Exhibit 10.18
A portion of this document is confidential and has been omitted and filed
separately with the Securities and Exchange Commission in connection with a
request for confidential treatment of such omitted material.
364-DAY CREDIT AGREEMENT
Dated as of October 31, 1997
among
GLENAYRE ELECTRONICS, INC.,
as Borrower,
GLENAYRE TECHNOLOGIES, INC. AND
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.........................................................1
1.1 Definitions........................................................1
1.2 Computation of Time Periods.......................................18
1.3 Accounting Terms..................................................18
SECTION 2 CREDIT FACILITIES..................................................19
2.1 Loans.............................................................19
2.2 Letter of Credit Subfacility......................................20
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.....................24
3.1 Default Rate......................................................24
3.2 Extension and Conversion..........................................24
3.3 Prepayments.......................................................24
3.4 Termination and Reduction of Committed Amount.....................25
3.5 Fees..............................................................25
3.6 Capital Adequacy..................................................26
3.7 Limitation on Eurodollar Loans....................................26
3.8 Illegality........................................................27
3.9 Requirements of Law...............................................27
3.10 Treatment of Affected Loans.......................................28
3.11 Taxes.............................................................28
3.12 Compensation......................................................30
3.13 Pro Rata Treatment................................................30
3.14 Sharing of Payments...............................................31
3.15 Payments, Computations, Etc.......................................32
3.16 Evidence of Debt..................................................33
SECTION 4 GUARANTY...........................................................33
4.1 The Guarantee.....................................................33
4.2 Obligations Unconditional.........................................34
4.3 Reinstatement.....................................................35
4.4 Certain Additional Waivers........................................35
4.5 Remedies..........................................................35
4.6 Rights of Contribution............................................35
4.7 Continuing Guarantee..............................................36
SECTION 5 CONDITIONS.........................................................36
5.1 Closing Conditions................................................36
5.2 Conditions to all Extensions of Credit............................37
SECTION 6 REPRESENTATIONS AND WARRANTIES.....................................38
6.1 Financial Condition...............................................38
6.2 No Change; Dividends..............................................39
6.3 Organization and Good Standing....................................39
6.4 Power; Authorization; Enforceable Obligations.....................39
6.5 No Conflicts......................................................40
6.6 No Default........................................................40
6.7 Ownership.........................................................40
6.8 Indebtedness......................................................40
6.9 Litigation........................................................40
6.10 Taxes.............................................................40
i
6.11 Compliance with Laws..............................................40
6.12 ERISA.............................................................41
6.13 Subsidiaries......................................................41
6.14 Governmental Regulations, Etc.....................................42
6.15 Purpose of Loans and Letters of Credit............................42
6.16 Environmental Matters.............................................43
6.17 Intellectual Property.............................................43
6.18 Solvency..........................................................43
6.19 Investments.......................................................43
6.20 Disclosure........................................................43
6.21 No Burdensome Restrictions........................................44
6.22 Labor Matters.....................................................44
6.23 Nature of Business................................................44
SECTION 7 AFFIRMATIVE COVENANTS..............................................44
7.1 Information Covenants.............................................44
7.2 Preservation of Existence and Franchises..........................46
7.3 Books and Records.................................................46
7.4 Compliance with Law...............................................46
7.5 Payment of Taxes and Other Indebtedness...........................46
7.6 Insurance.........................................................47
7.7 Maintenance of Property...........................................47
7.8 Performance of Obligations........................................47
7.9 Use of Proceeds...................................................47
7.10 Audits/Inspections................................................47
7.11 Financial Covenants...............................................47
7.12 Additional Credit Parties.........................................48
7.13 Funded Debt Reduction.............................................48
SECTION 8 NEGATIVE COVENANTS.................................................48
8.1 Indebtedness......................................................48
8.2 Liens.............................................................49
8.3 Nature of Business................................................49
8.4 Consolidation, Merger, Dissolution, etc...........................49
8.5 Asset Dispositions................................................50
8.6 Investments.......................................................50
8.7 Restricted Payments...............................................50
8.8 Prepayments of Indebtedness, etc..................................51
8.9 Transactions with Affiliates......................................51
8.10 Fiscal Year; Organizational Documents.............................51
8.11 Limitation on Restricted Actions..................................51
8.12 Ownership of Subsidiaries.........................................51
8.13 Sale Leasebacks...................................................52
8.14 No Further Negative Pledges.......................................52
8.15 Operating Lease Obligations.......................................52
8.16 Customer Financing Transactions...................................52
SECTION 9 EVENTS OF DEFAULT..................................................52
9.1 Events of Default.................................................52
9.2 Acceleration; Remedies............................................54
SECTION 10 AGENCY PROVISIONS.................................................55
10.1 Appointment, Powers and Immunities................................55
10.2 Reliance by Agent.................................................56
ii
10.3 Defaults..........................................................56
10.4 Rights as a Lender................................................56
10.5 Indemnification...................................................56
10.6 Non-Reliance on Agent and Other Lenders...........................57
10.7 Successor Agent...................................................57
SECTION 11 MISCELLANEOUS.....................................................57
11.1 Notices...........................................................57
11.2 Right of Set-Off; Adjustments.....................................58
11.3 Benefit of Agreement..............................................58
11.4 No Waiver; Remedies Cumulative....................................60
11.5 Expenses; Indemnification.........................................60
11.6 Amendments, Waivers and Consents..................................61
11.7 Counterparts......................................................62
11.8 Headings..........................................................62
11.9 Survival..........................................................62
11.10 Governing Law; Submission to Jurisdiction; Venue..................62
11.11 Severability......................................................63
11.12 Entirety..........................................................63
11.13 Binding Effect; Termination.......................................63
11.14 Confidentiality...................................................63
11.15 Conflict..........................................................63
11.16 Limitation on Attorneys' Fees.....................................63
iii
SCHEDULES
Schedule 1.1A Investments
Schedule 1.1B Liens
Schedule 1.1C Commitment Letter and Term Sheet for the Conxus
Credit Agreement
Schedule 1.1D Customer Financing Policy
Schedule 2.1(a) Lenders
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 5.1(c)(i) Form of Legal Opinion (General External Counsel)
Exhibit 5.1(c)(ii) Form of Legal Opinion (Local Corporate Counsel)
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
iv
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 31, 1997 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among GLENAYRE ELECTRONICS, INC., a Colorado corporation (the "Borrower"),
GLENAYRE TECHNOLOGIES, INC., a Delaware corporation (the "Parent"), and certain
Domestic Subsidiaries (as defined herein) of the Borrower which are Guarantors
(as defined herein), the Lenders (as defined herein) and NATIONSBANK, N.A., as
Agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $50,000,000
364-day credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such Person of
the Capital Stock or all or substantially all of the Property of another
Person, whether or not involving a merger or consolidation with such
Person.
"Additional Credit Party" means each Domestic Subsidiary of the Parent
or the Borrower (excluding Inactive Subsidiaries) that becomes a Guarantor
after the Closing Date by execution of a Joinder Agreement.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N. A., NC1-001-15-04, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Agency Services,
or such other address as may be identified by written notice from the Agent
to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
1
"Agent's Fee Letter" means that certain letter agreement, dated as of
September 25, 1997, between the Agent and the Borrower, as amended,
modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in Section
3.5(d).
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to
time specify to the Agent and the Borrower by written notice as the office
by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Eurodollar Loan, or the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b) or the applicable rate of the Standby Letter of Credit Fee for any
day for purposes of Section 3.5(c)(i), the appropriate applicable
percentage corresponding to the Leverage Ratio in effect as of the most
recent Calculation Date:
---------------------------------------------------------------------------------------
Applicable Percentage
Applicable for Standby Letters Applicable
Pricing Leverage Percentage for of Credit Percentage for
Level Ratio Eurodollar Loans Unused Fees
---------------------------------------------------------------------------------------
I >/= 1.0 0.750% 0.750% 0.225%
---------------------------------------------------------------------------------------
II >/= 0.5 < 1.0 0.625% 0.625% 0.200%
---------------------------------------------------------------------------------------
III < 0.5 0.500% 0.500% 0.175%
---------------------------------------------------------------------------------------
The Applicable Percentages shall be determined and adjusted quarterly on
the date (each a "Calculation Date") five Business Days after the date by
which the Borrower is required to provide the officer's certificate in
accordance with the provisions of Section 7.1(c) for the most recently
ended fiscal quarter of the Consolidated Parties; provided, however, that
(i) the initial Applicable Percentages shall be based on Pricing Level III
(as shown above) and shall remain at Pricing Level III until the first
Calculation Date subsequent to the Closing Date and, thereafter, the
Pricing Level shall be determined by the Leverage Ratio as of the last day
of the most recently ended fiscal quarter of the Consolidated Parties
preceding the applicable Calculation Date, and (ii) if the Borrower fails
to provide the officer's certificate to the Agency Services Address as
required by Section 7.1(c) for the last day of the most recently ended
fiscal quarter of the Consolidated Parties, the Applicable Percentage from
such Calculation Date shall be based on Pricing Level I until such time as
an appropriate officer's certificate is provided, whereupon the Pricing
Level shall be determined by the Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties preceding
such Calculation Date. Each Applicable Percentage shall be effective from
one Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Percentages shall be applicable to all existing Loans as well as
any new Loans made or issued.
"Application Period", in respect of any Asset Disposition, shall have
the meaning assigned to such term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the assets
of any Consolidated Party whether by sale, lease, transfer or otherwise,
but excluding (a) the sale of inventory in the ordinary course of business
for fair consideration, (b) the sale or disposition of machinery and
equipment no longer used or useful in the conduct of such Person's business
and (c) any Equity Issuance.
"Asset Disposition Prepayment Event" means, with respect to any Asset
Disposition other than an Excluded Asset Disposition, (i) any Asset
Disposition not occurring in the ordinary course of Business of the
Borrower or (ii) the failure of the Borrower to apply (or cause to be
applied) the Net Cash Proceeds of such Asset Disposition to the purchase,
acquisition or construction of Eligible Assets during the Application
Period for such Asset Disposition.
2
"Attributed Principal Amount" means, on any day, with respect to any
Permitted Receivables Financing entered into by the Borrower or any of its
Subsidiaries, the aggregate amount (with respect to any such transaction,
the "Invested Amount") paid to, or borrowed by, such Person as of such date
under such Permitted Receivables Financing, minus the aggregate amount
received by the applicable Receivables Financier and applied to the
reduction of the Invested Amount under such Permitted Receivables
Financing.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus one-half of one percent
(0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate due
to a change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or Federal Funds
Rate.
"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to close, except that, when used in
connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in U.S. dollar deposits in London,
England.
"Calculation Date" has the meaning set forth in the definition of
"Applicable Percentage" set forth in this Section 1.1.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other
3
interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than eighteen months from the date of acquisition, (b) U.S.
dollar denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than eighteen months from the date of acquisition,
(c) commercial paper and variable or fixed rate notes issued by any
Approved Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements with a bank or trust company
(including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued
by or fully guaranteed by the United States of America in which any Credit
Party shall have a perfected first priority security interest (subject to
no other Liens) and having, on the date of purchase thereof, a fair market
value of at least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in money
market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of
which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"Cash-on-Hand" means as to any Person, the sum of all deposits in
checking, money market, brokerage or savings accounts maintained by such
Person at a financial institution.
"Change of Control" means the occurrence of any of the following
events: (i) the failure of the Parent to own all of the Capital Stock of
the Borrower, (ii) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership, directly or indirectly, of, or
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or
their acquisition of, control over, Voting Stock of the Parent (or other
securities convertible into such Voting Stock) representing 30% or more of
the combined voting power of all Voting Stock of the Parent, or (iii)
during any period of up to 24 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 24 month period were
directors of the Parent (together with any new director whose election by
the Parent's Board of Directors or whose nomination for election by the
Parent's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the directors
of the Parent then in office. As used herein, "beneficial ownership" shall
have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Commitment" means (i) with respect to each Lender, the commitment of
such Lender in an aggregate principal amount at any time outstanding of up
to such Lender's Commitment Percentage of the Committed Amount, (A) to make
Loans in accordance with the provisions of Section 2.1(a) and (B) to
purchase Participation Interests in Letters of Credit in accordance with
the provisions of Section 2.2(c), and (ii) with respect to the Issuing
Lender, the LOC Commitment.
4
"Commitment Percentage" means, for any Lender, the percentage
identified as its Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Committed Amount" shall have the meaning assigned to such term in
Section 2.1(a).
"Consolidated Capital Expenditures" means, for any period, all capital
expenditures of the Consolidated Parties on a consolidated basis for such
period, as determined in accordance with GAAP.
"Consolidated Cash Taxes" means, for any period, the aggregate of all
taxes of the Consolidated Parties on a consolidated basis for such period
(excluding income taxes incurred during 1998 in connection with income from
the sale of Western Multiplex Corporation), as determined in accordance
with GAAP, to the extent the same are paid in cash during such period.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted
for (A) Consolidated Interest Expense, (B) total federal, state, local and
foreign income, value added and similar tax expenses, (C) depreciation and
amortization expense, all as determined in accordance with GAAP and (D)
other non-cash charges.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest component
under Permitted Receivables Financings and the implied interest component
under Synthetic Leases) of the Consolidated Parties on a consolidated basis
for such period, as determined in accordance with GAAP.
"Consolidated Interest Income" means, for any period, interest income
for such period of the Consolidated Parties on a consolidated basis, as
determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income (excluding
extraordinary items, but including in any event Consolidated Interest
Income) after taxes for such period of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP; provided,
however, Consolidated Net Income shall not include income arising under
Permitted Customer Financing Transactions with maturities exceeding 120
days until cash payment in respect of such income has been received by the
applicable Consolidated Party.
"Consolidated Net Worth" means, as of any date, shareholders' equity
or net worth of the Consolidated Parties on a consolidated basis, as
determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the Parent and
its Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Scheduled Funded Debt Payments" means, as of the end of
each fiscal quarter of the Consolidated Parties, for the Consolidated
Parties on a consolidated basis, the sum of all scheduled payments of
principal on Funded Indebtedness for the applicable period ending on such
date (including the principal component of payments due on Capital Leases
during the applicable period ending on such date); it being understood that
Scheduled Funded Debt Payments shall not include voluntary prepayments or
the mandatory prepayments required pursuant to Section 3.3.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurodollar Loan.
5
"Conxus Credit Agreement" means that certain credit agreement dated as
of June 3, 1997 among Conxus Credit Corp. as the borrower, Glenayre
Electronics, Inc. and Motorola, Inc. as vendors/lenders and The Chase
Manhattan Bank as the administrative agent for the lenders, as amended, and
as proposed to be further amended and restated substantially in accordance
with the commitment letter and term sheet dated October 14, 1997 attached
hereto as Schedule 1.1C.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto (in each
case, as the same may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time) and "Credit Document"
means any one of them.
"Credit Parties" means a collective reference to the Borrower and the
Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of the
obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Agent, whenever arising, under this Credit Agreement, the
Notes or any of the other Credit Documents (including, but not limited to,
any interest accruing after the occurrence of a Bankruptcy Event with
respect to any Credit Party, regardless of whether such interest is an
allowed claim under the Bankruptcy Code) and (ii) all liabilities and
obligations, whenever arising, owing from the Borrower to any Lender, or
any Affiliate of a Lender, arising under any Hedging Agreement.
"Customer Financing Policy" means that certain Customer Financing
Policy No. FIN-110 of Glenayre Technologies, Inc. issued July 19, 1997 and
revised October 22, 1997 attached hereto as Schedule 1.1D.
"Customer Financing Transaction" means as to any Consolidated Party,
any extension of credit to another Person to finance (i) the cost of
equipment, inventory or other goods (including, without limitation,
software) manufactured or sold by such Consolidated Party to such Person or
(ii) the cost of any services provided by such Consolidated Party to such
Person.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to
the term of this Credit Agreement within one Business Day of when due, (b)
other than as set forth in (a) above, has failed to pay to the Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement within one Business Day of when due, unless such amount is
subject to a good faith dispute or (c) has been deemed insolvent or has
become subject to a bankruptcy or insolvency proceeding or with respect to
which (or with respect to any of assets of which) a receiver, trustee or
similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws
of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial part of
another business or other long-term assets, in each case, in, or used or
useful in, the same or a similar line of business as the Consolidated
Parties were engaged in on the Closing Date or any reasonable extensions or
expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
and (iii) any other Person approved by the Agent and, unless an Event of
Default has occurred and is continuing at the time any
6
assignment is effected in accordance with Section 11.3, the Borrower (such
approval not to be unreasonably withheld or delayed by the Borrower);
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party to any
Person which is not a Credit Party of (a) shares of its Capital Stock, (b)
any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion
of any debt securities to equity. The term "Equity Issuance" shall not
include any Asset Disposition.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
any Consolidated Party within the meaning of Section 4001(a)(14) of ERISA,
or is a member of a group which includes the Borrower and which is treated
as a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by any
Consolidated Party or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (iii) the distribution of a notice of intent to terminate or
the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
ERISA; (iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party or
any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to
any Plan; or (viii) the adoption of an amendment to any Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
obtained by dividing (a) the Interbank Offered Rate for such Eurodollar
Loan for such Interest Period by (b) 1 minus the Eurodollar Reserve
Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate
at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Eurodollar
Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Adjusted
Eurodollar Rate is to
7
be determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Loans. The Adjusted Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"Excluded Asset Disposition" means (i) the sale, conveyance or other
contribution of applicable Transferred Assets by the Borrower or any of its
Subsidiaries as part of any Permitted Receivables Financing and (ii) any
Asset Disposition by any Consolidated Party to any Credit Party if after
giving effect such Asset Disposition, no Default or Event of Default
exists.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief
financial officer or treasurer of such Person.
"Event of Default" means such term as defined in Section 9.1.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual capacity)
on such day on such transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) the sum of (i) Consolidated EBITDA for the
applicable period minus (ii) Consolidated Cash Taxes for the applicable
period to (b) the sum of (i) Consolidated Interest Expense for the
applicable period plus (ii) Consolidated Capital Expenditures plus (iii)
Restricted Payments made in cash.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary
of such Person which is not a Domestic Subsidiary of such Person.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of
the types referred to in clauses (e), (f), (g), (i) and (n) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all
Indebtedness of another Person of the type referred to in clause (a) above
secured by (or for which the holder of such Funded Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, Property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, (c) all Guaranty Obligations of such Person with respect to
Indebtedness of the type referred to in clause (a) above of another Person
and (d) Indebtedness of the type referred to in clause (a) above of any
partnership or unincorporated joint venture in which such Person is legally
obligated or has a reasonable expectation of being liable with respect
thereto.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantors" means a collective reference to the Parent and each of
the Domestic Subsidiaries of the Parent (excluding the Borrower) and the
Borrower identified as a "Guarantor" on the signature pages hereto
8
and each Additional Credit Party which may hereafter execute a Joinder
Agreement, together with their successors and permitted assigns, and
"Guarantor" means any one of them; provided, however, that "Guarantors"
shall not include any Inactive Subsidiary.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person (including
without limitation keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements) for the benefit of any
holder of Indebtedness of such other Person, (iii) to lease or purchase
Property, securities or services primarily for the purpose of assuring the
holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in
respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement between any Consolidated Party and any
Lender, or any Affiliate of a Lender.
"Inactive Subsidiary" means any of the following entities: Genera
Hawaii Commerce Corp., Headway Colorado, Inc., Headway Hawaii, Inc.,
Headway Texas, Inc., Headway Washington, Inc., Western SCC, Inc., H.K.S.,
Inc., Hallcraft Homes of Denver, Inc., Sunway Financial Services, Inc. or
Sunway Management, Inc; provided that on or after the Closing Date (i) no
Inactive Subsidiary shall have EBITDA greater than 5% of Consolidated
EBITDA and (ii) the aggregate EBITDA of all Inactive Subsidiaries shall not
exceed 10% of Consolidated EBITDA.
"Indebtedness" means, with respect to any Person, without
duplication,(a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase price
of Property or services purchased by such Person which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all Guaranty Obligations
of such Person, (h) the principal portion of all obligations of such Person
under Capital Leases, (i) all obligations of such Person under Hedging
Agreements, (j) the maximum amount of all standby letters of credit issued
or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date, (l) with respect to the
Borrower or any of its Subsidiaries, the outstanding Attributed Principal
Amount under any Permitted Receivables Financing, (m) the principal portion
of all obligations of such Person under Synthetic Leases and (n) the
Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer. In no event shall the
term "Indebtedness" include accounts payable due within six months of
incurrence thereof, accrued expenses, deferred revenue items, pension
liabilities, and other advance payments incurred in the ordinary course of
business.
9
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
"Interbank Offered Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Interest Payment Date" means (a) as to Base Rate Loans, December 31,
1997, March 31, 1998, June 30, 1998, September 30, 1998 and the Maturity
Date, and (b) as to Eurodollar Loans, the last day of each applicable
Interest Period and the Maturity Date, and in addition where the applicable
Interest Period for a Eurodollar Loan is greater than three months, then
also the date three months from the beginning of the Interest Period and
each three months thereafter.
"Interest Period" means as to any Eurodollar Loan, a period of one,
two, three or six months' duration, as the Borrower may elect, commencing
in each case, on the date of the borrowing (including continuations and
conversions thereof); provided, however, (a) if any Interest Period would
end on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (b) no
Interest Period shall extend beyond the Maturity Date and (C) in the case
of Eurodollar Loans, where an Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month in which
the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or investment
in such Person, including, without limitation, any Guaranty Obligations
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such term in
Section 3.5(c)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12 hereto, executed and delivered by an Additional Credit
Party in accordance with the provisions of Section 7.12.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means any letter of credit issued by the Issuing
Lender for the account of the Borrower in accordance with the terms of
Section 2.2.
"Leverage Ratio" means, with respect to the Consolidated Parties on a
consolidated basis for the twelve month period ending on the last day of
any fiscal quarter, the ratio of (a) Funded Indebtedness of the
10
Consolidated Parties on a consolidated basis on the last day of such period
to (b) Consolidated EBITDA for such period.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" or "Loans" shall have the meaning assigned to such term in
Section 2.1(a) and shall include within the meaning thereof any portion of
any Loan bearing interest at the Base Rate or the Adjusted Eurodollar Rate
and referred to as a Base Rate Loan or a Eurodollar Loan.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up to
the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term in
Section 2.2(a).
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (i)
the rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed by the Borrower.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), results of operations, business,
assets, liabilities or prospects of the Consolidated Parties taken as a
whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii) the
material rights and remedies of the Lenders under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means October 30, 1998.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated Party or
any ERISA Affiliate and at least one employer other than the Consolidated
Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N. A. and its successors.
11
"Net Cash Proceeds" means the aggregate cash proceeds received by the
Consolidated Parties in respect of any Asset Disposition or Equity
Issuance, net of (a) direct costs (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and (b)
taxes paid or payable as a result thereof; it being understood that "Net
Cash Proceeds" shall include, without limitation, any cash received upon
the sale or other disposition of any non-cash consideration received by the
Consolidated Parties in any Asset Disposition or Equity Issuance.
"Note" or "Notes" means the promissory notes of the Borrower in favor
of each of the Lenders evidencing the Loans provided pursuant to Section
2.1(e), individually or collectively, as appropriate, as such promissory
notes may be amended, modified, restated, supplemented, extended, renewed
or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of extension
or conversion in substantially the form of Exhibit 3.2, as required by
Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property which is not a Capital Lease other than
any such lease in which that Person is the lessor.
"Other Taxes" means such term as is defined in Section 3.11.
"Parent" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Participation Interest" means, a purchase by a Lender of a
participation in any Letters of Credit or LOC Obligations as provided in
Section 2.2(c) or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means (A) each of the Acquisitions of Wireless
Access, Inc. and Open Development Corporation provided that each such
Acquisition is consummated on or before December 31, 1997, and (B) an
Acquisition by any Consolidated Party for the fair market value of the
Capital Stock or Property acquired; provided that (i) the Capital Stock or
Property acquired in such Acquisition relates to a line of business similar
to the business of the Consolidated Parties engaged in on the Closing Date,
(ii) the Agent shall have received all items in respect of the Capital
Stock or Property acquired in such Acquisition (and/or the seller thereof)
required to be delivered by the terms of Section 7.12, (iii) in the case of
an Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) of such other Person shall
have duly approved such Acquisition, (iv) the Borrower shall have delivered
to the Agent a Pro Forma Compliance Certificate demonstrating that, upon
giving effect to such Acquisition on a Pro Forma Basis, the Consolidated
Parties shall be in compliance with all of the covenants set forth in
Section 7.11, (v) the representations and warranties made by the Credit
Parties in any Credit Document shall be true and correct in all material
respects at and as if made as of the date of such Acquisition (after giving
effect thereto) except to the extent such representations and warranties
expressly relate to an earlier date, (vi) the cost (including cash and
non-cash consideration) for any such Acquisition or transaction described
in Section 8.4 occurring after the Closing Date shall not exceed
$50,000,000 (excluding the acquisitions of Wireless Access, Inc. and Open
Development Corporation) and (vii) the aggregate cost (including cash and
non-cash consideration plus the book value of assumed liabilities) for all
such Acquisitions and all transactions described in Section 8.4 occurring
after the Closing Date shall not exceed $100,000,000 (excluding the
acquisitions of Wireless Access, Inc. and Open Development Corporation).
12
"Permitted Customer Financing Transactions" means (i) any Customer
Financing Transaction permitted under the terms and conditions set forth in
the Customer Financing Policy or (ii) extensions of credit by the Borrower
under the Conxus Credit Agreement.
"Permitted Investments" means Investments which are either (i) cash
and Cash Equivalents; (ii) accounts receivable created, acquired or made by
any Consolidated Party in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (iii) Investments
consisting of Capital Stock, obligations, securities or other property
received by any Consolidated Party in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing as of the Closing Date and set forth in Schedule 1.1A,
(v) Guaranty Obligations permitted by Section 8.1; (vi) transactions
permitted by Section 8.9 or Section 8.16, (vii) advances or loans to
directors, officers, employees, agents, customers or suppliers that do not
exceed $500,000 in the aggregate at any one time outstanding for all of the
Consolidated Parties; (viii) Investments in any Credit Party; (ix)
Permitted Acquisitions; (x) Investments by the Borrower or any of its
Subsidiaries in a Receivables Financing SPC made in connection with a
Permitted Receivables Financing; (xi) equity securities listed on the New
York Stock Exchange, provided that (A) the long-term credit rating of the
corporation issuing such securities shall be A- (or the equivalent thereof)
or better from S&P or A3 (or the equivalent thereof) or better from ▇▇▇▇▇'▇
and (B) the purchase price paid for all such equity securities held at any
time shall not exceed $1,000,000; (xii) Investments in any Foreign
Subsidiaries not exceeding in the aggregate $45,000,000 per fiscal year of
the Borrower; (xiii) Investments in joint ventures, partnerships, limited
liability companies or OEMs in which a Consolidated Party owns an equity
interest, provided such Investments shall not exceed (when combined with
Investments described in clause (xiv)), in the aggregate, 5% of
Consolidated Net Worth; or (xiv) Investments consisting of Capital Stock
and/or warrants, taken by any Consolidated Party as consideration in a
Permitted Customer Financing Transaction in lieu of cash, provided such
Investments shall not exceed (when combined with Investments described in
clause (xiii)), in the aggregate, 5% of Consolidated Net Worth.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale or loss on
account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within 30 days after the expiration of any such stay;
13
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section
8.1(c), provided that any such Lien attaches to such Property
concurrently with or within 90 days after the acquisition thereof;
(viii) leases or subleases granted to others not interfering in
any material respect with the business of any Consolidated Party;
(ix) any interest of title of a lessor under, and Liens arising
from UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by
this Credit Agreement;
(x) Liens in favor of a Receivables Financing SPC or Receivables
Financier created or deemed to exist in connection with a Permitted
Receivables Financing (including any related filings of any financing
statements), but only to the extent that any such Lien relates to the
applicable Transferred Assets actually sold, contributed, financed or
otherwise conveyed or pledged pursuant to such transaction;
(xi) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(xii) normal and customary rights of setoff upon deposits of cash
in favor of banks or other depository institutions;
(xiii) Liens existing as of the Closing Date and set forth on
Schedule 1.1B, as renewed, refunded or refinanced; provided that (a)
no such Lien shall at any time be extended to or cover any Property
other than the Property subject thereto on the Closing Date and (b)
the Indebtedness secured by such Liens shall not be increased; and
(xiv) other Liens not to exceed in the aggregate $15,000,000.
"Permitted Receivables Financing" means any one or more receivables
financings in which (i) the Borrower or any of its Subsidiaries (a) sells
(as determined in accordance with GAAP) any accounts receivable, notes
receivable, rights to future lease payments or residuals (collectively,
together with certain related property relating thereto and the right to
collections thereon, being the "Transferred Assets") to any Person that is
not a Subsidiary or Affiliate of the Borrower (with respect to any such
transaction, the "Receivables Financier"), (b) borrows from such
Receivables Financier and secures such borrowings by a pledge of such
Transferred Assets and/or (c) otherwise finances its acquisition of such
Transferred Assets and, in connection therewith, conveys an interest in
such Transferred Assets to the Receivables Financier or (ii) the Borrower
or any of its Subsidiaries sells, conveys or otherwise contributes any
Transferred Assets to a Receivables Financing SPC, which Receivables
Financing SPC then (a) sells (as determined in accordance with GAAP) any
such receivables (or an interest therein) to any Receivables Financier, (b)
borrows from such Receivables Financier and secures such borrowings by a
pledge of such receivables or (c) otherwise finances its acquisition of
such receivables and, in connection therewith, conveys an interest in such
receivables to the Receivables Financier, provided that (1) the aggregate
amount of uncollected accounts receivable subject to all such receivables
financings shall not at any time exceed the lesser of $25,000,000 or 25% of
total accounts receivable of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP, as of the most recent fiscal
quarter end preceding any date of determination with respect to which the
Agent shall have received the Required Financial Information, (2) such
receivables financing shall not involve any recourse to the Borrower or any
of its Subsidiaries for any reason other than
14
(A) repurchases of non-eligible receivables or (B) indemnifications for
losses other than credit losses related to the receivables sold in such
financing, (3) such receivables financing shall not include any Guaranty
Obligations of the Borrower or any of its Subsidiaries, (4) the Agent shall
be reasonably satisfied with the structure of and documentation for any
such transaction and that the terms of such transaction, including the
discount at which receivables are sold (which in any event shall not exceed
10%), the term of the commitment of the Receivables Financier thereunder
and any termination events, shall be (in the good faith understanding of
the Agent) consistent with those prevailing in the market for similar
transactions involving a receivables originator/servicer of similar credit
quality and a receivables pool of similar characteristics and (5) the
documentation for such transaction shall not be amended or modified without
the prior written approval of the Agent, which approval shall not be
unreasonably withheld or delayed.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Consolidated
Party or any ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located at Charlotte, North Carolina.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred (for purposes of calculating
compliance in respect of such transaction with each of the financial
covenants set forth in Section 7.11 as of the most recent fiscal quarter
end preceding the date of such transaction with respect to which the Agent
has received the Required Financial Information) as of the first day of the
four fiscal-quarter period ending as of such fiscal quarter end. As used
herein, "transaction" shall mean (i) any incurrence or assumption of
Indebtedness as referred to in Section 8.1(g), (ii) any merger or
consolidation as referred to in Section 8.4, (iii) any Asset Disposition as
referred to in Section 8.5, (iv) any Permitted Acquisition or (v) any
Restricted Payment as referred to in Section 8.7. With respect to any
transaction of the type described in clause (i) above regarding
Indebtedness which has a floating or formula rate, the implied rate of
interest for such Indebtedness for the applicable period for purposes of
this definition shall be determined by utilizing the rate which is or would
be in effect with respect to such Indebtedness as at the relevant date of
determination. With respect to any transaction of the type described in
clause (ii) or (iv) above, any Indebtedness incurred by the Borrower or any
of its Subsidiaries in order to consummate such transaction (A) shall be
deemed to have been incurred on the first day of the applicable period and
(B) if such Indebtedness has a floating or formula rate, then the implied
rate of interest for such Indebtedness for the applicable period for
purposes of this definition shall be determined by utilizing the rate which
is or would be in effect with respect to such Indebtedness as at the
relevant date of determination. In connection with any calculation of the
financial covenants set forth in Section 7.11 upon giving effect to a
transaction on a Pro Forma Basis for purposes of Section 8.1(g), Section
8.4, Section 8.5, clause (v) of the definition of "Permitted Acquisition"
set forth in this Section 1.1, or Section 8.7, as applicable:
(A) for purposes of any such calculation in respect of any
incurrence or assumption of Indebtedness as referred to in Section
8.1(g), any Indebtedness which is retired in connection with such
incurrence or assumption shall be excluded and deemed to have been
retired as of the first day of the applicable period;
(B) for purposes of any such calculation in respect of any Asset
Disposition as referred to in Section 8.5, (1) income statement items
(whether positive or negative) attributable to the
15
Property disposed of in such Asset Disposition shall be excluded and
(2) any Indebtedness which is retired in connection with such Asset
Disposition shall be excluded and deemed to have been retired as of
the first day of the applicable period;
(C) for purposes of any such calculation in respect of any merger
or consolidation as referred to in Section 8.4, any Permitted
Acquisition or any Restricted Payment as referred to in Section 8.7,
(1) any Indebtedness incurred by the Borrower or any of its
Subsidiaries in connection with such transaction shall be deemed to
have been incurred as of the first day of the applicable period and
(2) income statement items (whether positive or negative) attributable
to the Property acquired in such transaction or to the Investment
comprising such transaction, as applicable, shall be included to the
extent relating to the relevant period; and
(D) for purposes of any such calculation, the principles set
forth in the second paragraph of Section 1.3 shall be applicable.
"Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of the Borrower delivered to the Agent in connection with (i) any
incurrence, assumption or retirement of Indebtedness as referred to in
Section 8.1(g), (ii) any merger or consolidation as referred to in Section
8.4, (iii) any Asset Disposition as referred to in Section 8.5, (iv) any
Permitted Acquisition or (v) any Restricted Payment as referred to in
Section 8.7, as applicable, and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a Pro
Forma Basis, of the Fixed Charge Coverage Ratio and the Leverage Ratio as
of the most recent fiscal quarter end preceding the date of the applicable
transaction with respect to which the Agent shall have received the
Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Receivables Financier" shall have the meaning assigned to such term
in the definition of "Permitted Receivables Financing" set forth in this
Section 1.1.
"Receivables Financing SPC" shall mean, in respect of any Permitted
Receivables Financing, any Subsidiary or Affiliate of the Borrower to which
the Borrower or any of its Subsidiaries sells, contributes or otherwise
conveys any Transferred Assets in connection with such Permitted
Receivables Financing.
"Register" shall have the meaning given such term in Section 11.3(c).
"Regulation G, T, U, or X" means Regulation G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment (including the abandonment or discarding of barrels,
containers and other closed receptacles containing any Materials of
Environmental Concern).
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the applicable
Calculation Date, (i) the financial statements of the Consolidated Parties
required to be delivered pursuant to Section 7.1(a) or (b) for the fiscal
period or quarter ending as of such Calculation Date, and (ii) the
certificate of an Executive Officer of the Borrower required by Section
7.1(c) to be delivered with the financial statements described in clause
(i) above.
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i) the Commitments
16
(and Participation Interests therein) or (ii) if the Commitments have been
terminated, the outstanding Loans and Participation Interests (including
the Participation Interests of the Issuing Lender in any Letters of
Credit).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
is subject.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock
of any Consolidated Party, now or hereafter outstanding, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding and
(iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding.
"S&P" means Standard & Poor's Ratings Services Group, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or later
acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom funds
have been, or are to be, advanced by such Person on the security of such
Property.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (ii)
such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (iii) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's Property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is
to engage, (iv) the fair value of the Property of such Person is greater
than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person and (v) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Standby Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(i).
"Subsidiary" means, as to any Person, (a) any corporation more than
50% of whose Capital Stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity of which such Person directly or
indirectly through Subsidiaries has more than 50% Capital Stock at any
time.
17
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease.
"Taxes" means such term as is defined in Section 3.11.
"Transferred Assets" shall have the meaning assigned to such term in
the definition of "Permitted Receivables Financing" set forth in this
Section 1.1.
"Unused Fee" shall have the meaning assigned to such term in Section
3.5(b).
"Unused Fee Calculation Period" shall have the meaning assigned to
such term in Section 3.5(b).
"Unused Committed Amount" means, for any period, the amount by which
(a) the then applicable Committed Amount exceeds (b) the daily average sum
for such period of (i) the outstanding aggregate principal amount of all
Loans plus (ii) the outstanding aggregate principal amount of all LOC
Obligations.
"Upfront Fee" shall have the meaning assigned to such term in Section
3.5(a).
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to
vote has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 31, 1996); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Agent or the
Required Lenders shall so object in writing within 30 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance with the
financial covenants set forth in Section 7.11 (including without limitation for
purposes of the definitions of "Applicable Percentage" and "Pro Forma Basis" set
forth in Section 1.1), (i)(A) income statement items (whether positive or
negative) attributable to the Property disposed of in any Asset Disposition as
contemplated by Section 8.5, as applicable, shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and (B)
Indebtedness which is retired in connection with any such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of the
applicable period and
18
(ii) income statement items (whether positive or negative) attributable to any
Property acquired in any Investment transaction contemplated by Section 8.6
shall be included to the extent relating to any period applicable in such
calculations occurring after the date of such transaction (and, notwithstanding
the foregoing, during the first four fiscal quarters following the date of such
transaction, shall be included on an annualized basis).
SECTION 2
CREDIT FACILITIES
2.1 Loans.
(a) Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower such Lender's
Commitment Percentage of revolving credit loans requested by the Borrower
in Dollars ("Loans") from time to time from the Closing Date until the
Maturity Date, or such earlier date as the Commitments shall have been
terminated as provided herein for the purposes hereinafter set forth;
provided, however, that the sum of the aggregate principal amount of
outstanding Loans shall not exceed FIFTY MILLION AND 00/100 DOLLARS
($50,000,000.00) (as such aggregate maximum amount may be reduced from time
to time as provided in Section 3.4, the "Committed Amount"); provided,
further, (i) with regard to each Lender individually, such Lender's
outstanding Loans shall not exceed such Lender's Commitment Percentage of
the Committed Amount, and (ii) the aggregate principal amount of
outstanding Loans plus LOC Obligations outstanding shall not exceed the
Committed Amount. Loans may consist of Base Rate Loans or Eurodollar Loans,
or a combination thereof, as the Borrower may request; provided, however,
that no more than 5 Eurodollar Loans shall be outstanding hereunder at any
time. For purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period. Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Loan
borrowing by written notice (or telephonic notice promptly confirmed
in writing) to the Agent not later than 11:00 A.M. (Charlotte, North
Carolina time) on the Business Day prior to the date of the requested
borrowing in the case of Base Rate Loans, and on the third Business
Day prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be irrevocable
and shall specify (A) that a Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall
be comprised of Base Rate Loans, Eurodollar Loans or a combination
thereof, and if Eurodollar Loans are requested, the Interest Period(s)
therefor. If the Borrower shall fail to specify in any such Notice of
Borrowing (I) an applicable Interest Period in the case of a
Eurodollar Loan, then such notice shall be deemed to be a request for
an Interest Period of one month, or (II) the type of Loan requested,
then such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Agent shall give notice to each affected Lender
promptly upon receipt of each Notice of Borrowing pursuant to this
Section 2.1(b)(i), the contents thereof and each such Lender's share
of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan
shall be in a minimum aggregate principal amount of $1,000,000 and
integral multiples of $500,000 in excess thereof (or the remaining
amount of the Committed Amount, if less).
(iii) Advances. Each Lender will make its Commitment Percentage
of each Loan borrowing available to the Agent for the account of the
Borrower as specified in Section 3.15(a), or
19
in such other manner as the Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such borrowing will then be made available to
the Borrower by the Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by
the Agent.
(c) Repayment. The principal amount of all Loans shall be due and
payable in full on the Maturity Date, unless accelerated sooner pursuant to
Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Loans shall be
comprised in whole or in part of Base Rate Loans, such Base Rate Loans
shall bear interest at a per annum rate equal to the Base Rate;
(ii) Eurodollar Loans. During such periods as Loans shall be
comprised in whole or in part of Eurodollar Loans, such Eurodollar
Loans shall bear interest at a per annum rate equal to the Adjusted
Eurodollar Rate.
Interest on Loans shall be payable in arrears on each applicable Interest
Payment Date (or at such other times as may be specified herein).
(e) Notes. The Loans made by each Lender shall be evidenced by a duly
executed promissory note of the Borrower to such Lender in an original
principal amount equal to such Lender's Commitment Percentage of the
Committed Amount and in substantially the form of Exhibit 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require and in reliance upon the representations and warranties
set forth herein, the Issuing Lender agrees to issue, and each Lender severally
agrees to participates in the issuance by the Issuing Lender of, standby Letters
of Credit in Dollars from time to time from the Closing Date until the Maturity
Date as the Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the LOC Obligations outstanding shall not at any
time exceed FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00) (the "LOC
Committed Amount") and (ii) the sum of the aggregate principal amount of
outstanding Loans plus LOC Obligations outstanding shall not at any time exceed
the aggregate Committed Amount. No Letter of Credit shall have an original
expiry date more than one year from the date of issuance. Each Letter of Credit
shall comply with the related LOC Documents. The issuance and expiry dates of
each Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter of Credit
shall be submitted by the Borrower to the Issuing Lender at least three (3)
Business Days prior to the requested date of issuance. The Issuing Lender will,
at least quarterly and more frequently upon request, disseminate to each of the
Lenders a detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have occurred
since the date of the prior report, and including therein, among other things,
the beneficiary, the face amount and the expiry date, as well as any payment or
expirations which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of Credit, shall
be deemed to have purchased without recourse a Participation Interest from the
applicable Issuing Lender in such Letter of Credit and the obligations arising
thereunder and any collateral relating thereto, in each case in an amount equal
to its pro rata share of the obligations under such Letter of Credit (based on
the respective Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the Issuing
Lender and discharge when due, its pro rata share of the obligations arising
under such Letter of
20
Credit. Without limiting the scope and nature of each Lender's Participation
Interest in any Letter of Credit, to the extent that the Issuing Lender has not
been reimbursed as required hereunder or under any such Letter of Credit, each
such Lender shall pay to the Issuing Lender its pro rata share of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
below. The obligation of each Lender to so reimburse the Issuing Lender shall be
absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of Credit, together
with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of Credit,
the Issuing Lender will promptly notify the Borrower. Unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to otherwise
reimburse the Issuing Lender for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Loan in the amount of the drawing as
provided in subsection (e) below on the related Letter of Credit, the proceeds
of which will be used to satisfy the related reimbursement obligations. The
Borrower promises to reimburse the Issuing Lender on the day of drawing under
any Letter of Credit (either with the proceeds of a Loan obtained hereunder or
otherwise) in same day funds. If the Borrower shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the Base Rate plus 2%. The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
Issuing Lender, the Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the Borrower or any other Credit Party to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify the other Lenders of
the amount of any unreimbursed drawing and each Lender shall promptly pay to the
Agent for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's pro rata share of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Lender from the Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time) otherwise such payment shall be made at or
before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal to, if
paid within two (2) Business Days of the date that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Lender, and the right of the
Issuing Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender, acquire a
Participation Interest in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing Lender) in the
related unreimbursed drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim against the
Borrower with respect thereto.
(e) Repayment with Loans. On any day on which the Borrower shall have
requested, or been deemed to have requested, a Loan advance to reimburse a
drawing under a Letter of Credit, the Agent shall give notice to the Lenders
that a Loan has been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a Loan advance
comprised of Base Rate Loans (or Eurodollar Loans to the extent the Borrower has
complied with the procedures of Section 2.1(b)(i) with respect thereto) shall be
immediately made to the Borrower by all Lenders (notwithstanding any termination
of the Commitments pursuant to Section 9.2) pro rata based on the respective
Commitment
21
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its pro rata
share of each such Loan immediately upon any such request or deemed request in
the amount, in the manner and on the date specified in the preceding sentence
notwithstanding (i) the amount of such borrowing may not comply with the minimum
amount for advances of Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such request or deemed
request for Loan to be made by the time otherwise required hereunder, (v)
whether the date of such borrowing is a date on which Loans are otherwise
permitted to be made hereunder or (vi) any termination of the Commitments
relating thereto immediately prior to or contemporaneously with such borrowing.
In the event that any Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to the Borrower or any
Credit Party), then each such Lender hereby agrees that it shall forthwith
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or after such date and
prior to such purchase) from the Issuing Lender such Participation Interests in
the outstanding LOC Obligations as shall be necessary to cause each such Lender
to share in such LOC Obligations ratably (based upon the respective Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.2)); provided, however, that at the
time any purchase of Participation Interests pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay to the Issuing
Lender, to the extent not paid to the Issuer by the Borrower in accordance with
the terms of subsection (d) above, interest on the principal amount of
Participation Interests purchased for each day from and including the day upon
which such borrowing would otherwise have occurred to but excluding the date of
payment for such Participation Interests, at the rate equal to, if paid within
two (2) Business Days of the date of the Loan advance, the Federal Funds Rate,
and thereafter at a rate equal to the Base Rate.
(f) Designation of Consolidated Parties as Account Parties. Notwithstanding
anything to the contrary set forth in this Credit Agreement, including without
limitation Section 2.2(a), a Letter of Credit issued hereunder may contain a
statement to the effect that such Letter of Credit is issued for the account of
a Consolidated Party other than the Borrower, provided that notwithstanding such
statement, the Borrower shall be the actual account party for all purposes of
this Credit Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect to such
Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have the Letters
of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.2, the
Borrower hereby agrees to pay, and protect, indemnify and save each Lender
harmless from and against, any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of such Lender to honor a drawing under a Letter
of Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or Governmental
Authority (all such acts or omissions, herein called "Government Acts").
22
(ii) As between the Borrower and the Lenders (including the Issuing
Lender), the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. No Lender
(including the Issuing Lender) shall be responsible: (A) for the validity
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (B) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (C) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit or of
the proceeds thereof; and (D) for any consequences arising from causes
beyond the control of such Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
any Lender (including the Issuing Lender), under or in connection with any
Letter of Credit or the related certificates, if taken or omitted in good
faith, shall not put such Lender under any resulting liability to the
Borrower or any other Credit Party. It is the intention of the parties that
this Credit Agreement shall be construed and applied to protect and
indemnify each Lender (including the Issuing Lender) against any and all
risks involved in the issuance of the Letters of Credit, all of which risks
are hereby assumed by the Borrower (on behalf of itself and each of the
other Credit Parties), including, without limitation, any and all
Government Acts. No Lender (including the Issuing Lender) shall, in any
way, be liable for any failure by such Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or
any other cause beyond the control of such Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Credit Agreement. No act or omissions of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Lenders (including the Issuing Lender)
to enforce any right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify any
Lender (including the Issuing Lender) in respect of any liability incurred
by such Lender (A) arising solely out of the gross negligence or willful
misconduct of such Lender, as determined by a court of competent
jurisdiction, or (B) caused by such Lender's failure to pay under any
Letter of Credit after presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by any
law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood and agreed
that the obligations of the Issuing Lender hereunder to the Lenders are only
those expressly set forth in this Credit Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.2 shall be deemed to prejudice the right of any
Lender to recover from the Issuing Lender any amounts made available by such
Lender to the Issuing Lender pursuant to this Section 2.2 in the event that it
is determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict between this
Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
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SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Base Rate plus 2%).
3.2 Extension and Conversion.
Subject to the terms of Section 5.2, the Borrower shall have the option, on
any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "Interest Period" set forth in Section 1.1 and shall be in
such minimum amounts as provided in, with respect to Loans, Section 2.1(b)(ii),
(iv) no more than 5 Eurodollar Loans shall be outstanding hereunder at any time
(it being understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in Schedule 2.1(a), or at such other office as the Agent may designate
in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. Each request for extension
or conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (b), (c), (d),
(e) and (f) of Section 5.2. In the event the Borrower fails to request extension
or conversion of any Eurodollar Loan in accordance with this Section, or any
such conversion or extension is not permitted or required by this Section, then
such Eurodollar Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable thereto. The Agent shall give each
Lender notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; provided, however, that each
partial prepayment of Loans shall be in a minimum principal amount of
$1,000,000 and integral multiples of $500,000. Subject to the foregoing
terms, amounts prepaid under this Section 3.3(a) shall be applied as the
Borrower may elect; provided that if the Borrower fails to specify a
voluntary prepayment then such prepayment shall be applied first to first
to Base Rate Loans and then to Eurodollar Loans in direct order of Interest
Period maturities. All prepayments under this Section 3.3(a) shall be
subject to Section 3.12, but otherwise without premium or penalty.
(b) Mandatory Prepayments.
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(i) Committed Amount. If at any time the sum of the aggregate
principal amount of outstanding Loans plus LOC Obligations outstanding
shall exceed the Committed Amount, the Borrower shall immediately
prepay the outstanding principal balance on the Loans (or, after all
Loans have been repaid, cash collateralize the LOC Obligations) in an
amount sufficient to eliminate such excess.
(iii) Asset Dispositions. Immediately upon the occurrence of any
Asset Disposition Prepayment Event, the Borrower shall prepay the
Loans in an aggregate amount equal to the Net Cash Proceeds of the
related Asset Disposition not applied (or caused to be applied) by the
Consolidated Parties during the related Application Period to the
purchase, acquisition or construction of Eligible Assets as
contemplated by the terms of Section 8.5(f) (such prepayment to be
applied as set forth in clause (iv) below).
(iv) Application of Mandatory Prepayments. All amounts required
to be paid pursuant to this Section 3.3(b) shall be applied to Loans
(first to Base Rate Loans and then to Eurodollar Loans in direct order
of Interest Period maturities) and, after all Loans have been repaid,
to a cash collateral account in respect of LOC Obligations. All
prepayments under this Section 3.3(b) shall be subject to Section 3.12
but shall otherwise be without any premium or penalty.
3.4 Termination and Reduction of Committed Amount.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Committed Amount in whole or in part
(in minimum aggregate amounts of $5,000,000 or in integral multiples of
$1,000,000 in excess thereof (or, if less, the full remaining amount of the
then applicable Committed Amount)) upon five Business Days' prior written
notice to the Agent; provided, however, no such termination or reduction
shall be made which would cause the aggregate principal amount of
outstanding Loans plus LOC Obligations outstanding to exceed the Committed
Amount unless, concurrently with such termination or reduction, the Loans
are repaid to the extent necessary to eliminate such excess. The Agent
shall promptly notify each Lender of receipt by the Agent of any notice
from the Borrower pursuant to this Section 3.4(a).
(b) Mandatory Reductions. On any date that the Loans are required to
be prepaid pursuant to the terms of Section 3.3(b)(iii) or (iv), the
Committed Amount automatically shall be permanently reduced by the amount
of such required prepayment, provided, however, that the Committed Amount
shall not be reduced in connection with any prepayment required as a result
of the sale of Western Multiplex Corporation.
(c) Maturity Date. The Commitments of the Lenders and the LOC
Commitment of the Issuing Lender shall automatically terminate on the
Maturity Date.
(d) General. The Borrower shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 3.5(b), on the date of
each termination or reduction of the Committed Amount, the Unused Fee
accrued through the date of such termination or reduction on the amount of
the Committed Amount so terminated or reduced.
3.5 Fees.
(a) Upfront Fees. The Borrower agrees to pay to the Agent for the
benefit of the Lenders in immediately available funds on or before the
Closing Date an upfront fee (the "Upfront Fee") in the amount provided in
the Agent's Fee Letter.
(b) Unused Fee. In consideration of the Commitments of the Lenders
hereunder, the Borrower agrees to pay to the Agent for the account of each
Lender a fee (the "Unused Fee") on the Unused Committed Amount computed at
a per annum rate for each day during the applicable Unused Fee Calculation
Period (hereinafter defined) at a rate equal to the Applicable Percentage
in effect from time to time. The Unused Fee
25
shall commence to accrue on the Closing Date and shall be due and payable
in arrears on the last business day of each March, June, September and
December (and any date that the Committed Amount is reduced as provided in
Section 3.4(a) and the Maturity Date) for the immediately preceding quarter
(or portion thereof) (each such quarter or portion thereof for which the
Unused Fee is payable hereunder being herein referred to as an "Unused Fee
Calculation Period"), beginning with the first of such dates to occur after
the Closing Date.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In consideration of
the issuance of standby Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Lender a fee (the
"Standby Letter of Credit Fee") on such Lender's Commitment Percentage
of the average daily maximum amount available to be drawn under each
such standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal to the
Applicable Percentage. The Standby Letter of Credit Fee will be
payable quarterly in arrears on the last Business Day of each March,
June, September and December for the immediately preceding quarter (or
a portion thereof).
(ii) Issuing Lender Fees. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (i) above, the Borrower promises
to pay to the Issuing Lender for its own account without sharing by
the other Lenders a standby letter of credit fronting fee equal to
0.125% on the average daily maximum amount available to be drawn under
each such standby Letter of Credit (such fee to be payable quarterly
in arrears on the last Business Day of each March, June, September and
December for the immediately preceding quarter (or a portion thereof))
and the customary charges from time to time of the Issuing Lender with
respect to the issuance, amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the Agent, for
its own account, the fees referred to in the Agent's Fee Letter
(collectively, the "Agent's Fees").
3.6 Capital Adequacy.
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy), then, upon notice from
such Lender to the Borrower, the Borrower shall be obligated to pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
26
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable); provided, however, that before giving any notice to the Borrower
pursuant to this Section, the notifying Lender shall designate a different
Applicable Lending Office or other lending office if such designation will avoid
the need for giving such notice and will not in the reasonable judgment of the
Lender be materially disadvantageous to the Lender.
3.9 Requirements of Law.
(a) If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in respect of any
Eurodollar Loans (other than taxes imposed on the overall net income, and
franchise taxes of such Lender by the jurisdiction in which such Lender has
its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such Lender
(or its Applicable Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be
27
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise unreasonably disadvantageous to it. Any
Lender claiming compensation under this Section 3.9 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.8 or 3.9 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made or Continued instead as Base Rate Loans,
and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by the Borrower to or for the account of any
Lender or the Agent hereunder or under any other Credit Document shall be
made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings,
and all liabilities
28
with respect thereto, excluding, in the case of each Lender and the Agent,
taxes imposed on its income and franchise taxes imposed on it (including
any interest and penalties imposed thereon), by the jurisdiction under the
laws of which such Lender (or its Applicable Lending Office) or the Agent
(as the case may be) is organized or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable under this Credit Agreement or any other Credit
Document to any Lender or the Agent, (i) the sum payable shall be increased
as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.11)
such Lender or the Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law, and (iv) the Borrower shall furnish to the Agent, at its
address referred to in Section 11.1, the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 3.11) paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, interest, and
expenses) arising therefrom or with respect thereto provided, however, that
the Borrower shall have no obligation to indemnify such Lender or the Agent
(i) unless five days' notice has been given by such Lender or the Agent, as
applicable, to afford the Borrower, in good faith, a reasonable opportunity
to contest such payment by such Lender or the Agent, provided such
opportunity to contest exists under Applicable Law, and (ii) until such
Lender or the Agent shall have delivered to the Borrower a certificate
setting forth in reasonable detail the basis of the Borrower's obligation
to indemnify such Lender or the Agent pursuant to this Section 3.11. This
indemnification shall be made within 30 days from the date such Lender or
the Agent (as the case may be) makes written demand therefor. If the Agent
(or such Lender, as the case may be), in its discretion , determines that
such Taxes or Other Taxes are incorrectly or illegally asserted against it,
and the Agent or such Lender has made a claim against the Borrower for such
amount, then the Agent or such Lender shall take reasonable action to seek
a refund and deliver said refund if received, to the Borrower.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of
this Credit Agreement in the case of each Lender listed on the signature
pages hereof and on or prior to the date on which it becomes a Lender in
the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only so long as such
Lender remains lawfully able to do so), shall provide the Borrower and the
Agent with (i) Internal Revenue Service Form 1001 or 4224, as appropriate,
or any successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Credit Agreement is effectively connected with
the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from or a reduced
rate of tax on payments pursuant to this Credit Agreement or any of the
other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be
29
provided), such Lender shall not be entitled to indemnification under
Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt
from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender
will agree to use its reasonable best efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the Borrower shall furnish to the Agent the original or a certified copy of
a receipt evidencing such payment.
(h) The agreements and obligations of the Borrower contained in this
Section 3.11 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
(i) Each Lender (and the Agent with respect to payments to the Agent
for its own account) agrees that (i) it will take all reasonable actions by
all usual means to maintain all exemptions, if any, available to it from
United States withholding taxes (whether available by treaty, existing
administrative waiver, by virtue of the location of any Applicable Lending
Office) and (ii) otherwise cooperate with Borrower to minimize amounts
payable by the Borrower under this Section 3.11.
3.12 Compensation.
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
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(a) Loans. Each Loan, each payment or (subject to the terms of Section
3.3) prepayment of principal of any Loan or reimbursement obligations
arising from drawings under Letters of Credit, each payment of interest on
the Loans or reimbursement obligations arising from drawings under Letters
of Credit, each payment of Unused Fees, each payment of the Standby Letter
of Credit Fee, each reduction of the Committed Amount and each conversion
or extension of any Loan, shall be allocated pro rata among the Lenders in
accordance with the respective principal amounts of their outstanding Loans
and Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or delay
by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Agent shall have been notified by any
Lender prior to the date of any requested borrowing that such Lender does
not intend to make available to the Agent its ratable share of such
borrowing to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such borrowing,
and the Agent in reliance upon such assumption, may (in its sole discretion
but without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Agent, the Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the
date such corresponding amount is recovered by the Agent (i) from the
Borrower at a per annum rate equal to the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at a per annum rate equal to the Federal Funds Rate.
3.14 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan, LOC Obligations or other obligation in the
amount of such Participation Interest. Except as otherwise expressly provided in
this Credit Agreement, if any Lender or the Agent shall fail to remit to the
Agent or any other Lender an amount payable by such Lender or the Agent to the
Agent or such other Lender pursuant to this Credit Agreement on the date when
such amount is due, such payments shall be made together with interest thereon
for each date from the date such amount is due until the date such amount is
paid to the Agent or such other Lender at a rate per annum equal to the Federal
Funds Rate. If under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
3.14 applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.14 to share in the benefits of any recovery on such
secured claim.
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3.15 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately available
funds, without offset, deduction, counterclaim or withholding of any kind,
at the Agent's office specified in Schedule 2.1(a) not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. Payments received
after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to)
debit the amount of any such payment owed by the Borrower which is not made
by such time to any ordinary deposit account of the Borrower maintained
with the Agent (with notice to the Borrower). The Borrower shall, at the
time it makes any payment under this Credit Agreement, specify to the Agent
the Loans, LOC Obligations, Fees, interest or other amounts payable by the
Borrower hereunder to which such payment is to be applied (and in the event
that it fails so to specify, or if such application would be inconsistent
with the terms hereof, the Agent shall distribute such payment to the
Lenders in such manner as the Agent may determine to be appropriate in
respect of obligations owing by the Borrower hereunder, subject to the
terms of Section 3.13(a)). The Agent will distribute such payments to such
Lenders, if any such payment is received prior to 12:00 Noon (Charlotte,
North Carolina time) on a Business Day in like funds as received prior to
the end of such Business Day and otherwise the Agent will distribute such
payment to such Lenders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and Fees for the period of
such extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding
Business Day. Except as expressly provided otherwise herein, all
computations of interest and fees shall be made on the basis of actual
number of days elapsed over a year of 360 days, except with respect to
computation of interest on Base Rate Loans which shall be calculated based
on a year of 365 or 366 days, as appropriate. Interest shall accrue from
and include the date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of each
of the Lenders in connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Credit Party Obligations owing
to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above;
and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
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In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Loans and LOC Obligations held by such Lender bears to the aggregate then
outstanding Loans and LOC Obligations) of amounts available to be applied
pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii)
to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent in a
cash collateral account and applied (A) first, to reimburse the Issuing
Lender from time to time for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in
the manner provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section 11.3(c),
and a subaccount for each Lender, in which Register and subaccounts (taken
together) shall be recorded (i) the amount, type and Interest Period of
each such Loan hereunder, (ii) the amount of any principal or interest due
and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Agent hereunder from or for the
account of the Borrower and each Lender's share thereof. The Agent will
make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such
subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay the Loans made by such
Lender in accordance with the terms hereof.
SECTION 4
GUARANTY
4.1 The Guarantee.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement and the
Agent as hereinafter provided the prompt payment of the Credit Party Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Credit Party Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Credit Party
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.
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Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and several,
and, to the fullest extent permitted by applicable law, absolute and
unconditional, irrespective of (i) the value, genuineness, validity, regularity
or enforceability of any of the Credit Documents or Hedging Agreements, or any
other agreement or instrument referred to therein, or any substitution, release,
impairment or exchange of any other guarantee of or security for any of the
Credit Party Obligations, and (ii) any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Credit Party Obligations for amounts paid under this
Section 4 until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under this
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Credit Party
Obligations shall be extended, or such performance or compliance shall be
waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Credit Party Obligations or
any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
(e) any of the Credit Party Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.
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4.3 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ▇▇.▇▇. 26-7
through 26-9, inclusive, to the extent applicable. Each Guarantor further agrees
that such Guarantor shall have no right of recourse to security for the Credit
Party Obligations, except through the exercise of the rights of subrogation
pursuant to Section 4.2 and through the exercise of rights of contribution
pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1.
4.6 Rights of Contribution.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the prior payment in full to the Agent and
the Lenders of the Guaranteed Obligations, and none of the Guarantors shall
exercise any right or remedy under this Section 4.6 against any other Guarantor
until payment and satisfaction in full of all of any Guaranteed Obligations. For
purposes of this Section 4.6, (a) "Guaranteed Obligations" shall mean any
obligations arising under the other provisions of this Section 4; (b) "Excess
Payment" shall mean the amount paid by any Guarantor in excess of its Pro Rata
Share of such Guaranteed Obligations; (c) "Pro Rata Share" shall mean, for any
Guarantor in respect of any payment of Guaranteed Obligations, the ratio
(expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors; provided, however, that, for purposes of calculating the
Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (d) "Contribution Share" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate
35
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Borrower and all of the Guarantors other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors other than the maker of such Excess Payment; provided,
however, that, for purposes of calculating the Contribution Shares of the
Guarantors in respect of any Excess Payment, any Guarantor that became a
Guarantor subsequent to the date of any such Excess Payment shall be deemed to
have been a Guarantor on the date of such Excess Payment and the financial
information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment.
This Section 4.6 shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
applicable law against the Borrower in respect of any payment of Guaranteed
Obligations. Notwithstanding the foregoing, all rights of contribution against
any Guarantor shall terminate from and after such time, if ever, that such
Guarantor shall be relieved of its obligations pursuant to Section 8.4.
4.7 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of: (i) this Credit Agreement; (ii) the Notes; and (iii) all other
Credit Documents, each in form and substance acceptable to the Agent in its
sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other jurisdiction
of its incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party certified
by a secretary or assistant secretary of such Credit Party to be true
and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party to be true and
correct and in force and effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
36
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could have a Material Adverse Effect.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct
as of the Closing Date.
(c) Opinions of Counsel. The Agent shall have received, in each case
dated as of the Closing Date:
(i) a legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
L.L.P., general counsel for the Credit Parties, substantially in the
form of Schedule 5.1(c)(i); and
(ii) a legal opinion of special local counsel for each Credit
Party incorporated in the State of Colorado, substantially in the form
of Schedule 5.1(c)(ii).
(d) Material Adverse Effect. No material adverse change shall have
occurred since December 31, 1996 in the condition (financial or otherwise),
business, management or prospects of the Consolidated Parties taken as a
whole.
(e) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party that
could have a Material Adverse Effect.
(f) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that to the best of the Borrower's
knowledge (A) each Consolidated Party is in compliance with all of its
existing material financial obligations, (B) all governmental, shareholder
and third party consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been obtained, (C)
no action, suit, investigation or proceeding is pending or threatened in
any court or before any arbitrator or governmental instrumentality that
purports to affect any Consolidated Party or any transaction contemplated
by the Credit Documents, if such action, suit, investigation or proceeding
could have a Material Adverse Effect, and (D) immediately after giving
effect to this Credit Agreement, the other Credit Documents and all the
transactions contemplated therein to occur on such date, (1) each of the
Credit Parties is Solvent, (2) no Default or Event of Default exists, (3)
all representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (4) the Credit
Parties are in compliance with each of the financial covenants set forth in
Section 7.11.
(g) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(h) Financial Statements. Receipt by the Agent of (a) financial
statements described in Section 7.1(a) for the fiscal year ending December
31, 1996, and (b) financial statements described in Section 7.1(b) for each
of the first two fiscal quarters of 1997.
(i) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender.
5.2 Conditions to all Extensions of Credit.
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
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(a) The Borrower shall have delivered (i) in the case of any Loan, an
appropriate Notice of Borrowing or Notice of Extension/Conversion or (ii)
in the case of any Letter of Credit, the Issuing Lender shall have received
an appropriate request for issuance in accordance with the provisions of
Section 2.2(b);
(b) The representations and warranties set forth in Section 6 shall
be, subject to the limitations set forth therein, true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any Credit Party an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation of
its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) As of the Closing Date,. no material adverse change shall have
occurred since December 31, 1996 in the condition (financial or otherwise),
business, results of operations or prospects of the Consolidated Parties
taken as a whole; and
(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal
amount of outstanding Loans plus LOC Obligations outstanding shall not
exceed the Committed Amount, and (ii) the LOC Obligations shall not exceed
the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), (d), (e) and (f) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The audited consolidated balance sheet of the Consolidated Parties
as of December 31, 1995 and December 31, 1996 and the audited consolidated
statements of earnings and statements of cash flows for the years ended
December 31, 1995 and December 31, 1996 and for the 6-month period ended
June 30, 1997 have heretofore been furnished to each Lender. Such financial
statements (including the notes thereto) (i) have been audited by Ernst &
Young, LLP (ii) have been prepared in accordance with GAAP consistently
applied throughout the periods covered thereby and (iii) present fairly (on
the basis disclosed in the footnotes to such financial statements) the
consolidated financial condition, results of operations and cash flows of
the Consolidated Parties as of such date and for such periods. The
unaudited interim balance sheets of the Consolidated Parties as at the end
of, and the related unaudited interim statements of earnings and of cash
flows for, each quarterly period ended after June 30, 1997 and prior to the
Closing Date have heretofore been furnished to each Lender. Such interim
financial statements for each such quarterly period, (i) have been prepared
in accordance with GAAP consistently applied throughout the periods covered
thereby and (ii) present fairly (on the basis disclosed in the footnotes to
such financial statements) the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date and
for such periods.
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During the period from June 30, 1997 to and including the Closing Date,
there has been no sale, transfer or other disposition by any Consolidated
Party of any material part of the business or property of the Consolidated
Parties, taken as a whole, and no purchase or other acquisition by any of
them of any business or property (including any Capital Stock of any other
person) material in relation to the consolidated financial condition of the
Consolidated Parties, taken as a whole, in each case, which, is not
reflected in the foregoing financial statements or in the notes thereto and
has not otherwise been disclosed in writing to the Lenders on or prior to
the Closing Date.
(b) The financial statements delivered to the Lenders pursuant to
Section 7.1(a) and (b), (i) have been prepared in accordance with GAAP
(except as may otherwise be permitted under Section 7.1(a) and (b)) and
(ii) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date and
for such periods.
6.2 No Change; Dividends.
Since December 31, 1996, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could have a
Material Adverse Effect and (b) except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock in a Consolidated Party nor has any of the Capital Stock
in a Consolidated Party been redeemed, retired, purchased or otherwise acquired
for value by such Person.
6.3 Organization and Good Standing.
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization except where the failure to be so organized, existing or in good
standing would not reasonably be expected to have a Material Adverse Effect, (b)
has the corporate or other necessary power and authority, and the legal right,
to own and operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, and (c) is duly
qualified as a foreign entity and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, other than in such jurisdictions
where the failure to be so qualified and in good standing could not have a
Material Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (i) consents, authorizations, notices and
filings described in Schedule 6.4, all of which have been obtained or made or
have the status described in such Schedule 6.4 and (ii) those the failure of
which to obtain could not have a Material Adverse Effect. This Credit Agreement
has been, and each other Credit Document to which any Credit Party is a party
will be, duly executed and delivered on behalf of the Credit Parties. This
Credit Agreement constitutes, and each other Credit Document to which any Credit
Party is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Credit Party enforceable against such party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
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6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or conflict in any material respect with any
Requirement of Law or any other law, regulation (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict in any material
respect with contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which it is a party or by which it may be bound, the violation
of which could have a Material Adverse Effect, or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.6 No Default.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could have a Material Adverse Effect. No Default or Event
of Default has occurred or exists except as previously disclosed in writing to
the Lenders.
6.7 Ownership.
Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective material assets and none of such assets is subject to
any Lien other than Permitted Liens
6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
6.9 Litigation.
Except as disclosed in Schedule 6.9, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
could reasonably be expected to have a Material Adverse Effect.
6.10 Taxes.
Each Consolidated Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP except where the failure to make such filings or pay such
amounts could not have a Material Adverse Effect.
6.11 Compliance with Laws.
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect. No applicable Requirement of Law could reasonably be expected to
cause a Material Adverse Effect.
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6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which any ERISA Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the
date on which this representation is made or deemed made (determined, in
each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither any Consolidated
Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any Consolidated Party or any ERISA Affiliate were
to withdraw completely from all Multiemployer Plans and Multiple Employer
Plans as of the valuation date most closely preceding the date on which
this representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section 4241
of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or
has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of the Credit Parties,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject any
Consolidated Party or any ERISA Affiliate to any liability under Sections
406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code which
could reasonably be expected to have a Material Adverse Effect, or under
any agreement or other instrument pursuant to which any Consolidated Party
or any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(e) Neither any Consolidated Party nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section
3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Code apply has been administered in compliance in all material respects
with such sections.
6.13 Subsidiaries.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation, the number of shares of each class of Capital
Stock outstanding, the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Consolidated Party; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than Permitted Liens). Other than
as set forth in Schedule 6.13, no Consolidated Party has
41
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to its Capital Stock. Schedule 6.13 may be updated
from time to time by the Borrower by giving written notice thereof to the Agent.
6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation G or Regulation U, or for
the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Agent, the Borrower will furnish to the
Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 referred to in Regulation U. No
indebtedness being reduced or retired out of the proceeds of the Loans was
or will be incurred for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U or any "margin security" within
the meaning of Regulation T. "Margin stock" within the meaning of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Consolidated Parties. None of the transactions
contemplated by this Credit Agreement (including, without limitation, the
direct or indirect use of the proceeds of the Loans) will violate or result
in a violation of the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or regulations issued pursuant thereto,
or Regulation G, T, U or X.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
Consolidated Party is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference
to any Lender) have the respective meanings assigned thereto in Regulation
O issued by the Board of Governors of the Federal Reserve System.
(d) Each Consolidated Party has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its
respective Property and to the conduct of its respective businesses as
presently conducted.
(e) No Consolidated Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any state,
city, town, municipality, county or any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which violation could reasonably be expected to have a
Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in compliance in all
material respects with all applicable rules and regulations of such
commissions.
6.15 Purpose of Loans and Letters of Credit.
The proceeds of the Loans hereunder shall be used solely by the Borrower
for working capital, capital expenditures and other lawful corporate purposes.
The Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance,
42
domestic or international trade transactions and obligations not otherwise
aforementioned relating to transactions entered into by the applicable account
party in the ordinary course of business.
6.16 Environmental Matters.
Except as disclosed and described in Schedule 6.16 attached hereto, no
Consolidated Party has and to the best of Borrower's knowledge, no other person
has stored, treated, used, managed, generated or disposed of any substance
deemed hazardous by any applicable Environmental Laws on any real property now
owned by any Consolidated Party in violation of any Environmental Law. The
Consolidated Parties are not in violation of or subject to any existing, pending
or, to the best of the Borrower's knowledge, threatened investigation or inquiry
by any Governmental Authority or to any material remedial obligations under any
applicable Environmental Laws, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
Governmental Authorities of all relevant facts, conditions and circumstances, if
any pertaining to any real property of the Consolidated Parties. The
Consolidated Parties have not obtained and are not required to obtain any
permits, licenses or similar authorizations (which have not already been
obtained) to construct, occupy, operate or use any buildings, improvements,
fixtures, and equipment forming a part of any real property of the Consolidated
Parties by reason of any applicable Environmental Laws. No Consolidated Parties,
and to the best of Borrower's knowledge, no other person has caused the release
of any Materials of Environmental Concern on or to the real property of the
Consolidated Parties in any manner or quantities which would be deemed a
violation or require investigation or remediation under the applicable
Environmental Laws.
6.17 Intellectual Property.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Material Adverse Effect. Set forth on Schedule 6.17 is a
list of all Intellectual Property owned by each Consolidated Party or that any
Consolidated Party has the right to use. Except as provided on Schedule 6.17, no
claim has been asserted in writing and is pending or to the best of the
Borrower's knowledge, threatened by any Person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, and to the Credit Parties' knowledge the use of such
Intellectual Property by any Consolidated Party does not infringe on the rights
of any Person, in either case except for such claims and infringements that in
the aggregate, could not have a Material Adverse Effect. Schedule 6.17 may be
updated from time to time by the Borrower by giving written notice thereof to
the Agent.
6.18 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.19 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.20 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
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6.21 No Burdensome Restrictions.
No Consolidated Party is a party to any agreement or instrument or subject
to any other obligation or any charter or corporate restriction or any provision
of any applicable law, rule or regulation which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
6.22 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the five years preceding the Closing
Date.
6.23 Nature of Business.
As of the Closing Date, the Consolidated Parties are engaged in the
business of manufacturing, selling and servicing telecommunications equipment,
developing software related thereto and conducting other activities related
thereto.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent and each
of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 120 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement of
the Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and of
cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and audited
by independent certified public accountants of recognized national standing
reasonably acceptable to the Agent and whose opinion shall be to the effect
that such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not be
limited as to the scope of the audit or qualified as to the status of the
Consolidated Parties as a going concern.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
120 days after the end thereof) a consolidated balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
quarter, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal quarter in each case
setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of the
chief financial officer of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the financial
condition of the Consolidated Parties and have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
audit adjustments.
44
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower substantially in the form of
Exhibit 7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each such
fiscal period and (ii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Credit Parties propose to take with
respect thereto.
(d) Compliance With Certain Provisions of the Credit Agreement. Within
120 days after the end of each fiscal year of the Borrower, a certificate
containing information regarding the amount of all Asset Dispositions and
Equity Issuances that were made during the prior fiscal year.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other material report or "management letter" submitted by independent
accountants to any Consolidated Party in connection with any annual,
interim or special audit of the books of such Person.
(f) Reports. Promptly upon transmission or receipt thereof, (i) copies
of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the request of the Agent, all reports and written
information to and from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state
or local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
(g) Notices. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent (i) promptly of the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties propose to
take with respect thereto, and (ii) within ten Business Days of the
occurrence of any of the following with respect to any Consolidated Party
(A) the commencement of any litigation, arbitral or governmental proceeding
against such Person which if adversely determined is likely to have a
Material Adverse Effect, (B) the institution of any proceedings against
such Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which could have a
Material Adverse Effect, or (C) any notice or determination concerning the
imposition of any withdrawal liability by a Multiemployer Plan against such
Person or any ERISA Affiliate, the determination that a Multiemployer Plan
is, or is expected to be, in reorganization within the meaning of Title IV
of ERISA or the termination of any Plan.
(h) ERISA. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent promptly (and in any event within ten Business
Days) of: (i) of any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Borrower or any of its ERISA Affiliates, or of a determination
that any Multiemployer Plan is in reorganization or insolvent (both within
the meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that could
have a Material Adverse Effect, together with a description of any such
event or condition or a copy of any such notice and a statement by the
chief financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which
has been or is being taken or is proposed to be taken by the Credit Parties
with respect thereto. Promptly upon request, the Credit Parties shall
furnish the Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto
45
required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(i) Environmental. The Consolidated Parties will conduct and complete
all investigations, studies, sampling, and testing and all remedial,
removal, and other actions reasonably necessary to address all Materials of
Environmental Concern on , from or affecting any of the Properties to the
extent necessary to be in compliance with all Environmental Laws and with
the validly issued orders and directives of all Governmental Authorities
with jurisdiction over such Properties to the extent any failure could have
a Material Adverse Effect.
(j) Permitted Customer Financing Transactions. Contemporaneously with
the furnishing of the annual and quarterly financial statements described
in clauses (a) and (b) above, a schedule setting forth in detail reasonably
satisfactory to the Agent, all outstanding Customer Financing Transactions
(including extensions of credit under the Conxus Credit Agreement), the
principal and interest balances of each such transaction and the date and
amounts of each payment default with respect to each such transaction.
(k) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the Required
Lenders may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority unless the failure to do so could not have a Material
Adverse Effect.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
in all material respects with all applicable laws, rules, regulations and orders
and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property if noncompliance with any such law, rule,
regulation, order or restriction could have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all material taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful material claims (including
claims for labor, materials and supplies) which, if unpaid, might give rise to a
Lien upon any of its properties, and (c) except as prohibited hereunder, all of
its other Indebtedness as it shall become due; provided, however, that no
Consolidated Party shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, unless the failure to make any such payment
(i) could give rise to an immediate right to foreclose on a Lien securing such
amounts or (ii) could reasonably be expected to have a Material Adverse Effect.
46
7.6 Insurance.
Each Credit Party will, and will cause each of its Subsidiaries (excluding
Inactive Subsidiaries) to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability insurance,
casualty insurance and business interruption insurance) in such amounts,
covering such risks and liabilities and with such deductibles or self-insurance
retentions as are in accordance with normal industry practice. The present
insurance coverage of the Consolidated Parties is outlined as to carrier, policy
number, expiration date, type and amount on Schedule 7.6.
7.7 Maintenance of Property.
Each Credit Party will, and will cause each of its Subsidiaries (except
Inactive Subsidiaries) to, maintain and preserve its properties and equipment
material to the conduct of its business in reasonably good repair, working order
and condition, taken as a whole, normal wear and tear and casualty and
condemnation excepted, and will make, or cause to be made, in such properties
and equipment from time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses.
7.8 Performance of Obligations.
Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound, the failure of which to perform
could have a Material Adverse Effect.
7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 6.15.
7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent (including, without limitation, independent accountants,
agents, attorneys, and appraisers) to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person.
7.11 Financial Covenants.
(a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties, shall
be greater than the following proportions:
(i) for the fiscal quarter ending December 31, 1997 1.5 to 1.0;
----------
(ii) for the fiscal quarter ending March 31, 1998 1.5 to 1.0;
----------
(iii) for the fiscal quarter ending June 30, 1998 1.0 to 1.0; and
----------
(iv) for the fiscal quarter ending September 30, 1998 1.0 to 1.0.
----------
(b) Leverage Ratio. The Leverage Ratio, as of the last day of each
fiscal quarter of the Consolidated Parties, shall be less than or equal to
1.5:1.0.
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(c) Consolidated Net Worth. At all times the Consolidated Net Worth
shall be greater than or equal to 90% of Consolidated Net Worth as of June
30, 1997, increased on a cumulative basis as of the end of each fiscal
quarter of the Consolidated Parties, commencing with the fiscal quarter
ending September 30, 1997 by (i) an amount equal to 50% of Consolidated Net
Income, to the extent positive (as adjusted for capitalized research and
development write-offs associated with the Acquisitions of Wireless Access,
Inc. and Open Development Corporation) for the fiscal quarter then ended
and (ii) an amount equal to 100% of the Net Proceeds of any Equity
Issuances.
7.12 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person
becomes a Subsidiary (other than an Inactive Subsidiary) of any Credit Party,
the Borrower shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person and
shall (a) if such Person is a Domestic Subsidiary of a Credit Party, cause such
Person to execute a Joinder Agreement in substantially the same form as Exhibit
7.12 and (b) cause such Person to deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above) and other items of the
types required to be delivered pursuant to Section 5.1(g), all in form, content
and scope reasonably satisfactory to the Agent.
7.13 Funded Debt Reduction.
The Borrower shall reduce the outstanding principal balance of all Loans to
$0 for one consecutive 30-day period during the term of this Credit Agreement.
For the purpose of this Section 7.13, all Cash-on-Hand and all Cash Equivalents
maturing within such 30-day period of the Borrower shall be treated as reducing
the outstanding principal balance of said Loans.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Consolidated Parties set forth in Schedule 8.1
(and renewals, refinancings and extensions thereof on terms and conditions
no less favorable to such Person than such existing Indebtedness);
(c) purchase money Indebtedness, Capital Leases (including Capital
Leases entered into in connection with any Sale and Leaseback Transaction)
and Synthetic Leases hereafter incurred by the Consolidated Parties to
finance the purchase of fixed assets provided that (i) the total of all
such Indebtedness shall not exceed an aggregate principal amount of
$15,000,000 at any one time outstanding (including any such Indebtedness
referred to in subsection (b) above); (ii) such Indebtedness when incurred
shall not exceed the purchase price of the asset(s) financed; and (iii) no
such Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such refinancing;
48
(d) obligations of the Consolidated Parties in respect of Hedging
Agreements entered into in order to manage existing or anticipated interest
rate or exchange rate risks and not for speculative purposes;
(e) intercompany Indebtedness arising out of loans and advances
permitted under Section 8.6;
(f) obligations of the Consolidated Parties in connection with any
Permitted Receivables Financing, to the extent such obligations constitute
Indebtedness;
(g) in addition to the Indebtedness otherwise permitted by this
Section 8.1, other unsecured Indebtedness hereafter incurred by the
Consolidated Parties provided that (A) the loan documentation with respect
to such Indebtedness shall not contain covenants or default provisions
relating to any Consolidated Party that are more restrictive than the
covenants and default provisions contained in the Credit Documents, (B) the
Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a Pro Forma Basis to
the incurrence of such Indebtedness and to the concurrent retirement of any
other Indebtedness of any Consolidated Party, no Default or Event of
Default would exist hereunder and (C) the aggregate principal amount of
such Indebtedness shall not exceed $20,000,000 at any time.
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.
8.4 Consolidation, Merger, Dissolution, etc.
Except in connection with an Asset Disposition permitted by the terms of
Section 8.5, the Credit Parties will not permit any Consolidated Party to enter
into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution) without obtaining the
prior written consent of the Required Lenders; provided that, notwithstanding
the foregoing provisions of this Section 8.4, (a) the Borrower may merge or
consolidate with any of its Subsidiaries provided that (i) the Borrower shall be
the continuing or surviving corporation, (ii) the Borrower shall have delivered
to the Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, no Default or Event of Default
would exist, (iii) the representations and warranties contained in Section 6 are
true immediately prior to and after giving effect to such transaction and (iv)
no Default or Event of Default exists or will exist after giving effect to such
transaction, (b) any Credit Party may merge or consolidate with any other Credit
Party provided that (i) neither the Parent nor the Borrower may merge or
consolidate with one another, (ii) in the case of a merger or consolidation
involving the Parent or the Borrower, the Parent or the Borrower, as the case
may be, shall be the continuing or surviving corporation, (iii) the Borrower
shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist, (iv) the representations and
warranties contained in Section 6 are true immediately prior to and after giving
effect to such transaction and (v) no Default or Event of Default exists or will
exist after giving effect to such transaction, (c) any Consolidated Party which
is not a Credit Party may be merged or consolidated with or into any Credit
Party provided that (i) such Credit Party shall be the continuing or surviving
corporation and (ii) the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect on a Pro Forma
Basis to such transaction, no Default or Event of Default would exist, (iii) the
representations and warranties contained in Section 6 are true immediately prior
to and after giving effect to such transaction and (iv) no Default or Event of
Default exists or will exist after giving effect to such transaction, (d) any
Consolidated Party which is not a Credit Party may be merged or consolidated
with or into any other Consolidated Party which is not a Credit Party provided
(i) the Borrower shall have delivered to the
49
Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect
on a Pro Forma Basis to such transaction, no Default or Event of Default would
exist, (ii) the representations and warranties contained in Section 6 are true
immediately prior to and after giving effect to such transaction and (iii) no
Default or Event of Default exists or will exist after giving effect to such
transaction, (e) the Borrower or any Subsidiary of the Borrower may merge with
any Person other than a Consolidated Party in connection with a Permitted
Acquisition if (i) the Borrower or such Subsidiary shall be the continuing or
surviving corporation and (ii) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect on a Pro
Forma Basis to such transaction, no Default or Event of Default would exist,
(iii) the representations and warranties contained in Section 6 are true
immediately prior to and after giving effect to such transaction and (iv) no
Default or Event of Default exists or will exist after giving effect to such
transaction, and (f) any Wholly-Owned Subsidiary (including Inactive
Subsidiaries) of the Borrower or the Parent (excluding the Borrower) may
dissolve, liquidate or wind up its affairs at any time. The consideration for
any transaction permitted by this Section 8.4 (excluding the Acquisitions of
Wireless Access, Inc. and Open Development Corporation) shall not exceed
$50,000,000, and the aggregate consideration for all transactions permitted
hereby (excluding the Acquisitions of Wireless Access, Inc. and Open Development
Corporation) shall not exceed $100,000,000 during the term of this Credit
Agreement.
8.5 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party (other than an
Inactive Subsidiary) to make any Asset Disposition (including, without
limitation, any Sale and Leaseback Transaction) other than Excluded Asset
Dispositions unless (a) the consideration paid in connection therewith is cash
or Cash Equivalents, (b) if such transaction is a Sale and Leaseback
Transaction, such transaction is permitted by the terms of Section 8.13, (c)
such transaction does not involve the sale or other disposition of a minority
equity interest in any Consolidated Party, (d) the aggregate net book value of
all of the assets sold or otherwise disposed of by the Consolidated Parties in
all such transactions (including, without limitation, Sale and Leaseback
Transactions) after the Closing Date (excluding the sale of Western Multiplex
Corporation) shall not exceed $15,000,000, (e) the Borrower shall have delivered
to the Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, no Default or Event of Default
would exist hereunder, and (f) no later than 15 days prior to such Asset
Disposition, the Agent and the Lenders shall have received a certificate of an
officer of the Borrower specifying the anticipated or actual date of such Asset
Disposition, briefly describing the assets to be sold or otherwise disposed of
and setting forth the net book value of such assets, the aggregate consideration
and the Net Cash Proceeds to be received for such assets in connection with such
Asset Disposition, and thereafter the Borrower shall, within the period of 12
months following the consummation of such Asset Disposition (with respect to any
such Asset Disposition, the "Application Period"), apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset Disposition to
(i) the purchase, acquisition or, in the case of improvements to real property,
construction of Eligible Assets or (ii) to the prepayment of the Loans in
accordance with the terms of Section 3.3(b)(iii).
Upon a sale of assets or the sale of Capital Stock of a Consolidated Party
permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of such Consolidated Party from all of its obligations, if any, under the Credit
Documents.
8.6 Investments.
The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment, except (a) to make dividends payable solely in the same class of
Capital Stock of such Person, (b) to make dividends or other distributions
payable to any Credit Party (directly or indirectly through Subsidiaries), (c)
as permitted by Section 8.8 and (d) other Restricted Payments provided that the
50
Borrower shall have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
no Default or Event of Default would exist.
8.8 Prepayments of Indebtedness, etc..
The Credit Parties will not permit any Consolidated Party to, if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, (a) after the issuance thereof, amend
or modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof, or (b) make (or give any notice with
respect thereto) any voluntary or optional payment or prepayment or redemption
or acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), refund, refinance or exchange of any other
Indebtedness.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
advances of working capital to any Credit Party, (b) transfers of cash and
assets to any Credit Party, (c) transactions permitted by Section 8.1, Section
8.4, Section 8.5, Section 8.6, or Section 8.7, (d) normal compensation and
reimbursement of expenses of officers and directors and (e) except as otherwise
specifically limited in this Credit Agreement, other transactions which are
entered into in the ordinary course of such Person's business on terms and
conditions substantially as favorable to such Person as would be obtainable by
it in a comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without the prior written consent of the Required Lenders.
8.11 Limitation on Restricted Actions.
The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the documents executed in
connection with any Permitted Receivables Financing (but only to the extent that
the related encumbrance or restriction pertains to the applicable Transferred
Assets actually sold, contributed, financed or otherwise conveyed or pledged
pursuant to such Permitted Receivables Financing), (iii) applicable law or (iv)
any Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (i)
permit any Person (other than the Parent, the Borrower or any other Wholly-Owned
Subsidiary of the Parent which is a Credit Party) to own any Capital Stock of
any Subsidiary of the
51
Borrower, (ii) permit any Subsidiary of the Borrower to issue Capital Stock
(except to the Parent, the Borrower or any other Wholly-Owned Subsidiary of the
Parent which is a Credit Party), (iii) permit, create, incur, assume or suffer
to exist any Lien thereon, in each case (A) except to qualify directors where
required by applicable law or to satisfy other requirements of applicable law
with respect to the ownership of Capital Stock of Foreign Subsidiaries, (B)
except as a result of or in connection with a dissolution, merger or disposition
of a Subsidiary permitted under Section 8.4 or Section 8.5 or (C) except for
Permitted Liens and (iv) notwithstanding anything to the contrary contained in
clause (ii) above, permit any Subsidiary of the Borrower to issue any shares of
preferred Capital Stock.
8.13 Sale Leasebacks.
Other than Sale Leaseback Transactions involving Property having an
aggregate book value, when combined with all Asset Dispositions other than
Excluded Asset Dispositions permitted by Section 8.5, of not more than
$15,000,000 (excluding the sale of Western Multiplex Corporation) for all such
transactions occurring on or after the Closing Date, the Credit Parties will not
permit any Consolidated Party to, directly or indirectly, become or remain
liable as lessee or as guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any Property (whether real or
personal or mixed), whether now owned or hereafter acquired, (a) which such
Consolidated Party has sold or transferred or is to sell or transfer to a Person
which is not a Consolidated Party or (b) which such Consolidated Party intends
to use for substantially the same purpose as any other Property which has been
sold or is to be sold or transferred by such Consolidated Party to another
Person which is not a Consolidated Party in connection with such lease.
8.14 No Further Negative Pledges.
The Credit Parties will not permit any Consolidated Party to enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its Property, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation except (a) pursuant to this
Credit Agreement and the other Credit Documents, (b) pursuant to the documents
executed in connection with any Permitted Receivables Financing (but only to the
extent that the related prohibitions against other encumbrances pertain to the
applicable Transferred Assets actually sold, contributed, financed or otherwise
conveyed or pledged pursuant to such Permitted Receivables Financing), and (c)
in connection with any Permitted Lien or any document or instrument governing
any Permitted Lien, provided that any such restriction contained therein relates
only to the asset or assets subject to such Permitted Lien.
8.15 Operating Lease Obligations.
The Credit Parties will not permit any Consolidated Party to enter into,
assume or permit to exist any obligations for the payment of rental under
Operating Leases which in the aggregate for all such Persons would exceed
$5,000,000 in any fiscal year.
8.16 Customer Financing Transactions.
The Credit Parties will not permit any Consolidated Party to engage in any
Customer Financing Transactions except for Permitted Customer Financing
Transactions. For the purpose of determining compliance with this Section 8.16,
all extensions of credit by the Borrower pursuant to the Conxus Credit Agreement
shall be deemed within the scope of transactions governed by the Customer
Financing Policy.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
52
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.9, 7.11, 7.12, 7.13
or 8.1 through 8.16, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b) or (c) and
such default shall continue unremedied for a period of at least 5
Business Days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the Agent;
or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained
in this Credit Agreement and such default shall continue unremedied
for a period of at least 45 days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or written
notice thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) except as a result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4 or
Section 8.5, any Credit Document shall fail to be in full force and effect
or to give the Agent and/or the Lenders the rights, powers and privileges
purported to be created thereby, or any Credit Party shall so state in
writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any Consolidated Party; or
(g) Defaults under Other Agreements.
53
(i) Any Consolidated Party shall default in the performance or
observance (beyond the applicable grace period with respect thereto,
if any) or any material obligation or condition of any contract or
lease material to the Consolidated Parties taken as a whole; or
(ii) With respect to any Indebtedness (other than Indebtedness
outstanding under this Credit Agreement) in excess of $5,000,000 in
the aggregate for the Consolidated Parties taken as a whole, (A) any
Consolidated Party shall (1) default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to
any such Indebtedness, or (2) the occurrence and continuance of a
default in the observance or performance relating to such Indebtedness
or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (B) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$10,000,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could have a Material Adverse Effect: (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, shall exist with respect to
any Plan, or any lien shall arise on the assets of any Consolidated Party
or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Agent, likely to result in (A) the
termination of such Plan for purposes of Title IV of ERISA, or (B) any
Consolidated Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency or (within the meaning of Section
4245 of ERISA) such Plan; or (iv) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Consolidated
Party or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which any Consolidated Party or
any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) Defaults under Permitted Customer Financing Transactions. During
any fiscal year of the Borrower, the aggregate amount of payment defaults
occurring with respect to principal and interest payments owed to the
Consolidated Parties pursuant to Permitted Customer Financing Transactions
(including extensions of credit pursuant to the Conxus Credit Agreement)
shall exceed $15,000,000.
(k) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
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(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Borrower to the Agent and/or
any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
(c) Cash Collateral. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event
of Default under Section 9.1(f), it will immediately pay) to the Agent
additional cash, to be held by the Agent, for the benefit of the Lenders,
in a cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents and all rights and remedies
available at law or in equity.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Agent and/or any of the Lenders
hereunder automatically shall immediately become due and payable without the
giving of any notice or other action by the Agent or the Lenders.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
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10.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; provided, however,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.
10.3 Defaults.
The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received written notice
from a Lender or the Borrower specifying such Default or Event of Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent shall give prompt notice thereof to the Lenders. The Agent shall (subject
to Section 10.2 hereof) take such action with respect to such Default or Event
of Default as shall reasonably be directed by the Required Lenders, provided
that, unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
10.4 Rights as a Lender.
With respect to its Commitment and the Loans made by it, NationsBank (and
any successor acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.
10.5 Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof) ratably in accordance with their respective
Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including attorneys'
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against the Agent (including by any Lender) in any
way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document; provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any costs or expenses payable by the Borrower under Section 11.5, to
the extent that the Agent is not promptly reimbursed for such costs and expenses
by the Borrower. The agreements in this Section 10.5 shall survive the repayment
of the Loans, LOC Obligations and other obligations under the Credit Documents
and the termination of the Commitments hereunder.
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10.6 Non-Reliance on Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Agent with the prior written consent of the
Borrower (such consent not to be unreasonably withheld). If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may with the prior written
consent of the Borrower (such consent not to be unreasonably withheld), on
behalf of the Lenders, appoint a successor Agent which shall be a commercial
bank organized under the laws of the United States of America having combined
capital and surplus of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor shall thereupon
succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 10 shall continue
in effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:
if to the Borrower or the Guarantors:
Glenayre Electronics, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Treasury Department
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
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with a copy to:
Glenayre Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Agency Services/▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank, N. A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender. The rights of each Lender under
this Section 11.2 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written consent
of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
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(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount at
least equal to $5,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender) or an integral multiple of
$1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit 11.3(b) hereto, together with any Note subject to such
assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 11.3(b), the assignor, the Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee. If the assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall deliver
to the Borrower and the Agent certification as to exemption from deduction
or withholding of Taxes in accordance with Section 3.11. The Credit Parties
shall not be liable for any fees or expenses of the Agent, any Lender or
any Eligible Assignee incurred in connection with such assignment.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of
this Credit Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in all
or a portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment and its Loans); provided,
however, that (i) such Lender's obligations under this Credit Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) the
participant shall be entitled to the benefit of the yield protection
provisions contained in Sections 3.7 through 3.12, inclusive, and the right
of set-off contained in Section 11.2, and (iv) the Borrower shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Credit Agreement, and such
Lender shall retain the sole right to enforce the obligations of the
Borrower relating to its Loans and its Notes and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement (other
than amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or
Notes, extending any scheduled principal payment date or date fixed for the
payment of interest on such
59
Loans or Notes, or extending its Commitment). The Credit Parties shall not
be liable for any fees or expenses of the Agent, any Lender or any Eligible
Assignee incurred in connection with such assignment.
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender
from its obligations hereunder. The Credit Parties shall not be liable for
any fees or expenses of the Agent, any Lender or any Eligible Assignee
incurred in connection with such assignment.
(g) Any Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.14 hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle the Borrower or any other Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
modification, and amendment of this Credit Agreement, the other Credit
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Borrower further agrees to pay
on demand all costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses and the
cost of internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and the
other documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and each
Lender and each of their Affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any litigation, or proceeding or preparation of defense in
connection therewith) the Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans, except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 11.5 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower and the Lenders, including the Agent, agree not to assert any claim
against the other, any of such other's Affiliates, or any of such other's
respective directors, officers, employees, attorneys, agents, and advisers, on
any theory of
60
liability, for special, indirect, consequential, or punitive damages arising out
of or otherwise relating to the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower; provided, however, that:
(a) the consent of each Lender affected thereby is required to
(i) extend the final maturity of any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings under
Letters of Credit,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount thereof
in effect (it being understood and agreed that a waiver of any Default
or Event of Default or mandatory reduction in the Commitments shall
not constitute a change in the terms of any Commitment of any Lender),
(v) except as the result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4,
release the Borrower or substantially all of the other Credit Parties
from its or their obligations under the Credit Documents,
(vi) except, amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(vii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(viii) consent to the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under (or
in respect of) the Credit Documents except as permitted thereby;
(b) without the consent of the Agent, no provision of Section 10 may
be amended;
(c) without the consent of the Issuing Lender, no provision of Section
2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
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11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NORTH CAROLINA WITHOUT REFERENCE TO THE CONFLICT OR CHOICE OF
LAW PRINCIPLES THEREOF. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the courts
of the State of North Carolina in Mecklenburg County, or of the United
States for the Western District of North Carolina, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the nonexclusive jurisdiction of such courts. Each of
the Credit Parties further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section 11.1,
such service to become effective three (3) Business Days after such
mailing. Nothing herein shall affect the right of the Agent or any Lender
to serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS,
THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
62
11.11 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.13 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Credit
Parties and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures of
each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Credit Parties, the Agent and each Lender and
their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit shall
be outstanding, all of the Credit Party Obligations have been irrevocably
satisfied in full and all of the Commitments hereunder shall have expired
or been terminated.
11.14 Confidentiality.
The Agent and each Lender (each, a "Lending Party") agree to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any Affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or Affiliate
of any Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, regulation or judicial decree (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Credit Agreement, (g) in connection with
any litigation that is related to the transactions contemplated hereby to which
such Lending Party or any of its Affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Credit
Agreement or any other Credit Document, and (i) subject to written provisions
substantially similar to those contained in this Section 11.14, to any actual or
proposed participant or assignee.
11.15 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.16 Limitation on Attorneys' Fees.
Notwithstanding anything to the contrary herein or in any other Credit
Document, attorneys' fees due in connection with the Credit Documents shall be
reasonable and calculated without regard to any statutory presumption and
determined based on the standard hourly rates of the attorneys and paralegals
performing the work.
[Signature Pages to Follow]
63
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: GLENAYRE ELECTRONICS, INC.,
a Colorado corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: EVP, CFO
GUARANTORS: GLENAYRE TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: EVP, CFO
OPEN DEVELOPMENT CORP. CNET, INC.
a Delaware corporation a Texas corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer Title: Secretary & Treasurer
GTI ACQUISITION CORP. WAI ACQUISITION CORP.
a Delaware corporation a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer Title: CFO
GLENAYRE NETWORK GLENAYRE DIGITAL SYSTEMS, INC.
SERVICES, INC. a North Carolina corporation
a North Carolina corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Title: EVP & CFO
Title: President
WESTERN MULTIPLEX CORPORATION
a California corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Secretary & Treasurer
S-1
LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. Thou
Name: ▇▇▇▇▇▇▇ ▇. Thou
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
S-2
Schedule 1.1A
INVESTMENTS
See Schedule 6.13.
1
Schedule 1.1B
LIENS
Western Multiplex Corporation
Center Capital Corp. - equipment
CIT Group - equipment
Open Development Corp.
Fleet Bank - all property
1
Schedule 1.1C
COMMITMENT LETTER AND TERM SHEET
FOR THE CONXUS CREDIT AGREEMENT
See attached.
[Attached 17 pages are confidential and have been omitted and filed separately
with the Securities and Exchange Commission in connection with a request for
confidential treatment of such omitted material.]
1
Schedule 1.1D
CUSTOMER FINANCING POLICY
See attached.
[Attached 4 pages are confidential and have been omitted and filed separately
with the Securities and Exchange Commission in connection with a request for
confidential treatment of such omitted material.]
1
Schedule 2.1(a)
LENDERS
Lender Commitment Percentage Commitment
------ --------------------- ----------
NationsBank, N.A. 40% $20,000,000.00
First Union National Bank 30% $15,000,000.00
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
ABN Amro Bank N.V. 30% $15,000,000.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Total 100% $50,000,000.00
1
Schedule 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
None.
1
Schedule 6.9
LITIGATION
See Attached.
1
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LITIGATION STATUS REPORT
------------------------------------------------------------------------------------------------------------------------------------
Case Name Parties Description Status
------------------------------------------------------------------------------------------------------------------------------------
US District Court, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLM, This suit alleges violations of Sections 10(b) and The Consolidated Amended
Southern District of Franco et al, on behalf 20(a) of the Securities Exchange Act of 1934 and Complaint was filed on
New York of themselves and all Rule 10b-5 promulgated thereunder. January 31, 1997. Oral
▇▇ ▇▇▇. ▇▇▇▇ (▇▇) similarly situated, v. arguments on a Motion to
Glenayre Technologies, Dismiss and Motion to
Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Change Venue were heard
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. by the Court in
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ September. We are
Ciepcielinski, ▇▇▇▇▇▇ ▇. waiting for the Court's
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ruling on those motions.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, Court's ruling on
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. those motions.
Israel, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
and A.C. Israel
Enterprises.
------------------------------------------------------------------------------------------------------------------------------------
U.S. District Court ▇▇▇▇▇ ▇▇▇▇ v. ▇▇▇▇▇▇▇ ▇. This suit alleges that the directors breached The Complaint was filed
Southern District of ▇▇▇▇▇▇▇▇▇ (sic), ▇▇▇▇▇ ▇. their fiduciary duties to GTI by engaging in the on February 20, 1997.
New York ▇▇▇▇, ▇▇▇▇▇▇ ▇. actions that subjected GTI to the class action The parties have agreed
96 Civ. 1163 ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. lawsuit. that the Defendants ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, not be obligated to file
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ Answers until the Court
▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. rules on the pending
Israel and Glenayre Motions in the class
Technologies, Inc., as a action lawsuit.
nominal defendant ("GTI").
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2
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LITIGATION STATUS REPORT
------------------------------------------------------------------------------------------------------------------------------------
Case Name Parties Description Status
------------------------------------------------------------------------------------------------------------------------------------
District Court of El Swinger Properties, a This suit alleges that Swinger entered into an The Complaint was filed
Paso Co., Colorado limited agreement (the "Swinger Agreement"), with Nu-West on February 1, 1996. The
Colorado partnership, and Development Corporation of Arizona (GEI's judge recently ruled on
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, predecessor), under which Swinger conveyed to several pre-trial
General Partner v. Nu-West approximately 600 acres of land near motions. He has ordered
Glenayre Electronics, Colorado Springs Municipal Airport. The land is that an accounting master
Inc. ("GEI") know as Gateway Park (the "Property"). Swinger be appointed to look over
alleges that, as part of the consideration for the the accounting records
Property, Swinger received a "profits interest" in and to make certain
certain profits generated by the Property. The findings of fact. He
suit alleges that GEI sold the last 85 acres of ruled that GEI did not
the Property at substantially less than its fair have a fiduciary
market value, breaching its contractual duties of obligation to Swinger or
good faith and fair dealing and its fiduciary ▇▇▇▇▇▇. He ruled that
duties to Swinger and ▇▇▇▇▇▇, and that Swinger is ▇▇▇▇▇▇ was entitled to
entitled to 50% of the difference between the fair the half of the proceeds
market value of that remaining Property and its of certain letters of
sale price on May 12, 1994. The suit further credit. GEI plans to file
alleges that Swinger is entitled to various a Motion for
distributions of profits from sales of the Reconsideration on the
Property, including distributions related to its letters of credit ruling.
share of (i) a present cash balance of at least We will ask that the
$927,343; (ii) over $100,000 of "Miscellaneous" letter of credit issue be
expenses not properly identified; and (iii) a examined by the
reduction of improper reserves of $1,000,000 for accounting master.
the contingent cost of an airport road and
$321,164 for contingencies regarding a drainage A trial is set for next
culvert and bridge. The suit also seeks damages Spring.
for "emotional distress" to ▇▇▇▇▇▇, punitive
damages and all other incidental or consequential
damages suffered by Swinger and ▇▇▇▇▇▇, as well as
statutory pre-judgment and post-judgment interest
on all recoverable damages.
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3
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LITIGATION STATUS REPORT
------------------------------------------------------------------------------------------------------------------------------------
Case Name Parties Description Status
------------------------------------------------------------------------------------------------------------------------------------
U.S. District Court, Mountain ▇▇▇▇▇▇▇ Claim by Homeowners Association of residential The Complaint was filed
Central District of Patio/Terrace Maintenance development in Pomona, California known as on June 19, 1993.
California, Case No. Association, v. Mountain "Mountain ▇▇▇▇▇▇▇" alleging negligence, breach of Counsel for GEI has been
93-7450 ▇▇▇▇▇▇▇ I; Nu-West, Inc.: implied and express warranties, negligent advised by O'Melveny &
Mountain ▇▇▇▇▇▇▇ misrepresentations, strict liability and ▇▇▇▇▇ (Los Angeles) that
Development Co., Inc.; negligence per se in connection with the design GEI has not ever been
Western Savings and Loan and construction of the development. "Nu-West, served with process. On
Association; Western Inc." ("GEI") is alleged to be the general partner August 30, 1994,
Property Service of Mountain ▇▇▇▇▇▇▇ I, the partnership that plaintiff filed a
Corporation; and DOES 1 developed the Mountain ▇▇▇▇▇▇▇ project. The lender request to enter a
through 500 inclusive involved in the project, Western Savings and Loan default against GEI. On
Association, and its related co-defendants, have September 8, 1994,
been taken over by the RTC. O'Melveny & ▇▇▇▇▇ filed
GEI's opposition to
plaintiff's request to
enter default against
GEI, asserting that
plaintiff's request is
defective in that
plaintiff has not served
GEI with process. No
further actions have
been taken.
------------------------------------------------------------------------------------------------------------------------------------
State Superior Court of Auric Telephone Answering Claim by Auric Telephone Answering Service, Inc. Auric's counsel has
Connecticut, Case No. Service, Inc. v. Glenayre ("Auric") for wrongful payoff of lease and loss of indicated the he will
26105. Electronics, Inc., right to purchase "Glenayre Concentrators." Auric release GEI but final
("GEI") and Lease claims GEI allowed an unauthorized person to documents have not yet
Acceptance Corporation payoff the lease and to purchase these been received.
concentrators, thereby depriving Auric of the use
and possession of the concentrators.
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4
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LITIGATION STATUS REPORT
------------------------------------------------------------------------------------------------------------------------------------
Case Name Parties Description Status
------------------------------------------------------------------------------------------------------------------------------------
Superior Court, Access Global Telecom, Plaintiffs are clients of Open Development Defendants filed a
Middlesex County, Inc. And Sunnet Telecom, Corporation ("ODC"). They purchased an ODC motion to stay the state
Civil Action No. 97-3834 Inc. v. platform which they allege was incapable of court proceeding and to
Open Development Corp. performing functions critical to their business. compel arbitration.
(Mass. Corp.), Open The plaintiffs further allege that ODC lacked the
Development Corp. technical expertise to install and service the
(Delaware Corp.), platform properly. The complaint alleges both
▇▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ fraud and negligence. Although the purchase
▇▇▇▇▇▇▇▇▇ agreement between the plaintiffs and ODC requires
that disputes be submitted to arbitration, the
plaintiffs contend they are not required to
proceed to arbitration since the basic allegations
of their complaint are not contract claims, but
tort claims.
------------------------------------------------------------------------------------------------------------------------------------
5
Schedule 6.12
ERISA
None.
1
Schedule 6.13
SUBSIDIARIES
Glenayre Technologies, Inc. (Delaware)
Glenayre Electronics, Inc. (Colorado) - 100%
Glenayre Administracion, S.A. de C.V. (Mexico) - 100%
Glenayre Network Services (North Carolina) - 100%
Glenayre de Mexico S.A. de C.V. (Mexico) - 100%
Glenayre Electronics South America Ltda (Brazil) - 100%
Glenayre Digital Systems, Inc. (North Carolina) - 100%
Glenayre Electronics (UK) Limited (England) - 100%
Glenayre Electronics Europe B.V. (Netherlands) - 100%
Glenayre Electronics Middle East LLC (Dubai, UAE) - 49%
Glenayre Electronics (Proprietary) Limited (South Africa) - 100%
Glenayre Electronics (Korea) Limited (Korea) - 100%
Glenayre Electronics Singapore PTE Ltd. (Singapore) - 100%
Glenayre Electronics Philippines Inc. (Philippines) - 100%
Glenayre (India) Private Limited (India) - 100%
Nihon Glenayre Electronics K.K. (Japan) - 100%
Glenayre Electronics (Hong Kong) Ltd. (Hong Kong) - 100%
Headway Colorado, Inc. - inactive
Headway Hawaii, Inc. - inactive
Genera Hawaii Commerce Corp. - inactive
Headway Texas, Inc. - inactive
H.K.S., Inc. - inactive
Headway Washington, Inc. - inactive
Western SCC, Inc. - inactive
Hallcraft Homes of Denver, Inc. - inactive
Western Multiplex Corporation (California) - 100%
WAI Acquisition Corp. - 100%
Open Development Corporation (Delaware) - 100%
Glenayre Services Ltd. (Canada) - 100%
CNET, Inc. (Texas) - 100%
CNET GmbH (Germany) - 100%
Glenayre R & D Inc. (Canada) - 100%
GTI Acquisition Corp. (Delaware) - 100%
Glenayre Manufacturing Ltd. (Canada) - 100%
Sunway Financial Services, Inc. - inactive
Sunway Management, Inc. - inactive
Schedule 6.16
ENVIRONMENTAL DISCLOSURES
None.
1
Schedule 6.17
INTELLECTUAL PROPERTY
See attached.
1
INTELLECTUAL PROPERTY CLAIMS BY OR AGAINST
GLENAYRE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
October 29, 1997
INTELLECTUAL PROPERTY CLAIMS
COJK
File No. Parties Description Current Status
------------------------------------------------------------------------------------------------------------------------------------
5-6797 Glenayre Electronics, Inc. ▇▇▇▇▇ Research has notified Glenayre of Mobile Media and Nextel have sent letters
and ▇▇▇▇▇ Research infringement of fifteen US patents to Glenayre, requesting indemnification
applicable to voice messaging systems, against infringement claims by ▇▇▇▇▇
and has offered to license those Research. Glenayre has responded in
patents. writing, indicating the steps that Glenayre
is taking and stating that Glenayre will
honor all existing indemnity arrangements.
COJK is monitoring the progress of the
litigation involving Octel, Northern
Telecom, and Pacific Telesis. Of the six
patents at issue in that litigation, one
has been declared invalid. Trial on the
remaining patents has been concluded. The
jury found Octel's Aspen and Sierra
products infringe the claims of the `436,
`817 and `647 ▇▇▇▇▇ patents, but found
Northern Telecom's systems not infringing.
The jury also found the `436, `817 and `647
obvious and anticipated by the prior art,
and thus invalid. The court has issued an
order in conformance with the jury verdict.
Decisions on various post-trial motions
upheld the jury verdict, with the exception
that the court found Claim 1 of the `647
patent to be valid. ▇▇▇▇▇ has appealed the
court's order to the Court of Appeals for
the Federal Circuit.
In 1994, COJK provided Glenayre with its
in-depth infringement opinion that
Glenayre's voice messaging products as then
configured did not infringe any of the
▇▇▇▇▇ patents, and recommending that
Glenayre continue manufacture, use and sale
of its voice messaging products without
modification. COJK provided a supplementary
opinion that one of the ▇▇▇▇▇ patents of
interest to Glenayre is invalid in view of
the VMRS device of Commterm and other prior
art.
On 10/7/96, ▇▇▇▇▇ Research again wrote to
Glenayre and repeated its general offer to
license the 15 U.S. patents in issue.
Settlement discussions conducted in
December 1996 were fruitless.
2
COJK
File No. Parties Description Current Status
------------------------------------------------------------------------------------------------------------------------------------
5-6797
(cont'd) On 4/11/97, COJK provided Glenayre with a
reconfirmation of its 1994 opinion, as
applied to Glenayre's voice messaging
products as currently configured.
Nothing has transpired lately, to COJK's
knowledge.
5-13206 AccessLine Technologies, Inc. Claim by AccessLine based on U.S.P. COJK and Glenayre are currently conducting
v. Glenayre Electronics, Inc. 4,893,335; 5,375,161; 5,588,037; an in-depth infringement and validity
5,610,970, 5,673,299, and 25 pending review of the AccessLine patents.
U.S. patent applications, and
potential corresponding patents in AccessLine and Glenayre are engaged in
other countries relating to "meet-me," active discussions concerning the exchange
"one number" and "call management" of cross-licenses under all patents and
functions of telephone systems. Claim patent applications of AccessLine and the
by Glenayre based on U.S.P. 5,307,399 noted patents of Glenayre (and U.S.P.
and 5,559,859 relating to enhanced 5,657,376).
"meet-me" functions, and claim by
Glenayre based on U.S.P. 4,642,425
more broadly directed to a "meet-me"
function.
5-12568 Competitive Technologies v. Claim by Competitive Technologies on Competitive Technologies offered to license
Glenayre Electronics, Inc. behalf of the patent owner, Intertel Glenayre by its letter of 9/17/96. On
Communications, Inc., based on 4/3/97, COJK informed Competitive
U.S.P. 5,247,568relating to a method Technologies that Glenayre was not
for selecting a name of a person to interested in a license, due to prior art
receive an audiotext message. patents found by COJK during a validity
review of the patent. No further word has
been received by COJK.
3
COJK
File No. Parties Description Current Status
------------------------------------------------------------------------------------------------------------------------------------
5-13779 ReadyCom, Inc. v. Glenayre ReadyCom claims that use by the This matter is under initial review by
Electronics, Inc. Wireless Messaging Group of "talk COJK.
balloons" in advertising infringes
ReadyCom's rights in its trademark for
a "talk balloon," U.S. Trademark
Registration Nos. 2,070,206 and
2,099,738.
6-1523 CNet, Inc. v. Concurrent U.S. PTO Opposition No. 102,771. CNet Settlement discussions are continuing. The
Technologies Corporation CNet has opposed registration in the parties have extended the time for the
U.S. of the ▇▇▇▇ CTCNET, for consulting close of discovery to accommodate these
and Internet development services discussions. Attorneys for Concurrent
Technologies have taken an aggressive role
in this matter, which action is making it
difficult to structure a settlement.
6-1526 CNet, Inc. v. US WEST U.S. PTO Opposition No. 101,904. CNet The parties have negotiated a settlement
International Systems has opposed registration in the U.S. of agreement which is in the process of being
Group, Inc. the ▇▇▇▇ BOS++, for computer programs. executed.
4
PATENTS, TRADEMARKS AND COPYRIGHTS OF GLENAYRE ELECTRONICS,
INC. AND ITS RELATED COMPANIES (EXCLUDING OPEN DEVELOPMENT
CORPORATION AND WIRELESS ACCESS, INC.)
November 12, 1997
Pending Patent Applications
---------------------------
Country Application No. Filing Date
Canada (not available) 08/27/93
Canada 2,062,880 03/12/92
Canada 2,091,962 03/18/93
Canada 2,109,639 11/22/93
Canada 2,109,737 11/23/93
Canada 2,117,640 03/01/93
Canada 2,126,342 01/04/93
Canada 2,145,187 08/20/93
Canada 2,171,634 09/19/94
Canada 2,185,801 03/17/95
Canada 2,193,659 06/30/94
Canada 2,197,871 03/03/95
Canada 2,197,887 09/20/95
China 93117995.5 09/29/93
China 94100280.2 01/05/94
China 94193450.0 09/19/96
China 94195146.4 06/30/94
China 95192686.1 03/17/95
China 95194982.9 03/03/95
European 93302450.7 03/30/93
European 93309390.8 11/24/93
European 93309391.6 11/24/93
European 93902937.7 01/04/93
European A93909566.7 03/01/93
European 93921192.6 08/27/93
European 94910263.6 08/20/93
European 94922064.4 06/30/94
European 94928635.5 09/19/94
European 95912720.0 03/03/95
European 95914107.8 03/17/95
European 93920066.3 08/13/93
Finland 950662 08/13/93
Finland 931421 03/30/93
Finland 943415 01/04/93
Finland 960575 08/27/93
Finland 965244 06/30/94
Finland 970966 03/03/95
India 517/CAL/93 09/06/93
India 11/CAL/93 01/05/93
India 158/CAL/93 03/16/93
India 172CAL95 02/20/95
India 1763/CAL/96 10/07/96
India 476/CAL/93 08/17/93
India 492/CAL/93 08/25/93
India 525CAL94 07/04/94
5
Country Application No. Filing Date
India 785CAL94 09/26/94
Israel 117156 02/16/96
Korea 93-5084 03/30/93
Korea 94-702457 01/04/93
Korea 95-700617 08/13/93
Korea 95-701111 08/20/93
Korea 96-700709 08/27/93
Korea 96-701445 09/19/94
Korea 96-705165 03/17/95
Korea 97-701561 03/03/95
Korea 97-701589 08/20/95
PCT (not available) 10/31/96
PCT (not available) 11/15/96
PCT PCT/US96/12914 08/07/96
PCT PCT/US96/13771 08/22/96
PCT PCT/US96/16412 10/10/96
PCT PCT/US96/17390 11/01/96
PCT PCT/US97/00810 01/08/97
PCT PCT/US97/02248 02/13/97
PCT PCT/US97/02352 02/13/97
PCT PCT/US97/03451 03/07/97
PCT PCT/US97/04057 03/04/97
PCT PCT/US97/06949 04/25/97
PCT PCT/US97/12079 07/11/97
PCT PCT/US97/12080 07/11/97
PCT PCT/US97/l2083 07/11/97
PCT PCT/US97/17592 09/29/97
PCT PCT/US97/12048 07/11/97
PCT PCT/US97/12098 07/11/97
Sweden 96-00966.7 09/19/94
Sweden 9701046-6 09/20/95
United States 08/496,829 06/29/95
United States 08/513,546 08/10/95
United States 08/522,871 09/01/95
United States 08/601,370 02/14/96
United States 08/702,291 08/19/96
United States 08/743,983 10/31/96
United States 08/759,624 12/05/96
United States 08/825,728 04/02/97
United States 08/852,390 05/07/97
United States 08/864,662 05/28/97
United States 08/893,529 07/11/97
United States 08/474,332 06/07/95
United States 08/549,055 10/27/95
United States 08/559,540 11/16/95
United States 08/601,118 02/14/96
United States 08/604,159 02/21/96
United States 08/611,461 03/04/96
United States 08/612,748 03/08/96
United States 08/640,719 05/01/96
United States 08/717,075 09/23/96
United States 08/722,375 09/30/96
United States 08/741,396 10/29/96
United States 08/751,226 11/15/96
▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 08/764,798 12/12/96
United States 08/792,620 01/31/97
United States 08/795,063 02/05/97
United States 08/824,685 04/08/97
United States 08/850,940 05/05/97
United States 08/893,528 07/11/97
United States 08/893,531 07/11/97
United States 08/893,537 07/11/97
United States 08/932,006 09/17/97
United States 60/021,617 07/12/96
United States 60/022,045 07/22/96
Issued Patents
--------------
Country Patent No. Issue Date
Australia 555,497 05/17/84
Canada 1,126,341 06/22/82
Canada 1,214,218 11/18/86
Canada 1,254,979 05/30/89
Canada 2,028,016 10/19/90
Canada 2,081,675 11/21/95
Canada 2,142,730 08/13/93
United Kingdom 2,140,253 04/29/87
United Kingdom 2,158,678 10/26/88
United Kingdom 2,173,975 04/29/87
United Kingdom 2,174,272 04/29/87
United States 4,577,060 03/18/86
United States 4,642,425 02/10/87
United States 5,039,966 08/13/91
United States 5,195,644 03/23/93
United States 5,227,741 07/13/93
United States 5,243,299 09/07/93
United States 5,307,399 04/26/94
United States 5,333,194 07/26/94
United States 5,365,569 11/15/94
United States 5,369,682 11/29/94
United States 5,414,734 05/09/95
United States 5,416,808 05/16/95
United States 5,418,818 05/23/95
United States 5,455,546 10/03/95
United States 5,473,638 12/05/95
United States 5,481,258 01/02/96
United States 5,485,463 01/16/96
United States 5,513,215 04/30/96
United States 5,559,859 09/24/96
United States 5,626,406 05/06/97
United States 5,657,376 08/12/97
United States 5,663,715 09/02/97
United States 5,666,378 09/09/97
7
Trademark Applications
----------------------
Country Application No. Filing Date
Argentina 2,002,206 10/02/95
Argentina 2,002,207 10/02/95
Argentina 2,002,208 10/02/95
Argentina 2074545 03/24/97
Argentina 2074546 03/24/97
Bahrain 306/96 02/27/96
Bahrain 307/96 02/27/96
Bahrain 308/96 02/27/96
Bahrain 453/96 03/13/96
Bangladesh 45271 12/13/95
Bangladesh 45621 12/13/95
Brazil Information not yet available
Brazil Information not yet available
Brazil 818968648 12/08/95
Brazil 818968656 12/08/95
Brunei Darussalam 25,797 02/29/96
Bulgaria 32,470 10/04/95
Canada Information not yet available
Canada 809,609 04/11/96
Canada 809,629 04/11/96
Chile Information not yet available
Chile Information not yet available
Chile Information not yet available
China Information not yet available
China Information not yet available
China Information not yet available
China 950154286 12/07/95
China 950154287 12/07/95
China 970043610 05/09/97
China 970043611 05/09/97
▇▇▇ ▇▇▇▇▇▇ 04/01/96
▇▇▇ ▇▇▇▇▇▇ Not yet confirmed
▇▇▇ ▇▇▇▇▇▇ Not yet confirmed
▇▇▇ ▇▇▇▇▇▇ Not yet confirmed
▇▇▇ ▇▇▇▇▇▇ Not yet confirmed
▇▇▇ ▇▇▇▇▇▇ Not yet confirmed
Czech Republic 0-104523 10/02/95
Egypt 88065 02/09/93
Egypt 97725 10/05/95
Egypt 97726 10/05/95
Egypt 97727 10/05/95
El Salvador 3710/94 10/14/94
El Salvador 4602/95 10/24/95
El Salvador 4603/95 10/24/95
El Salvador 4604/95 10/24/95
Germany 395 50 274.8 12/08/95
Greece 119029 05/05/94
Greece 126,428 10/04/95
Hong Kong 1995-12485 10/05/95
Hong Kong 3953/97 03/26/97
Hong Kong 3954/97 03/26/97
India Information not yet available
8
Country Application No. Filing Date
India Information not yet available
India 562,527 11/25/91
India 682831 10/09/95
Indonesia J95-23387 12/08/95
Indonesia ▇▇▇ ▇▇▇▇ 05/15/97
Indonesia ▇▇▇ ▇▇▇▇ 05/15/97
Indonesia J95 23385 12/08/95
Indonesia J95 23386 12/08/95
Iran 106,770 02/15/93
Ireland 96/1581 03/01/96
Ireland 96/1580 03/01/96
Ireland 96/1579 03/01/96
Israel 102,243 12/07/95
Israel 102,244 12/07/95
Israel 102,245 12/07/95
Israel 102,246 12/07/95
Italy RM95C/004718 10/13/95
Japan 1995-101915 10/03/95
Japan 1995-101914 10/03/95
Japan 1995-101913 10/03/95
Japan 1997-32744 03/26/97
Japan 1997-32743 03/26/97
Kuwait Information not yet available
Kuwait Information not yet available
Kuwait Information not yet available
Kuwait 31080 05/23/95
Lebanon 067552 12/08/95
Lebanon 067553 12/08/95
Malaysia 94-10241 11/08/94
Malaysia 97-05202 04/23/97
Malaysia 97-05201 04/23/97
Malaysia 96-00716 01/19/96
Malta 25880 06/25/96
Mexico Information not yet available
Mexico 291046 03/31/97
▇▇▇▇▇▇ ▇▇▇▇▇▇ 03/31/97
Mexico 299611 06/26/97
New Zealand 254246 10/02/95
New Zealand 254247 10/02/95
New Zealand 254248 10/02/95
Norway 95.6630 10/24/95
Oman 5949 08/21/91
Oman 12305 10/01/95
Oman 12306 10/01/95
Oman 12307 10/01/95
Pakistan 133689 01/09/96
Pakistan 133690 01/09/96
Panama 078744 12/14/95
Panama 078745 12/14/95
Panama 078746 12/14/95
Paraguay 20237 10/04/95
Paraguay 20238 10/04/95
Paraguay 20239 10/04/95
Philippines 97224 12/20/94
9
Country Application No. Filing Date
Philippines 105940 02/12/96
Philippines 105941 02/12/96
Philippines 105942 02/12/96
Poland Z-152,223 10/10/95
Portugal 312,807 10/03/95
Puerto Rico Information not yet available
Qatar 13996 09/30/95
Qatar 13997 09/30/95
Qatar 13998 09/30/95
Romania Not yet available 02/21/96
Romania Information not yet available
Russian Federation 95711126 10/05/95
Saudi Arabia 31292 10/15/95
Saudi Arabia 31293 10/15/95
Saudi Arabia 31294 10/15/95
Singapore 4096/97 04/08/97
Singapore 4097/97 04/08/97
Singapore 10050/95 10/19/95
Singapore 10051/95 10/19/95
Singapore 10052/95 10/19/95
Slovakia 65007 08/02/95
Slovakia 104523 10/02/95
South Africa 95/16169 12/06/95
South Africa 95/16168 12/06/95
South Africa 95/16167 12/06/95
South Africa 95/16166 12/06/95
South Korea Information not yet available
South Korea Information not yet available
South Korea 96-38915 09/02/96
South Korea 97-15316 04/03/97
South Korea 96-10855 09/02/96
South Korea 95-9650 10/05/95
South Korea 95-9649 10/05/95
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 12/08/94
Sri Lanka 76395 11/09/95
Sri Lanka 76396 11/09/95
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇▇▇ 95-14540 12/15/95
Taiwan (86)15050 03/28/97
Taiwan (86)15051 03/28/97
Taiwan (86)15052 03/28/97
Taiwan (86)15053 03/28/97
Taiwan (86)15054 03/28/97
Taiwan (84)62055 12/08/95
Thailand Information not yet available
Thailand Information not yet available
Thailand 299408 12/19/95
Turkey Information not yet available
Ukraine 95123390/T 12/14/95
Ukraine 95123343/T 12/08/95
United Arab Emirates 9066 01/30/95
United Arab Emirates 13160 10/08/95
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 10/08/95
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 10/08/95
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Information not yet available
United States 74/723,509 08/30/95
United States 74/723,285 08/31/95
United States 74/656,450 04/05/95
United States 74/504,130 03/22/94
United States 75/168,534 09/19/96
United States 75/025,687 11/29/95
United States 75/014,105 11/02/95
Uruguay 281720 10/03/95
Venezuela 16212-95 10/16/95
Venezuela 16213-95 10/16/95
Venezuela 16214-95 10/16/95
Venezuela 16493-93 09/08/93
Trademark Registrations
-----------------------
Country Registration No. Registration Date
Argentina 1.611.152 08/12/96
Argentina 1.611.153 08/12/96
Argentina 1.611.154 08/12/96
Argentina 1.511.272 03/31/94
Australia 680124 12/07/95
Austria 162 435 02/09/96
Austria 146 820 04/21/93
Benelux 525675 01/20/93
Benelux 583962 10/01/96
Bolivia 58469-C 04/21/95
Bolivia 62626-C 11/27/96
Bolivia 62628-C 11/27/96
Bolivia 62627-C 11/27/96
Brazil 817353542 01/10/95
Brazil 817353585 01/10/95
Brunei Darussalarn 21,781 02/29/96
Bulgaria 26,059 05/22/95
Canada 265,612 01/08/82
Canada 343,276 07/29/88
Canada 354,849 04/21/89
Canada 363,188 11/10/89
Canada 364,274 01/12/90
Canada 377,832 01/04/91
Canada 404,217 10/30/92
Canada 415,976 08/27/93
Canada 799,508 03/20/97
Chile 419,162 12/29/93
China 664393 11/07/93
China 1031785 06/14/97
Colombia 170425 11/29/94
Colombia 183627 01/31/96
Colombia 184450 02/27/96
Colombia 184811 03/01/96
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 01/31/94
Denmark VR 00.063 1996 01/05/96
Denmark VR 07.436 1993 10/22/93
11
Country Registration No. Registration Date
Ecuador 453-96 09/23/96
Ecuador 786-97 08/28/97
Ecuador 787-97 08/28/97
Ecuador 788-97 08/28/97
Finland 129,667 12/20/93
Finland 203,224 11/29/96
France 93458007 09/24/93
France 95591164 08/02/96
Germany 2058553 03/02/94
Hong Kong 2158/97 06/09/95
Hong Kong 2159/97 06/09/95
Hong Kong 4406/94 07/25/94
Hungary 143 646 10/04/95
Hungary 134,664 5/10/93
Indonesia 356199 01/05/95
Ireland 172172 12/07/95
Ireland 172173 12/07/95
Italy 659776 03/15/93
Japan 2698568 10/31/94
Jordan 10047 12/18/96
Jordan 10048 12/18/96
Liechtenstein 8895 02/22/95
Liechtenstein 9606 01/09/96
Macau N/000002 05/14/96
Macau N/000001 08/29/96
Macau N/000003 08/29/96
Macau N/000004 08/29/96
Malta 22408 05/18/93
▇▇▇▇▇▇ ▇▇▇▇▇▇ 03/23/93
Mexico 521115 04/26/96
Mexico 521116 04/26/96
Mexico 521117 04/26/96
New Zealand 239703 11/18/96
Norway 161872 03/17/94
Panama 074288 02/03/95
Paraguay 173551 12/13/94
Peru 005398 02/16/94
Peru 006167 01/17/96
Peru 006168 01/17/96
Peru 280717 04/08/96
Poland 90845 07/02/96
Portugal 289,030 01/25/94
Puerto Rico 37,641 12/19/95
Puerto Rico 37,642 12/19/05
Puerto Rico 67,640 07/01/06
Qatar 9020 08/26/91
Russian Federation 125,129 04/10/95
Saudi Arabia 16,212 03/24/92
Singapore 3819/91 04/12/91
South Korea 240,792 06/13/92
Spain 1749985 12/03/93
Spain 1999614 11/30/95
Spain 1999615 11/30/95
Spain 1999616 11/30/95
12
Country Registration No. Registration Date
Sweden 314 750 06/28/96
Switzerland 405781 12/03/93
Switzerland 433650 10/3/95
Taiwan 086562 12/01/96
Taiwan 87945 01/16/97
Taiwan 88386 02/01/97
Thailand Bor4721 08/23/96
Thailand Bor4705 08/23/96
Thailand 155,156 04/30/91
Turkey 145657 05/28/93
United Kingdom 1461117 03/24/95
United Kingdom 2016383 05/31/96
United Kingdom 2,039,273 10/02/95
United States 1,190,503 02/23/82
United States 1,234,407 04/12/83
United States 1,298,505 10/02/84
United States 1,317,724 02/05/85
United States 1,326,326 03/19/85
United States 1,326,327 03/19/85
United States 1,474,000 01/26/88
United States 1,591,739 04/17/90
United States 1,616,464 10/09/90
United States 1,617,353 10/16/90
United States 1,630,621 01/08/91
United States 1,760,616 03/23/93
United States 1,772,814 05/25/93
United States 1,985,442 07/09/96
Uruguay 265,017 08/11/94
Vietnam 22 256 09/09/96
Vietnam s10167 12/15/93
Copyright Registrations
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▇▇▇▇▇▇ 455084
Canada 455085
Canada 456566
Canada 456567
Canada 456568
Canada 456569
Canada 456570
Canada 457995
Canada 458264
Canada 458383
Canada 458643
Canada 458644
Canada 458705
Canada 459397
Canada 459681
Canada 459682
Canada 460573
Canada 460574
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Canada ▇▇▇▇▇▇
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▇▇▇▇▇▇ 461,487
Canada 461,488
Canada 461,489
Canada 461,490
Canada 461745
Canada 461771
Canada 461772
Canada 462,339
Canada 462,340
Canada 462,341
Canada 462,342
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16
Open Development
INTELLECTUAL PROPERTY
Registrations and Applications: None
Copyrights (unregistered):
Software Programs and Software Applications:
openMEDIA Prepaid Calling Card (versions 2.x, 3.x and 4.x)
openMEDIA Enhanced Calling Card (versions 1.x, 3.x, and 4.x)
openMEDIA Wireless Prepaid (versions 2.x, 3.x, and 4.x)
openMEDIA Prepaid Calling Card Service Control Point (version 1.x, and 2.x)
openMEDIA Enhanced Calling Card Service Control Point (version 1.x, and 2.x)
openMEDIA Wireless Prepaid Service Control Point (version 1.x, and 2.x)
openMEDIA Administration openMEDIA Customer Service
openMEDIA Automatic Call Distribution
SCP
SCE (new architecture for openMEDIA)
Written Materials:
openMEDIA Prepaid Calling Card (versions 2.x, 3.x and 4.x) user documentation,
training material and support information.
openMEDIA Enhanced Calling Card (versions 1.x, 3.x, and 4.x) user documentation,
training material and support information.
openMEDIA Wireless Prepaid (versions 2.x, 3.x, and 4.x) user documentation,
training material and support information.
openMEDIA Prepaid Calling Card Service Control Point (version 1.x, and 2.x) user
documentation, training material and support information.
openMEDIA Enhanced Calling Card Service Control Point (version 1.x, and 2.x)
user documentation, training material and support information.
openMEDIA Wireless Prepaid Service Control Point (version 1.x, and 2.x) user
documentation, training material and support information.
openMEDIA Administration user documentation, training material and support
information.
openMEDIA Customer Service user documentation, training material and support
information.
openMEDIA Automatic Call Distribution user documentation, training material and
support information.
Written Materials In Process:
SCP
SCE (new architecture for openMEDIA)
17
Trademarks (unregistered):
Open Development
ODC
openMEDIA
openPLATINUM
SCP
SCE
Internet Domain Name: opendev
18
Schedule 7.6
INSURANCE
See attached.
[Attached 1 page is confidential and has been omitted and filed separately with
the Securities and Exchange Commission in connection with a request for
confidential treatment of such omitted material.]
1
Schedule 8.1
INDEBTEDNESS
Open Development Corp.
1. Cable & Wireless
$450,000 outstanding at 9 1/2% payable in monthly installments
2. Fleet Bank
a. $1,000,000 term note dated 6/27/96, as amended 6/27/97; 48
months; $708,333 outstanding
b. $1,000,000 term note dated 6/20/97; 36 months; $916,666
balance outstanding
c. $2,000,000 revolving note dated 6/20/97; $900,000 balance
outstanding
1
Exhibit 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Lenders
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Independence Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, GLENAYRE ELECTRONICS, INC. (the "Borrower"), refers to the
Credit Agreement dated as of October 31, 1997 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Borrower, the
Guarantors, the Lenders and NationsBank, N. A., as Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The Borrower hereby gives notice pursuant to
Section 2.1 of the Credit Agreement that it requests a Loan advance under the
Credit Agreement, and in connection therewith sets forth below the terms on
which such Loan advance is requested to be made:
(A) Date of Borrowing (which is a Business Day) _______________________
(B) Principal Amount of Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
GLENAYRE ELECTRONICS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
1
Exhibit 2.1(e)
FORM OF REVOLVING NOTE
$_________________ October 31, 1997
FOR VALUE RECEIVED, GLENAYRE ELECTRONICS, INC., a Colorado corporation (the
"Borrower"), hereby promises to pay to the order of __________________________,
its successors and assigns (the "Lender"), at the office of NationsBank, N. A.,
as Agent (the "Agent"), at ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ Center,
NC1-001-15-04, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such other place or places
as the holder hereof may designate), at the times set forth in the Credit
Agreement dated as of the date hereof among the Borrower, the Guarantors, the
Lenders and the Agent (as it may be amended, modified, extended or restated from
time to time, the "Credit Agreement"; all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Credit Agreement), but
in no event later than the Maturity Date, in Dollars and in immediately
available funds, the principal amount of ________________________ DOLLARS
($____________) or, if less than such principal amount, the aggregate unpaid
principal amount of all Loans made by the Lender to the Borrower pursuant to the
Credit Agreement, and to pay interest from the date hereof on the unpaid
principal amount hereof, in like money, at said office, on the dates and at the
rates selected in accordance with Section 2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Lender shall become immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees limited as set
forth in the Credit Agreement.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
1
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
GLENAYRE ELECTRONICS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
2
Exhibit 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Lenders
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Independence Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, GLENAYRE ELECTRONICS, INC. (the "Borrower"), refers to the
Credit Agreement dated as of OCTOBER 31, 1997 (as amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Borrower, the
Guarantors, the Lenders and NationsBank, N. A., as Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The Borrower hereby gives notice pursuant to
Section 3.2 of the Credit Agreement that it requests an extension or conversion
of a Loan outstanding under the Credit Agreement, and in connection therewith
sets forth below the terms on which such extension or conversion is requested to
be made:
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(B) Principal Amount of Extension or Conversion _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
GLENAYRE ELECTRONICS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
1
Exhibit 5.1(c)(i)
FORM OF LEGAL OPINION
1
Exhibit 5.1(c)(ii)
FORM OF LEGAL OPINION
1
Exhibit 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of GLENAYRE ELECTRONICS, INC. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of OCTOBER 31, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the other Credit Parties party thereto,
the Lenders party thereto and NationsBank, N. A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments;
and
b. Since ___________ (the date of the last similar certification, or, if
none, the Closing Date) no Default or Event of Default has occurred
and is continuing under the Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
GLENAYRE ELECTRONICS, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
1
Attachment to Officer's Certificate
Computation of Financial Covenants
2
Exhibit 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, 19__,
is by and between _____________________, a ___________________ (the "Domestic
Subsidiary"), and NATIONSBANK, N. A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of OCTOBER 31, 1997, by and
among GLENAYRE ELECTRONICS, INC., a Colorado corporation (the "Borrower"), the
other Credit Parties party thereto, the Lenders party thereto and NationsBank,
N. A., as Agent. All of the defined terms in the Credit Agreement are
incorporated herein by reference.
The Domestic Subsidiary is an Additional Credit Party, and, consequently,
the Credit Parties are required by Section 7.12 of the Credit Agreement to cause
the Domestic Subsidiary to become a "Guarantor".
Accordingly, the Domestic Subsidiary hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Domestic Subsidiary hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Domestic Subsidiary will be deemed to be
a party to the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement, and shall have all of the obligations of a Guarantor thereunder as if
it had executed the Credit Agreement. The Domestic Subsidiary hereby ratifies,
as of the date hereof, and agrees to be bound by, all of the terms, provisions
and conditions applicable to the Guarantors contained in the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
Domestic Subsidiary hereby jointly and severally together with the other
Guarantors, guarantees to each Lender and the Agent, as provided in Section 4 of
the Credit Agreement, the prompt payment and performance of the Credit Party
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) strictly in accordance with the terms
thereof.
2. The address of the Domestic Subsidiary for purposes of all notices and
other communications is ____________________, ____________________________,
Attention of ______________ (Facsimile No. ____________).
3. The Domestic Subsidiary hereby waives acceptance by the Agent and the
Lenders of the guaranty by the Domestic Subsidiary under Section 4 of the Credit
Agreement upon the execution of this Agreement by the Domestic Subsidiary.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina without reference to the
conflicts or choice of law principles thereof.
IN WITNESS WHEREOF, the Domestic Subsidiary has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
[DOMESTIC SUBSIDIARY]
By:_______________________________
Name:_____________________________
Title:____________________________
Acknowledged and accepted:
1
NATIONSBANK, N. A., as Agent
By:_______________________________
Name:_____________________________
Title:____________________________
2
Exhibit 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October 31, 1997, as
amended and modified from time to time thereafter (the "Credit Agreement") among
GLENAYRE ELECTRONICS, INC., the other Credit Parties party thereto, the Lenders
party thereto and NationsBank, N. A., as Agent. Terms defined in the Credit
Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Credit Documents as of the date hereof equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement and the other Credit Documents. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the Loans owing
to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Agent exchange such Notes for new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment retained by the
Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of North Carolina without regard to the
conflicts or choice of law principles thereof.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
2
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By:_______________________________
Name:_____________________________
Title:____________________________
_____________________, as Assignee
By:_______________________________
Name:_____________________________
Title:____________________________
Notice address of Assignee:
<>
__________________________________
__________________________________
Attn: ____________________________
Telephone: (___) _________________
Telecopy: (___) _________________
CONSENTED TO:
NATIONSBANK, N. A., *
as Agent
By:_______________________________
Name:_____________________________
Title:____________________________
GLENAYRE ELECTRONICS, INC.*
By:_______________________________
Name:_____________________________
Title:____________________________
--------
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
3
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment* :
(e) Commitment Percentage Assigned (expressed as a percentage
set forth to at least 8 decimals) %
(f) Commitment Percentage of Assignee after giving effect to
this Assignment and Acceptance as of the Effective Date
(set forth to at least 8 decimals) %
(g) Commitment Percentage of Assignor after giving effect to
this Assignment and Acceptance as of the Effective Date
(set forth to at least 8 decimals) %
(h) Committed Amount as of Effective Date $___________
(i) Dollar Amount of Assignor's Commitment Percentage as of
the Effective Date (the amount set forth in (h)
multiplied by the percentage set forth in (g)) $___________
(j) Dollar Amount of Assignee's Commitment Percentage as of
the Effective Date (the amount set forth in (h)
multiplied by the percentage set forth in (f)) $___________
--------
* This date should be no earlier than five Business Days after delivery of
this Assignment and Acceptance to the Agent.
4