or refinanced does not increase and such Lien otherwise remains
a Permitted Lien under clauses (i) through (xv) above; and
10
(xvii) Liens not otherwise permitted hereunder
securing Indebtedness in an aggregate principal amount not to exceed
15% of Consolidated Tangible Net Worth, measured as of the last day of
the then most recent fiscal quarter, at any time outstanding.
"PERMITTED RECEIVABLES PURCHASE FACILITY" shall mean any
receivables sales, financing or securitization programs now or hereafter entered
into by the Borrower or any of its Subsidiaries, in each case for the purpose of
financing Receivables, including, without limitation, the facilities identified
on Attachment A hereto, in each case, as amended, restated or supplemented from
time to time.
"PERSON" means an individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization or
any other entity of whatever nature or any Governmental Authority.
"PLAN" means any employee pension benefit plan as defined in
Section 3(2) of ERISA (including any Multiemployer Plan) and any employee
welfare benefit plan, as defined in Section 3(1) of ERISA (including any plan
providing benefits to former employees or their survivors).
"PREMISES" means any and all real property, including all
buildings and improvements now or hereafter located thereon and all
appurtenances thereto, now or hereafter owned, leased, occupied or used by the
Borrower and its Subsidiaries.
"PRO RATA SHARE" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) at such time of such Bank's Revolving Commitment divided by the combined
Revolving Commitments of all Banks (or, if all Revolving Commitments have been
terminated, the aggregate principal amount of such Bank's Loans divided by the
aggregate principal amount of the Loans then held by all Banks). The initial Pro
Rata Share of each Bank is set forth opposite such Bank's name in SCHEDULE 1
under the heading "Pro Rata Share."
"RATE CONTRACTS" means interest rate swaps, caps, floors and
collars, currency swaps, or other similar financial products designed to provide
protection against fluctuations in interest, currency or exchange rates.
"RECEIVABLES" means any rights to payment for license fees,
whether in the form of accounts receivable, general intangibles, instruments,
chattel paper or otherwise.
"RECEIVABLES RELATED ASSETS" means (a) any rights arising
under the documentation governing or relating to Receivables which are the
subject of a Permitted Receivables Purchase Facility, including, without
limitation, rights in respect of Liens securing such Receivables, (b) any
proceeds of such Receivables and any lockboxes or accounts in which such
proceeds are deposited, (c) spread accounts and other similar accounts, and any
amounts on deposit therein, established in connection with any Permitted
Receivables Purchase Facility, (d) any warranty, indemnity, dilution and other
intercompany claim arising out of any Permitted Receivables Purchase Facility,
and (e) other assets which are customarily transferred or in respect of which
security interests are customarily granted in connection with factoring or asset
securitization transactions involving Receivables.
11
"REGULATION D" means Regulation D of the FRB.
"REGULATORY CHANGE" has the meaning set forth in Section 5.03.
"RELATED PERSON" has the meaning set forth in Section 11.06.
"REQUIRED NOTICE DATE" has the meaning set forth in Section
2.07.
"RESPONSIBLE OFFICER" means, with respect to any Person, the
chief executive officer, the president, the chief financial officer, the vice
president of corporate finance, the treasurer or the controller of such Person,
or any other senior officer of such Person having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer, the treasurer or the controller of any
such Person, or any other senior officer of such Person involved principally in
the financial administration or controllership function of such Person and
having substantially the same authority and responsibility.
"REVOLVING COMMITMENT," as to each Bank, has the meaning
specified in subsection 2.01.
"REVOLVING LOAN" has the meaning specified in subsection
2.01.
"REVOLVING NOTE" means a promissory note substantially in
the form of Exhibit A.
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) September 29, 2003, and (b) the date on which the Revolving Commitments
terminate in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any
successor thereto.
"▇▇▇▇▇ AVENUE CAMPUS" means the real property, taken either in
whole or any part thereof, consisting of approximately 50.5 acres of land and 10
buildings that total approximately 778,000 square feet and is located on both
the east and west sides of ▇▇▇▇▇ Avenue, in San Jose, California. Specific
street addresses for the property are: 535, 545, 555, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (which consists of five buildings and entitled land for a
sixth building), and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.
"SOLVENT" means, as to any Person at any time, that (i) the
fair value of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 101(31) of the Bankruptcy Code; (ii) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (iii) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital.
"SPINCIRCUIT" means SpinCircuit, Inc.
12
"SUBSIDIARY" means, as to any Person, any corporation,
association, partnership, joint venture or other business entity of which more
than 50% of the voting stock or other equity interest is owned directly or
indirectly by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof. Unless the context otherwise clearly requires,
references to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Rate Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Rate Contracts, (i) for any date on or after
the date such Rate Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (ii) for any
date prior to the date referenced in clause (i), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Rate Contracts, as determined by the Borrower
based upon one or more mid-market or other readily available quotations provided
by any recognized dealer in such Rate Contracts (which may include any Bank).
"TALITY IPO" means the initial public offering of the
Borrower's design-services operation pursuant to the terms and conditions
disclosed in the Borrower's Form S-1 filed with the Securities Exchange
Commission on July 17, 2000 (registration number 333-41552).
"TAXES" has the meaning set forth in Section 6.03.
"TERMINATION EVENT" means any of the following:
(i) with respect to a Pension Plan, a reportable
event described in Section 4043 of ERISA and the regulations
issued thereunder (other than a reportable event not subject
to the provisions for 30-day notice to the PBGC under such
regulations);
(ii) the withdrawal of the Borrower or an ERISA
Affiliate from a Pension Plan during a plan year in which the
withdrawing employer was a "substantial employer" as defined in Section
4001(a)(2) or 4062(e) of ERISA;
(iii) the taking of any actions (including the filing
of a notice of intent to terminate) by the Borrower, an ERISA
Affiliate, the PBGC, a Plan Administrator, or any other Person to
terminate a Pension Plan or the treatment of a Plan amendment as a
termination of a Pension Plan under Section 4041 of ERISA;
(iv) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan; or
(v) the complete or partial withdrawal of the
Borrower or an ERISA Affiliate from a Multiemployer Plan.
"UCC" means the Uniform Commercial Code of the jurisdiction
the law of which governs the Loan Document in which such term is used or the
attachment, perfection or priority of the Lien on any collateral.
13
"UNFUNDED ACCRUED BENEFITS" means the excess of a Pension
Plan's accrued benefits, as defined in Section 3(23) of ERISA, over the current
value of that Plan's assets, as defined in Section 3(26) of ERISA.
"UNITED STATES" and "U.S." each means the United States of
America.
"VENTURE FUND" means Telos Venture Partners, L.P.
SECTION 1.02 ACCOUNTING PRINCIPLES.
(a) ACCOUNTING TERMS. Unless otherwise defined or the
context otherwise requires, all accounting terms not expressly defined herein
shall be construed, and all accounting determinations and computations
required under the Loan Documents shall be made, in accordance with GAAP,
consistently applied.
(b) GAAP CHANGES. If GAAP shall have been modified after
the Closing Date and the application of such modified GAAP shall have a
material effect on any financial computations hereunder (including the
computations required for the purpose of determining compliance with the
covenants set forth in Section 9.02), then such computations shall be made
and the financial statements, certificates and reports due hereunder shall be
prepared, and all accounting terms not otherwise defined herein shall be
construed, in accordance with GAAP, as in effect prior to such modification,
unless and until the Majority Banks and the Borrower shall have agreed upon
the terms of the application of such modified GAAP which agreement shall not
be unreasonably withheld.
(c) "FISCAL YEAR" AND "FISCAL QUARTER." References herein
to "fiscal year" and "fiscal quarter" refer to such fiscal periods of the
Borrower.
SECTION 1.03 INTERPRETATION. In the Loan Documents, except to the
extent the context otherwise requires:
(i) Any reference to an Article, a Section, a
Schedule or an Exhibit is a reference to an article or section thereof,
or a schedule or an exhibit thereto, respectively, and to a subsection
or a clause is, unless otherwise stated, a reference to a subsection or
a clause of the Section or subsection in which the reference appears.
(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement or any other
Loan Document as a whole and not merely to the specific Article,
Section, subsection, paragraph or clause in which the respective word
appears.
(iii) The meaning of defined terms shall be equally
applicable to both the singular and plural forms of the terms defined.
(iv) The words "including," "includes" and "include"
shall be deemed to be followed by the words "without limitation."
14
(v) References to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of the Loan
Documents.
(vi) References to statutes or regulations are
to be construed as including all statutory and regulatory provisions
consolidating, amending or replacing the statute or regulation
referred to.
(vii) Any table of contents, captions and headings
are for convenience of reference only and shall not affect the
construction of this Agreement or any other Loan Document.
(viii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding"; and the word "through" means "to and including."
(ix) The use of a word of any gender shall
include each of the masculine, feminine and neuter genders.
(x) This Agreement and the other Loan Documents
are the result of negotiations among the Agent, the Borrower and the
other parties, have been reviewed by counsel to the Agent, the
Borrower and such other parties, and are the products of all
parties. Accordingly, they shall not be construed against the Banks
or the Agent merely because of the Agent's or Banks' involvement in
their preparation.
ARTICLE II
THE LOANS
SECTION 2.01 THE REVOLVING CREDIT. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Borrower
(each such loan, a "Revolving Loan") from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination Date, in
an aggregate amount not to exceed at any time outstanding the amount set
forth opposite such Bank's name on Schedule 1 under the heading "Revolving
Commitment" (such amount, as the same may be reduced under Section 4.01 or
reduced or increased as a result of one or more assignments under Section
12.09, such Bank's "Revolving Commitment"); PROVIDED, HOWEVER, that, after
giving effect to any Borrowing of Revolving Loans, the aggregate principal
amount of all outstanding Revolving Loans shall not at any time exceed the
combined Revolving Commitments. Within the limits of each Bank's Revolving
Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this subsection 2.01, prepay under Section 4.03 and
reborrow under this subsection 2.01.
SECTION 2.02 BORROWING PROCEDURE.
(a) NOTICE TO THE AGENT. Each Borrowing shall be made on a
Business Day upon written or telephonic notice (in the latter case to be
confirmed promptly in writing) from the Borrower to the Agent, which notice
shall be received by the Agent not later than 2:00 P.M. (New York City time)
on the Required Notice Date. Each such notice, except as provided in
15
Section 5.01 and 5.04, shall be irrevocable and binding on the Borrower,
shall be in substantially the form of Exhibit C (a "Notice of Borrowing") and
shall specify whether the Borrowing consists of Base Rate Loans or Eurodollar
Rate Loans, and shall contain the other information required thereby.
(b) NOTICE TO THE BANKS. The Agent shall give each Bank
prompt notice by telephone (confirmed promptly in writing) or by facsimile of
each Borrowing, specifying the information contained in the Borrower's Notice
and such Bank's Pro Rata Share of the Borrowing. On the date of each
Borrowing, each Bank shall make available such Bank's Pro Rata Share of such
Borrowing, in same day or immediately available funds, to the Agent for the
Agent's Account, not later than 3:00 P.M. (New York City time). Upon
fulfillment of the applicable conditions set forth in Article VII and after
receipt by the Agent of any such funds, and unless other payment instructions
are provided by the Borrower, the Agent shall make such funds available to
the Borrower by crediting the Borrower's Account with same day or immediately
available funds on such Borrowing date.
SECTION 2.03 NON-RECEIPT OF FUNDS. Unless the Agent shall have
received notice from a Bank prior to the date of any Borrowing that such Bank
shall not make available to the Agent such Bank's Pro Rata Share of such
Borrowing, the Agent may assume that such Bank has made such portion
available to the Agent on the date of such Borrowing in accordance with
Section 2.02(b) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent such Bank shall not have so made such Pro Rata Share available to the
Agent, and the Agent in such circumstances shall have made available to the
Borrower such amount, such Bank agrees to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date
such amount is repaid to the Agent, at the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan as part of such Borrowing for purposes of
this Agreement. If such amount is not made available by such Bank to the
Agent on the Business Day following the Borrowing date, the Agent shall
notify the Borrower of such failure to fund and, upon demand by the Agent,
the Borrower shall pay such amount to the Agent for the Agent's Account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.
SECTION 2.04 LENDING OFFICES. The Loans made by each Bank may be
made from and maintained at such offices of such Bank (each a "Lending
Office") as such Bank may from time to time designate (whether or not such
office is specified on Schedule 2). A Bank shall not elect a Lending Office
that, at the time of making such election, increases the amounts which would
have been payable by the Borrower to such Bank under this Agreement in the
absence of such election. With respect to Eurodollar Rate Loans made from and
maintained at any Bank's non-U.S. offices, the obligation of the Borrower to
repay such Eurodollar Rate Loans shall nevertheless be to such Bank and
shall, for all purposes of this Agreement (including for purposes of the
definition of the term "Majority Banks") be deemed made or maintained by it,
for the account of any such office.
16
SECTION 2.05 EVIDENCE OF INDEBTEDNESS. The Loans made by each Bank
shall be evidenced by one or more loan accounts maintained by such Bank in
accordance with its usual practices. The loan accounts maintained by the
Agent and each such Bank shall be rebuttable presumptive evidence of the
amount of the Loans made by such Bank to the Borrower and the interest and
payments thereon. Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Borrower
hereunder to pay any amount owing with respect to the Loans. At the request
of any Bank, as additional evidence of the Indebtedness of the Borrower to
such Bank resulting from the Loans made by such Bank, the Borrower shall
execute and deliver for account of such Bank pursuant to Article VII Notes
setting forth such Bank's Revolving Commitment as the maximum principal
amount thereof.
SECTION 2.06 MINIMUM AMOUNTS. Any Borrowing, conversion,
continuation, Revolving Commitment reduction or prepayment of Loans hereunder
shall be in an aggregate amount determined as follows (each such specified
amount a "Minimum Amount"): (i) any Borrowing or partial prepayment of Base
Rate Loans shall be in the amount of $250,000 or a greater amount which is an
integral multiple of $50,000; (ii) any Borrowing, continuation or partial
prepayment of, or conversion into, Eurodollar Rate Loans shall be in the
amount of $2,000,000 or a greater amount which is an integral multiple of
$100,000; and (iii) any partial Revolving Commitment reduction under Section
4.01(a) shall be in the amount of $5,000,000 or a greater amount which is an
integral multiple of $5,000,000.
SECTION 2.07 REQUIRED NOTICE. Any Notice hereunder shall be given
not later than the date determined as follows (each such specified date a
"Required Notice Date"): (i) any Notice with respect to a Borrowing of, or
conversion into, Base Rate Loans shall be given not later than the date of
the proposed borrowing or conversion; (ii) any Notice with respect to any
Borrowing or continuation of, or conversion into, Eurodollar Rate Loans shall
be given at least three Eurodollar Business Days prior to the date of the
proposed Borrowing, conversion or continuation; (iii) any Notice with respect
to any prepayment under Section 4.03(a) shall be given at least one Business
Day prior to the date of the proposed prepayment, in the case of Base Rate
Loans, and at least three Eurodollar Business Days prior to the date of the
proposed prepayment, in the case of Eurodollar Rate Loans; and (iv) any
Notice with respect to any Revolving Commitment reduction or termination
under Section 4.01(a) shall be given at least five Business Days prior to the
proposed reduction or termination date.
ARTICLE III
INTEREST AND FEES; CONVERSION OR CONTINUATION
SECTION 3.01 INTEREST.
(a) INTEREST RATE. Subject to Section 3.02, the Borrower
shall pay interest on the unpaid principal amount of each Loan from the date
of such Loan until such principal amount shall be paid in full, at the
following rates:
(i) during such periods as such Loan is a Base Rate
Loan, at a rate per annum equal at all times to the Base Rate PLUS the
Applicable Margin; and
17
(ii) during such periods as such Loan is a Eurodollar
Rate Loan, at a rate per annum equal at all times during each Interest
Period for such Eurodollar Rate Loan to the Eurodollar Rate for such
Interest Period PLUS the Applicable Margin.
(b) INTEREST PERIODS. The initial and each subsequent
Interest Period for Eurodollar Rate Loans shall be a period of one, two,
three or six months. The determination of Interest Periods shall be subject
to the following provisions:
(A) in the case of immediately successive
Interest Periods, each successive Interest Period shall
commence on the day on which the next preceding Interest
Period expires;
(B) if any Interest Period pertaining to an
Eurodollar Rate Loan would otherwise end on a day which is not
a Business Day, that Interest Period shall be extended to the
next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(C) no Interest Period shall extend beyond
the Revolving Termination Date with respect to any Revolving
Loan;
(D) any Interest Period pertaining to a
Eurodollar 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 ending calendar month of such
Interest Period) shall end on the last Business Day of the
ending calendar month of such Interest Period;
(E) there shall be no more than ten Interest
Periods in effect at any one time.
(c) INTEREST PAYMENT DATES. Subject to Section 3.02,
interest on the Loans shall be payable in arrears at the following times:
(i) interest on each Base Rate Loan shall be payable
quarterly in arrears on the last Business Day in each calendar quarter,
on the date of any prepayment or conversion of any such Base Rate Loan,
and at maturity;
(ii) interest on each Eurodollar Rate Loan shall be
payable on the last day of each Interest Period for such Eurodollar
Rate Loan, PROVIDED that (a) in the case of any such Interest Period
which is greater than three months, interest on such Eurodollar Rate
Loan shall be payable on each date that is three months, or any
integral multiple thereof, after the beginning of such Interest Period,
and on the last day of such Interest Period, and (b) if any prepayment,
conversion, or continuation is effected other than on the last day of
such Interest Period, accrued interest on such Eurodollar Rate Loan
shall be due on such prepayment, conversion or continuation date as to
the principal amount of such Eurodollar Rate Loan prepaid, converted or
continued PLUS all amounts required under Section 5.02.
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(d) NOTICE TO THE BORROWER AND THE BANKS. Each
determination by the Agent hereunder of a rate of interest and of any change
therein, including any changes in (i) the Applicable Margin, (ii) the Base
Rate during any periods in which Base Rate Loans shall be outstanding, and
(iii) the Eurodollar Reserve Percentage (if any) during any periods in which
Eurodollar Rate Loans shall be outstanding, in the absence of manifest error,
shall be conclusive and binding on the parties hereto and shall be promptly
notified by the Agent to the Borrower and the Banks. Such notice shall set
forth in reasonable detail the basis for any such determination or change.
The failure of the Agent to give any such notice specified in this subsection
shall not affect the Borrower's obligation to pay such interest or fees.
SECTION 3.02 DEFAULT RATE OF INTEREST. Notwithstanding Section
3.01, in the event that any amount of principal of or interest on any Loan,
or any other amount payable hereunder or under the Loan Documents, is not
paid in full when due (whether at stated maturity, by acceleration or
otherwise), the Borrower shall pay interest on such unpaid principal,
interest or other amount, from the date such amount becomes due until the
date such amount is paid in full, and after as well as before any entry of
judgment to the extent permitted by law, payable on demand, at a rate per
annum equal at all times to the Base Rate PLUS 2% PLUS the Applicable Margin
in respect of Base Rate Loans.
SECTION 3.03 FEES.
(a) REVOLVING COMMITMENT FEES. The Borrower agrees to pay
to the Agent for the account of each Bank a fee on the average daily unused
portion of such Bank's Revolving Commitment as in effect from time to time
from the Closing Date until the Revolving Termination Date at a rate per
annum equal to the Applicable Fee Amount, payable quarterly in arrears on the
last Business Day of each calendar quarter (commencing on the first such date
after the Closing Date), and on the earlier of the date such Revolving
Commitment is terminated hereunder and the Revolving Termination Date.
(b) AGENCY FEE. The Borrower agrees to pay to the Agent
for its own account such fee for administrative agency services rendered by
it as specified in the Fee Letter.
(c) FEES NONREFUNDABLE. All fees payable under this
Section 3.03 shall be nonrefundable.
SECTION 3.04 COMPUTATIONS. All computations of interest based upon
the Base Rate (including interest accruing based upon the Federal Funds Rate)
shall be made on the basis of a year of 365 or 366 days, as the case may be,
for the actual number of days occurring in the period for which such interest
is payable. All computations of Revolving Commitment fee and of interest
based upon the Eurodollar Rate shall be made on the basis of a year of 360
days for the actual number of days occurring in the period for which such
Revolving Commitment fee or interest is payable, which results in more
interest being paid than if computed on the basis of a 365-day year, and in
accordance with the pricing grid set forth in Annex 1.
SECTION 3.05 CONVERSION OR CONTINUATION.
(a) ELECTION. The Borrower may elect (i) to convert all or
any part of (A) outstanding Base Rate Loans into Eurodollar Rate Loans, or
(B) outstanding Eurodollar Rate
19
Loans into Base Rate Loans; or (ii) to continue all or any part of a Loan
with one type of interest rate as such; PROVIDED, HOWEVER, that if the
aggregate amount of Eurodollar Rate Loans in respect of any Borrowing shall
have been reduced, by payment, prepayment, or conversion of part thereof to
be less than $2,000,000, such Eurodollar 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, Eurodollar
Rate Loans, as the case may be, shall terminate. The continued or converted
Base Rate and Eurodollar Rate Loans shall be allocated to the Banks ratably
in accordance with their Pro Rata Shares. Any conversion or continuation of
Eurodollar Rate Loans shall be made on the last day of the current Interest
Period for such Eurodollar Rate Loans. No outstanding Loan may be converted
into or continued as a Eurodollar Rate Loan if any Event of Default has
occurred and is continuing.
(b) AUTOMATIC CONVERSION. On the last day of any Interest
Period for any Eurodollar Rate Loans, such Eurodollar Rate Loans shall, if
not repaid, automatically convert into Base Rate Loans unless the Borrower
shall have made a timely election to continue such Eurodollar Rate Loans as
such for an additional Interest Period or to convert such Eurodollar Rate
Loans, in each case as provided in subsection (a).
(c) NOTICE TO THE AGENT. The conversion or continuation of
any Loans contemplated by subsection (a) shall be made upon written or
telephonic notice (in the latter case to be confirmed promptly in writing)
from the Borrower to the Agent, which notice shall be received by the Agent
not later than 11:00 A.M. (California time) on the Required Notice Date. Each
such notice (a "Notice of Conversion or Continuation") shall, except as
provided in Sections 5.01 and 5.04, be irrevocable and binding on the
Borrower, shall refer to this Agreement and shall specify: (i) the proposed
date of the conversion or continuation, which shall be a Business Day; (ii)
the outstanding Loans (or parts thereof) to be converted into or continued as
Base Rate or Eurodollar Rate Loans; (iii) the aggregate amount of the Loans
which are the subject of such continuation or conversion, which shall be in a
Minimum Amount; (iv) if the conversion or continuation consists of any
Eurodollar Rate Loans, the duration of the Interest Period with respect
thereto; and (v) that no Event of Default exists hereunder.
(d) NOTICE TO THE BANKS. The Agent shall give each Bank
prompt notice by telephone (confirmed promptly in writing) or by facsimile of
(i) the proposed conversion or continuation of any Loans, specifying the
information contained in the Borrower's Notice and such Bank's Pro Rata Share
thereof or (ii), if timely notice was not received from the Borrower, the
details of any automatic conversion under subsection (b).
SECTION 3.06 REPLACEMENT OF REFERENCE BANKS. If the Loans of the
Eurodollar Reference Bank are prepaid in full or its Revolving Commitment
shall terminate (otherwise than on termination of all the Revolving
Commitments), or if the Eurodollar Reference Bank transfers its Loans in full
to an unaffiliated Person or otherwise shall cease to be a Bank hereunder,
the Agent shall, in consultation with the Borrower and with the approval of
the Majority Banks, appoint another similarly situated Bank to replace such
Bank as Eurodollar Reference Bank.
SECTION 3.07 HIGHEST LAWFUL RATE. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed
hereunder, the applicable interest rate, together with all fees, charges and
other payments which are treated as interest
20
under applicable law, as provided for herein or in any other Loan Document,
would exceed the maximum rate of interest which may be charged, contracted
for, reserved, received or collected by any Bank in connection with this
Agreement under applicable law (the "Maximum Rate"), the Borrower shall not
be obligated to pay, and such Bank shall not be entitled to charge, collect,
receive, reserve or take, interest in excess of the Maximum Rate, and during
any such period the interest payable hereunder to such Bank shall be limited
to the Maximum Rate.
ARTICLE IV
REDUCTION OF REVOLVING COMMITMENTS;
REPAYMENT; PREPAYMENT
SECTION 4.01 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENTS.
(a) OPTIONAL REDUCTION OR TERMINATION. The Borrower may,
upon prior written notice to the Agent delivered not later than the Required
Notice Date, terminate in whole or reduce ratably in part, as of the date
specified by the Borrower in such notice, any then unused portion of the
Revolving Commitments, PROVIDED that each partial reduction shall be in a
Minimum Amount.
(b) MANDATORY TERMINATION. The Revolving Commitments
shall terminate on the Revolving Termination Date.
(c) [INTENTIONALLY OMITTED.]
(d) [INTENTIONALLY OMITTED.]
(e) NOTICE. The Agent shall give each Bank prompt notice
of any termination or reduction of its Revolving Commitments under this
Section 4.01.
(f) ADJUSTMENT OF REVOLVING COMMITMENT FEE; NO
REINSTATEMENT. From the effective date of any reduction or termination prior
to the Revolving Termination Date, the Revolving Commitment fee payable under
Section 3.03(a) shall be computed on the basis of the Revolving Commitments
as so reduced or terminated. Once reduced or terminated, the Revolving
Commitments may not be increased or otherwise reinstated.
SECTION 4.02 REPAYMENT OF LOANS. The Borrower shall repay to the
Banks in full on the Revolving Termination Date the aggregate principal
amount of the Revolving Loans outstanding on such date.
SECTION 4.03 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. Subject to Section 5.02, the
Borrower may, upon prior written notice to the Agent not later than the
Required Notice Date, prepay the outstanding amount of the Loans in whole or
ratably in part, without premium or penalty. Partial prepayments shall be in
Minimum Amounts.
(b) [INTENTIONALLY OMITTED.]
21
(c) NOTICE; APPLICATION. The notice given of any
prepayment (a "Notice of Prepayment") shall specify the date and amount of
the prepayment and whether the prepayment is of Base Rate or Eurodollar Rate
Loans or a combination thereof, and if of a combination thereof the amount of
the prepayment allocable to each. Upon receipt of the Notice of Prepayment
the Agent shall promptly notify each Bank thereof. If the Notice of
Prepayment is given, the Borrower shall make such prepayment and the
prepayment amount specified in such Notice shall be due and payable on the
date specified therein, with accrued interest to such date on the amount
prepaid.
ARTICLE V
YIELD PROTECTION AND ILLEGALITY
SECTION 5.01 INABILITY TO DETERMINE RATES. If the Agent shall
determine that adequate and reasonable means do not exist to ascertain the
Eurodollar Rate, or the Majority Banks shall determine that the Eurodollar
Rate does not accurately reflect the cost to the Banks of making or
maintaining Eurodollar Rate Loans, then the Agent shall give telephonic
notice (promptly confirmed in writing) to the Borrower and each Bank of such
determination. Such notice shall specify the basis for such determination and
shall, in the absence of manifest error, be conclusive and binding for all
purposes. Thereafter, the obligation of the Banks to make or maintain
Eurodollar Rate Loans hereunder shall be suspended until the Agent (upon the
instructions of the Majority Banks) revokes such notice. Upon receipt of such
notice, the Borrower may revoke any Notice then submitted by it. If the
Borrower does not revoke such Notice, the Banks shall make, convert or
continue Loans, as proposed by the Borrower, in the amount specified in the
Notice submitted by the Borrower, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Eurodollar Rate Loans, as the case
may be.
SECTION 5.02 FUNDING LOSSES. In addition to such amounts as are
required to be paid by the Borrower pursuant to Section 5.03, the Borrower
shall compensate each Bank, promptly upon receipt of such Bank's written
request made to the Borrower (with a copy to the Agent), for all losses,
costs and expenses (including any loss or expense incurred by such Bank in
obtaining, liquidating or re-employing deposits or other funds to fund or
maintain its Eurodollar Rate Loans), if any, which such Bank sustains: (I) if
the Borrower repays, converts or prepays any Eurodollar Rate Loan on a date
other than the last day of an Interest Period for such Eurodollar Rate Loan
(whether as a result of an optional prepayment, mandatory prepayment, a
payment as a result of acceleration or otherwise); (II) if the Borrower fails
to borrow a Eurodollar Rate Loan after giving its Notice (other than as a
result of the operation of Section 5.01 or 5.04); (III) if the Borrower fails
to convert into or continue a Eurodollar Rate Loan after giving its Notice
(other than as a result of the operation of Section 5.01 or 5.04); or (IV) if
the Borrower fails to prepay a Eurodollar Rate Loan after giving its Notice.
Any such request for compensation shall set forth the basis for the
calculation of requested compensation and shall, in the absence of manifest
error, be conclusive and binding for all purposes.
SECTION 5.03 REGULATORY CHANGES.
(a) INCREASED COSTS. If after the date hereof, the
adoption of, or any change in, any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any Governmental Authority charged with the interpretation or
22
administration thereof (a "Regulatory Change"), or compliance by any Bank (or
its Lending Office) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority shall impose, modify
or deem applicable any reserve, special deposit or similar requirement
(including any such requirement imposed by the FRB, but excluding with
respect to any Eurodollar Rate Loan any such requirement included in the
calculation of the Eurodollar Rate) against assets of, deposits with or for
the account of, or credit extended by, any Bank's Lending Office or shall
impose on any Bank (or its Lending Office) or on the United States market for
the interbank eurodollar market any other condition affecting its Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Loans, and the result of
any of the foregoing is to increase the cost to such Bank (or its Lending
Office) of making or maintaining any Eurodollar Rate Loan hereunder, or to
reduce the amount of any sum received or receivable by such Bank (or its
Lending Office) under this Agreement with respect thereto, by an amount
deemed by such Bank, in good faith and on a non-discriminatory basis, to be
material, then from time to time, within 30 days after written demand by such
Bank (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amounts as shall compensate such Bank for such increased cost or
reduction in respect of its Eurodollar Rate Loans hereunder.
(b) CAPITAL REQUIREMENTS. If any Bank shall have
determined in good faith that any Regulatory Change regarding capital
adequacy, or compliance by such Bank (or any corporation controlling such
Bank) with any request, guideline or directive regarding capital adequacy
(whether or not having the force of law) of any Governmental Authority, has
or shall have the effect of reducing the rate of return on such Bank's or
such corporation's capital as a consequence of such Bank's obligations
hereunder to a level below that which such Bank or such corporation would
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or such corporation's policies with respect to
capital adequacy), by an amount deemed, in good faith and on a
non-discriminatory basis, by such Bank to be material, then from time to
time, within 30 days after written demand by such Bank (with a copy to the
Agent) in reasonable detail describing such reduction, the Borrower shall pay
to such Bank such additional amounts as shall compensate such Bank for such
reduction in respect of its obligations hereunder.
(c) REQUESTS. Any such request for compensation by a Bank
under this Section 5.03 shall set forth the basis of calculation thereof and
shall, in the absence of manifest error, be conclusive and binding for all
purposes. In determining the amount of such compensation, such Bank may use
any reasonable averaging and attribution methods.
SECTION 5.04 ILLEGALITY. If any Bank shall determine that it has
become unlawful, as a result of any Regulatory Change, for such Bank to make,
convert into or maintain Eurodollar Rate Loans as contemplated by this
Agreement, such Bank shall promptly give notice of such determination to the
Borrower (through the Agent), and (i) the obligation of such Bank to make or
convert into Eurodollar Rate Loans, as the case may be, shall be suspended
until such Bank gives notice that the circumstances causing such suspension
no longer exist; and (ii) each of such Bank's outstanding Eurodollar Rate
Loans, as the case may be, shall, if requested by such Bank, be converted
into a Base Rate Loan not later than upon expiration of the Interest Period
related to such Eurodollar Rate Loan, or, if earlier, on such date as may be
required by the applicable Regulatory Change, as shall be specified in such
request. Any such determination shall, in the absence of manifest error, be
conclusive and binding for all purposes.
23
SECTION 5.05 FUNDING ASSUMPTIONS. Solely for purposes of
calculating amounts payable by the Borrower to the Banks under this Article
V, each Eurodollar Rate Loan made by a Bank (and any related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been
funded at the Interbank Rate used in determining the Eurodollar Rate for such
Eurodollar Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan is in fact so funded.
SECTION 5.06 OBLIGATION TO MITIGATE. Each Bank agrees that as
promptly as practicable after it becomes aware of the occurrence of an event
that would entitle it to give notice pursuant to Section 5.03(a), 5.03(b) or
5.04, and in any event if so requested by the Borrower, each Bank shall use
reasonable efforts to make, fund or maintain its affected Eurodollar Rate
Loans through another Lending Office if as a result thereof the increased
costs would be avoided or materially reduced or the illegality would thereby
cease to exist; PROVIDED, HOWEVER, that such Bank shall not be obligated to
select an alternative Lending Office if such Bank determines that (a) as a
result of such selection such Bank would be in violation of any applicable
law, regulation, treaty, or guideline, or would incur additional costs or
expenses or (b) such selection would be inadvisable for regulatory reasons or
inconsistent with the interests of such Bank.
SECTION 5.07 SUBSTITUTION OF BANKS. Upon the receipt by the
Borrower from any Bank (an "Affected Bank") of a request for compensation
under Section 5.03, a notice under Section 5.04 or a request for payment
under Section 6.03, the Borrower may (i) request one more of the other Banks
to acquire and assume all or part of such Affected Bank's Loans and Revolving
Commitment; or (ii) designate an Eligible Assignee satisfactory to the
Borrower to acquire and assume all or part of such Affected Bank's Loans and
Revolving Commitment (in each case, a "Replacement Bank"). Any such
designation of a Replacement Bank under clause (ii) shall be subject to the
prior written consent of the Agent (which consent shall not be unreasonably
withheld). In connection with any such assumption (a) the Replacement Bank
shall pay to the Affected Bank in immediately available funds on the date of
the assignment the principal amount of the Loans made by the Affected Bank
hereunder which are being acquired by the Replacement Bank, and (b) the
Borrower shall pay to the Affected Bank in immediately available funds on the
date of the assignment the interest accrued to the date of the assignment on
the Loans which are being acquired by the Replacement Bank and all other
amounts then accrued for the Affected Bank's account or owed to it hereunder
with respect to such Loans, including any amounts owing under Section 5.02.
ARTICLE VI
PAYMENTS
SECTION 6.01 PRO RATA TREATMENT. Except as otherwise provided in
this Agreement, each Borrowing hereunder, each Revolving Commitment
reduction, each payment (including each prepayment) by the Borrower on
account of the principal of and interest on the Loans and on account of any
Revolving Commitment fee, and each conversion or continuation of Loans, shall
be made ratably in accordance with the respective Pro Rata Shares of the
Banks.
24
SECTION 6.02 PAYMENTS.
(a) PAYMENTS. The Borrower shall make each payment under
the Loan Documents, unconditionally in full without set-off, counterclaim or
other defense, not later than 2:00 P.M. (California time) on the day when due
to the Agent in Dollars and in same day or immediately available funds, to
the Agent's Account. The Agent shall promptly thereafter distribute like
funds relating to the payment of principal or interest, Revolving Commitment
fee or any other amounts payable to the Banks, ratably (except as a result of
the operation of Article V) to the Banks in accordance with their Pro Rata
Shares.
(b) APPLICATION. (i) Unless the Agent shall receive a
timely election by the Borrower with respect to the application of any
principal payments, each payment of principal by the Borrower shall be
applied (a) first, to the Base Rate Loans then outstanding, and (b) second,
to the Eurodollar Rate Loans.
(c) EXTENSION. Whenever any payment hereunder shall be
stated to be due, or whenever any Interest Payment Date or any other date
specified hereunder would otherwise occur, on a day other than a Business
Day, then, except as otherwise provided herein, such payment shall be made,
and such Interest Payment Date or other date shall occur, on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or Revolving Commitment
fee hereunder.
SECTION 6.03 TAXES.
(a) NO REDUCTION OF PAYMENTS. The Borrower shall pay all
amounts of principal, interest, fees and other amounts due under the Loan
Documents free and clear of, and without reduction for or on account of, any
present and future taxes, levies, imposts, duties, fees, assessments,
charges, deductions or withholdings and all liabilities with respect thereto
excluding, in the case of each Bank and the Agent, income and franchise taxes
imposed on it by the jurisdiction under the laws of which such Bank or the
Agent is organized or in which its principal executive offices may be located
or any political subdivision or taxing authority thereof or therein or by the
jurisdiction of such Bank's Lending Office and any political subdivision or
taxing authority thereof or therein (all such nonexcluded taxes, levies,
imposts, duties, fees, assessments, charges, deductions, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted or withheld from any payment, the Borrower
shall increase the amount paid so that the respective Bank or the Agent
receives when due (and is entitled to retain), after deduction or withholding
for or on account of such Taxes (including deductions or withholdings
applicable to additional sums payable under this Section 6.03), the full
amount of the payment provided for in the Loan Documents.
(b) DEDUCTION OR WITHHOLDING; TAX RECEIPTS. If the
Borrower makes any payment hereunder in respect of which it is required by
law to make any deduction or withholding, it shall pay the full amount to be
deducted or withheld to the relevant taxation or other authority within the
time allowed for such payment under applicable law and promptly thereafter
shall furnish to the Agent (for itself or for redelivery to the Bank to or
for the account of which such payment was made) an original or certified copy
of a receipt evidencing payment
25
thereof, together with such other information and documents as the Agent or
any Bank (through the Agent) may reasonably request.
(c) INDEMNITY. If any Bank or the Agent is required by law
to make any payment on account of Taxes, or any liability in respect of any
Tax is imposed, levied or assessed against any Bank or the Agent, the
Borrower shall indemnify the Agent and the Banks for and against such payment
or liability, together with any incremental taxes, interest or penalties, and
all costs and expenses, payable or incurred in connection therewith,
including Taxes imposed on amounts payable under this Section 6.03. A
certificate of the Agent or any Bank as to the amount of any such payment
shall, in the absence of manifest error, be conclusive and binding for all
purposes. If any Bank shall obtain a credit with respect to all or part of
any tax paid or indemnified by the Borrower pursuant to this Section 6.03,
then, to the extent such items have not previously been taken into account in
computing the amount of any payment pursuant to this sentence or the amount
of indemnification payable under this Section 6.03, such Bank shall promptly
pay to the Borrower an amount equal to the amount of such credit, reduced by
the amount of any prior payments by such Bank to, or for the benefit of, the
Borrower arising from the same claim. All computations required hereunder
shall be made by such Bank, acting reasonably and in good faith and the
results of such computations shall be delivered to the Borrower. At the
request and expense of the Borrower the accuracy of such computations shall
be verified by such Bank's independent accounts.
(d) FORMS W-8BEN AND W-8ECI. Each Bank that is
incorporated under the laws of any jurisdiction outside the United States
agrees to deliver to the Agent and the Borrower on or prior to the Closing
Date, and in a timely fashion thereafter, Internal Revenue Service Form
W-8BEN, Form W-8ECI or such other documents and forms of the I.R.S., duly
executed and completed by such Bank, as are required under United States law
to establish such Bank's status for United States withholding tax purposes.
(e) MITIGATION. Each Bank agrees that as promptly as
practicable after it becomes aware of the occurrence of an event that would
cause the Borrower to make any payment in respect of Taxes to such Bank or a
payment in indemnification with respect to any Taxes, and in any event if so
requested by the Borrower following such occurrence, each Bank shall use
reasonable efforts to make, fund or maintain its affected Loan (or relevant
part thereof) through another Lending Office if as a result thereof the
additional amounts so payable by the Borrower would be avoided or materially
reduced; PROVIDED, HOWEVER, that such Bank shall not be obligated to select
an alternative Lending Office if such Bank determines that (a) as a result of
such selection such Bank would be in violation of any applicable law,
regulation, treaty, or guideline, or would incur additional costs or expenses
or (b) such selection would be inadvisable for regulatory reasons or
inconsistent with the interests of such Bank.
SECTION 6.04 NON-RECEIPT OF FUNDS. Unless the Agent shall have
received notice from the Borrower prior to the date on which any payment is
due to any of the Banks hereunder that the Borrower shall not make such
payment in full, the Agent may assume that the Borrower has made such payment
in full to the Agent on such date and the Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Borrower
shall not have so made such payment in full to the Agent, each Bank shall
repay to the Agent forthwith on demand
26
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate.
SECTION 6.05 SHARING OF PAYMENTS. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans made by it (other than
pursuant to a provision hereof providing for non-pro rata treatment) in
excess of its Pro Rata Share of payments on account of the Loans obtained by
all the Banks, such Bank shall forthwith advise the Agent of the receipt of
such payment, and within five Business Days of such receipt purchase from the
other Banks (through the Agent), without recourse, such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to
share the excess payment ratably with each of them in accordance with the
respective Pro Rata Shares of the Banks; PROVIDED, HOWEVER, that if all or
any portion of such excess payment is thereafter recovered by or on behalf of
the Borrower from such purchasing Bank, the purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest. No documentation other than notices and the like referred to in
this Section 6.05 shall be required to implement the terms of this Section
6.05. The Agent shall keep records (which shall be conclusive and binding in
the absence of manifest error) of participations purchased pursuant to this
Section 6.05 and shall in each case notify the Banks following any such
purchases.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 CONDITIONS PRECEDENT TO THE INITIAL LOANS. The
obligation of each Bank to make its initial Loan shall be subject to the
satisfaction of each of the following conditions precedent on or before the
Closing Date:
(a) FEES AND EXPENSES. The Borrower shall have paid (i)
all invoiced fees then due in accordance with Section 3.03 and under the Fee
Letter and (ii) all invoiced costs and expenses then due in accordance with
Section 12.04(a).
(b) LOAN DOCUMENTS. The Agent shall have received the
following Loan Documents: (i) this Agreement, executed by the Borrower and
each Bank (ii) the Notes, executed by the Borrower, for any Banks requesting
Notes; and (iii) the Fee Letter, executed by each of the respective parties
thereto.
(c) CERTIFICATE OF RESPONSIBLE OFFICER. The Agent shall
have received in form and substance satisfactory to it a certificate of a
Responsible Officer of the Borrower, dated the Closing Date, stating that (a)
the representations and warranties contained in Section 8.01 and in the other
Loan Documents are true and correct on and as of the date of such certificate
as though made on and as of such date and (b) on and as of the Closing Date,
no Default shall have occurred and be continuing or shall result from the
initial Borrowing.
(d) CORPORATE DOCUMENTS. The Agent shall have received
the following, in form and substance satisfactory to it:
27
(i) certified copies of the certificate or articles,
as the case may be, of incorporation of the Borrower, together with
certificates as to good standing and tax status, from the Secretary of
State or other Governmental Authority, as applicable, of the Borrower's
state of incorporation and California, each dated as of a recent date
prior to the Closing Date;
(ii) a certificate of the Secretary or Assistant
Secretary of the Borrower, dated the Closing Date, certifying (a)
copies of the bylaws of the Borrower and the resolutions of the Board
of Directors of the Borrower authorizing the execution, delivery and
performance of the Loan Documents and (b) the incumbency, authority and
signatures of each officer of the Borrower authorized to execute and
deliver the Loan Documents and act with respect thereto, upon which
certificate the Agent and the Banks may conclusively rely until the
Agent shall have received a further certificate of the Secretary or an
Assistant Secretary of the Borrower canceling or amending such prior
certificate;
(e) LEGAL OPINION. The Agent shall have received the
opinion of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Borrower, dated the
Closing Date, in substantially the form of Exhibit E.
(f) COMPLIANCE CERTIFICATE. The Agent shall have received
a completed Compliance Certificate for the Borrower's fiscal quarter ended on
July 1, 2000.
(g) MATERIAL ADVERSE EFFECT. On and as of the date of
such Borrowing, there shall have occurred no Material Adverse Effect since
July 1, 2000.
(h) EXISTING CREDIT AGREEMENT. All interest, principal,
fees and other amounts owing under the Existing Credit Agreement shall have
been paid in full (or shall have been paid in full concurrently with the
initial Borrowing hereunder), and all commitments to lend thereunder
terminated, and the Existing Credit Agreement shall have been cancelled and
be of no further force or effect (except for such provisions thereof that
expressly survive the termination thereof). Each Bank that is a party to the
Existing Credit Agreement hereby waives its five-day advance notice of
termination of the commitments thereunder.
SECTION 7.02 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of
each Bank to make a Loan (including its initial Loan) on the occasion of each
Borrowing shall be subject to the satisfaction of each of the following
conditions precedent:
(a) NOTICE. The Borrower shall have given the Notice of
Borrowing as provided in Section 2.02(a).
(b) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. On the
date of such Borrowing, both before and after giving effect thereto and to
the application of proceeds therefrom: (i) the representations and warranties
contained in Section 8.01 and in the other Loan Documents shall be true,
correct and complete on and as of the date of such Borrowing as though made
on and as of such date; and (ii) no Default shall have occurred and be
continuing or shall result from such Borrowing. For purposes of this Section
7.02(b), the representation and warranty made in Section 8.01(p) shall be
deemed instead to refer to the last day of the most
28
recent quarter and year for which financial statements have then been
delivered; the preceding clause (i) shall not be deemed to refer to any other
representations and warranties which relate solely to an earlier date
(PROVIDED that such other representations and warranties shall be true,
correct and complete as of such earlier date); and the preceding clause (i)
shall take into account any amendments to the Schedules and other disclosures
made in writing by the Borrower to the Agent and the Banks after the Closing
Date and approved by the Agent and the Majority Banks. The giving of any
Notice of Borrowing and the acceptance by the Borrower of the proceeds of
each Borrowing on or following the Closing Date shall each be deemed a
certification to the Agent and the Banks that on and as of the date of such
Borrowing such statements are true.
(c) ADDITIONAL DOCUMENTS. The Agent shall have received,
in form and substance satisfactory to it, such additional approvals,
opinions, documents and other information as the Agent or any Bank (through
the Agent) may reasonably request.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.01 REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to each Bank and the Agent that:
(a) ORGANIZATION AND POWERS. Each of the Borrower and its
Material Subsidiaries (i) is a corporation or partnership duly organized or
formed, as the case may be, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, (ii) except as
set forth on Schedule 8.01(a), is qualified to do business and is in good
standing in each jurisdiction in which the failure so to qualify or be in
good standing would result in a Material Adverse Effect and (iii) has all
requisite power and authority to own its assets and carry on its business
and, with respect to the Borrower, to execute, deliver and perform its
obligations under the Loan Documents.
(b) AUTHORIZATION; NO CONFLICT. The execution, delivery
and performance by the Borrower of the Loan Documents have been duly
authorized by all necessary corporate action of the Borrower and do not and
will not (i) contravene the terms of the certificate or articles, as the case
may be, of incorporation and the bylaws of the Borrower or result in a breach
of or constitute a default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Borrower is a party or
by which it or its properties may be bound or affected; (ii) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree or the like binding on or affecting the Borrower; or (iii) except as
contemplated by this Agreement, result in, or require, the creation or
imposition of any Lien upon or with respect to any of the properties of the
Borrower.
(c) BINDING OBLIGATION. The Loan Documents constitute, or
when delivered under this Agreement will constitute, legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance
with their respective terms.
(d) CONSENTS. No authorization, consent, approval,
license, exemption of, or filing or registration with, any Governmental
Authority, or approval or consent of any other
29
Person, is required for the due execution, delivery or performance by the
Borrower of any of the Loan Documents.
(e) NO DEFAULTS. Neither the Borrower nor any of its
Material Subsidiaries is in default under any material contract, lease,
agreement, judgment, decree or order to which it is a party or by which it or
its properties may be bound.
(f) TITLE TO PROPERTIES; LIENS. The Borrower and its
Material Subsidiaries have good and marketable title to, or valid and
subsisting leasehold interests in, their properties and assets, and there is
no Lien upon or with respect to any of such properties or assets, except for
Permitted Liens.
(g) LITIGATION. Except as set forth on Schedule 8.01(g),
there are no actions, suits or proceedings pending or, to the best of the
Borrower's knowledge, threatened against or affecting the Borrower or any of
its Subsidiaries or the properties of the Borrower or any of its Subsidiaries
before any Governmental Authority or arbitrator which if determined adversely
to the Borrower or any such Subsidiary would result in a Material Adverse
Effect.
(h) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set
forth on Schedule 8.01(h), and except in respect of matters that in the
aggregate are not and cannot reasonably be expected to result in a Material
Adverse Effect, the Borrower and each Material Subsidiary is in full
compliance with all Environmental Laws, whether in connection with the
ownership, use, maintenance or operation of its Premises or the conduct of
any business thereon, or otherwise. Neither the Borrower, any Material
Subsidiary, nor to the best of the Borrower's knowledge, any previous owner,
tenant, occupant, user or operator of the Premises, or any present tenant or
other present occupant, user or operator of the Premises has used, generated,
manufactured, installed, treated, released, stored or disposed of any
Hazardous Substances on, under, or at the Premises, except in compliance with
all applicable Environmental Laws. To the best of the Borrower's knowledge,
no Hazardous Substances have at any time been spilled, leaked, dumped,
deposited, discharged, disposed of or released on, under, at or from the
Premises, nor have any of the Premises been used at any time by any Person as
a landfill or waste disposal site. Except as set forth on Schedule 8.01(h),
there are no actions, suits, claims, notices of violation, hearings,
investigations or proceedings pending or, to the best of the Borrower's
knowledge, threatened against or affecting the Borrower, any Material
Subsidiary or with respect to the ownership, use, maintenance and operation
of the Premises, relating to Environmental Laws or Hazardous Substances.
(i) GOVERNMENTAL REGULATION. Neither the Borrower nor any
of its Material Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Investment
Company Act of 1940, the Interstate Commerce Act, any state public utilities
code or any other federal or state statute or regulation limiting its ability
to incur Indebtedness.
30
(j) ERISA.
(i) The Borrower and all ERISA Affiliates have
satisfied all applicable contribution requirements under Section
412(c)(11) of the Internal Revenue Code and have never sought a waiver
under Section 412(d) of the Internal Revenue Code;
(ii) no Termination Event has occurred and is
continuing, or is reasonably expected to occur;
(iii) the aggregate amount of Unfunded Accrued
Benefits under all Pension Plans (excluding in such computation Pension
Plans with assets greater than accrued benefits) does not exceed
$5,000,000;
(iv) there is no condition or event under which the
Borrower, any ERISA Affiliate, or any Plan maintained by the Borrower
or any ERISA Affiliate could be subject to any risk of material
liability under ERISA or the Internal Revenue Code, regardless of
whether the Borrower or any ERISA Affiliate engaged in a transaction
giving rise to the liability;
(v) neither the Borrower nor any ERISA Affiliate
has unfunded, contingent liability that exceeds $5,000,000 with
respect to Plans that provide post-retirement welfare benefits; and
(vi) all Plans maintained by, or contributed to by,
the Borrower or any ERISA Affiliate comply in all material respects,
and have been administered in material compliance with, the
requirements of applicable law (including, if applicable, foreign law,
ERISA and the Internal Revenue Code), and in accordance with each
Plan's terms.
(k) SUBSIDIARIES. The name, capital structure and
ownership of each Subsidiary of the Borrower on the date of this Agreement is
as set forth in Schedule 8.01(k). All of the outstanding capital stock of, or
other interest in, each such Subsidiary has been validly issued, and is fully
paid and nonassessable. Except as set forth in such Schedule, on the date of
this Agreement the Borrower has no equity interest in any Person. Each
Material Subsidiary of the Borrower, as of the date of this Agreement, is
specified as such on Schedule 8.01(k).
(l) MARGIN REGULATIONS. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying
"margin stock" (within the meaning of Regulations G or U of the FRB). No part
of the proceeds of the Loans will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock, except in accordance with the provisions of Regulations T,
U, and X of the FRB.
(m) TAXES. Each of the Borrower and its Material
Subsidiaries has duly filed all tax and information returns required to be
filed, and has paid all taxes, fees, assessments and other governmental
charges or levies that have become due and payable, except to the extent such
taxes or other charges are being contested in good faith and are adequately
reserved against in accordance with GAAP.
31
(n) PATENTS AND OTHER RIGHTS. Each of the Borrower and its
Subsidiaries possesses all permits, franchises, licenses, patents,
trademarks, trade names, service marks, copyrights and all rights with
respect thereto, free from burdensome restrictions, that are reasonably
necessary for the ownership, maintenance and operation of its business and
neither the Borrower nor any such Subsidiary is in violation of any rights of
others with respect to the foregoing, except where the failure to do so would
not reasonably be expected to result in a Material Adverse Effect.
(o) INSURANCE. The properties of the Borrower and its
Material Subsidiaries are insured, with financially sound and reputable
insurance companies, in such amounts, with such deductibles and covering such
risks as is customarily carried by companies engaged in similar businesses
and owning similar properties in the localities where the Borrower or such
Material Subsidiary operates.
(p) FINANCIAL STATEMENTS. The audited consolidated balance
sheet of the Borrower and its Subsidiaries as at January 1, 2000, and the
related consolidated statements of income, shareholders' equity and cash
flows for the fiscal year then ended, and the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at July 1, 2000, and the
related consolidated statements of income, shareholders' equity and cash
flows, for the quarter then ended and the 6-month period then ended, are
complete and correct and fairly present the financial condition of the
Borrower and its Subsidiaries as at such dates and the results of operations
of the Borrower and its Subsidiaries for the periods covered by such
statements, in each case in accordance with GAAP consistently applied,
subject, in the case of the July 1, 2000 financial statements, to normal
year-end adjustments and the absence of notes.
(q) LIABILITIES. Neither the Borrower nor any of its
Material Subsidiaries has any material liabilities, fixed or contingent, that
are not reflected in the financial statements referred to in subsection (p),
in the notes thereto or otherwise disclosed in writing to the Banks, other
than liabilities arising in the ordinary course of business since July 1,
2000.
(r) LABOR DISPUTES, ETC. There are no strikes, lockouts or
other labor disputes against the Borrower or any of its Material
Subsidiaries, or, to the best of the Borrower's knowledge, threatened against
or affecting the Borrower or any of its Material Subsidiaries, and no event
of loss has occurred with respect to any assets or property of the Borrower
or any of its Subsidiaries, which would reasonably be expected to result in a
Material Adverse Effect.
(s) SOLVENCY. Each of the Borrower and its Material
Subsidiaries is Solvent.
(t) DISCLOSURE. None of the representations or warranties
made by the Borrower in the Loan Documents as of the date of such
representations and warranties, and none of the statements contained in each
exhibit, report, certificate or written statement furnished by or on behalf
of the Borrower or any of its Subsidiaries to the Agent and the Banks in
connection with the Loan Documents, contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in the light of the
circumstances under which they are made, not misleading, as of the time made
or delivered.
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ARTICLE IX
COVENANTS
SECTION 9.01 REPORTING COVENANTS. So long as any of the
Obligations shall remain unpaid or any Bank shall have any Revolving
Commitment, the Borrower agrees that:
(a) FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower
shall furnish to the Agent in sufficient copies for distribution to the Banks:
(i) as soon as available and in any event within 55
days after the end of each of the first three fiscal quarters of each
fiscal year, a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter, and the related
consolidated statements of income, shareholders' equity and cash flows
of the Borrower and its Subsidiaries for such quarter and the portion
of the fiscal year through the end of such quarter, prepared in
accordance with GAAP consistently applied, all in reasonable detail and
setting forth in comparative form the figures for the corresponding
period in the preceding fiscal year, together with a certificate of a
Responsible Officer of the Borrower stating that such financial
statements fairly present the financial condition of the Borrower and
its Subsidiaries as at such date and the results of operations of the
Borrower and its Subsidiaries for the period ended on such date and
have been prepared in accordance with GAAP consistently applied,
subject to changes resulting from normal, year-end audit adjustments
and except for the absence of notes;
(ii) as soon as available and in any event within
100 days after the end of each fiscal year, a consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such
fiscal year, and the related consolidated statements of income,
shareholders' equity and cash flows of the Borrower and its
Subsidiaries for such fiscal year, prepared in accordance with GAAP
consistently applied, all in reasonable detail and setting forth in
comparative form the figures for the previous fiscal year,
accompanied by a report thereon of a firm of independent certified
public accountants of recognized national standing, which report
shall be unqualified as to scope of audit or the status of the
Borrower and its Subsidiaries as a going concern;
(iii) together with the financial statements required
pursuant to clauses (i) and (ii), a Compliance Certificate of a
Responsible Officer as of the end of the applicable accounting period;
(iv) promptly after the giving, sending or filing
thereof, copies of all reports, if any, which the Borrower sends to the
holders of its respective capital stock or other securities and of all
reports or filings, if any, by the Borrower with the SEC or any
national securities exchange.
As to any information contained in materials furnished pursuant to clause (iv),
the Borrower shall not be separately required to furnish such information under
clause (i) or (ii), but the foregoing shall not be in derogation of the
obligation of the Borrower to furnish the information and materials described in
clauses (i) and (ii) at the times specified therein.
33
(b) ADDITIONAL INFORMATION. The Borrower shall furnish to
the Agent:
(i) promptly after the Borrower has knowledge or
becomes aware thereof, notice of the occurrence or existence of any
Default;
(ii) prompt written notice of (A) any proposed
acquisition of stock, assets or property by the Borrower or any of its
Material Subsidiaries that could reasonably be expected to result in
material environmental liability under Environmental Laws, and (B)(1)
any spillage, leakage, discharge, disposal, leaching, migration or
release of any Hazardous Substances required to be reported to any
Governmental Authority under applicable Environmental Laws, and (2) all
actions, suits, claims, notices of violation, hearings, investigations
or proceedings pending, or to the best of the Borrower's knowledge,
threatened against or affecting the Borrower or any of its Material
Subsidiaries or with respect to the ownership, use, maintenance and
operation of the Premises, relating to Environmental Laws or Hazardous
Substances;
(iii) prompt written notice of all actions, suits
and proceedings before any Governmental Authority or arbitrator
pending, or to the best of the Borrower's knowledge, threatened
against or affecting the Borrower or any of its Material
Subsidiaries which if adversely determined would be reasonably
expected to have a Material Adverse Effect;
(iv) promptly after the Borrower has knowledge or
becomes aware thereof, (a) notice of the occurrence of any Termination
Event, together with a copy of any notice of such Termination Event to
the PBGC, and (b) the details concerning any material action taken or
proposed to be taken by the IRS, PBGC, Department of Labor or other
Person with respect thereto;
(v) the information regarding insurance
maintained by the Borrower and its Material Subsidiaries as required
under Section 9.03(c);
(vi) within 30 days of the date thereof, or, if
earlier, on the date of delivery of any financial statements pursuant
to subsection (a), notice of any material change in accounting policies
or financial reporting practices by the Borrower or any of its Material
Subsidiaries;
(vii) promptly after the occurrence thereof, notice
of any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other material labor
disruption against or involving the Borrower or any of its Material
Subsidiaries;
(viii) upon the reasonable request from time to time,
but no more often than once per fiscal quarter, of the Agent or any
Bank (through the Agent), the Swap Termination Values, together with a
description of the method by which such values were determined,
relating to any then-outstanding Rate Contracts to which the Borrower
or any of its Material Subsidiaries is party;
34
(ix) prompt written notice of any other condition or
event which has resulted, or that could reasonably be expected to
result, in a Material Adverse Effect; and
(x) such other information respecting the operations,
properties, business or condition (financial or otherwise) of the
Borrower or its Subsidiaries as any Bank (through the Agent) may from
time to time reasonably request.
Each notice pursuant to this subsection (b) shall be accompanied by a written
statement by a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein, and stating what action the Borrower proposes to
take with respect thereto.
SECTION 9.02 FINANCIAL COVENANTS. So long as any of the
Obligations shall remain unpaid or any Bank shall have any Revolving
Commitment, the Borrower agrees that:
(a) MINIMUM CONSOLIDATED EBITDA. The Borrower shall
maintain as of the last day of each fiscal quarter a minimum Consolidated
EBITDA for the period of four fiscal quarters ended on such date (taken as a
single accounting period) of not less than $200,000,000;
(b) [INTENTIONALLY OMITTED.]
(c) MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrower
shall maintain as of the last day of each fiscal quarter a ratio (such ratio,
the "Fixed Charge Coverage Ratio") of (i) Consolidated EBITDA to (ii) the sum
of (without duplication) (A) Consolidated Interest Expense PLUS (B) 20% of
Funded Debt PLUS (C) taxes paid in cash, PLUS (D) payments in respect of
Capital Leases, in each case, of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP, for the 12-month
period ended on such date, of not less than 1.50 to 1.00.
(d) MINIMUM CURRENT RATIO. The Borrower shall maintain as
of the last day of each fiscal quarter a ratio of (i) current assets to (ii)
current liabilities, in each case, of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP, of not less than
1.00 to 1.00. For purposes of calculating the Borrower's compliance with this
Section 9.02(d) as of the last day of any fiscal quarter, current liabilities
shall include (A) off-balance sheet Indebtedness having a maturity of less
than one year from such fiscal quarter-end, (B) reimbursement obligations in
respect of letters of credit having an expiry date less than one year from
such fiscal quarter-end and (C) the current portion of (1) all Loans then
outstanding hereunder and (2) all loans then outstanding under the 364-Day
Credit Agreement.
(e) MAXIMUM FUNDED DEBT TO EBITDA RATIO. The Borrower
shall maintain as of the last day of each fiscal quarter a ratio of (i)
Funded Debt of the Borrower and its Subsidiaries on a consolidated basis, to
(ii) Consolidated EBITDA for the twelve-month period ended on such date, of
not more than 2.00 to 1.00.
SECTION 9.03 ADDITIONAL AFFIRMATIVE COVENANTS. So long as any of
the Obligations shall remain unpaid or any Bank shall have any Revolving
Commitment, the Borrower agrees that:
35
(a) PRESERVATION OF EXISTENCE, ETC. The Borrower shall,
and shall cause each of its Material Subsidiaries to, (i) maintain and
preserve its legal existence, and (ii) maintain and preserve its rights to
transact business and all other rights, franchises and privileges necessary
or desirable in the normal course of its business and operations and the
ownership of its properties, except in connection with transactions permitted
by Section 9.04.
(b) PAYMENT OF OBLIGATIONS. The Borrower shall, and shall
cause each of its Material Subsidiaries to, pay and discharge (i) all taxes,
fees, assessments and governmental charges or levies imposed upon it or upon
its properties or assets prior to the date on which penalties attach thereto,
and all lawful claims for labor, materials and supplies which, if unpaid,
might become a Lien upon any properties or assets of the Borrower or any
Material Subsidiary, except to the extent such taxes, fees, assessments or
governmental charges or levies, or such claims, are being contested in good
faith by appropriate proceedings and are adequately reserved against in
accordance with GAAP; (ii) all lawful claims which, if unpaid, would by law
become a Lien upon its property not constituting a Permitted Lien; and (iii)
all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
(c) MAINTENANCE OF INSURANCE. The Borrower shall, and
shall cause each of its Material Subsidiaries to, carry and maintain in full
force and effect, at its own expense and with financially sound and reputable
insurance companies, insurance in such amounts, with such deductibles and
covering such risks as is customarily carried by companies engaged in the
same or similar businesses and owning similar properties in the localities
where the Borrower or such Subsidiary operates, including fire, extended
coverage, business interruption, public liability, property damage and
worker's compensation. Upon the request of the Agent or any Bank, the
Borrower shall furnish to the Agent from time to time a certificate of the
Borrower's insurance broker or other insurance specialist stating that all
premiums then due on the policies relating to insurance have been paid, that
such policies are in full force and effect and that such insurance coverage
and such policies comply with all the requirements of this subsection.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Borrower
shall, and shall cause each of its Material Subsidiaries to, keep adequate
records and books of account, in which complete entries shall be made in
accordance with GAAP, reflecting all financial transactions of the Borrower
and its Material Subsidiaries.
(e) INSPECTION RIGHTS. Upon reasonable prior notice to the
Borrower (except during the existence of an Event of Default, in which case
no prior notice shall be required), the Borrower shall at any reasonable time
and from time to time permit the Agent and the Banks or any of their
respective agents or representatives to visit and inspect any of the
properties of the Borrower and its Material Subsidiaries and to examine and
make copies of and abstracts from the records and books of account of the
Borrower and its Material Subsidiaries, and to discuss the business affairs,
finances and accounts of the Borrower and any such Material Subsidiary with
any of the officers or accountants of the Borrower or such Material
Subsidiary; PROVIDED that with respect to any such discussions with the
Borrower's or any Material Subsidiary's accountants, the Borrower shall be
given a reasonable opportunity to have a representative participate in or
otherwise be present at any such discussion; and PROVIDED FURTHER that so
long as no Event of Default has occurred and is continuing, the Borrower's
prior written consent (which
36
consent shall not be unreasonably withheld) shall be required prior to any
discussions between the Agent or any Bank or any of their respective agents
or representatives, on the one hand, and the Borrower's or any Material
Subsidiary's accountants, on the other.
(f) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and
shall cause each of its Material Subsidiaries to, comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority (including all Environmental Laws) and
the terms of any indenture, contract or other instrument to which it may be a
party or under which it or its properties may be bound, except to the extent
that the failure to so comply would not reasonably be expected to result in a
Material Adverse Effect.
(g) MAINTENANCE OF PROPERTIES, ETC. The Borrower shall,
and shall cause each of its Material Subsidiaries to, maintain and preserve
all of its properties necessary or useful in the proper conduct of its
business in good working order and condition in accordance with the general
practice of other corporations of similar character and size, ordinary wear
and tear excepted.
(h) LICENSES. The Borrower shall, and shall cause each of
its Material Subsidiaries to, obtain and maintain all licenses,
authorizations, consents, filings, exemptions, registrations and other
governmental approvals necessary in connection with (i) the execution,
delivery and performance of the Loan Documents and the consummation of the
transactions therein contemplated and (ii) the operation and conduct of its
business and ownership of its properties, except, in the case of this clause
(ii), where the failure to do so would not reasonably be expected to have a
Material Adverse Effect.
(i) ACTION UNDER ENVIRONMENTAL LAWS. The Borrower shall,
and shall cause each of its Material Subsidiaries to, upon becoming aware of
the presence of any Hazardous Substance or the existence of any environmental
liability under applicable Environmental Laws with respect to the Premises,
take all actions, at their cost and expense, as shall be necessary or
advisable to investigate and clean up the condition of the Premises,
including all removal, containment and remedial actions, and restore the
Premises to a condition in compliance with applicable Environmental Laws.
(j) USE OF PROCEEDS. The Borrower shall use the proceeds
of the Loans solely for general corporate purposes, including the repurchase
of the Borrower's stock for immediate cancellation and for acquisitions, in
each case, in compliance herewith.
(k) FURTHER ASSURANCES AND ADDITIONAL ACTS. The Borrower
shall execute, acknowledge, deliver, file, notarize and register at its own
expense all such further agreements, instruments, certificates, documents and
assurances and perform such acts as the Agent or the Majority Banks shall
reasonably deem necessary or appropriate to effectuate the purposes of the
Loan Documents, and promptly provide the Agent with evidence of the foregoing
satisfactory in form and substance to the Agent or the Majority Banks.
SECTION 9.04 NEGATIVE COVENANTS. So long as any of the Obligations
shall remain unpaid or any Bank shall have any Revolving Commitment, the
Borrower agrees that:
37
(a) LIENS; NEGATIVE PLEDGES. The Borrower shall not
create, incur, assume or suffer to exist any Lien upon or with respect to any
of its properties, revenues or assets, whether now owned or hereafter
acquired, other than Permitted Liens.
(b) CHANGE IN NATURE OF BUSINESS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, engage in any material line
of business substantially different from those lines of business carried on
by it at the date hereof or other businesses incidental or reasonably related
thereto. Without limiting the generality of the preceding sentence, the
parties hereto agree that this subsection 9.04(b) shall not operate to
prohibit any Permitted Receivables Purchase Facility otherwise permitted
hereunder.
(c) RESTRICTIONS ON FUNDAMENTAL CHANGES. The Borrower
shall not, and shall not permit any of its Subsidiaries to, merge with or
consolidate into, or acquire all or substantially all of the assets of, any
Person, or sell, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets, except that:
(i) any of the Borrower's wholly owned Subsidiaries
may merge with, consolidate into or transfer all or substantially all
of its assets to another of the Borrower's wholly owned Subsidiaries or
to the Borrower and in connection therewith such Subsidiary may be
liquidated or dissolved;
(ii) the Borrower or any of its Subsidiaries may
sell or dispose of assets in accordance with the provisions of
subsection 9.04(d);
(iii) the Borrower or any of its Subsidiaries may
make any investment permitted by subsection 9.04(e);
(iv) the Borrower or any of its Subsidiaries may
merge with or consolidate into any other Person, PROVIDED that (a) the
Borrower is the surviving corporation in respect of any merger or
consolidation involving the Borrower, (b) subject to the preceding
clause (a), after giving effect to any such merger or consolidation,
the surviving entity in respect thereof shall be a wholly owned
Subsidiary, and (c) no such merger or consolidation shall be made if a
Default would exist, or with the giving of notice or a passage of time,
or both, would come into existence after giving effect thereto; and
(v) the Borrower or any of its Subsidiaries may
sell, transfer or dispose of any Receivables and Receivables Related
Assets pursuant to any Permitted Receivables Purchase Facility.
(d) SALES OF ASSETS. The Borrower shall not convey, sell,
lease, transfer, or otherwise dispose of, or part with control of (whether in
one transaction or a series of transactions) all or any or any material part
of its business, property or assets (including any shares of stock in any
Subsidiary or other Person), whether now owned or hereafter acquired, except
sales or other dispositions of any of the following:
38
(i) any inventory in the ordinary course of
business;
(ii) any Permitted Investments;
(iii) any assets which have become worn out or
obsolete or which are promptly being replaced, in the ordinary course
of business;
(iv) any Receivables and Receivables Related Assets
pursuant to any Permitted Receivables Purchase Facility;
(v) assets constituting the Borrower's
design-services operation pursuant to the Tality IPO;
(vi) the ▇▇▇▇▇ Avenue Campus pursuant to a
sale-leaseback transaction, PROVIDED that such sale is made for fair
value and the aggregate sales price from such sale is paid in cash;
(vii) any other assets to the extent not otherwise
permitted hereunder; PROVIDED that such assets do not constitute
Substantial Assets and such sale or disposition is made for fair value;
and PROVIDED FURTHER that (A) at the time of any such sale or
disposition, no Default shall exist or shall result therefrom, (B) the
aggregate sales price from such sale or disposition shall be paid in
cash, or, if approved by the board of directors of the Borrower,
capital stock or debt obligations so long as the aggregate sales price
paid in capital stock or debt obligations, when added to the non-cash
sales price of all other assets sold, leased, transferred or otherwise
disposed of pursuant to this clause (vii) after the Closing Date
pursuant to this Section 9.04(d)(vii), does not exceed 5% of
Consolidated Tangible Net Worth measured as of the last day of the then
most recent fiscal quarter, and (C) no dispositions of accounts or
notes receivable shall be permitted under this clause (vii) unless in
connection with the sale of all or substantially all of a business
unit, division or Subsidiary of the Borrower and such sale is otherwise
permitted hereunder.
For purposes of clause (vii), a sale, lease, transfer or other disposition of
assets shall be deemed to be of "Substantial Assets" if such assets, when added
to all other assets sold, leased, transferred or otherwise disposed of after the
Closing Date (other than assets sold in the ordinary course of business), shall
exceed 15% of Consolidated Tangible Net Worth measured as of the last day of the
then most recent fiscal quarter.
(e) LOANS AND INVESTMENTS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, purchase or otherwise acquire
the capital stock, assets (constituting a business unit), obligations or
other securities of or any interest in any Person, or otherwise extend any
credit to, guarantee the obligations of or make any additional investments in
any Person, other than in connection with:
(i) extensions of credit in the nature of accounts
receivable, general intangibles or notes receivable arising from the
licensing of software or the sales of goods or services in the ordinary
course of business;
39
(ii) investments by the Borrower in the capital
stock of wholly-owned Subsidiaries, and extensions of credit by the
Borrower to any of its wholly owned Subsidiaries or by any of its
wholly owned direct or indirect Subsidiaries to another of its
wholly owned direct or indirect Subsidiaries or the Borrower, in
each case in the ordinary course of business;
(iii) Permitted Investments;
(iv) investments permitted under Section 9.04
(c)(iv);
(v) to the extent not otherwise permitted under
this subsection 9.04(e), additional purchases of, loans to or
investments in joint ventures or the capital stock, assets,
obligations or other securities of or interest in other Persons not
exceeding 15% of Consolidated Tangible Net Worth, measured as of the
last day of the then most recent fiscal quarter, as to all such
investments, loans and purchases in the aggregate, PROVIDED that (A)
in the case of any such acquisition or investment the prior,
effective written consent or approval to such acquisition or
investment of the board of directors or equivalent governing body of
the acquiree is obtained and (B) immediately after giving effect
thereto, no Default shall have occurred and be continuing;
(vi) investments in the Venture Fund, so long as
the aggregate unrecovered investment made therein (not counting
recoveries fairly characterized as income) does not exceed
$100,000,000;
(vii) investments existing on the Closing Date
disclosed in Schedule 9.04(e);
(viii) investments consisting of the endorsement of
negotiable instruments for deposit;
(ix) investments (including debt obligations)
received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of,
and other disputes with, customers or suppliers arising in the ordinary
course of business;
(x) extensions of credit in the ordinary course of
business consisting of (a) compensation of employees, officers and
directors of the Borrower or a Subsidiary, as the case may be, so long
as the board of directors of the Borrower or such Subsidiary determines
that such compensation is in the best interests of the Borrower or such
Subsidiary, (b) travel advances, employee relocation loans and other
employee loans and advances, (c) loans to employees, officers or
directors relating to the purchase of equity securities of the
Borrower, and (d) other loans to officers and employees approved by the
board of directors;
(xi) investments in connection with any
Permitted Receivables Purchase Facility; and
40
(xii) investments consisting of shares in Tality
Corporation retained by the Borrower resulting from the Tality IPO.
(f) TRANSACTIONS WITH RELATED PARTIES. Except in
connection with (i) any Permitted Receivables Purchase Facility otherwise
permitted hereunder, or (ii) investments in Alchemy or SpinCircuit or
resulting from the Tality IPO which are otherwise permitted by subsection (e)
above, the Borrower shall not, and shall not permit any of its Material
Subsidiaries to, enter into any transaction, including the purchase, sale or
exchange of property or the rendering of any services, with any Affiliate,
any officer or director thereof or any Person which beneficially owns or
holds 5% or more of the equity securities, or 5% or more of the equity
interest, thereof (a "Related Party"), or enter into, assume or suffer to
exist, or permit any Material Subsidiary to enter into, assume or suffer to
exist, any employment or consulting contract with any Related Party, except a
transaction or contract which is in the ordinary course of the Borrower's or
such Material Subsidiary's business and which, when considered in the
aggregate with all such transactions between the Related Party and the
Borrower or such Material Subsidiary, such aggregate transactions are upon
fair and reasonable terms not less favorable to the Borrower or such Material
Subsidiary than it would obtain in a comparable arm's length transaction (or
series of transactions) with a Person not a Related Party.
(g) HAZARDOUS SUBSTANCES. The Borrower shall not, and
shall not permit any of its Material Subsidiaries to, use, generate,
manufacture, install, treat, release, store or dispose of any Hazardous
Substances, except in compliance with all applicable Environmental Laws.
(h) ACCOUNTING CHANGES. The Borrower shall not, and shall
not suffer or permit any of its Material Subsidiaries to, (i) make any
significant change in accounting treatment or reporting practices, except as
required or permitted by GAAP, or, in respect of any non-U.S. Subsidiary, as
required or permitted by generally accepted accounting principles as then in
effect in the jurisdiction in which such non-U.S. Subsidiary is located or
(ii) without the prior written consent of the Majority Banks (not to be
unreasonably withheld), change its fiscal year or that of any of its
consolidated Subsidiaries, except to change the fiscal year of a Subsidiary
acquired in connection with a permitted acquisition to conform its fiscal
year to the Borrower's.
ARTICLE X
EVENTS OF DEFAULT
SECTION 10.01 EVENTS OF DEFAULT. Any of the following events which
shall occur shall constitute an "Event of Default":
(a) PAYMENTS. The Borrower shall fail to pay (i) when due
any amount of principal of any Loan or Note, or (ii) within three days after
the date due, any amount of interest on any Loan or Note or any fee or other
amount payable hereunder or under any of the Loan Documents.
(b) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty by the Borrower under or in connection with the Loan Documents shall
prove to have been incorrect in any material respect when made or deemed made.
41
(c) FAILURE BY BORROWER TO PERFORM CERTAIN COVENANTS. The
Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 9.02, subsections (a)(i) or (j) of Section 9.03 or
Section 9.04 other than Subsection 9.04(g).
(d) FAILURE BY BORROWER TO PERFORM OTHER COVENANTS. The
Borrower shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Loan Document on its part
to be performed or observed and any such failure shall remain unremedied for
a period of 30 days after either (i) a Responsible Officer of the Borrower
knew or reasonably should have known of such failure or (ii) the Borrower
receives written notice thereof by the Agent or any Bank.
(e) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or any
Material Subsidiary (i) generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(f) INVOLUNTARY PROCEEDINGS. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Borrower or any
Material Subsidiary, or any writ, judgment, warrant of attachment, execution
or similar process, is issued or levied against a substantial part of the
Borrower's or any Material Subsidiary's properties, and any such proceeding
or petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the
Borrower or any Material Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Borrower or any Material Subsidiary acquiesces in the appointment
of a receiver, trustee, custodian, conservator, liquidator, mortgagee in
possession (or agent therefor), or other similar Person for itself or a
substantial portion of its property or business; or
(g) DEFAULT UNDER OTHER INDEBTEDNESS. (i) The Borrower or
any of its Material Subsidiaries shall fail (A) to make any payment of any
principal of, or interest or premium on, any single Indebtedness (other than
in respect of the Loans) having a principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $10,000,000
(or its equivalent in another currency) when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace or notice period, if any,
specified in the agreement or instrument relating to such Indebtedness as of
the date of such failure; or (B) to perform or observe any term, covenant or
condition on its part to be performed or observed under any agreement or
instrument relating to any such Indebtedness, when required to be performed
or observed, or any other event shall occur or condition shall exist under
any such agreement or instrument, and such failure, event or condition shall
continue after the applicable grace or notice period, if any, specified in
such agreement or instrument, if the effect of such failure, event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or (ii) any such Indebtedness shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
42
required prepayment), prior to the stated maturity thereof; (iii) there
occurs under any Rate Contract an Early Termination Date (as defined in such
Rate Contract) resulting from (A) any event of default under such Rate
Contract as to which the Borrower or any Material Subsidiary is the
Defaulting Party (as defined in such Rate Contract) or (B) any Termination
Event (as so defined) as to which the Borrower or any Material Subsidiary is
an Affected Party (as so defined), and, in either event, the Swap Termination
Value owed by the Borrower or such Material Subsidiary as a result thereof is
greater than $10,000,000 (or its equivalent in another currency).
(h) JUDGMENTS. (i) A final judgment or order for the
payment of money in excess of $50,000,000 (or its equivalent in another
currency) which is not fully covered by third-party insurance shall be
rendered against the Borrower or any of its Material Subsidiaries; or (ii)
any non-monetary judgment or order shall be rendered against the Borrower or
any Material Subsidiary which has or would reasonably be expected to have a
Material Adverse Effect; and in each case there shall be any period of 30
consecutive days during which such judgment continues unsatisfied or during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
(i) ERISA. (i) The Borrower or an ERISA Affiliate shall
fail to satisfy its contribution requirements in an amount in excess of
$5,000,000 under Section 412(c)(11) of the Internal Revenue Code, whether or
not it has sought a waiver under Section 412(d) of the Internal Revenue Code;
(ii) in the case of a Termination Event involving the withdrawal from a
Pension Plan of a "substantial employer" (as defined in Section 4001(a)(2) or
Section 4062(e) of ERISA), the Borrower's or an ERISA Affiliate's
proportionate share of that Pension Plan's Unfunded Accrued Benefits is more
than $5,000,000; (iii) in the case of a Termination Event involving the
complete or partial withdrawal from a Multiemployer Plan, the Borrower or an
ERISA Affiliate has incurred a withdrawal liability in an aggregate amount
exceeding $5,000,000; (iv) in the case of a Termination Event not described
in clause (ii) or (iii), the Unfunded Accrued Benefits of the relevant
Pension Plan or Plans exceed $5,000,000; (v) a Plan of the Borrower or an
ERISA Affiliate that is intended to be qualified under Section 401(a) of the
Internal Revenue Code shall lose its qualification, and the loss can
reasonably be expected to impose on the Borrower or an ERISA Affiliate
liability (for additional taxes, to Plan participants, or otherwise) in the
aggregate amount of $5,000,000 or more; (vi) the commencement or increase of
contributions to, the adoption of, or the amendment of a Plan by, the
Borrower or an ERISA Affiliate shall result in a net increase in unfunded
liabilities to the Borrower or an ERISA Affiliate in excess of $5,000,000; or
(vii) the occurrence of any combination of events listed in clauses (ii)
through (vi) that involves a net increase in aggregate Unfunded Accrued
Benefits and unfunded liabilities in excess of $5,000,000.
(j) DISSOLUTION, ETC. The Borrower or any of its Material
Subsidiaries shall (i) liquidate, wind up or dissolve (or suffer any
liquidation, wind-up or dissolution), except to the extent expressly
permitted by Section 9.04, (ii) suspend its operations other than in the
ordinary course of business, or (iii) take any corporate or similar action to
authorize any of the actions or events set forth above in this subsection (j).
(k) SUBORDINATION PROVISIONS. The subordination provisions
of any agreement or instrument governing any Indebtedness subordinated to the
Obligations shall for any reason be
43
revoked or invalidated, or otherwise cease to be in full force and effect,
any Person shall contest in any manner the validity or enforceability thereof
or deny that it has any further liability or obligation thereunder, or the
Indebtedness hereunder shall for any reason be subordinated or shall not have
the priority contemplated by this Agreement or such subordination provisions.
(l) MERGERS AND ACQUISITIONS. The Borrower or any
Subsidiary shall acquire or otherwise merge or consolidate with any Person
for cash consideration (in whole or in part), without the prior, effective
written consent or approval to such acquisition, merger or consolidation of
the board of directors or equivalent governing body of such Person.
SECTION 10.02 EFFECT OF EVENT OF DEFAULT. If any Event of Default
shall occur and be continuing, the Agent shall, at the request of, or may,
with the consent of, the Majority Banks, (i) by notice to the Borrower, (a)
declare the Revolving Commitments of the Banks to be terminated, whereupon
the same shall forthwith terminate, and (b) declare the entire unpaid
principal amount of the Loans and the Notes, all interest accrued and unpaid
thereon and all other Obligations to be forthwith due and payable, whereupon
the Loans and the Notes, all such accrued interest and all such other
Obligations shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower, PROVIDED that if an event described
in Sections 10.01(e) or 10.01(f) shall occur, the result which would
otherwise occur only upon giving of notice by the Agent to the Borrower as
specified in this clause (I) shall occur automatically, without the giving of
any such notice; and (ii) whether or not the actions referred to in clause
(I) have been taken, proceed to enforce all other rights and remedies
available to the Agent and the Banks under the Loan Documents and applicable
law.
ARTICLE XI
THE AGENT
SECTION 11.01 AUTHORIZATION AND ACTION. Each Bank hereby appoints
ABN AMRO as Agent and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and perform such duties under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto. The duties and obligations of the Agent are strictly
limited to those expressly provided for herein, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agent. As to any matters
not expressly provided for by the Loan Documents (including enforcement or
collection of the Loan Documents), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Banks, and such
instructions shall be binding upon all Banks; PROVIDED, HOWEVER, that except
for action expressly required of the Agent hereunder, the Agent shall in all
cases be fully justified in failing or refusing to act under any Loan
Document unless it shall be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by reason of
taking or continuing to take any such action, and that the Agent shall not in
any event be required to take any action which exposes the Agent to liability
or which is contrary to any Loan Document or applicable law. Nothing in any
Loan Document shall, or shall be construed to, constitute the Agent a trustee
or fiduciary for any Bank. In performing its functions and
44
duties hereunder, the Agent shall act solely as the agent of the Banks and
does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. Without
limiting the generality of the foregoing, the use of the term "agent" in this
Agreement and the other Loan Documents 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.
SECTION 11.02 LIMITATION ON LIABILITY OF AGENT; NOTICES; CLOSING.
(a) LIMITATION ON LIABILITY OF AGENT. Neither the Agent
nor any Affiliate thereof nor any of their respective directors, officers,
employees or agents shall be liable for any action taken or omitted to be
taken by it or them under or in connection with any Loan Document, except for
its or their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Agent (i) may treat a Bank as the
holder of its Loans for all purposes hereof unless and until such Bank and
its assignee shall have delivered to the Agent and the Borrower an Assignment
and Acceptance Agreement substantially in the form of Exhibit F (an
"Assignment and Acceptance"), and the Agent receives written notice of the
assignment in substantially the form of Schedule 1 to the Assignment and
Acceptance and the other conditions to assignment set forth in Section 12.09
shall have been satisfied; (ii) may consult with legal counsel (including
counsel to the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; and (iii) shall incur no liability to any Bank under
or in respect of any Loan Document by acting upon any notice, consent,
certificate, telegram, facsimile, telex or teletype message, statement or
other instrument or writing believed by it to be genuine and signed or sent
by the proper party or parties or by acting upon any representation or
warranty made or deemed to be made hereunder or under any other Loan
Document. Further, the Agent (A) makes no warranty or representation to any
Bank and shall not be responsible to any Bank for the accuracy or
completeness of any information, exhibit or report furnished under any Loan
Document, for any statements, warranties or representations (whether written
or oral) made or deemed made in or in connection with any Loan Documents; (B)
shall have no duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or
any other Loan Document on the part of the Borrower or any other Person or to
inspect the property, books or records of the Borrower or any other Person;
and (C) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency, value or collectibility
of this Agreement or any other Loan Document or of any collateral.
(b) NOTICES. Promptly upon receipt thereof, the Agent
shall forward to each Bank originals or copies, as specified in this
Agreement or any other Loan Document, of all agreements, instruments,
opinions, financial statements, notices and other documents delivered by the
Borrower or any other Person to the Agent pursuant to any Loan Document for
distribution to the Banks. Except for any of the foregoing expressly required
to be furnished to the Banks by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower which
may
45
come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
(c) CLOSING. For purposes of determining compliance with
the conditions specified in Section 7.01, each Bank 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 (or made available)
by the Agent to such Bank for consent, approval, acceptance or satisfaction,
or required thereunder to be consented to or approved by or acceptable or
satisfactory to such Bank, unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice
from such Bank prior to the Closing Date specifying its objection thereto and
either such objection shall not have been withdrawn by notice to the Agent to
that effect on or prior to the Closing Date or, if any Borrowing on the
Closing Date has been requested, the Bank shall not have made available to
the Agent on or prior to the Closing Date the Bank's Pro Rata Share of any
Borrowing.
SECTION 11.03 AGENT AND AFFILIATES. With respect to its Revolving
Commitment, the Loans made by it, the Notes issued to it and all other
Obligations owing to it as a Bank, the Agent shall have the same rights and
powers under the Loan Documents as any other Bank and may exercise the same
as though it were not the Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include the Agent in its individual capacity.
The Agent and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of and generally engage in any kind of business with
the Borrower, and any Affiliate thereof, all as if the Agent were not the
Agent hereunder and without any duty to account therefor to the Banks.
SECTION 11.04 NOTICE OF DEFAULTS. The Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default hereunder (other than
nonpayment of principal of or interest on the Loans or of any fees or any of
its costs and expenses) unless the Agent has actual knowledge thereof or has
received notice in writing from a Bank or the Borrower referring to this
Agreement, describing such event or condition and expressly stating that such
notice is a "notice of default." Should the Agent receive such notice of the
occurrence of a Default, the Agent shall promptly give notice thereof to the
Banks. The Agent thereupon shall take such action with respect to such
Default as shall be reasonably directed by the Majority Banks; PROVIDED that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable in the best
interests of the Banks.
SECTION 11.05 NON-RELIANCE ON AGENT. Each Bank has itself been, and
will continue to be, based on such documents and information as it has deemed
appropriate, solely responsible for making its own independent appraisal of
and investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of the Borrower or any of its Subsidiaries.
Accordingly, each Bank confirms to the Agent that it has not relied, and will
not hereafter rely, on the Agent (i) to check or inquire on such Bank's
behalf into the adequacy, accuracy or completeness of any information
provided by the Borrower or any other Person under or in connection with the
Loan Documents or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed to such Bank by the Agent),
or (ii) to assess or keep under review on such Bank's behalf the financial
condition, creditworthiness, condition, affairs, status or nature of the
Borrower or any Subsidiary.
46
SECTION 11.06 INDEMNIFICATION. The Banks agree to indemnify the
Agent, and any Affiliates, directors, officers, employees, agents, counsel
and other advisors (collectively, the "Related Persons") of the Agent (to the
extent not reimbursed by the Borrower), ratably in accordance with the
respective Pro Rata Shares of the Banks, against and hold each of them
harmless from any and all liabilities, obligations, losses, claims, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever, including the reasonable fees and disbursements of
counsel to the Agent (including allocated costs of internal counsel), which
may be imposed on, incurred by, or asserted against the Agent or any such
Related Person to be indemnified, in any way relating to or arising out of
the Loan Documents, the use or intended use of the proceeds of the Loans or
the transactions contemplated hereby or thereby or any action taken or
omitted by the Agent or other such Related Person to be indemnified in
connection with any of the foregoing; PROVIDED that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
they are found by a final decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the Agent,
or any other Related Person to be indemnified.
SECTION 11.07 DELEGATION OF DUTIES. The Agent may, in its
discretion, employ from time to time one or more agents or attorneys-in-fact
(including any of the Agent's Affiliates) to perform any of the Agent's
duties under the Loan Documents. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
SECTION 11.08 SUCCESSOR AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving 90 days' written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Borrower shall have the right to
appoint a successor Agent from among the Banks, with the consent of the
Majority Banks (which shall not be unreasonably withheld), and the Borrower
and the Banks shall use their best efforts so to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Borrower and the
Majority Banks, and shall have accepted such appointment, prior to the
effective date of the retiring Agent's resignation, the retiring Agent may,
on behalf of the Banks, appoint a successor Agent from among the Banks. Upon
the effectiveness of the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties and obligations of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article XI shall inure
to its benefit as to any actions taken or omitted to be taken by it while it
was Agent under the Loan Documents.
SECTION 11.09 CO-AGENTS. None of the Banks identified on the facing
page or signature pages of this Agreement as a "co-agent" shall have any
right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. Without limiting
the foregoing, none of the Banks so identified as a "co-agent" shall have or
be deemed to have any fiduciary relationship with any Bank. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks
so identified in deciding to enter into this Agreement or in taking or not
taking action hereunder.
47
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 AMENDMENTS AND WAIVERS. Except as otherwise provided
herein or in any other Loan Document, (I) no amendment to any provision of
this Agreement or any of the other Loan Documents shall in any event be
effective unless the same shall be in writing and signed by the Borrower, the
Agent and the Majority Banks (or the Agent with the written consent of the
Majority Banks); and (II) no waiver of any provision of this Agreement or any
other Loan Document, or consent to any departure by the Borrower, shall in
any event be effective unless the same shall be in writing and signed by the
Agent and the Majority Banks (or the Agent with the consent of the Majority
Banks). Any such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that, notwithstanding the foregoing provisions of this Section
12.01, any term or provision of Article XI (other than the provisions of
Section 11.08 pertaining to Borrower consent) may be amended without the
agreement or consent of, or prior notice to, the Borrower; and PROVIDED
FURTHER, HOWEVER, that, unless in writing and signed by all of the Banks (or
by the Agent with the written consent of all the Banks), no amendment, waiver
or consent shall do any of the following:
(A) increase the amount, or extend the
stated expiration or termination date, of the Revolving
Commitments of the Banks (or any of them);
(B) reduce the principal of, or interest on,
the Loans or any fee or other amount payable to the Banks (or
any of them) hereunder;
(C) postpone any date fixed for any payment
in respect of principal of, or interest on, the Loans or any
fee or other amount payable to the Banks (or any of them)
hereunder;
(D) change the definition of "Majority
Banks" or any definition or provision of this Agreement
requiring the approval of Majority Banks or some other
specified amount of Banks;
(E) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under the
Loan Documents;
(F) waive any of the conditions specified in
Article VII;
(G) amend, modify or waive the provisions of
Section 6.01, 6.05 or 12.07; or
(H) amend, modify or waive the provisions of
this Section 12.01; and
PROVIDED, FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Banks required hereinabove to
take such action, affect the rights, obligations or duties of the Agent under
any Loan Document, and (ii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto.
48
SECTION 12.02 NOTICES.
(a) NOTICES. All notices and other communications provided
for hereunder and under the other Loan Documents shall, unless otherwise
stated herein, be in writing (including by facsimile transmission followed by
a telephone call by the sender to confirm receipt by the recipient party) and
mailed, sent or delivered to the respective parties hereto at or to their
respective addresses or facsimile numbers set forth in Schedule 2, or at or
to such other address or facsimile number as shall be designated by any party
in a written notice to the other parties hereto. All such notices and
communications shall be effective (i) if delivered by hand, when delivered;
(ii) if sent by mail, upon the earlier of the date of receipt and five
Business Days after deposit in the mail, first class (or air mail, with
respect to communications to be sent to or from the United States), postage
prepaid; and (iii) if sent by facsimile transmission, upon verbal
confirmation of receipt by the recipient party; PROVIDED, HOWEVER, that
notices and communications to the Agent shall not be effective until received.
(b) FACSIMILE AND TELEPHONIC NOTICE. The Borrower
acknowledges and agrees that the agreement of the Agent and the Banks herein
and in any other Loan Document to receive certain notices by telephone and
facsimile is solely for the convenience and at the request of the Borrower.
The Agent and the Banks shall be entitled to rely on the authority of any
Person purporting to be a Person authorized by the Borrower to give such
notice and the Agent and the Banks shall not have any liability to the
Borrower or any other Person on account of any action taken or not taken by
the Agent and the Banks in reliance upon such telephonic or facsimile notice.
The obligation of the Borrower to repay the Loans and the other Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Banks of a confirmation which is
at variance with the terms understood by the Agent and the Banks to be
contained in the telephonic or facsimile notice.
SECTION 12.03 NO WAIVER; CUMULATIVE REMEDIES. No failure on the
part of the Agent or any Bank to exercise, and no delay in exercising, any
right, remedy, power or privilege under any Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights and
remedies under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges that may otherwise be available to
the Agent or any Bank.
SECTION 12.04 COSTS AND EXPENSES; INDEMNIFICATION.
(a) COSTS AND EXPENSES. The Borrower agrees to pay not
later than 30 days after written demand therefor, including a statement of
account, whether or not the transactions contemplated hereby shall be
consummated:
(i) the reasonable out-of-pocket costs and expenses
of the Agent and any of its Affiliates, and the reasonable fees and
disbursements of outside counsel to the Agent, in connection with the
negotiation, preparation, execution, delivery and syndication of the
Loan Documents, and any amendments, modifications or waivers requested
by the Borrower of the terms thereof; and
49
(ii) all costs and expenses of the Agent, its
Affiliates and the Banks, and fees and disbursements of counsel
(including allocated costs of internal counsel), in connection with (a)
any Default, (b) the enforcement or attempted enforcement of, and
preservation of any rights or interests under, the Loan Documents, and
(c) any out-of-court workout or other refinancing or restructuring or
any bankruptcy case, including any losses, costs and expenses sustained
by the Agent and any Bank as a result of any failure by the Borrower to
perform or observe its obligations contained in the Loan Documents.
(b) INDEMNIFICATION. Whether or not the transactions
contemplated hereby shall be consummated, the Borrower hereby agrees to
indemnify the Agent, each Bank and any Related Person thereof (each an
"Indemnified Person") against, and hold each of them harmless from, any and
all liabilities, obligations, losses, claims, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including the reasonable fees and disbursements of counsel to an
Indemnified Person (including allocated costs of internal counsel), which may
be imposed on, incurred by, or asserted against any Indemnified Person, (i)
in any way relating to or arising out of any of the Loan Documents, the use
or intended use of the proceeds of the Loans, or the transactions
contemplated hereby, (ii) with respect to any investigation, litigation or
other proceeding relating to any of the foregoing, irrespective of whether
the Indemnified Person shall be designated a party thereto, or (iii) in any
way relating to or arising out of the use, generation, manufacture,
installation, treatment, storage or presence, or the spillage, leakage,
leaching, migration, dumping, deposit, discharge, disposal or release, at any
time, of any Hazardous Substances on, under, at or from any Premises,
including any personal injury or property damage suffered by any Person, and
any investigation, site assessment, environmental audit, feasibility study,
monitoring, clean-up, removal, containment, restoration, remedial response or
remedial work undertaken by or on behalf of the any Indemnified Person at any
time, voluntarily or involuntarily, with respect to the Premises (the
"Indemnified Liabilities"); PROVIDED that the Borrower shall not be liable to
any Indemnified Person for any portion of such Indemnified Liabilities to the
extent they are found by a final decision of a court of competent
jurisdiction to have resulted from such Indemnified Person's gross negligence
or willful misconduct. Subject to the preceding proviso, if and to the extent
that the foregoing indemnification is for any reason held unenforceable, the
Borrower agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law.
(c) OTHER CHARGES. The Borrower agrees to indemnify the
Agent and each of the Banks against and hold each of them harmless from any
and all present and future stamp, transfer, documentary and other such taxes,
levies, fees, assessments and other charges made by any jurisdiction by
reason of the execution, delivery, performance and enforcement of the Loan
Documents.
SECTION 12.05 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, each Bank hereby is authorized, to the
extent permitted by applicable statute, at any time and from time to time,
without notice to the Borrower (any such notice being expressly waived by the
Borrower), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Bank to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower now or
hereafter existing under this Agreement and the other Loan
50
Documents, irrespective of whether or not such Bank shall have made any
demand under this Agreement or any such other Loan Document and although such
Obligations may be unmatured. Each Bank agrees promptly to notify the
Borrower (through the Agent) after any such set-off and application made by
such Bank; PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under this
Section 12.05 are in addition to other rights and remedies (including other
rights of set-off) which such Bank may have.
SECTION 12.06 SURVIVAL. All covenants, agreements, representations
and warranties made in any Loan Documents shall, except to the extent
otherwise provided therein, survive the execution and delivery of this
Agreement, the making of the Loans and the execution and delivery of the
Notes, and shall continue in full force and effect so long as the Banks have
any Revolving Commitments, any Loans remain outstanding or any other
Obligations remain unpaid or any obligation to perform any other act under
any Loan Document remains unsatisfied. Without limiting the generality of the
foregoing, the obligations of the Borrower under Sections 5.02, 5.03, 6.03
and 12.04, and of the Banks under Sections 6.03 and 11.06, and all similar
obligations under the other Loan Documents (including all obligations to pay
costs and expenses and all indemnity obligations), shall survive the
repayment of the Loans and the termination of the Revolving Commitments.
SECTION 12.07 OBLIGATIONS SEVERAL. The obligations of the Banks
under the Loan Documents are several. The failure of any Bank or the Agent to
carry out its obligations thereunder shall not relieve any other Bank or the
Agent of any obligation thereunder, nor shall any Bank or the Agent be
responsible for the obligations of, or any action taken or omitted by, any
other Person hereunder or thereunder. Nothing contained in any Loan Document
shall be deemed to cause any Bank or the Agent to be considered a partner of
or joint venturer with any other Bank or Banks, the Agent or the Borrower.
SECTION 12.08 BENEFITS OF AGREEMENT. The Loan Documents are entered
into for the sole protection and benefit of the parties hereto and their
successors and assigns, and no other Person other than Affiliates of the
Agent and the Related Persons referred to in Sections 11.06, 12.04 and 12.14
shall be a direct or indirect beneficiary of, or shall have any direct or
indirect cause of action or claim in connection with, any Loan Document.
SECTION 12.09 BINDING EFFECT; ASSIGNMENT.
(a) BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Bank that such Bank has executed it
and thereafter shall be binding upon, inure to the benefit of and be
enforceable by the Borrower, the Agent and each Bank and their respective
successors and assigns.
(b) ASSIGNMENT. The Borrower shall not have the right to
assign its rights and obligations hereunder or under the other Loan Documents
or any interest herein or therein without the prior written consent of the
Banks. Each Bank may sell, assign, transfer or grant participations in all or
any portion of such Bank's rights and obligations hereunder and under the
51
other Loan Documents to any Bank or Eligible Assignee on the basis set forth
below in this subsection (b).
(i) Any Bank may, with the written consent of the
Borrower and the Agent (which in each case shall not be unreasonably
withheld), at any time assign and delegate to one or more Eligible
Assignees all, or any ratable part of all, of the Revolving Loans and
Revolving Commitment and the other rights and obligations of such Bank
hereunder; PROVIDED, HOWEVER, that (A) no consent of the Borrower shall
be required during the existence of an Event of Default; (B) no consent
of the Borrower or the Agent shall be required in connection with any
assignment and delegation by a Bank to an Eligible Assignee that is
another Bank or an Affiliate of such Bank; and (C) except in connection
with an assignment of all of a Bank's rights and obligations with
respect to its Revolving Commitment and Loans, any such assignment to
an Eligible Assignee that is not a Bank hereunder shall be equal to or
greater than $15,000,000.
(ii) In the event of any such assignment, unless and
until (A) an Assignment and Acceptance and notice of assignment shall
have been delivered pursuant to clause (i) of Section 11.02(a), (B) the
Agent shall have received payment of an administrative transfer charge
in the amount of $3,500 from the assigning Bank (unless the assignee
shall otherwise agree to pay such charge), and (C) the Agent and the
Borrower shall have received all tax forms and documents required under
Section 6.03(d), such assignee shall not be entitled to exercise the
rights of a Bank under this Agreement and the other Loan Documents with
respect to such assignment and the Agent shall not be obligated to make
payment of any amount to which such assignee may become entitled
thereunder other than to the assigning Bank. Subject to satisfaction of
the foregoing conditions in connection with any assignment, upon the
effectiveness of such assignment, the assignee shall be deemed a "Bank"
for all purposes of this Agreement and the other Loan Documents with
respect to the rights and obligations assigned to it, and the assigning
Bank shall, to the extent that rights and obligations hereunder and
under the other Loan Documents have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released
from its obligations under the Loan Documents; PROVIDED, HOWEVER, that
the assigning Bank shall not relinquish its rights under Article V or
under Sections 6.03 and 12.04 to the extent such rights relate to the
time prior to the effective date of the Assignment and Acceptance.
(iii) In connection with any partial assignment, upon
the request of the assigning Bank or the assignee, (A) the Borrower
shall execute and deliver substitute Notes to the assigning Bank or the
assignee, dated the effective date of such assignment, setting forth
the respective Revolving Commitment of such assigning Bank and assignee
as the respective maximum principal amounts thereof, and containing
other appropriate insertions, and the assigning Bank shall thereupon
return the Notes previously held by it; and (B) Schedules 1 and 2 shall
be deemed amended to reflect the adjustment of the Revolving
Commitments and Pro Rata Shares of the Banks resulting therefrom and
the Lending Office, if any, and address for notices of the assignee.
(iv) In the event of any grant of a participation,
the granting Bank shall remain a "Bank" for purposes of this Agreement,
the Borrower, the other Banks and the
52
Agent shall continue to deal solely and directly with such Bank in
connection with this Agreement and the other Loan Documents, and no
Bank shall transfer or grant any participating interest under which
the participant shall have rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other
Loan Document, except to the extent such amendment, consent or
waiver would require the consent of the Bank granting such
participation as described in the second proviso to Section 12.01 or
the unanimous consent of all of the Banks as described in the third
proviso to Section 12.01. In the case of any such participation, the
participant shall not have any of the rights of a Bank under this
Agreement or the other Loan Documents, except that the participant
shall (A) be deemed to have a right of setoff under Section 12.05 in
respect of its participation to the same extent as if it were a
"Bank" hereunder, PROVIDED that such participant shall also be
considered a "Bank" for purposes of Section 6.05; and (B) such
participant shall also be entitled to the benefits of Sections 5.02,
5.03, 6.03 and 12.04, PROVIDED that any amounts payable under
Sections 5.03 or 6.03 to any participant shall not exceed the
amounts which would have been payable by the Borrower thereunder to
the Bank granting such participation.
(v) The Borrower agrees that in connection with any
such grant or assignment, such Bank may deliver to the prospective
participant or assignee financial statements and other relevant
information relating to the Borrower and its Subsidiaries.
(vi) Each Bank shall obtain from any such
prospective participant or assignee a confidentiality agreement in
which such participant or assignee agrees to an obligation of
confidentiality substantially similar to the terms of Section 12.14.
(vii) Notwithstanding any other provision in this
Agreement, any Bank may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this
Agreement and any Note held by it in favor of any Federal Reserve Bank
in accordance with Regulation A of the FRB or U.S. Treasury Regulation
31 CFR ss.203.14, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law.
SECTION 12.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
Section 12.11 SUBMISSION TO JURISDICTION.
(a) SUBMISSION TO JURISDICTION. The Borrower hereby (i)
submits to the non-exclusive jurisdiction of the courts of the State of
California and the Federal courts of the United States sitting in the State
of California for the purpose of any action or proceeding arising out of or
relating to the Loan Documents, (ii) agrees that all claims in respect of any
such action or proceeding may be heard and determined in such courts, (iii)
irrevocably waives (to the extent permitted by applicable law) any objection
which it now or hereafter may have to the laying of venue of any such action
or proceeding brought in any of the foregoing courts, and any objection on
the ground that any such action or proceeding in any such court has been
brought in an inconvenient forum and (iv) agrees that a final judgment in any
such action or proceeding shall
53
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner permitted by law.
(b) NO LIMITATION. Nothing in this Section 12.11 shall
limit the right of the Agent or the Banks to bring any action or proceeding
against the Borrower or its property in the courts of other jurisdictions.
SECTION 12.12 WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE
AGENT HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT
BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE
BANKS AND THE AGENT HEREBY AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT IN ANY WAY LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. A COPY OF THIS SECTION 12.12 MAY BE
FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE WAIVER OF THE RIGHT TO TRIAL
BY JURY AND CONSENT TO TRIAL BY COURT.
SECTION 12.13 LIMITATION ON LIABILITY. No claim shall be made by
the Borrower or its Affiliates against the Agent, the Banks or any of their
respective Related Persons for any special, indirect, exemplary,
consequential or punitive damages in respect of any breach or wrongful
conduct (whether or not the claim therefor is based on contract, tort or duty
imposed by law), in connection with, arising out of or in any way related to
the transactions contemplated by the Loan Documents or any act or omission or
event occurring in connection therewith; and the Borrower hereby waives,
releases and agrees not to ▇▇▇ upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
SECTION 12.14 CONFIDENTIALITY. Each Bank and the Agent shall hold
all non-public information relating to the Borrower and its Subsidiaries
obtained by it under this Agreement in accordance with its customary
procedures for handling confidential information of this nature, except for:
(i) disclosure to its Affiliates or to its counsel or to any agent or advisor
acting on its behalf in connection with the negotiation, execution or
performance of the Loan Documents; (ii) disclosure as reasonably required in
connection with a transfer to a prospective assignee or participant of all or
part of its Loans or Revolving Commitment or any participation therein, as
provided in Section 12.09(b); (iii) disclosure as may be required or
requested by any
54
Governmental Authority or representative thereof or pursuant to legal
process; (iv) disclosure to any Person and in any proceeding necessary in
such Bank's or the Agent's judgment to protect its interests in connection
with any claim or dispute involving such Bank or the Agent; and (v) any other
disclosure with the prior written consent of the Borrower. Prior to any
disclosure by any Bank or the Agent of such non-public information permitted
under clause (iii) (other than in connection with an examination of the
financial condition of such Bank, the Agent or any of their Affiliates by any
Governmental Authority), it shall, if permitted by applicable laws or
judicial order, notify the Borrower of such pending disclosure. In no event
shall any Bank or the Agent be obligated or required to return any materials
furnished by the Borrower or its Subsidiaries. Notwithstanding the foregoing,
such obligation of confidentiality shall not apply if the information or
substantially similar information (a) is rightfully received by any Bank or
the Agent from a Person other than the Borrower or any of its Affiliates
without such Bank or the Agent being under an obligation to such Person not
to disclose such information, or (b) is or becomes part of the public domain.
SECTION 12.15 ENTIRE AGREEMENT. The Loan Documents reflect the
entire agreement among the Borrower, the Banks and the Agent with respect to
the matters set forth herein and therein and supersede any prior agreements,
Revolving Commitments, drafts, communications, discussions and
understandings, oral or written, with respect thereto.
SECTION 12.16 SEVERABILITY. Whenever possible, each provision of
the Loan Documents shall be interpreted in such manner as to be effective and
valid under all applicable laws and regulations. If, however, any provision
of any of the Loan Documents shall be prohibited by or invalid under any such
law or regulation in any jurisdiction, it shall, as to such jurisdiction, be
deemed modified to conform to the minimum requirements of such law or
regulation, or, if for any reason it is not deemed so modified, it shall be
ineffective and invalid only to the extent of such prohibition or invalidity
without affecting the remaining provisions of such Loan Document, or the
validity or effectiveness of such provision in any other jurisdiction.
SECTION 12.17 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the
same agreement.
[SIGNATURE PAGES FOLLOW.]
55
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first above written.
THE BORROWER
CADENCE DESIGN SYSTEMS, INC.
By
------------------------------
Name:
Title:
THE AGENT
ABN AMRO BANK N.V., AS AGENT
By
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
THE BANKS
ABN AMRO BANK N.V., AS A BANK
By
-------------------------------
Name:
Title:
By
-------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By
------------------------------
Name:
Title:
BANK ONE, N.A.
By
------------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION
By
------------------------------
Name:
Title:
UBS AG, STAMFORD BRANCH
By
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
BARCLAYS BANK PLC
By
------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By
-------------------------------
Name:
Title:
FLEET NATIONAL BANK
By
--------------------------------
Name:
Title:
MELLON BANK, N.A.
By
-------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By
--------------------------------
Name:
Title:
BANK HAPOALIM B.M.
By
---------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
Title:
THE FUJI BANK LIMITED
By
---------------------------------
Name:
Title:
ATTACHMENT A
Permitted Receivables Purchase Facilities
1. Purchase and Sale Program Agreement executed and
delivered as of February 25, 1998, by and among Cadence Design Systems, Inc.,
a Delaware corporation ("Seller"), Cadence Design Systems, Inc., a Delaware
corporation (solely in its capacity as the servicer of the Contracts
thereunder, "Servicer"), and BancBoston Leasing Inc., a Massachusetts
corporation ("BancBoston"), as supplemented by that certain Addendum to
Purchase and Sale Program Agreement executed and delivered as of December 31,
1998, by and among Cadence Design Systems, Inc., a Delaware corporation (in
its individual capacity "Cadence Design"), Servicer, Cadence Credit
Corporation, a Delaware corporation ("Cadence Credit"), Cadence Receivables
Consolidation Corporation, a Delaware corporation and BancBoston.
2. Amended and Restated Purchase and Sale Program
Agreement executed and delivered as of March 19, 1999, by and among Cadence
Design Systems, Inc., a Delaware corporation ("Cadence Design"), Cadence Credit
Corporation, a Delaware corporation, ("Cadence Credit"), Cadence Credit
Corporation, a Delaware corporation (solely in its capacity as the servicer of
the Contracts thereunder, "Servicer"), and Bane One Leasing Corporation, an Ohio
corporation ("Banc One"), as supplemented by that certain Addendum to Amended
and Restated Purchase and Sale Program Agreement executed and delivered as of
March 19, 1999, by and among Cadence Design, Cadence Credit, Servicer, Cadence
Receivables Consolidation Corporation, a Delaware corporation, and Banc one.
3. Purchase and Sale Program Agreement executed and
delivered as of January 18, 1999, by and among Cadence Design Systems, Inc., a
Delaware corporation ("Cadence Design"), Cadence Credit Corporation, a Delaware
corporation, ("Cadence Credit"), Servicer, and Dresdner Kleinwort ▇▇▇▇▇▇ North
America Leasing, Inc. ("Dresdner"), as supplemented by that certain Addendum to
Purchase and Sale Program Agreement executed and delivered as of April 21, 1999,
by and among Cadence Design, Cadence Credit Servicer, Cadence Receivables
Consolidation Corporation, a Delaware corporation ("Cadence Consolidation"), and
Dresdner.
4. Amended and Restated Purchase and Sale Program
Agreement executed and delivered as of December 31, 1998, by and among Cadence
Design Systems, Inc., a Delaware corporation ("Cadence Design"), Cadence Credit
Corporation, a Delaware corporation, ("Cadence Credit"), Cadence Credit
Corporation, a Delaware corporation (solely in its capacity as the servicer of
the Contracts thereunder, "Servicer"), and Sanwa Business Credit Corporation, a
Delaware corporation ("Sanwa"), as supplemented by that certain Addendum to
Amended and Restated Purchase and Sale Program Agreement executed and delivered
as of December 31, 1998, by and among Cadence Design, Cadence Credit, Servicer,
Cadence Receivables Consolidation Corporation, a Delaware corporation ("Cadence
Consolidation"), and Sanwa.
5. Purchase and Sale Program Agreement executed and
delivered as of March 24, 1999, by and among Cadence Design Systems, Inc., a
Delaware corporation ("Cadence Design, Cadence Credit Corporation, a Delaware
corporation, ("Cadence Credit"), Cadence Credit Corporation, a Delaware
corporation (solely in its capacity as the servicer of the
Schedule 1-1
Contracts thereunder, "Servicer", and ▇▇▇▇▇▇ Financial Leasing, Inc., a
Delaware corporation ("▇▇▇▇▇▇"), as supplemented by that certain Addendum to
Purchase and Sale Program Agreement executed and delivered as of March 24,
1999, by and among Cadence Design, Cadence Credit, Servicer, Cadence
Receivables Consolidation Corporation, a Delaware corporation, and ▇▇▇▇▇▇.
6. Purchase and Sale Program Agreement executed and
delivered as of March 29, 1999, by and among Cadence Design Systems, Inc., a
Delaware corporation ("Cadence Design"), Cadence Credit Corporation, a
Delaware corporation, ("Cadence Credit"), Cadence Credit Corporation, a
Delaware corporation (solely in its capacity as the servicer of the Contracts
thereunder, "Servicer"), and Hitachi Credit America Corp., a Delaware
corporation ("Hitachi"), as supplemented by that certain Addendum to Purchase
and Sale Program Agreement executed and delivered as of March 29, 1999, by
and among Cadence Design, Cadence Credit, Servicer, Cadence Receivables
Consolidation Corporation, a Delaware corporation, and Hitachi.
7. Purchase and Sale Program Agreement and amendment
thereto executed and delivered as of December 1, 1998, by and among Cadence
Design Systems, Inc., a Delaware corporation, Cadence Design Systems, Inc., a
Delaware corporation (solely in its capacity as the servicer of the Contracts
thereunder), and International Software Finance Corporation, a Delaware
corporation.
8. Purchase and Sale Program Agreement executed and
delivered as of April 16, 1999, by and among Cadence Design Systems, Inc., a
Delaware corporation ("Cadence Design"), Cadence Credit Corporation, a Delaware
corporation, ("Cadence Credit'), Cadence Credit Corporation, a Delaware
corporation (solely in its capacity as the servicer of the Contracts thereunder,
"Servicer"), and Leasetec Corporation, a Delaware corporation ("Leasetec"), as
supplemented by that certain Addendum to Purchase and Sale Program Agreement
executed and delivered as of April 16, 1999, by and among Cadence Design,
Cadence Credit, Servicer, Cadence Receivables Consolidation Corporation, a
Delaware corporation, and Leasetec.
9. Amended and Restated Purchase and Sale Program
Agreement executed and delivered as of May 21, 1999, by and among Cadence Design
Systems, Inc., a Delaware corporation ("Cadence Design"), Cadence Credit
Corporation, a Delaware corporation, ("Cadence Credit"), Cadence Credit
Corporation, a Delaware corporation (solely in its capacity as the servicer of
the Contracts thereunder, "Servicer"), and Mellon US Leasing, a division of
Mellon Leasing Corporation, a Pennsylvania corporation ("Mellon"), as
supplemented by that certain Addendum to Amended and Restated Purchase and Sale
Program executed and delivered as of May 21, 1999, by and among Cadence Design,
Cadence Credit, Servicer, Cadence Receivables Consolidation Corporation, a
Delaware corporation, and Mellon.
10. Amended and Restated Purchase and Sale Program
executed and delivered as of March 12, 1999, by and among Cadence Design
Systems, Inc., a Delaware corporation ("Cadence Design"), Cadence Credit
Corporation, a Delaware corporation, ("Cadence Credit"), Cadence Credit
Corporation, a Delaware corporation (solely in its capacity as the servicer of
the Contracts thereunder, "Servicer"), and Prime Leasing, Inc., an Illinois
corporation ("Prime Leasing"), as supplemented by that certain Addendum to
Amended and Restated Purchase and Sale Program Agreement executed and delivered
as of March 12, 1999, by and among Cadence
Design, Cadence Credit, Servicer, Cadence Receivables Consolidation
Corporation, a Delaware corporation, and Prime Leasing.
11. Purchase and Sale Program Agreement s executed and
delivered as of March 31, 1999, by and among Cadence Design Systems, Inc., a
Delaware corporation ("Cadence Design"), Cadence Credit Corporation, a Delaware
corporation, ("Cadence Credit"), Cadence Credit Corporation, a Delaware
corporation (solely in its capacity as the servicer of the Contracts thereunder,
"Servicer"), and Siemens Credit Corporation, a Delaware corporation ("Siemens"),
as supplemented by that certain Addendum to Purchase and Sale Program Agreement
executed and delivered as of March 31, 1999, by and among Cadence Design,
Cadence Credit, Servicer, Cadence Receivables Consolidation Corporation, a
Delaware corporation, and Siemens.
12. Purchase and Sale Program Agreement executed and
delivered as of June 24, 1998, by and among Cadence Design Systems, Inc., a
Delaware corporation, Cadence Design Systems, Inc., a Delaware corporation
(solely in its capacity as the servicer of the Contracts thereunder), and
Software Lease Finance Group, Inc., a California corporation.
13. Purchase and Sale Program Agreement (United Kingdom)
executed and delivered as of June 30, 2000, by and between Cadence Design
Systems Limited ("Sellee") and Leasetec UK Limited ("Purchaser").
14. Receivables Sale Agreement dated as of September 30,
1998, among Cadence Receivables Corporation, Cadence Credit Corporation, Cadence
Design Systems, Inc., Windmill Funding Corporation, the liquidity providers from
time to time party thereto, and ABN AMRO Bank N.V., as the enhancer and the
agent, together with the other agreements in connection therewith.