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EXHIBIT 10.12
CREDIT AGREEMENT
AMONG
▇▇▇, INC.
AND
THE LENDERS NAMED HEREIN
AND
U.S. BANK NATIONAL ASSOCIATION
AS AGENT
AUGUST 28, 2000
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TABLE OF CONTENTS
Page
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Article I Definitions............................................................2
SECTION 1.1 Defined Terms.......................................2
SECTION 1.2 Interpretation.....................................16
SECTION 1.3 Headings...........................................16
Article II The Credits...........................................................16
SECTION 2.1 Line Of Credit.....................................16
SECTION 2.2 Term Loans.........................................19
SECTION 2.3 The Letter Of Credit Facility......................21
SECTION 2.4 Notice Of Borrowing................................22
SECTION 2.5 Interest/Fees......................................23
SECTION 2.6 Conversion Of Interest Options.....................25
SECTION 2.7 Other Payment Terms................................26
SECTION 2.8 Prepayment.........................................27
SECTION 2.9 Funding............................................28
SECTION 2.10 Pro Rata Treatment.................................29
SECTION 2.11 Change Of Circumstances............................29
SECTION 2.12 Taxes On Payments..................................31
SECTION 2.13 Funding Loss Indemnification.......................32
SECTION 2.14 Authorized Representatives.........................33
SECTION 2.15 Collateral.........................................33
SECTION 2.16 Guaranties.........................................34
Article III Payments With Respect To The Bonds And The Letter Of Credit...........34
SECTION 3.1 Annual Redemption Of Bonds.........................34
SECTION 3.2 Reimbursement Deposit Account......................35
SECTION 3.3 Other Optional Redemptions Of Bonds................35
Article IV Representations And Warranties........................................35
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SECTION 4.1 Legal Status.......................................36
SECTION 4.2 Authorization And Validity.........................36
SECTION 4.3 No Violation.......................................36
SECTION 4.4 No Additional Approvals............................36
SECTION 4.5 Litigation.........................................36
SECTION 4.6 Correctness Of Financial Statement.................37
SECTION 4.7 Income Tax Returns.................................37
SECTION 4.8 No Subordination...................................37
SECTION 4.9 Permits, Franchises................................37
SECTION 4.10 ERISA..............................................37
SECTION 4.11 Other Obligations..................................38
SECTION 4.12 Government Regulations.............................38
SECTION 4.13 Securities Activities..............................38
SECTION 4.14 Environmental Matters..............................38
SECTION 4.15 Real Property Collateral...........................38
SECTION 4.16 Subsidiaries.......................................39
SECTION 4.17 Truth, Accuracy Of Information.....................39
Article V Conditions............................................................39
SECTION 5.1 Conditions Of Initial Extension Of Credit..........39
SECTION 5.2 Conditions Of Each Extension Of Credit.............43
Article VI Affirmative Covenants.................................................44
SECTION 6.1 Punctual Payments..................................44
SECTION 6.2 Accounting Records.................................44
SECTION 6.3 Financial Statements...............................44
SECTION 6.4 Compliance.........................................45
SECTION 6.5 Insurance..........................................45
SECTION 6.6 Facilities.........................................45
SECTION 6.7 Taxes And Other Liabilities........................46
SECTION 6.8 Litigation.........................................46
SECTION 6.9 Financial Condition................................46
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SECTION 6.10 Notice To Agent....................................47
SECTION 6.11 Site Visits; Right To Stop Work....................47
SECTION 6.12 Security...........................................47
SECTION 6.13 Related Documents..................................47
SECTION 6.14 Investigations And Inquiries.......................47
SECTION 6.15 Contract Collateral................................48
SECTION 6.16 Borrowing Base Deficiency..........................48
SECTION 6.17 Notice Of Certain Matters..........................48
Article VII Negative Covenants....................................................49
SECTION 7.1 Use Of Funds.......................................49
SECTION 7.2 Other Indebtedness.................................50
SECTION 7.3 Merger, Consolidation, Organizational
Structure, Transfer Of Assets......................50
SECTION 7.4 Guaranties.........................................50
SECTION 7.5 Loans, Advances, Investments.......................50
SECTION 7.6 Dividends And Distributions........................50
SECTION 7.7 Pledge Of Assets...................................51
Article VIII Events Of Default.....................................................51
SECTION 8.1 Events Of Default..................................51
SECTION 8.2 Remedies...........................................53
Article IX The Agent.............................................................54
SECTION 9.1 Authorization And Action...........................54
SECTION 9.2 Reliance By Agent..................................55
SECTION 9.3 Defaults...........................................55
SECTION 9.4 Indemnification....................................55
SECTION 9.5 Non-Reliance On Agent..............................56
SECTION 9.6 Successor Agent....................................56
SECTION 9.7 Execution Of Loan Documents........................57
SECTION 9.8 Agent In Its Individual Capacity...................57
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Article X Miscellaneous.........................................................57
SECTION 10.1 Notices............................................57
SECTION 10.2 Costs, Expenses Attorneys' Fees....................58
SECTION 10.3 Indemnification....................................58
SECTION 10.4 Waivers, Amendments................................59
SECTION 10.5 Successors And Assigns.............................60
SECTION 10.6 Setoff.............................................63
SECTION 10.7 No Waiver; Cumulative Remedies.....................63
SECTION 10.8 Entire Agreement, Amendment........................63
SECTION 10.9 No Third Party Beneficiaries.......................63
SECTION 10.10 Time...............................................64
SECTION 10.11 Severability Of Provisions.........................64
SECTION 10.12 Governing Law......................................64
SECTION 10.13 Submission To Jurisdiction.........................64
SECTION 10.14 Arbitration........................................64
SECTION 10.15 Counterparts.......................................67
SECTION 10.16 Confidentiality....................................67
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LIST OF SCHEDULES AND EXHIBITS
Schedule 1 Lenders and Proportionate Shares
Schedule 2.1(d) Borrower Letter of Credit Agreement
Schedule 2.3(a) Amortization Schedule for the Letter of Credit Facility
Schedule 2.13(b) Prepayment Indemnity
Schedule 4
Schedule 5 Contract Collateral Description
Schedule 7.4 Existing Indebtedness
Schedule 7.5 Existing Guaranties
Schedule 7.7 Existing Loans; Advances; Investments
Schedule 7.8 Existing Liens; Pledges of Assets
Exhibit A Letter of Credit
Exhibit B Form of Line of Credit Note
Exhibit C Form of Term Note
Exhibit D Notice of Borrowing
Exhibit E Notice of Conversion or Continuation
Exhibit F Notice of Authorized Representatives
Exhibit G Assignment and Assumption Agreement
Exhibit H Borrowing Base Certificate
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of August 28, 2000, by
and among ▇▇▇, INC., a Delaware corporation ("Borrower"), each of the financial
institutions from time to time listed on Schedule I attached hereto, as amended
from time to time (collectively, "Lenders"), and U.S. BANK NATIONAL ASSOCIATION
("U.S. Bank"), as agent for the Lenders (in such capacity, "Agent"), and as
arranger.
RECITALS
WHEREAS, Borrower has requested from Lenders the line of credit,
term loan and other credit facilities described herein for the purposes
described herein; and
WHEREAS, Borrower has issued a series of bonds designated the
Variable Rate Taxable Demand Revenue Bonds Series 1998, in the aggregate
principal amount of $11,615,000.00 (the "Bonds"), pursuant to an Indenture dated
as of December 1, 1998 (the "Indenture") between Borrower and ▇▇▇▇▇▇ Trust
Company of California, as trustee (the "Trustee"); and
WHEREAS, to support certain payments with respect to the Bonds,
Borrower requested U.S. Bank to issue, and U.S. Bank issued for the account of
Borrower and for the benefit of the Trustee, an irrevocable direct-pay letter of
credit (the "Letter of Credit"), in the original stated amount of
$11,986,680.00, a copy of which is attached hereto as Exhibit A, pursuant to
that certain Reimbursement Agreement dated as of December 1, 1998, between
Borrower and U.S. Bank; and
WHEREAS, as of the date of this Agreement, [$11,092,000.00] of
the principal amount of the Bonds remains outstanding; and
WHEREAS, Borrower will be responsible for amounts drawn under the
Letter of Credit and for certain fees and amounts due with respect to the Letter
of Credit and this Credit Agreement; and
WHEREAS, Lenders and Agent have agreed to provide said Letter of
Credit facility to Borrower, as well as a revolving line of credit facility and
certain term loans to Borrower on the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and
promises of the parties contained herein, Agent, Lenders and Borrower hereby
agree as follows:
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ARTICLE I
---------
DEFINITIONS
SECTION 1.1 DEFINED TERMS. As used in this Agreement, all terms
defined above shall have the meanings set forth above, and the following terms
shall have the meanings set forth after each:
"Accounts" means all currently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods or the rendition of
services by Borrower, irrespective of whether earned by performance, and
any and all credit insurance, guaranties, or security therefor.
"Agent's Office" means (i) initially, Agent's office designated
as such in Schedule I attached hereto, and (ii) subsequently, such other
office designated as such in writing by Agent to Lenders and Borrower.
"Agreement" means this Credit Agreement, as amended, amended and
restated, modified or supplemented from time to time.
"Applicable Lending Office" means, with respect to each Lender,
(i) initially, its office designated as such in Schedule I attached
hereto, and (ii) subsequently, such other office or offices designated
as such in writing by such Lender to Agent.
"Assignee" has the meaning assigned to that term in Section
10.5(c) hereof.
"Assignment" has the meaning assigned to that term in Section
10.5(c) hereof.
"Assignment Agreement" has the meaning assigned to that term in
Section 10.5(c) hereof.
"Assignor" has the meaning assigned to that term in Section
10.5(c) hereof.
"Authorized Representatives" means those officers and employees
designated by Borrower on the most current Notice of Authorized
Representatives delivered by Borrower to Agent as being authorized to
request any borrowing or to make any interest rate selection on behalf
of Borrower hereunder, or to give Agent any other notice hereunder that
is required by the terms hereof to be made through one of Borrower's
Authorized Representatives.
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"Bankruptcy Code" means the Bankruptcy Reform Act, Title 11 of
the United States Code, as amended or recodified from time to time,
including (unless the context otherwise requires) any rules or
regulations promulgated thereunder.
"Bond Interest Payment Date" has the meaning assigned to that
term in the Indenture.
"Bonds" means the Bonds described in the Recitals hereof.
"Borrower Letter of Credit(s)" has the meaning assigned to that
term in Section 2.1(d) hereof.
"Borrower Letter of Credit Agreement(s)" has the meaning assigned
to that term in Section 2.1(d) hereof.
"Borrower's Books" means all of Borrower's books and records
including: ledgers; records indicating, summarizing, or evidencing
Borrower's properties or assets (including the Personal Property
Collateral) or liabilities; all information relating to Borrower's
business operations or financial condition; and all computer programs,
disk or tape files, printouts, runs, or other computer prepared
information.
"Borrowing Base" has the meaning assigned to that term in Section
2.1(b) hereof.
"Borrowing Base Certificate" has the meaning assigned to that
term in Section 2.1(b) hereof.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or Seattle are
authorized or required by law to close and, if the applicable Business
Day relates to any LIBOR borrowing, means such a day which is also a day
on which banks in the City of London are generally open for interbank or
foreign exchange transactions.
"Change of Law" means the adoption of any Governmental Rule, any
change in any Governmental Rule or the application or requirements
thereof (whether such change occurs in accordance with the terms of such
Governmental Rule as enacted, as a result of amendment or otherwise),
any change in the interpretation or administration of any Governmental
Rule by any Governmental Authority, or compliance by any Lender (or any
entity controlling such Lender) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority.
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"Closing Date" means the date on which all of the conditions set
forth in Section 5.1 of this Agreement have been satisfied or waived by
Agent.
"Collateral" means, collectively, the Personal Property
Collateral and the Real Property Collateral.
"Contract Collateral" has the meaning assigned to that term in
Section 5.1(b)(xiv) hereof.
"Credits" means the Line of Credit, the Term Loans and the Letter
of Credit Facility.
"Date of Issuance" means December 1, 1998.
"Deeds of Trust" means, collectively, all of the deeds of trust
for the benefit of Agent that secure the obligations of Borrower to
Agent and Lenders under this Agreement.
"Default" means an Event of Default or an event or condition
which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default.
"EBITDA" means, for the most recent trailing four-quarter period,
consolidated net income from operations (after eliminating all
extraordinary items of gain or loss) plus interest expense, income
taxes, depreciation and amortization, in each case defined in accordance
with GAAP and, if applicable, to the extent each has been deducted in
the determination of net income.
"El Monte Property" means that certain real property located at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, in the City of El Monte, County of Los Angeles,
California, owned by Borrower and improved with a commercial building
used for research and development and manufacturing purposes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time, including (unless the
context otherwise requires) any rules or regulations promulgated
thereunder.
"Event of Default" has the meaning assigned to that term in
Section 8.1 hereof.
"Expiration Date" means December 1, 2008.
"Federal Funds Rate" means, for any day, the weighted average of
the per annum rates on overnight Federal funds transactions with member
banks of the Federal Reserve System arranged by Federal funds brokers as
published by
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the Federal Reserve Bank of New York for such day (or, if such rate is
not so published for any day, the average rate quoted to Agent on such
day by three (3) Federal funds brokers of recognized standing selected
by Agent).
"Fixed Charge Coverage Ratio" means the ratio of (A) EBITDA less
the aggregate amount of (i) unfinanced capital expenditures, (ii) cash
taxes, and (ii) permitted dividends, distributions and treasury stock
purchases, divided by (B) the aggregate amount of the following, each
measured for the most recent four historical quarters (excluding the
current quarter in possession) (i) cash Interest Expense (including any
letter of credit fees payable to U.S. Bank) and (ii) capital lease
payments plus the average of current maturities of long-term debt
(including all bond redemptions required by this Agreement) measured for
the most recent four historical quarters (excluding the current quarter
in possession) and (iii) the current maturity of subordinated debt
measured for the most recent four historical quarters (excluding the
current quarter in possession).
"Fixed Rate Term" means a period of one (1), two (2), three (3),
or six (6) months, as designated by Borrower, during which all or a
portion of the Line of Credit or the Term Loan bears interest determined
in relation to LIBOR; provided however, that (a) no Fixed Rate Term may
be selected for a principal amount less than One Million Dollars
($1,000,000.00); (b) no Fixed Rate Term shall extend beyond the
scheduled maturity date hereof; (c) any Fixed Rate Term which would
otherwise expire on a day which is not a Business Day shall be extended
to the next succeeding Business Day, unless the result of such extension
would be to extend such Fixed Rate Term into another calendar month, in
which event the Fixed Rate Term shall end on the immediately preceding
Business Day; (d) any Fixed Rate Term that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Fixed Rate
Term) shall end on the last Business Day of a calendar month; and (e)
with respect to the Term Loans, no Fixed Rate Term shall extend beyond a
date on which Borrower is required to make a scheduled payment of
principal on the Term Loans unless the aggregate principal amount of
Term Loans bearing interest at the Reference Rate plus the aggregate
principal amount of Term Loans bearing interest at LIBOR with Fixed Rate
Terms expiring on or before such date equals or exceeds the principal
amount required to be paid on the Term Loans on such date.
"Funded Debt" means the aggregate amount of all obligations for
(1) borrowed money, including senior bank debt, subordinated debt and
amounts owing under the Bonds; (2) capital leases; (3) issued but
undrawn letters of credit, except the direct pay Letter of Credit
supporting the Bonds, plus any
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amounts outstanding under drawn letters of credit; and (4) contingent
obligations.
"GAAP" means generally accepted accounting principles as in
effect in the United States of America from time to time, consistently
applied.
"General Intangibles" means all of Borrower's present and future
general intangibles and other personal property (including the Contract
Collateral and all contract rights, rights arising under common law,
statutes, or regulations, choses or things in action, goodwill, patents,
trade names, trademarks, servicemarks, copyrights, blueprints, drawings,
purchase orders, customer lists, monies due or recoverable from pension
funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, literature, reports,
catalogs, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), other than goods, Accounts and Negotiable
Collateral.
"Governmental Authority" means any domestic or foreign national,
state or local government, any political subdivision thereof, any
department, agency, authority or bureau of any of the foregoing, or any
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including the
Federal Deposit Insurance Corporation, the Federal Reserve Board, the
Comptroller of the Currency, any central bank or any comparable
authority.
"Governmental Rule" means any law, rule, regulation, ordinance,
order, code interpretation, judgment, decree, directive, guideline,
policy or similar form of decision of any Governmental Authority.
"Guarantee" means any guarantee of Borrower's obligations to
Agent and Lenders under the Loan Documents executed by a Guarantor.
"Guarantor" means, subject to the release provisions set forth in
Section 2.16 hereof, collectively, ▇▇▇-Japan, Beijing Tongmei Xtal
Technology Co., Ltd., American Xtal Technology (Hong Kong), Lyte
Optronics, Inc., Lyte Optronics Ltd. (UK), Advanced Semiconductor
(Xiamen), Bestal Substrate Foreign Sales Corp., and each future
wholly-owned subsidiary of Borrower.
"Indemnitees" has the meaning assigned to that term in Section
10.3 hereof.
"Indenture" has the meaning assigned to that term in the Recitals
hereof.
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"Interest Expense" means any and all interest owing by Borrower
under any debt obligations, including the Credits, during the measured
period.
"Inventory" means all present and future inventory in which
Borrower has any interest, including goods held for sale or lease or to
be furnished under a contract of service and all of Borrower's present
and future raw materials, work in process, finished goods, and packing
and shipping materials, wherever located.
"Investment Property" means all of Borrower's presently existing
and hereafter acquired or arising investment property (as that term is
defined in Section 9115 of the California Uniform Commercial Code).
"Issuance Spread" means two and one-half of one percent (2.50%)
per annum.
"Letter of Credit" has the meaning assigned to that term in the
Recitals hereof.
"Letter of Credit Facility" means the credit facility available
to Borrower pursuant to Section 2.3 hereof pursuant to which U.S. Bank
has issued the direct pay Letter of Credit to the Trustee.
"LIBOR" means, for each Fixed Rate Term, the rate per annum
(computed on the basis of a 360-day year and the actual number of days
elapsed and rounded upward if necessary to the nearest whole 1/16 of 1%)
and determined pursuant to the following formula:
Base LIBOR
LIBOR = ----------------------------------------------------
100% - LIBOR Reserve Percentage
As used herein, (i) "Base LIBOR" shall mean the rate per annum at
which United States dollar deposits would be offered to U.S. Bank in the
London interbank market at approximately 11:00 a.m. London time on the
date which is two Business Days prior to the first day of a Fixed Rate
Term for delivery of funds on the first day of such Fixed Rate Term for
a period of time substantially equal to the number of days in such Fixed
Rate Term and in an amount substantially equal to the principal amount
to which such Fixed Rate Term applies, and (ii) "LIBOR Reserve
Percentage" shall mean the reserve percentage measured as of the date
which is two Business Days prior to the date of pricing, prescribed by
the Board of Governors of the Federal Reserve System (or any successor)
for "Eurocurrency Liabilities" (as defined in Regulation D of
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the Federal Reserve Board, as amended), required to be maintained by
U.S. Bank, adjusted by U.S. Bank for expected changes in such reserve
percentage during the applicable Fixed Rate Term.
"Line Maturity Date" means May 31, 2002.
"Line of Credit" means a revolving credit facility in the maximum
principal amount of $20,000,000.00, as defined more fully in Section 2.1
hereof.
"Line of Credit Facility Fee" has the meaning assigned to that
term in Section 2.5(c)(i).
"Line of Credit Note" means a promissory note executed by
Borrower in favor of a Lender to evidence advances under the Line of
Credit, substantially in the form of Exhibit B attached hereto.
"Line of Credit Pricing Grid" means the following Line of Credit
Pricing Grid:
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- APPLICABLE MARGINS (IN BASIS POINTS) & FEE -
-----------------------------------------------------------------------------------------------------
RATIO OF FUNDED PRICING LIBOR REFERENCE LINE OF CREDIT
DEBT TO EBITDA LEVEL MARGIN RATE MARGIN FACILITY FEE
-----------------------------------------------------------------------------------------------------
less than 1.00 I 175 50 25.0
equal to/greater than 1.00 less than 1.50 II 200 75 25.0
equal to/greater than 1.50 less than 2.00 III 225 100 37.5
equal to/greater than 2.00 less than 2.50 IV 250 125 50.0
-----------------------------------------------------------------------------------------------------
Borrower shall be eligible for Level I pricing when its ratio of
Funded Debt to EBITDA is less than 1.00:1.00; for Level II pricing when
such ratio is equal to or greater than 1.00:1.00, but less than
1.50:1.00; for Level III pricing when such ratio is equal to or greater
than 1.50:1.00, but less than 2.00:1.00; for Level IV pricing when such
ratio is equal to or greater than 2.00:1.00, but less than 2.50:1.00.
This ratio shall be measured quarterly for the preceding four-quarter
period. The pricing will be set at Level IV until receipt of the first
financial covenant compliance reflecting the Funded Debt to EBITDA
ratio.
"Loan Costs" means all costs incurred by Agent in connection with
the Credits, including, without limitation, all taxes and assessments,
recording fees, title insurance premiums and other title charges,
document binding costs,
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appraisal fees, lien and judgment search costs, fees of architects,
engineers, surveyors and any special consultants, construction and
Collateral inspection and exam fees, brokers fees (except as otherwise
specified herein), escrow fees, all travel and out-of-pocket expenses of
Agent to conduct audits or inspections and wire transfer fees.
"Loan Documents" means this Agreement, the Notes, the Security
Documents and each other notice, document, contract or instrument
required by or at any time delivered to Agent in connection with this
Agreement.
"Majority Lenders" means two (2) or more Lenders whose
Proportionate Shares at any time equal or exceed sixty-six and
two-thirds percent (66-2/3%) of the Total Commitments.
"Material Adverse Effect" means a material adverse effect on (i)
the business operations or financial condition of Borrower and its
Subsidiaries taken as a whole or (ii) the ability of Borrower to repay
the amounts loaned to Borrower by Lenders hereunder.
"Minimum Interest Coverage Ratio" means EBITDA divided by
Interest Expense (net of capitalized interest expense) for the most
recent four quarter period.
"Monterey Park Property" means that certain real property located
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, in the City of ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ owned by Borrower and improved with a commercial
building used for research and development and manufacturing purposes.
"Negotiable Collateral" means all of Borrower's present and
future letters of credit, notes, drafts, instruments, securities
(including the shares of stock of Subsidiaries of Borrower), documents,
personal property leases (wherein Borrower is the lessor), and chattel
paper.
"Notes" means, collectively, the Line of Credit Note and all of
the Term Notes.
"Notice of Authorized Representatives" has the meaning set forth
in Section 2.14 hereof.
"Notice of Borrowing" has the meaning set forth in Section 2.4
hereof.
"Notice of Conversion or Continuation" has the meaning assigned
to that term in Section 2.6(b) hereof.
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"Participant" has the meaning assigned to that term in Section
10.5(b) hereof.
"Permitted Indebtedness" means, subject to Borrower's compliance
with the financial covenants required under this Agreement, the
following:
(a) Indebtedness of Borrower in favor of Lenders arising
hereunder or any other Loan Document:
(b) Capital leases incurred solely to purchase equipment which
is secured by a purchase money security interest and is
not in excess of the lesser of the purchase price for such
equipment or the fair market value of such equipment on
the date of acquisition.
(c) Indebtedness to trade creditors incurred in the ordinary
course of business;
(d) Indebtedness set forth on Schedule 7.7 hereto;
(e) Indebtedness incurred to refinance any Indebtedness
permitted under the foregoing clause (b) or clause (d);
(f) Accrued dividends on the capital stock of Borrower;
(g) Interest rate and currency hedging agreements;
(h) Guaranties of any Subsidiary's suppliers in connection
with the purchase of supplies in the ordinary course of
business;
(i) Guaranties of lease obligations incurred in the ordinary
course of business and to the extent otherwise permitted
hereunder;
"Permitted Investments" means, subject to Borrower's compliance
with the financial covenants required under this Agreement, the
following:
(a) Investments existing on the Closing Date and disclosed in
Schedule 7.7 attached hereto;
(b) Marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency
or any State thereof maturing within one year from the
date of acquisition thereof, (ii) commercial paper
maturing no more than one year from the date of creation
thereof and currently having a rating of at least A-2 or
P-2 from either Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, (iii) certificates of
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deposit maturing no more than one year from the date of
investment therein; and (iv) money market accounts;
(c) Investments consisting of travel advances and employee
relocation loans and other employee loans and advances in
the ordinary course of business;
(d) Joint ventures or strategic alliances in the ordinary
course of Borrower's business consisting of the
non-exclusive licensing of technology, the development of
technology or the providing of technical support, provided
that any such investments by Borrower do not exceed
$3,000,000.00 in the aggregate in any fiscal year; and
(e) Investments or capital infusions in Borrower's
Subsidiaries.
"Permitted Liens" means, subject to Borrower's compliance with
the financial covenants required under this Agreement, the following:
(a) Liens in favor of Agent;
(b) liens and security interests existing on the Closing Date
and disclosed in Schedule 4.15 attached hereto;
(c) liens for taxes, fees, assessment or other governmental
charges or levies, either not delinquent or being
contested in good faith by appropriate proceedings;
(d) liens securing claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other
like persons or entities imposed without action of such
parties, provided that the payment thereof is not yet
required;
(e) liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default
hereunder;
(f) liens incurred or deposits made in the ordinary course of
Borrower's business in connection with workers'
compensation, unemployment insurance, Social Security and
other like laws;
(g) liens and security interests (a) upon or in any equipment
acquired or held by the Borrower to secure the purchase
price of such equipment or indebtedness incurred solely
for the purpose of financing the acquisition of such
equipment, or (b) existing on such equipment at the time
of its acquisition, provided that the
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lien and security interest is confined solely to the
property so acquired and improvements thereon, and the
proceeds of such equipment;
(h) liens consisting of leases and subleases and licenses and
sublicenses granted to others in the ordinary course of
Borrower's business not interfering in any material
respect with the business of Borrower and any interest or
title of a lessor or licensor under any lease or license,
as applicable;
(i) liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in
connection with the importation of goods; and
(j) liens that are not prior to Agent's security interest
which constitute rights of set-off of a customary nature.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity
or organization, including a Governmental Authority.
"Personal Property Collateral" means each of the following:
(k) the Accounts,
(l) Borrower's Books,
(m) the General Intangibles,
(n) the Inventory,
(o) the Investment Property,
(p) the Negotiable Collateral,
(q) any money, or other assets of Borrower that now or
hereafter come into the possession, custody, or control of
U.S. Bank or the Lenders, and
(r) the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance
covering any or all of the Personal Property Collateral,
and any and all Accounts, Borrower's Books, General
Intangibles, Inventory, Investment Property, Negotiable
Collateral, Real Property, money, deposit accounts, or
other tangible or intangible property resulting from
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the sale, exchange, collection, or other disposition of
any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof.
"Plan" means any defined employee pension benefit plan as defined
in ERISA.
"Proportionate Share" means, for each Lender, the dollar amount
determined at any time by multiplying the percentage set forth opposite
such Lender's name in Schedule 1 attached hereto by the amount of the
Total Commitments at such time, and shall include, where the context so
requires, the amount of all outstanding credit from such Lender to
Borrower pursuant to this Agreement and the obligation of such Lender to
make advances or otherwise extend credit up to such amount on the terms
and subject to the conditions set forth herein.
"Real Property" means collectively, the Monterey Park Property,
the El Monte Property, the Technology Drive Property and the Solar Way
Property.
"Real Property Collateral" means, collectively, the Monterey Park
Property, the El Monte Property, the Technology Drive Property and the
Solar Way Property.
"Reference Rate" means at any time the rate of interest which
U.S. Bank establishes as its reference rate and is not necessarily the
lowest rate of interest which it collects from any borrower or class of
borrowers. If U.S. Bank ceases to publicly announce or publish its
Reference Rate, U.S. Bank will choose a new index by using a comparable
index or reference rate as its Reference Rate.
"Register" has the meaning assigned to that term in Section
10.5(d) hereof.
"Reimbursement Default Rate" has the meaning assigned to that
term in Section 2.3(b).
"Reimbursement Deposit Account" means the demand deposit account
established by Borrower with U.S. Bank as defined in Section 3.2 hereof.
"Reimbursement Obligations" mean the obligations of Borrower to
Lenders described in Section 2.3(b) hereof.
"Related Documents" means the Bonds, the Indenture, the Bond Loan
Agreement, the Deeds of Trust, the UCC-1 Financing Statements, the
Security Agreements, the Guarantees and any other agreement or
instrument related to the issuance of the Bonds and pertaining to
Borrower.
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"Security Agreements" means, collectively, all of the security
agreements for the benefit of Agent that secure the obligations of
Borrower to Agent and Lenders under this Agreement.
"Security Documents" means, collectively, the Deeds of Trust and
the Security Agreements.
"Solar Way Property" means that certain real property located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ in the City of Fremont, County of Alameda, California
owned by Borrower and improved with a manufacturing and research and
development facility.
"Stated Amount" means $11,986,680.00, as such amount may be
reduced from time to time as a result of unreinstated Drawings on the
Letter of Credit in accordance with the terms thereof.
"Subsidiary" means any corporation, association, limited
liability company, partnership, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other
equity interest is owned directly or indirectly by Borrower.
"Tangible Net Worth" means, at any time, total stockholders'
equity at such time less the amount of any treasury stock less the value
of any in tangible assets at such time.
"Taxes" has the meaning assigned to that term in Section 2.12(a)
hereof.
"Technology Drive Property" means that certain real property
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in the City of Fremont, County of
Alameda, California owned by Borrower and improved with a manufacturing
facility.
"Term Loan A" means a credit facility available to Borrower in
the maximum principal amount of $1,190,000.00, as defined more fully in
Section 2.2 hereof.
"Term Loan A Maturity Date" means May 31, 2003.
"Term Loan B" means a credit facility available to Borrower in
the maximum principal amount of $1,610,000.00, as defined more fully in
Section 2.2 hereof.
"Term Loan B Maturity Date" means May 31, 2003.
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"Term Loan C" means a credit facility available to Borrower in
the maximum principal amount of $3,200,000.00, as more fully defined in
Section 2.2 hereof.
"Term Loan C Maturity Date" means May 31, 2003.
"Term Loan Pricing Grid" means the following Term Loan Pricing
Grid:
---------------------------------------------------------------------------------------------
- APPLICABLE MARGINS (IN BASIS POINTS) -
---------------------------------------------------------------------------------------------
RATIO OF FUNDED PRICING LIBOR MARGIN REFERENCE
DEBT TO EBITDA LEVEL RATE MARGIN
---------------------------------------------------------------------------------------------
less than 1.00 I 200 75
equal to/greater than 1.00 less than 1.50 II 225 100
equal to/greater than 1.50 less than 2.00 III 250 125
equal to/greater than 2.00 less than 2.50 IV 275 150
---------------------------------------------------------------------------------------------
Borrower shall be eligible for Level I pricing when its ratio of Funded
Debt to EBITDA is less than 1.00:1.00; for Level II pricing when such
ratio is equal to or greater than 1.00:1.00, but less than 1.50:1.00;
for Level III pricing when such ratio is equal to or greater than
1.50:1.00, but less than 2.00:1.00; for Level IV pricing when such ratio
is equal to or greater than 2.00:1.00, but less than 2.50:1.00. This
ratio shall be measured quarterly for the preceding four-quarter period.
The pricing will be set at Level IV until receipt of the first financial
covenant compliance reflecting the Funded Debt to EBITDA ratio.
"Term Loans" means, collectively, Term Loan A, Term Loan B and
Term Loan C.
"Term Notes" means, collectively, each of the promissory notes
executed by Borrower in favor of a Lender to evidence advances under
each of the Term Loans, substantially in the form of Exhibit C attached
hereto.
"Termination Date" has the meaning assigned to that term in
Section 3.2 hereof.
"Total Commitments" means, for all Lenders and at any time, the
then aggregate amount of (i) the outstanding principal balance of each
of the Credits, and (ii) the maximum undisbursed principal amount of
each of the Credits.
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"Treasury Rate" means the Issuance Spread plus the yield to
maturity of the most recently issued one, two or three year U.S.
Treasury Security, as elected by Borrower, as quoted in the Wall Street
Journal on the date of election of a Treasury Rate. If such date is not
a Business Day, then the quote shall be obtained on the Business Day
immediately preceding such date. If the Wall Street Journal (i) quotes
more than one such one, two or three year U.S. Treasury Security, the
highest of such quotes shall apply, or (ii) ceases to publish such
quotes, the one, two or three year U.S. Treasury Security, as elected by
Borrower, shall be determined from such substitute financial reporting
service or source as U.S. Bank in its reasonable discretion shall
determine.
"Trustee" has the meaning assigned to that term in the Recitals
hereof.
SECTION 1.2 INTERPRETATION. The meaning of each defined term is
equally applicable to both the singular and plural forms of the terms defined.
As used in this Agreement and each of the other Loan Documents, the term
"including" is not limiting, and means "including without limitation."
SECTION 1.3 HEADINGS. Headings in this Agreement and each of the
other Loan Documents are for convenience of reference only and are not part of
the substance hereof or thereof.
ARTICLE II
----------
THE CREDITS
SECTION 2.1 LINE OF CREDIT.
(a) Line of Credit. On the terms and subject to the conditions
set forth in this Agreement, each Lender hereby severally agrees, on a pro rata
basis in accordance with Schedule 1 attached hereto, to make advances to
Borrower under the Line of Credit from time to time up to and including the Line
Maturity Date, not to exceed at any time the aggregate principal amount of
Twenty Million Dollars ($20,000,000.00), the proceeds of which shall be used for
general corporate purposes, including working capital financing, and for the
issuance of standby and commercial letters of credit, subject to a sublimit of
$250,000.00 for such letters of credit as described in subparagraph (d), below.
Borrower's obligation to repay advances under the Line of Credit shall be
evidenced by the Line of Credit Note, all terms of which are incorporated herein
by this reference.
(b) Limitation on Borrowings. Outstanding borrowings under the
Line of Credit, to a maximum of the principal amount set forth above, shall not
at any
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time exceed an aggregate of (i) eighty percent (80%) of eligible receivables
generated by U.S. based obligors, (ii) eighty percent (80%) of eligible
receivables generated by obligors with principal offices outside of the United
States provided that such foreign eligible receivables are insured in a manner
acceptable to Lender, and (iii) the lesser of $7,500,000 or fifty percent (50%)
of eligible inventory (the "Borrowing Base"), as evidenced by a borrowing base
certificate in the form attached hereto as Exhibit H (the "Borrowing Base
Certificate"). All of the foregoing shall be determined by Agent upon receipt
and review of the collateral reports required hereunder and such other documents
and collateral information as Agent may from time to time require.
As used herein, "eligible receivables" shall consist solely of
trade accounts which have been created in the ordinary course of Borrower's or
any Guarantor's business, upon which Borrower's or any Guarantor's right to
receive payment is absolute and not contingent upon the fulfillment of any
condition whatsoever, and in which Agent has a perfected security interest of
first priority, and shall not include:
(i) any Account which is past due more than ninety (90)
days after the invoice date;
(ii) that portion of any Account for which there exists
any right of setoff, defense or discount (except regular
discounts allowed in the ordinary course of business to promote
prompt payment) or for which any defense or counterclaim has been
asserted;
(iii) any Account which represents an obligation of any
state or municipal government or of the United States government
or any political subdivision thereof (except accounts which
represent obligations of the United States government and for
which Assignment of Claims Act forms reasonably satisfactory to
Agent have been duly executed and acknowledged);
(iv) any Account which arises from the sale or lease to or
performance of services for, or represents an obligation of, an
employee, affiliate, partner, member, parent or subsidiary of
Borrower;
(v) that portion of any Account which represents interim
or progress ▇▇▇▇▇▇▇▇ or retention rights on the part of the
account debtor;
(vi) any Account which represents an obligation of any
account debtor when twenty percent (25%) or more of Borrower's
accounts from such account debtor are not eligible pursuant to
(i) above;
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(vii) that portion of any Account from an account debtor
which represents the amount by which Borrower's total accounts
from said account debtor exceeds twenty-five percent (25%) of
Borrower's total accounts;
(viii) any Account deemed ineligible by Agent when Agent,
in its sole discretion, deems the creditworthiness or financial
condition of the account debtor to be unsatisfactory; or
(ix) uninsured foreign receivables.
As used herein, "eligible inventory" shall mean, at any time, all
of Borrower's Inventory constituting raw materials (valued at the lower of cost
or market), except:
(i) Inventory which is not owned by Borrower free and
clear of all security interests, liens, encumbrances and claims
of third parties; and
(ii) Inventory which Agent, in its sole discretion, deems
to be obsolete, unsalable, damaged, defective or unfit for
further processing.
(c) Borrowing and Repayment. Borrower may from time to time
during the term of the Line of Credit borrow, partially or wholly repay its
outstanding borrowings, and reborrow, subject to all the limitations, terms and
conditions contained herein; provided however, that the total outstanding
borrowings under the Line of Credit shall not at any time exceed the maximum
principal amount set forth above in this Section 2.1.
(d) Borrower Letter of Credit Subfeature. As a subfeature under
the Line of Credit, Agent agrees from time to time during the term thereof to
issue standby or commercial letters of credit for the account of Borrower (each,
a "Borrower Letter of Credit" and collectively, "Borrower Letters of Credit");
provided however, that the form and substance of each Borrower Letter of Credit
shall be subject to reasonable approval by Agent and the aggregate amount of
Borrower Letters of Credit issued at any one time shall not exceed $250,000.00.
Except with the prior approval of Agent, which may be granted or withheld in its
sole discretion, no Borrower Letter of Credit shall have an expiration date
subsequent to the Line Maturity Date. The undrawn amount of all Borrower Letters
of Credit issued and outstanding under this letter of credit subfeature shall be
reserved under the Line of Credit and shall not be available for borrowings
thereunder. Each Borrower Letter of Credit shall be subject to the additional
terms and conditions of the Borrower Letter of Credit Agreement and related
documents, if any, required by Agent in connection with the issuance thereof
(each, a "Borrower Letter of Credit Agreement" and collectively, the "Borrower
Letter
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of Credit Agreements"), each of which shall be substantially in the form
attached hereto as Schedule 2.1. Each draft paid by Agent under a Borrower
Letter of Credit shall be deemed an advance under the Line of Credit and shall
be repaid by Borrower on or before the Line Maturity Date in accordance with the
terms and conditions of this Agreement. Borrower agrees that Agent, in its sole
discretion, may debit any demand deposit account maintained by Borrower with
Agent, other than a demand deposit account maintained by Borrower on behalf of a
joint venture of which Borrower is a member, for the amount of any such draft.
SECTION 2.2 TERM LOANS.
(a) Term Loan A. On the terms and subject to the conditions set
forth in this Agreement, each Lender hereby severally agrees, on a pro rata
basis in accordance with Schedule 1 attached hereto, to grant Term Loan A to
Borrower on the Closing Date in the principal amount of One Million One Hundred
Ninety Thousand Dollars ($1,190,000.00), the proceeds of which shall be used to
repay existing indebtedness encumbering the Monterey Park Property in the
approximate amount of $684,260.00 and to finance improvements and additions to
the El Monte Property. Borrower's obligation to repay Term Loan A shall be
evidenced by the Term Note for Term Loan A, all terms of which are incorporated
herein by this reference.
(b) Repayment of Term Loan A. Interest on Term Loan A shall be
paid monthly or as otherwise set forth in this Agreement. Commencing September
30, 2000, and on the last day of each calendar quarter thereafter, Borrower
shall make quarterly installments of principal in the amount required in order
to amortize fully the principal amount of Term Loan A, together with interest
thereon at the rates of interest applicable under the Term Loan A Notes, over
twenty (20) years and continuing until the Term Loan A Maturity Date, as
follows:
----------------------------------------------------------------------
YEAR QUARTERLY PAYMENT AMOUNT
----------------------------------------------------------------------
2000 $14,875
2001 $14,875
2002 $14,875
2003 $14,875
BALANCE DUE $1,011,500
======================================================================
There will be one payment due on March 31, 2003 in the amount of $14,875 with
the entire balance of principal and interest then unpaid due and payable on the
Term Loan A Maturity Date. Such quarterly payment shall be credited to
principal, and interest shall be paid separately as set forth herein.
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(c) Term Loan B. On the terms and subject to the conditions set
forth in this Agreement, each Lender hereby severally agrees, on a pro rata
basis in accordance with Schedule 1 attached hereto, to grant Term Loan B to
Borrower on the Closing Date in the principal amount of One Million Six Hundred
Ten Thousand Dollars ($1,610,000.00), the proceeds of which shall be used to
repay existing indebtedness encumbering the El Monte Property in the approximate
amount of $1,106,559.00 and to finance improvements and additions to the El
Monte Property. Borrower's obligation to repay Term Loan B shall be evidenced by
the Term Notes for Term Loan B, all terms of which are incorporated herein by
this reference.
(d) Repayment of Term Loan B. Interest on Term Loan B shall be
paid monthly or as otherwise set forth in this Agreement. Commencing on
September 30, 2000, and on the last day of each calendar quarter thereafter,
Borrower shall make quarterly installments of principal in the amount required
in order to amortize fully the principal amount of Term Loan B, together with
interest thereon at the rates of interest applicable under the Term Loan B
Notes, over twenty (20) years and continuing until the Term Loan B Maturity
Date, as follows:
----------------------------------------------------------------------
YEAR QUARTERLY
PAYMENT AMOUNT
----------------------------------------------------------------------
2000 $20,125
2001 $20,125
2002 $20,125
2003 $20,125
BALANCE DUE $1,368,500
=====================================================================
There will be one payment due on March 31, 2003 in the amount of $20,125 with
the entire balance of principal and interest then unpaid due and payable on the
Term Loan B Maturity Date. Such quarterly payment shall be credited to
principal, and interest shall be paid separately as set forth herein.
(e) Term Loan C. On the terms and subject to the conditions set
forth in this Agreement, each Lender hereby severally agrees, on a pro rata
basis in accordance with Schedule 1 attached hereto, to grant Term Loan C to
Borrower on the Closing Date in the principal amount of Three Million Two
Hundred Thousand Dollars ($3,200,000.00), the proceeds of which shall be used to
finance the construction of improvements and additions to the El Monte Property.
Borrower's obligation to repay Term Loan C shall be evidenced by the Term Notes
for Term Loan C, all terms of which are incorporated herein by this reference.
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(f) Repayment of Term Loan C. Borrower shall make installments of
interest only through December 31, 2000 monthly or as otherwise set forth in
this Agreement. Commencing on March 31, 2001, and on the last day of each
calendar quarter thereafter, Borrower shall make quarterly installments of
principal in the amount required in order to amortize fully the principal amount
of Term Loan C, together with interest thereon at the rates of interest
applicable under the Term Loan C Notes, over five (5) years and continuing until
the Term Loan C Maturity Date, as follows:
----------------------------------------------------------------------
YEAR QUARTERLY PAYMENT
AMOUNT
----------------------------------------------------------------------
2001 $160,000
2002 $160,000
2003 $160,000
----------------------------------------------------------------------
BALANCE DUE $1,760,000
======================================================================
There will be one payment due on March 31, 2003 in the amount of $160,000 with
the entire balance of principal and interest then unpaid due and payable on the
Term Loan C Maturity Date. Such quarterly payment shall be credited to
principal, and interest shall be paid separately as set forth herein.
(g) Prepayment. Borrower may prepay principal on each of the Term
Loans solely in accordance with the provisions of Sections 2.8 and 2.13 of this
Agreement.
SECTION 2.3 THE LETTER OF CREDIT FACILITY.
(a) Terms and Amount of Letter of Credit. U.S. Bank has issued
its irrevocable direct-pay Letter of Credit for the account of Borrower in favor
of the Trustee in an initial amount equal to the initial Stated Amount, which
amount shall be amortized as follows: $10,340,000.00 of the initial Stated
Amount shall be amortized based on a twenty-five (25) year amortization schedule
and $1,275,000.00 of the initial Stated Amount shall be amortized based on a
five (5) year amortization schedule. The amount of principal and interest which
Borrower must pay monthly in order to amortize fully the initial Stated Amount
according to the above amortization schedule is set forth on Schedule 2.3(a)
attached hereto. Notwithstanding any contrary provision of this Agreement, this
Agreement shall not expire or be otherwise terminated until such time as all
payment obligations due or to become due to Agent or any Lender with respect to
the Letter of Credit have been paid.
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(b) Reimbursement Obligations. Borrower agrees to pay to Agent
(i) on the day that any drawing is made by the Trustee under the Letter of
Credit, all amounts to be advanced by Agent pursuant to the Letter of Credit on
behalf of Borrower in respect of such drawing, and (ii) interest on any and all
amounts that Borrower fails to pay when due under this Agreement from the date
such amounts become payable until payment in full (collectively, the
"Reimbursement Obligations"). For each day that any Reimbursement Obligation
remains unpaid, interest shall accrue on such amounts at an aggregate rate per
annum equal to five percent (5%) above the Reference Rate (the "Reimbursement
Default Rate"), based on the actual number of days elapsed in a year of 360
days.
SECTION 2.4 NOTICE OF BORROWING. Borrower, through one of its
Authorized Representatives, shall request advances under each of the Term Loans
and each advance under the Line of Credit by giving Agent irrevocable written
notice or telephonic notice (confirmed promptly in writing), in the form of
Exhibit D attached hereto (each, a "Notice of Borrowing"), which specifies,
among other things:
(i) the principal amount to be disbursed, if under the
Term Loans, or the principal amount of the requested advance, if
under the Line of Credit;
(ii) the proposed date of borrowing, which shall be a
Business Day;
(iii) the interest rate option applicable to such
borrowing (which, for a LIBOR interest selection, shall be
subject to the minimum dollar requirements set forth in Section
2.5(a) hereof); and
(iv) if the amounts disbursed or advanced will bear
interest determined in relation to LIBOR, the length of the Fixed
Rate Term applicable thereto.
Each such Notice of Borrowing must be received by Agent not later than 10:00
a.m. Pacific Standard time at least one (1) Business Day prior to the date of
borrowing if interest will be determined in relation to the Reference Rate, and
(ii) at least three (3) Business Days prior to the date of borrowing if interest
will be determined in relation to LIBOR; provided however, that Agent, at its
sole discretion, may permit borrowing requests to be made by telephone
(confirmed promptly in writing) and on the same day only if interest will be
determined in relation to the Reference Rate. Agent shall promptly notify each
Lender of the contents of each Notice of Borrowing and of the amount of the
disbursement or advance to be made by such Lender. Each advance for which
interest will be determined in relation to the Reference Rate shall be in the
minimum amount of $100,000.00.
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SECTION 2.5 INTEREST/FEES.
(a) Interest on the Line of Credit. The outstanding principal
balance of the Line of Credit shall bear interest in accordance with the
following interest rate options, as designated periodically by Borrower:
(i) at the applicable margin over the Reference Rate set
forth in the Line of Credit Pricing Grid; or
(ii) at the applicable margin over LIBOR set forth in the
Line of Credit Pricing Grid; provided, however, that each LIBOR
interest selection must be for a minimum amount of $1,000,000 and
in integral multiples of $100,000.
(b) Interest on the Term Loans. The outstanding principal
balances of each of the Term Loans shall bear interest in accordance with the
following interest rate options, as designated periodically by Borrower:
(i) at the applicable margin over the Reference Rate set
forth in the Term Loan Pricing Grid;
(ii) at the applicable margin over LIBOR set forth in the
Term Loan Pricing Grid; provided, however, that each LIBOR
interest selection must be for a minimum amount of $1,000,000 and
in integral multiples of $100,000; or
(iii) at a fixed rate per annum equal to the Treasury Rate
(for a term of one, two or three years, at Borrower's option).
The margins above the Reference Rate or LIBOR, as applicable (the "Interest Rate
Margins"), at which the outstanding principal balances of the Line of Credit and
each of the Term Loans bear interest from time to time shall be adjusted in
accordance with the Line of Credit Pricing Grid and the Term Loan Pricing Grid,
respectively. Until such time as Agent receives Borrower's financial statements
(as required under this Agreement) evidencing Borrower's compliance with any of
the Funded Debt to EBITDA ratios set forth in the applicable Pricing Grid, the
Level IV Interest Rate Margin above the Reference Rate or LIBOR shall apply.
Thereafter, Agent shall adjust the Interest Rate Margins in accordance with the
applicable Pricing Grid on the first day of the month following each month in
which Agent receives updated financial statements from Borrower pursuant to this
Agreement. Such Interest Rate Margins shall be determined (i) using the most
recent quarterly financial statement of Borrower available to Agent on the
applicable adjustment date to determine the amount of Funded Debt and (ii) using
the most recent financial statements of Borrower available
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to Agent on the applicable adjustment date for a four (4) consecutive quarter
period to determine EBITDA.
(c) Fees for the Line of Credit.
(i) Line of Credit Facility Fee. Commencing on the Closing
Date and continuing through the Line Maturity Date, Borrower
shall pay to Agent, for the ratable benefit of Lenders, a per
annum facility fee (the "Line of Credit Facility Fee") calculated
based on the average undisbursed portion of the Line of Credit at
the applicable Line of Credit Facility Fee described in the Line
of Credit Pricing Grid. Such Line of Credit Facility Fee shall be
payable quarterly in arrears commencing September 30, 2000, and
on the last day of each calendar quarter thereafter, and on the
Line Maturity Date. The rate set forth above shall be adjusted in
accordance with the Line of Credit Pricing Grid as of the first
day of the month following receipt of Borrower's financial
statements as required under this Agreement.
(ii) Borrower Letter of Credit Fees. In the event any
Borrower Letters of Credit are issued for the account of
Borrower, Borrower shall pay to the Agent , for the ratable
benefit of the Lenders, (1) with respect to each Borrower Letter
of Credit which is a commercial letter of credit, a fee at
issuance equal to one quarter of one percent (.25%) of the
Borrower Letter of Credit amount plus a flat fee of $125.00 for
each commercial letter of credit without negotiation and a fee
upon negotiation equal to one quarter of one percent (.25%) of
the drawn amount plus a flat fee of $100.00 for each commercial
letter of credit with negotiation, and (2) with respect to each
Borrower Letter of Credit which is a standby letter of credit, a
per annum fee equal to the Interest Rate Margin above LIBOR set
forth in the Line of Credit Pricing Grid then applicable and
multiplied by the face amount of such standby letter of credit.
(d) Term Loan Commitment Fees. Borrower shall pay to Agent a
non-refundable commitment fee for each of the Term Loans as set forth below,
which fee shall be due and payable in full on the date on which the applicable
Term Loan is made:
-- Term Loan A: $11,900.00
-- Term Loan B: $16,100.00
-- Term Loan C: $32,000.00
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(e) Letter of Credit Facility Fee. Borrower shall pay to Agent a
Letter of Credit Facility fee (for itself) in an amount equal to one and
one-quarter of one percent (1.25%) per annum of the Stated Amount of the Letter
of Credit, payable annually on each anniversary of the Date of Issuance, until
the earlier of the termination or expiration of the Letter of Credit Facility,
which fee shall be non-refundable even if the Letter of Credit is terminated or
canceled before its stated expiration date.
(f) Computation and Payment. All interest and fees shall be
computed on the basis of a 360-day year, actual days elapsed. Interest
determined in relation to the Reference Rate or the Treasury Rate shall be
payable on the first (1st) day of each month. Interest determined in relation to
LIBOR shall be payable on the last day of the Fixed Rate Term to which such
interest rate applies; provided that if such Fixed Rate Term is for six (6)
months, on the first (1st) day of the fourth (4th) month of such Fixed Rate Term
and on the last day of such Fixed Rate Term.
SECTION 2.6 CONVERSION OF INTEREST OPTIONS.
(a) Election. Subject to the minimum dollar requirements set
forth in Section 2.5(a) hereof, (i) at any time any portion of the Line of
Credit or any of the Term Loans bear interest determined in relation to the
Reference Rate, Borrower may convert all or any portion thereof so that it bears
interest determined in relation to LIBOR for a Fixed Rate Term designated by
Borrower, and (ii) at any time any portion of the Line of Credit or the Term
Loan bears interest determined in relation to LIBOR, Borrower may convert all or
a portion thereof at the end of the Fixed Rate Term applicable thereto so that
it bears interest determined in relation to the Reference Rate or in relation to
LIBOR for a new Fixed Rate Term designated by Borrower. In addition, Borrower
may elect to convert any Term Loan to a fixed rate equal to the Treasury Rate as
set forth in Section 2.5(b). If Borrower has not made the required interest rate
conversion or continuation election prior to the last day of any Fixed Rate
Term, Borrower shall be deemed to have made a Reference Rate interest selection
for the amounts that were subject thereto.
(b) Notice to Agent. Borrower, through one of its Authorized
Representatives, shall request each interest rate conversion or continuation by
giving Agent irrevocable written notice or telephonic notice (confirmed promptly
in writing), in the form of Exhibit E attached hereto (a "Notice of Conversion
or Continuation"), which specifies, among other things:
(i) the Credit to which such Notice applies;
(ii) the principal amount which is the subject of such
conversion or continuation;
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(iii) the proposed date of such conversion or
continuation, which shall be a Business Day;
(iv) and if such Notice pertains to a LIBOR interest
selection, the length of the applicable Fixed Rate Term.
Any such Notice of Conversion or Continuation must be received by Agent not
later than 10:00 a.m. at least one (1) Business Day prior to the effective date
of any Reference Rate interest selection, and (ii) at least three (3) Business
Days prior to the effective date of any LIBOR interest selection; provided
however, that Agent, at its sole discretion, may permit interest rate conversion
or continuation requests to be made by telephone (confirmed promptly in writing)
and on the same day for a Reference Rate interest selection. Agent shall
promptly notify each Lender of the contents of each such Notice of Conversion or
Continuation, or if timely notice is not received from Borrower prior to the
last day of any Fixed Rate Term of the automatic conversion of the amounts
subject thereto to the Reference Rate interest option.
SECTION 2.7 OTHER PAYMENT TERMS.
(a) Automatic Debit. Agent shall, and Borrower hereby authorizes
Agent to, debit any deposit account of Borrower with Agent (including the
Reimbursement Deposit Account described in Section 3.2 hereof) for all payments
of principal, interest and fees as they become due on any of the Credits. At
least one Business Day prior to any such debit of a deposit account of Borrower,
Agent shall provide a written statement of all amounts to be debited. Should,
for any reason whatsoever, the funds in any such deposit account be insufficient
to pay all principal, interest and/or fees when due, Borrower shall, immediately
upon demand, remit to Agent the full amount of any such deficiency.
(b) Place and Manner. Borrower shall make all payments due to
each Lender under the Loan Documents by payment to Agent at Agent's Office, for
the account of such Lender, in lawful money of the United States and in same day
or immediately available funds not later than 12:00 noon Pacific Standard time
on the date due. Agent shall promptly disburse to each Lender at such Lender's
Applicable Lending Office each such payment received by Agent for such Lender.
(c) Date. Whenever any payment due hereunder shall fall due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall be included in the computation of
interest or fees, as the case may be.
(d) Default Interest Rate. Notwithstanding any contrary provision
of this Agreement or any Note, upon the occurrence and during the continuance of
any Event of Default, interest shall accrue on the outstanding principal balance
of the Line
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of Credit and each of the Term Loans at an increased rate per annum (computed on
the basis of a year of 360 days for the actual number of days elapsed) equal to
two percent (2%) above the rate of interest from time to time applicable to such
Credit, and on the outstanding principal balance of the Letter of Credit
Facility at an increased rate per annum (computed on the basis of a year of 360
days for the actual number of days elapsed) equal to five percent (5%) above the
Reference Rate in effect from time to time. Borrower agrees that an Event of
Default will cause the Agent to incur additional expense in servicing the
Credits, that the Agent is entitled to damages for the detriment caused thereby,
that such damages are extremely difficult and impractical to ascertain, and that
application of the above default interest rates to the amounts owing by Borrower
under the Loan Documents is a reasonable estimate of such damages to Agent.
(e) Application of Payments. All payments under the Loan
Documents (including prepayments) shall be applied first to unpaid fees, costs
and expenses then due and payable under this Agreement and the other Loan
Documents, second to accrued interest then due and payable under the Loan
Documents, and finally to reduce the outstanding principal amount of such
Credits. Subject to the provisions of Section 3.2, if no Event of Default has
occurred and is continuing, Agent shall, subject to the preceding sentence,
apply all payments to be applied to Borrower's obligations as directed by
Borrower. If an Event of Default has occurred and is continuing or if Borrower
fails to direct application, Agent shall apply such payments as determined by it
in its discretion.
(f) Failure to Pay Agent. Unless Agent shall have received notice
from Borrower at least one (1) Business Day prior to the date on which any
payment is due to the Lenders hereunder that Borrower will not make such payment
in full, Agent may assume that Borrower has made such payment in full to Agent
on such date and Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrower shall not have made such payment
in full to Agent, such Lender shall repay to Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for each day
from the date such amount is distributed to such Lender until the date such
Lender repays such amount to Agent, at the Federal Funds Rate. A certificate of
Agent submitted to any Lender with respect to any amounts owing by such Lender
under this Section 2.7(f) shall be presumptive evidence of such amounts.
SECTION 2.8 PREPAYMENT.
(a) Optional Prepayments. Borrower may, through one of its
Authorized Representatives and upon at least (i) one (1) Business Day's prior
written notice to Agent if interest is determined in relation to the Reference
Rate, or (ii) three (3) Business Days' prior written notice to Agent if interest
is determined in relation to
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LIBOR, prepay the outstanding amount of the Line of Credit or any Term Loan in
whole or in part, without premium or penalty, except as required by Section 2.13
hereof. Partial prepayments of any portion of the Line of Credit or any Term
Loan shall be in the minimum amount of $1,000,000 and in integral multiples of
$100,000.
(b) Application of Term Loan Prepayments. All optional
prepayments on any of the Term Loans pursuant to Section 2.8(a) shall be applied
pro rata to reduce principal then outstanding.
SECTION 2.9 FUNDING.
(a) Lender Funding and Disbursement. Each Lender shall, before
11:00 a.m. (San Francisco time) on the date of each borrowing under the Line of
Credit or under any of the Term Loans, make available to Agent at Agent's
Office, in same day or immediately available funds, such Lender's Proportionate
Share thereof. After Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article V hereof, Agent will promptly
disburse such funds in same day or immediately available funds to Borrower.
Unless otherwise directed by Borrower in writing, Agent shall disburse the
proceeds of each borrowing to Borrower by deposit to any demand deposit account
maintained by Borrower with Agent.
(b) Lender's Failure to Fund. Unless Agent shall have received
notice from a Lender on or prior to the date of any borrowing under the Line of
Credit or any of the Term Loans that such Lender will not make available to
Agent such Lender's Proportionate Share thereof, Agent may assume that such
Lender has made such portion available to Agent on the date of such borrowing in
accordance with Section 2.9(a) hereof, and Agent may, in reliance upon such
assumption, make available to Borrower (or otherwise disburse) on such date a
corresponding amount. If any Lender does not make the amount of its
Proportionate Share of any borrowing available to Agent on the date of such
borrowing, such Lender shall pay to Agent, on demand, interest which shall
accrue on such amount until made available to Agent at rates equal to (i) the
daily Federal Funds Rate during the period from the date of such borrowing
through the third Business Day thereafter, and (ii) thereafter, the Reference
Rate in effect from time to time. A certificate of Agent submitted to any Lender
with respect to any amounts owing under this Section 2.9(b) shall be presumptive
evidence of such amounts. If any Lender's Proportionate Share of any borrowing
is not in fact made available to Agent by such Lender within three (3) Business
Days after the date of such borrowing, Borrower shall pay to Agent, on demand,
an amount equal to such Proportionate Share together with interest thereon, for
each day from the date such amount was made available to Borrower until the date
such amount is repaid to Agent, at the rate of interest then applicable thereto.
(c) Lenders' Obligations Several. The obligation of each Lender
hereunder is several. The failure of any Lender to make available its
Proportionate
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Share of any borrowing shall not relieve any other Lender of its obligation
hereunder to do so on the date requested, but no Lender shall be responsible for
the failure of any other Lender to make available the Proportionate Share to be
funded by such other Lender.
SECTION 2.10 PRO RATA TREATMENT.
(a) Borrowings. Except as otherwise provided herein, (i) each
extension of credit under any Credit shall be made or shared among the Lenders
pro rata according to their respective Proportionate Shares in such Credit, and
(ii) each payment of principal of and interest or fees on a Credit shall be made
or shared among the Lenders pro rata according to the respective unpaid
principal amounts of such Credit held by such Lenders.
(b) Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary or otherwise) on account of a Credit in
excess of its ratable share of payments on account of such Credit obtained by
all Lenders entitled to such payments, such Lender shall forthwith purchase from
the other Lenders sufficient participations in such Credit as shall be necessary
to cause the purchasing Lender's interest in the Credit to be equivalent to the
excess payment received; provided however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase shall be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such other Lender's ratable share (according to the proportion of (i)
the amount of such other Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10(b) may, to the fullest extent permitted by
law, exercise all its rights of payment (but not including any right of setoff)
with respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
SECTION 2.11 CHANGE OF CIRCUMSTANCES.
(a) Inability to Determine Rate. If Agent at any time shall
determine that adequate and reasonable means do not exist for ascertaining
LIBOR, or the Majority Lenders shall determine at any time that LIBOR does not
accurately reflect the cost to Lenders of making or maintaining LIBOR interest
rates hereunder, then Agent shall give telephonic notice (promptly confirmed in
writing) to Borrower and each Lender of such determination. If such notice is
given, and until such notice has been withdrawn in writing by Agent, then no
LIBOR interest option may be selected by Borrower and any portion of any Credit
which bears interest determined in relation to LIBOR, subsequent to the end of
the Fixed Rate Term applicable thereto, shall bear
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interest determined in relation to the Reference Rate pursuant to the terms and
conditions of this Agreement.
(b) Illegality: Termination of Commitment. Notwithstanding any
other provisions herein, if any Change of Law shall make it unlawful for any
Lender (i) to make a LIBOR interest rate available, or (ii) to maintain LIBOR
interest rates hereunder, then, in the former event, any obligation of Lenders
hereunder to make available such unlawful LIBOR interest rate shall forthwith be
canceled, and in the latter event, any such unlawful LIBOR interest rate then
outstanding shall at the option of Agent be converted so that interest is
determined in relation to the Reference Rate pursuant to the terms of this
Agreement; provided however, if any such Change in Law, shall permit a LIBOR
interest rate until the expiration of the Fixed Rate Term relating thereto, then
such permitted LIBOR interest rate shall continue as such until the end of such
Fixed Rate Term. With respect to any outstanding principal amount as to which
such LIBOR interest rate is converted to a lower rate in accordance with the
foregoing terms and provisions, Borrower agrees to pay to Agent, for the benefit
of each Lender, as appropriate, the amount of any increase in cost or expense to
the Lenders.
(c) Charges: Illegality. Upon the occurrence of any event
described in Section 2.11(b) hereof, Borrower shall pay to Agent, for the
benefit of each Lender, as appropriate, such amount or amounts as may be
necessary to compensate such Lender for any fines, fees, changes, penalties or
other amounts payable by such Lender as a result thereof and which are
attributable to LIBOR interest rates made available to Borrower hereunder. In
determining which amounts payable by any Lender and/or losses incurred by any
Lender are attributable to LIBOR interest rates made available to Borrower
hereunder, any reasonable allocation made by any Lender among its operations
shall be conclusive and binding upon Borrower provided Lender provides Borrower
with a statement setting forth in reasonable detail such amount and the
reasonable calculation thereof.
(d) Charges: Change of Law. If, after the date of this Agreement,
any Change of Law:
(i) shall subject any Lender to any tax, duty or other
charge with respect to any LIBOR interest rate, or shall change
the basis of taxation of payments by Borrower to any Lender of
principal, interest, fees or any other amount payable hereunder
(except for changes in the rate of taxation on the overall net
income of any Lender imposed by the jurisdiction of such Lender's
incorporation or by any jurisdiction in which its Applicable
Lending Office is located); or
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets
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held by, deposits or other liabilities in or for the account of,
advances or loans by, or any other acquisition of funds by any
Lender; or
(iii) shall impose on any Lender any other condition with
respect to its performance hereunder;
and the effect of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining any LIBOR interest rate hereunder or to reduce
any amount receivable by such Lender in connection therewith, then Borrower
shall, pay to Agent, on behalf of each Lender, as appropriate, such amount or
amounts as may be necessary to reimburse such Lender for such increased costs or
to compensate such Lender for such reduced amounts. A certificate as to the
amount of such increased costs or reduced amounts, delivered by such Lender to
Borrower (which delivery shall be through Agent) shall, in the absence of
manifest error, be conclusive and binding on Borrower for all purposes provided
Lender provides Borrower with a statement setting forth in reasonable detail
such amount and the reasonable calculation thereof.
(e) Capital Requirements. If any Lender shall have determined
that any Change of Law regarding capital adequacy which occurs after the Closing
Date hereof has or shall have the effect of reducing the rate of return on the
capital of such Lender (or any entity controlling such Lender) as a consequence
of such Lender's obligations hereunder to a level below that which such Lender
or such entity would have achieved but for such Change of Law (taking into
consideration such Lender's or such entity's policies with respect to capital
adequacy), by an amount deemed by such Lender to be material, then from time to
time, within fifteen (15) days after presenting a statement setting forth in
reasonable detail such amount and the reasonable calculation thereof. Borrower
shall pay to Agent, for the benefit of such Lender such amounts set forth
therein which shall compensate such Lender for such reduction.
SECTION 2.12 TAXES ON PAYMENTS.
(a) Payments Free of Taxes. All payments made by Borrower under
the Loan Documents shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (except net income taxes imposed on Agent or any Lender)
(with all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings relating to the payments made hereunder being
hereinafter referred to herein as "Taxes"). If any Taxes are required to be
withheld from any amounts payable to Agent or any Lender under the Loan
Documents, the amounts so payable to Agent or such Lender shall be increased to
the extent necessary to yield to Agent or such Lender (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in the Loan Documents. Whenever any such
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Taxes are payable by Borrower, as promptly as possible thereafter, Borrower
shall send to Agent, for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
Borrower showing payment thereof. If Borrower fails to pay any Taxes when due to
the appropriate taxing authority or fails to remit to Agent the required
receipts or other required documentary evidence, Borrower shall indemnify Agent
and the Lenders for any incremental taxes, interest or penalties that may become
payable by Agent or any Lender as a result of any such failure. The agreements
in this Section 2.12(a) shall survive the termination of this Agreement for a
period not to exceed the lesser of the applicable statute of limitations or
twenty-four months.
(b) Withholding Exemption Certificates. Each Lender agrees that
it will deliver to Borrower and Agent, upon the reasonable request of Borrower
or Agent, either (i) a statement that it is incorporated under the laws of the
United States of America or a state thereof, or (ii) if it is not so
incorporated, two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes.
SECTION 2.13 FUNDING LOSS INDEMNIFICATION.
(a) LIBOR. If Borrower shall (a) repay or prepay any portion of a
Credit which bears interest determined in relation to LIBOR on any day other
than the last day of the Fixed Rate Term therefor (whether an optional
prepayment, a mandatory prepayment, a payment upon acceleration or otherwise),
(b) fail to borrow any such portion of a Credit for which a Notice of Borrowing
has been delivered to Agent (whether as a result of the failure to satisfy any
applicable conditions or otherwise), or (c) fail to convert or continue at the
LIBOR interest option any portion of a Credit in accordance with a Notice of
Conversion or Continuation delivered to Agent (whether as a result of the
failure to satisfy any applicable conditions or otherwise), Borrower shall,
concurrent with Borrower's repayment pursuant to the foregoing, reimburse Agent
on behalf of each Lender, as appropriate, and hold such Lender harmless for all
costs and losses incurred by such Lender as a result of such repayment,
prepayment or failure. Borrower understands that such costs and losses may
include, without limitation, losses incurred by a Lender as a result of funding
and other contracts entered into by such Lender to fund any LIBOR portion of any
Credit. Each Lender demanding payment under this Section 2.13 shall, in
accordance with the foregoing, deliver to Agent for delivery to Borrower a
certificate setting forth the amount of costs and losses for which demand is
made. Borrower shall have the right to review and confirm any amount alleged to
be owing and any calculation relating thereto. The agreements in this Section
2.13 shall survive the termination of this Agreement.
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(b) Treasury Rate. If Borrower shall repay or prepay any portion
of a Credit which bears interest at the Treasury Rate on any day other than the
last day of its term (whether an optional prepayment, a mandatory prepayment, a
payment upon acceleration or otherwise), Borrower shall pay to such Lender the
"prepayment indemnity" more particularly described on Schedule 2.13(b).
SECTION 2.14 AUTHORIZED REPRESENTATIVES. On the Closing Date, and
from time to time subsequent thereto at Borrower's option, Borrower shall
deliver to Agent a written notice in the form of Exhibit F attached hereto
(each, a "Notice of Authorized Representatives"), which designates by name each
of Borrower's Authorized Representatives and includes each of their respective
specimen signatures. Agent shall be entitled to rely conclusively on the
authority of each officer or employee designated as an Authorized Representative
in the most current Notice of Authorized Representatives delivered by Borrower
to Agent, to request borrowings and select interest rate options hereunder, and
to give to Agent such other notices are as specified herein as being made
through one of Borrower's Authorized Representatives, until such time as
Borrower has delivered to Agent, and Agent has actual receipt of, a new written
Notice of Authorized Representatives. Agent shall have no duty or obligation to
Borrower to verify the authenticity of any signature appearing on any Notice of
Borrowing, Notice of Conversion or Continuation or any other written notice from
an Authorized Representative or to verify the authenticity of any person
purporting to be an Authorized Representative giving any telephonic notice
permitted hereby.
SECTION 2.15 COLLATERAL.
(a) Personal Property Collateral and Contract Collateral. As
security for all indebtedness of Borrower to Lenders pursuant to this Agreement,
as of the Closing Date Borrower grants to Agent, for the benefit of Lenders, a
security interest of first priority in the Personal Property Collateral.
(b) Real Property Collateral. As additional security for all
indebtedness of Borrower to Lenders pursuant to this Agreement, as of the
Closing Date Borrower grants to Agent, for the benefit of Lenders (but only to
the extent that a Lender has a Proportional Share in any of the Term Loans), (i)
a lien of first priority in the Monterey Park Property and all improvements
thereon with respect to Term Loan A, (ii) a lien of first priority in the El
Monte Property and all improvements thereon with respect to Term Loan B, (iii) a
lien of second priority in the Monterey Park Property and all improvements
thereon with respect to Term Loan C, and (iv) a lien of second priority in the
El Monte Property and all improvements thereon with respect to Term Loan C,
subject solely to such exceptions to title as Agent shall deem acceptable.
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(c) Cross-Collateralization and Cross-Default. Borrower
acknowledges that the Lenders have made the Credits to Borrower upon the
security of Borrower's collective interests in the Collateral and in reliance
upon the Collateral taken together being of greater value as collateral security
than the sum of the Collateral taken separately. Borrower agrees that the
Security Agreements are and will be cross-collateralized and cross-defaulted
with each other so that (i) an Event of Default under any Security Agreement
shall constitute an Event of Default under each of the other Security
Agreements; (ii) an Event of Default under any Note or this Agreement shall
constitute an Event of Default under each Security Agreement; and (iii) each
Deed of Trust shall secure the obligations evidenced by all of the Notes as if a
single blanket lien were placed on all of the Collateral as security for such
obligations provided that to the extent that a Lender does not have a
Proportional Share in a particular Credit hereunder, such Lender's security
interest in the Collateral for such Credit shall be subordinate and second in
priority to the pro rata security interests of the Lenders having Proportional
Shares in such Credit(s).
(d) Documentation; Fees. All of the foregoing shall be evidenced
by and subject to the terms of the documents described in Section 5.1 hereof.
Borrower shall fully cooperate with Agent and perform all additional acts
reasonably requested by Agent or any Lender to effect the purposes of this
Section 2.15. Borrower shall reimburse Agent, immediately upon demand, for all
reasonable costs and expenses incurred by Agent in connection with any of the
foregoing security, including filing and recording fees and costs of
inspections, expert opinions, appraisals, and audits.
SECTION 2.16 GUARANTIES. One hundred percent (100%) of the
principal amount of the Credits plus one hundred percent (100%) of all accrued
interest, late charges, attorney's fees and other charges arising under the
Credits, shall be unconditionally guaranteed by each of the Guarantors.
Notwithstanding the foregoing, Lender agrees that American Xtal Technology (Hong
Kong) and Lyte Optronics Ltd. (UK) shall be released at such time as Borrower
has provided Agent with satisfactory evidence that such Guarantors have ceased
all operations and have no assets.
ARTICLE III
-----------
PAYMENTS WITH RESPECT TO THE BONDS
AND THE LETTER OF CREDIT
SECTION 3.1 ANNUAL REDEMPTION OF BONDS.
Borrower covenants to take all necessary action to prepay the
loan and cause optional redemptions of the Bonds pursuant to Article IV of the
Indenture and this Section 3.1 at a price equal to the principal amount of the
Bonds to be redeemed, together with accrued interest to the redemption date, on
the Bond Interest Payment
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Date for December of each year, commencing with the Bond Interest Payment Date
for the month of December 2000. The principal amount of Bonds to be redeemed on
each such December Bond Interest Payment Date is set forth on Schedule 2.3(a)
attached hereto.
SECTION 3.2 REIMBURSEMENT DEPOSIT ACCOUNT. Borrower agrees to
maintain an interest-bearing deposit account in Borrower's name with U.S. Bank
(the "Reimbursement Deposit Account"), which shall be pledged to Agent as
security for Borrower's performance of its obligations under this Agreement.
Borrower agrees to deposit into the Reimbursement Deposit Account on a monthly
basis, three (3) Business Days before the Bond Interest Payment Date for such
month, until the earlier to occur of (x) the earliest date on which both no
further demands may be made for a drawing under the Letter of Credit and all
amounts due to Agent or any Lender under this Agreement in respect of the Letter
of Credit have been paid in full, or (y) the Expiration Date (such earlier date,
the "Termination Date"), an amount equal to the sum of (i) the next monthly
interest payment that Borrower is obligated to make under the Indenture and (ii)
the smallest monthly amount that, if deposited by Borrower into the
Reimbursement Deposit Account each month during the year commencing on the date
of the last annual principal redemption of the Bonds, would be sufficient to
meet when due the next annual principal redemption of the Bonds as required
under Section 3.1 hereof.
SECTION 3.3 OTHER OPTIONAL REDEMPTIONS OF BONDS. Notwithstanding
any contrary provision of this Agreement, any optional redemption of the Bonds
under the Indenture other than the optional redemptions required by Section 3.1,
above, shall require the advance written consent of Agent (which consent shall
not be unreasonably withheld), and Agent's receipt of satisfactory evidence of
Borrower's ability to reimburse Agent and Lenders for any drawing under the
Letter of Credit for such redemption.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
Except as set forth in Schedules 4.5-4.16 hereto (the "Disclosure
Schedule"), the parts of which are numbered according to the relevant Sections
of this Agreement, Borrower makes the following representations and warranties
to Agent and Lenders, which representations and warranties shall survive the
execution of this Agreement and shall continue in full force and effect until
the full and final payment, and satisfaction and discharge, of all obligations
of Borrower to Lenders and Agent under this Agreement.
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SECTION 4.1 LEGAL STATUS. Borrower is a corporation, duly
organized and existing and in good standing under the laws of the State of
Delaware, each of Borrower and each Guarantor is qualified or licensed to do
business in California and is in good standing as a foreign corporation in
California, and is qualified or licensed to do business (and is in good standing
as a foreign corporation, if applicable) in all other jurisdictions in which
such qualification or licensing is required or in which the failure to so
qualify or to be so licensed could have a Material Adverse Effect.
SECTION 4.2 AUTHORIZATION AND VALIDITY. The execution, delivery
and performance by each of Borrower and each Guarantor of the Loan Documents to
which it is a party have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof such Loan Documents will
constitute legal, valid and binding agreements and obligations of Borrower and
such Guarantor, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws or equitable principles relating to or limiting
creditors' rights generally or the availability of equitable remedies.
SECTION 4.3 NO VIOLATION. The execution, delivery and performance
by Borrower of each of the Loan Documents to which it is a party do not (a) to
Borrower's knowledge, violate any provision of any applicable law or regulation,
(b) contravene any provision of the Certificate of Incorporation or By-Laws of
Borrower, (c) result in a breach of, or constitute a default under, any
contract, obligation, indenture or other instrument, or, any judgment,
injunction, order or decree, to which Borrower is a party or by which Borrower
or any of its respective property may be bound, or (d) result in or require the
creation or imposition of any lien, security interest or other charge or
encumbrance upon or with respect to any property of Borrower except in favor of
Agent or Lenders.
SECTION 4.4 NO ADDITIONAL APPROVALS. No further approval,
authorization, consent, order, notice to or filing or registration with any
governmental authority or any public board or body is legally required with
respect to the execution, delivery or performance by Borrower of the Loan
Documents to which it is a party where the failure to obtain such approval could
reasonably have a Material Adverse Effect.
SECTION 4.5 LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could reasonably be expected to have a Material
Adverse Effect.
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SECTION 4.6 CORRECTNESS OF FINANCIAL STATEMENT. The audited
consolidated financial statements of Borrower dated as of December 31, 1999, and
the unaudited interim consolidated financial statements of Borrower dated as of
March 31, 2000, heretofore delivered by Borrower to Agent, (a) are complete and
correct and present fairly the financial condition of Borrower as of the date
thereof; (b) disclose all liabilities of Borrower that are required to be
reflected or reserved against under GAAP, whether liquidated or unliquidated,
fixed or contingent; and (c) have been prepared in accordance with GAAP. Since
the date of such financial statements there has been no material adverse change
in the financial condition of Borrower, nor has Borrower mortgaged, pledged or
granted a security interest in or otherwise encumbered any of its assets or
properties except as permitted by this Agreement or as disclosed by Borrower to
Agent in the Disclosure Schedule.
SECTION 4.7 INCOME TAX RETURNS. Except to the extent covered by
legally permitted and validly filed extensions, Borrower has filed all United
States federal income tax returns, state tax returns and all other material tax
returns which it is required to file, and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by them, except for those
being actively contested in good faith. The charges, accruals and reserves on
the books of Borrower in respect of taxes or other governmental charges are, in
the opinion of Borrower or its independent certified public accountants,
adequate. Borrower has no knowledge of any pending assessments or adjustments of
the income tax paid or payable by Borrower with respect to any year.
SECTION 4.8 NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower or any Guarantor is a party or by which
Borrower or any Guarantor may be bound that requires the subordination in right
of payment of any of Borrower's or such Guarantor's or such other Person's
obligations subject to this Agreement to any other obligation of Borrower or
such Guarantor or such other Person.
SECTION 4.9 PERMITS, FRANCHISES. Borrower possesses, and will
hereafter possess, all permits, franchises and licenses required and rights to
all trademarks, trade names, patents and fictitious names, if any, necessary to
enable it to conduct the business in which it is now engaged in compliance with
applicable law.
SECTION 4.10 ERISA. Borrower and each Guarantor is in compliance
in all material respects with all applicable provisions of ERISA; neither
Borrower nor any Guarantor has violated any provision of any Plan maintained or
contributed to by Borrower or such Guarantor or such other Person; no Reportable
Event as defined in ERISA has occurred and is continuing with respect to any
Plan initiated by Borrower or any Guarantor; each of Borrower and each Guarantor
has met its minimum funding requirements under ERISA with respect to each Plan;
and each
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Plan will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under GAAP.
SECTION 4.11 OTHER OBLIGATIONS. To the best of Borrower's
knowledge, neither Borrower nor any Guarantor is in default on any obligation
for borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
SECTION 4.12 GOVERNMENT REGULATIONS. Neither Borrower nor any
Guarantor is subject to regulation under the Investment Company Act of 1940, the
Federal Power Act, the Interstate Commerce Act, the Public Utility Holding
Company Act of 1935 or any federal or state statute or regulation limiting its
ability to incur indebtedness for money borrowed.
SECTION 4.13 SECURITIES ACTIVITIES. Neither Borrower nor any
Guarantor is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying any
margin stock (as defined within Regulations G, T and U of the Board of Governors
of the Federal Reserve System), and not more than twenty-five percent (25%) of
the value of Borrower's or any Guarantor's assets consists of such margin stock.
SECTION 4.14 ENVIRONMENTAL MATTERS. Except as set forth on the
Disclosure Schedule hereto, each of Borrower and each Guarantor is in compliance
in all material respects with all applicable Federal and state environmental,
hazardous waste, health and safety statutes, and any rules or regulations
adopted pursuant thereto, which govern or affect any of Borrower's or any
Guarantor's operations and/or properties, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Toxic Substances Control Act and the
California Health and Safety Code, as any of the same may be amended, modified
or supplemented from time to time. None of the operations of Borrower or any
Guarantor is the subject of any federal or state investigation evaluating
whether any remedial action involving a material expenditure is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment. To Borrower's knowledge, neither Borrower nor any Guarantor has any
material contingent liability in connection with any release of any toxic or
hazardous waste or substance into the environment.
SECTION 4.15 REAL PROPERTY COLLATERAL. Except as set forth in
Schedule 4.15 hereto, with respect to the Real Property Collateral:
(a) All taxes, governmental assessments, insurance premiums, and
water, sewer and municipal charges, and rents (if any) which previously became
(or
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without payment before the date hereof would have become) delinquent in
respect thereof have been paid as of the date hereof;
(b) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to any such lien) which affect all or any interest in any
such real property and which are or may be prior to or equal to the lien thereon
in favor of Agent;
(c) To Borrower's knowledge, none of the improvements which were
included for purpose of determining the appraised value of any such real
property lie outside of the boundaries and/or building restriction lines
thereof, and no improvements on adjoining properties materially encroach upon
any such real property; and
(d) There is no pending, or to the best of Borrower's knowledge
threatened, proceeding for the total or partial condemnation of all or any
portion of any such real property, and all such real property is in good repair
and free and clear of any damage that would materially and adversely affect the
value thereof as security and/or the intended use thereof.
SECTION 4.16 SUBSIDIARIES. Borrower does not own any stock or
equity interest in any corporation or other entity, other than those listed on
the Disclosure Schedule hereto.
SECTION 4.17 TRUTH, ACCURACY OF INFORMATION. All financial and
other information furnished to Agent or any Lender in connection with this
Agreement is true and correct as of the date hereof and does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the information furnished, in light of the circumstances under
which furnished, not misleading.
ARTICLE V
---------
CONDITIONS
SECTION 5.1 CONDITIONS OF INITIAL EXTENSION OF CREDIT. The
obligation of Lenders to extend any credit contemplated by this Agreement is
subject to the fulfillment to Agent's satisfaction of all of the following
conditions:
(a) Approval of Agent's Counsel. All legal matters incidental to
the extension of credit hereunder shall be satisfactory to counsel for Agent.
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(b) Documentation. Agent shall have received, in form and
substance satisfactory to Agent, each of the following duly executed:
(i) This Agreement and the Notes.
(ii) Guaranty from each Guarantor as required by Section
2.16 hereof.
(iii) All Security Agreements, UCC-1 Financing Statements
and other documentation from Borrower and each other person or
entity required by Agent for the creation, perfection and
preservation of the personal property security interests
described in Section 2.15(a) hereof.
(iv) All Deeds of Trust and other documentation from
Borrower and each other person or entity required by Agent for
the creation, perfection and preservation of the real property
security interests described in Section 2.15(b) hereof
(including, as deemed necessary by Agent, a modification to the
Deeds of Trust encumbering the Solar Way Property and the
Technology Drive Property), together with such policies of title
insurance covering said parcels of real property, issued by
companies, in amounts and in form and substance as Agent shall
deem acceptable.
(v) Corporate Borrowing Resolution from Borrower.
(vi) Resolution from each corporate or limited liability
company Guarantor authorizing the execution and delivery of its
respective Guaranty and its pledge of collateral required
hereunder.
(vii) Certified copies of the filed Articles of
Incorporation for Borrower and each corporate Guarantor and the
certificate of formation for each limited liability company
Guarantor.
(viii) Certificate of Incumbency from Borrower and each
corporate or limited liability company Guarantor.
(ix) Notice of Authorized Representatives.
(x) Evidence satisfactory to Agent certifying that all
improvements at each of the Real Properties comply with all
applicable zoning and building laws, and all approvals, consents,
licenses, and permits necessary to conduct Borrower's business
have been obtained.
(xi) An opinion of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP,
counsel to Borrower, in form satisfactory to Agent, confirming
that the
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Loan Documents are valid, binding and enforceable in accordance
with their terms, that they do not violate any usury or other
applicable laws and that the Borrower, the Guarantors and each of
the Real Properties are in compliance with all applicable laws.
(xii) Copies of all of Borrower's franchise agreements and
service agreements.
(xiii) Evidence of a tax service contract with a third
party vendor which shall provide tax information on the
Properties.
(xiv) Copies of all material contracts, agreements and
leases set forth on Schedule 5 hereto (the "Contract Collateral")
to which Borrower or any Guarantor is a party and assignments
thereof to Agent as additional collateral for the Credits and any
consents to such assignment or landlord waivers as Agent may
require.
(xv) Copies of the most current tax bills for each of the
Real Properties evidencing no delinquency in payment and that
such Real Property has been segregated from all other property on
the applicable municipal tax rolls.
(xvi) A written certification executed by Borrower and
each Guarantor certifying as to the truth and accuracy of all
material facts pertinent to the Credits and to the legal opinion
described in (xi) above.
(xvii) Such other documents as Agent may require under any
other Section of this Agreement.
(c) Financial Statements. Agent shall have received, in form and
substance satisfactory to Agent and Lenders, audited financial statements for
Borrower for and as of the fiscal year ending December 31, 1999, which financial
statements shall reflect no material adverse change in the financial condition
of Borrower from the financial information previously delivered to Agent.
(d) Fees and Expenses. Borrower shall have paid all fees and
invoiced costs and expenses then due pursuant to the terms of this Agreement and
all Loan Costs incurred by Agent as of the Closing Date.
(e) Insurance. Borrower shall have delivered to Agent evidence of
insurance coverage on all Borrower's and Guarantor's property, in form,
substance, amounts, covering risks and issued by companies satisfactory to
Agent, and where required by Agent, with loss payable endorsements in favor of
Agent, including policies of fire and extended coverage insurance covering the
Real Property Collateral, with replacement cost and mortgagee loss payable
endorsements, commercial general
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liability insurance for Borrower and each Guarantor with respect to each of
Borrower's and such Guarantor's properties providing for limits of not less than
$5,000,000 for both injury to or death of a person and for property damage per
occurrence, and such policies of insurance against specific hazards affecting
any such real property as may be required by governmental regulation or Agent.
(f) Appraisals; Collateral Audit; and Credit Checks. Agent shall
have obtained, at Borrower's cost (A) an appraisal of all Real Property
Collateral, all improvements thereon, and all Personal Property Collateral
issued by an appraiser acceptable to Agent and in form, substance and reflecting
values satisfactory to Agent, in its discretion, (B) a collateral audit of all
Personal Property Collateral performed by a person satisfactory to Agent and in
form, substance and reflecting values satisfactory to Agent, and (C)
satisfactory credit checks on Borrower and each Guarantor.
(g) Title Insurance. As to the El Monte Property and the Monterey
Park Property, Agent shall have received an ALTA Policy of Title Insurance, with
such endorsements as Agent may require, including CLTA endorsements 100, 100.29,
103.1A, 103.7, 104.7, 111.5, 116, 116.4, 116.7 and 123.2, issued by a company
and in form and substance satisfactory to Agent, in such amount as Agent shall
require, insuring Agent's lien on the El Monte Property and the Monterey Park
Property to be of first priority, subject only to such exceptions as Agent shall
approve in its discretion, with all costs thereof to be paid by Borrower. As to
the Solar Way Property and the Technology Drive Property, Agent shall have
received a CLTA 110.5 modification endorsement to each of the existing Title
Policies for such properties.
(h) Environmental Reports. Agent shall have obtained, at
Borrower's cost, a Phase I (and to the extent deemed necessary by Agent, a Phase
II) Environmental Site Assessment for each parcel of Real Property Collateral,
and such other documentation as Agent may reasonably determine is necessary in
order to adequately review and make a determination as to the condition of each
such parcel of Real Property Collateral.
(i) Material Adverse Change. There shall have been no material
adverse change, as determined by Agent, in the business, operations, properties,
or financial condition of Borrower since the dates of the financial statements
delivered to Agent pursuant to Section 5.1(c).
(j) Engineering Survey. Agent shall have made a physical
inspection of each parcel of Real Property Collateral and if required by Agent,
an independently prepared structural and mechanical engineering report
satisfactory to Agent.
(k) UCC Filings. There shall exist no UCC filings against
Borrower or any Guarantor which have not been approved by Agent, and each of
Borrower and each Guarantor, as applicable, shall have delivered to Agent such
first priority UCC-1
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Financing Statements covering all Personal Property Collateral and Contract
Collateral as Agent may require.
(l) Subordination Agreement. Agent shall have received, in form
and substance satisfactory to Agent, a subordination agreement from the Small
Business Administration subordinating its lien in the Solar Way Property to
Agent's first priority lien in the Solar Way Property or a re-affirmation
thereof consenting to the cross-collateralization as set forth in the Loan
Documents.
SECTION 5.2 CONDITIONS OF EACH EXTENSION OF CREDIT. The
obligation of Lenders to make each extension of credit requested by Borrower
hereunder (including the initial extension of credit) shall be subject to the
fulfillment to Agent's satisfaction of all of the following conditions:
(a) Compliance. The representations and warranties contained
herein and in each of the other Loan Documents shall be true on and as of the
date of the signing of this Agreement and on the date of each extension of
credit by Lenders pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and on
each such date, no Default or Event of Default shall have occurred and be
continuing or shall exist, and Agent shall have received a certificate
confirming the matters set forth in this Section 5.2(a) signed by a senior
financial officer of Borrower.
(b) Borrowing Base. With respect to the Line of Credit, Agent has
determined that there is availability under the Borrowing Base to make the
extension of credit.
(c) Minimum Extension of Credit. The extension of credit is in
the amount of at least $100,000; however, Agent in its sole discretion may make
an extension of credit in an amount less than $100,000.
(d) Documentation. Agent shall have received all additional
documents which may be required in connection with such extension of credit.
Borrower shall pay the costs of any additional documentation, legal fees or
title insurance required by Agent to evidence such extension of credit and
preserve the priority of the lien of the Security Documents.
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ARTICLE VI
----------
AFFIRMATIVE COVENANTS
Borrower covenants that so long as Lenders remain committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Lenders under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Agent otherwise consents in
writing:
SECTION 6.1 PUNCTUAL PAYMENTS. Punctually pay all principal,
interest, fees or other liabilities due under any of the Loan Documents at the
times and place and in the manner specified therein.
SECTION 6.2 ACCOUNTING RECORDS. Maintain adequate books and
records in accordance with generally accepted accounting principles consistently
applied, and permit any representative of Agent, upon reasonable notice and
during regular business hours, to inspect, audit and examine such books and
records, to make copies of the same, and to inspect the properties of Borrower.
Borrower shall not be responsible for the costs of more than one (1) inspection
and audit of Borrower's books and records in any six (6) month period if an
Event of Default is not continuing during the inspection and audit.
SECTION 6.3 FINANCIAL STATEMENTS. Provide to Agent all of the
following, in form and detail satisfactory to Agent:
(a) not later than ninety (90) days after and as of the end of
each fiscal year, an audited financial statement of Borrower and each entity
whose financial results are consolidated with those of Borrower for reporting
purposes, prepared by a nationally recognized certified public accountant, to
include a balance sheet, income statement, statement of cash flows,
reconciliation of net worth and notes to financial statements;
(b) not later than thirty (30) days prior to the end of each
fiscal year, an annual budget for Borrower, prepared by Borrower, which shall
include three-year projections of Borrower's operations and planned capital
expenditures and financial projections for Borrower and each entity whose
financial results are consolidated with those of Borrower for reporting purposes
for the next fiscal year;
(c) not later than forty-five (45) days after and as of the end
of each fiscal quarter, a financial statement of Borrower and each entity whose
financial results are consolidated with those of Borrower for reporting
purposes, prepared by Borrower, to include a balance sheet and income statement;
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(d) not later than thirty (30) days after and as of the end of
each calendar month, (i) a calculation of the Borrowing Base certified as
correct by a senior financial officer of Borrower; and (ii) an accounts
receivable aging and an accounts payable aging;
(e) not later than ninety (90) days after and as of the end of
each fiscal year, a financial statement of each Guarantor hereunder, prepared by
such Guarantor to include a balance sheet and, for any non-individual Guarantor,
an income statement, and within thirty (30) days after filing, copies of each
such Guarantor's filed United States federal income tax returns, if any, for
such year;
(f) contemporaneously with each annual and quarterly financial
statement of Borrower required hereby, a certificate of the chief financial
officer or other executive officer of Borrower that said financial statements
are accurate, that Borrower is in compliance with the financial covenants set
forth in Section 6.9 below and that there is no Borrowing Base Deficiency as
defined in Section 6.16 below, and that there exists no Event of Default nor any
condition, act or event which, with the giving of notice or the passage of time
or both, would constitute an Event of Default;
(g) from time to time such other information as Agent may
reasonably request.
SECTION 6.4 COMPLIANCE. Preserve and maintain all licenses,
permits, governmental approvals, rights, privileges and franchises necessary for
the conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.
SECTION 6.5 INSURANCE. Maintain and keep in force insurance of
the types and in amounts customarily carried in lines of business similar to
that of Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts reasonably satisfactory to
Agent, and deliver to Agent from time to time at Agent's request schedules
setting forth all insurance then in effect.
SECTION 6.6 FACILITIES. Keep all properties useful or necessary
to Borrower's business in good repair and condition, ordinary wear and tear
excepted, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained, ordinary wear and tear excepted.
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SECTION 6.7 TAXES AND OTHER LIABILITIES. Pay and discharge when
due any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except such (a) as Borrower may in
good faith contest or as to which a bona fide dispute may arise, and (b) for
which Borrower has made appropriate reserves in accordance with GAAP.
SECTION 6.8 LITIGATION. Promptly give notice in writing to Agent
of any litigation pending or threatened against Borrower with a claim in excess
of $500,000.00.
SECTION 6.9 FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows, based on the consolidated financial statements of Borrower
and each entity whose financial results are consolidated with those of Borrower
for reporting purposes, using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein):
(a) Maintain at all times a ratio of current assets to current
liabilities greater than or equal to 1.75 to 1.00.
(b) Without Agent's prior written consent, Borrower shall not
incur expenses for capital expenditures in excess of (i) $50,000,000 for the
Borrower's fiscal year 2000, and (ii) $40,000,000 for the Borrower's fiscal year
2001, and (iii) thereafter, such limit to be mutually approved by Borrower and
Majority Lenders.
(c) Maintain at all times a Minimum Interest Coverage Ratio of
3.00 to 1:00, measured quarterly, based upon the four-quarter period then ended.
(d) Maintain, as of the end of each fiscal quarter commencing
with the quarter ended September 30, 2000, a Tangible Net Worth not less than
$63,000,000.00 plus seventy-five percent (75%) of net income for each fiscal
quarter after June 30, 2000 without deduction for losses, plus 100% of net
equity proceeds.
(e) Maintain at all times a Fixed Charge Coverage Ratio of not
less than (i) 1.15 to 1.00 for the period from January 1, 2000 to December 31,
2000, measured as of December 31, 2000, and (ii) 1.25 to 1.00 measured for the
most recent four historical quarters (excluding the current quarter in
possession), for the fiscal quarter ending on March 31, 2001 and for each fiscal
quarter thereafter.
(f) Maintain a ratio of Funded Debt to EBITDA not to exceed the
following amounts for the four (4) consecutive fiscal quarter period ending on
the last day of each fiscal quarter during the following periods:
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--------------------------------------------------------------------
the period from June 30, 2000, through and
including December 31, 2000 2.50 to 1.00
--------------------------------------------------------------------
the period from January 1, 2001, through and
including December 31, 2001, and each fiscal 2.00 to 1.00
quarter thereafter
--------------------------------------------------------------------
SECTION 6.10 NOTICE TO AGENT. Promptly (but in no event more than
five (5) Business Days after Borrower becomes aware of the occurrence of each
such event or matter) give written notice to Agent in reasonable detail of: (a)
the occurrence of any Event of Default, or any condition, event or act which,
with the giving of notice or the passage of time or both, would constitute an
Event of Default; (b) any change in the name or the organizational structure of
Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited
Transaction, each as defined in ERISA, or any funding deficiency with respect to
any Plan; or (d) any termination or cancellation of any insurance policy which
Borrower is required to maintain, or any uninsured or partially uninsured loss
through liability or property damage, or through fire, theft or any other cause
affecting Borrower's property in excess of an aggregate of $500,000.
SECTION 6.11 SITE VISITS; RIGHT TO STOP WORK. Agent and its
agents and representatives shall have the right to enter and visit the Real
Property and the facilities thereon during regular business hours. In each
instance, Agent shall give Borrower reasonable notice before entering any of the
Real Property facilities thereon. Agent shall use its best efforts to reasonably
avoid interfering with Borrower's use of any Real Property facilities thereon or
with Borrower's business operations when exercising any of the rights granted in
this Section 6.11. Notwithstanding this Section 6.11 or any other provisions of
the Loan Documents, Borrower shall not be responsible for the cost of more than
one (1) such visit to the Real Properties and facilities thereon in any six (6)
month period if an Event of Default is not continuing at the time of the
proposed visit.
SECTION 6.12 SECURITY. At all times maintain in favor of Agent
perfected security interests of such priority as is designated herein in all
assets in which, under the provisions of this Agreement, Agent has or is to
obtain a security interest; take such actions (including the execution of
financing statements and fixture filings) as Agent reasonably requests to
protect Agent's security interests; and provide to Agent such assurances as
Agent may require as to Borrower's compliance herewith.
SECTION 6.13 RELATED DOCUMENTS. Comply with the terms and
covenants of the Related Documents to which it is a party, and Borrower
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will not amend, modify or terminate, or agree to amend, modify or terminate, any
Related Document.
SECTION 6.14 INVESTIGATIONS AND INQUIRIES. Agent and its agents
and representatives shall have the right once per six (6) month period (or more
frequently if an Event of Default is outstanding) to conduct such investigations
and inquiries as to the credit and operations of Borrower, each of the
Guarantors and the Collateral as shall be necessary in connection with the
Credits and monitoring of the Credits, and Borrower shall cooperate with Agent
and provide Agent with such information reasonably requested by Agent in the
exercise of such right and pay for the cost of such inquiry.
SECTION 6.15 CONTRACT COLLATERAL. Agent shall have the right to
review any Contract Collateral.
SECTION 6.16 BORROWING BASE DEFICIENCY. If at any time and for
any reason, Borrower delivers to Agent a quarterly compliance certificate that
shows that the outstanding unpaid principal balance of the Line of Credit
exceeds the aggregate amount of the Borrowing Base ("Borrowing Base
Deficiency"), or if at any time and for any reason Agent gives notice to
Borrower of a Borrowing Base Deficiency, then Borrower shall immediately prepay
the principal balance of the Line of Credit in an amount equal to the difference
between the aggregate outstanding principal balance of the Line of Credit and
the amount of the Borrowing Base.
SECTION 6.17 NOTICE OF CERTAIN MATTERS. Borrower shall give
notice to Agent, within ten (10) days of Borrower's learning thereof, of any of
the following:
(a) any disputes, litigation, investigation, proceeding or
suspension that may exist at any time between Borrower or any Guarantor and any
Governmental Agency;
(b) any threat or commencement of proceedings in condemnation or
eminent domain relating to any of the Real Property Collateral;
(c) the commencement of, or any material development in, any
litigation or proceeding relating to any Collateral between the Borrower and (i)
any Governmental Authority, (ii) any Person having rights under or in connection
with any covenants, conditions, restrictions, easements or rights-of-way
affecting such Collateral, or (iii) any tenant under its lease of such
Collateral, in each case under this subsection (c) the adverse determination of
which would reasonably be expected to materially and adversely affect such
Collateral;
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(d) upon, but in no event later than ten (10) days after,
Borrower's becoming aware of (i) any and all enforcement, cleanup, removal or
other governmental or regulatory actions, instituted or threatened in writing
against (A) Borrower that involve potential liability in excess of $5,000,000
for any single action or $15,000,000 in the aggregate of all such actions, or
(B) any of the Real Properties, pursuant to any applicable environmental laws,
(ii) all other environmental claims against (A) Borrower that involve potential
liability in excess of $5,000,000 for any single environmental claim or
$15,000,000 in the aggregate for all such environmental claims, or (B) any Real
Property, and (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of any Real Property that causes such Real Property
or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such Real Property under any applicable
environmental laws; and
(e) any trade name hereafter used by Borrower and any change in
Borrower's principal place of business.
Each notice under this Section 6.17 shall be accompanied by a
written statement by Borrower setting forth details of the occurrence referred
to therein, and stating what action, if any, Borrower or any affected Guarantor
proposes to take with respect thereto and at what time. Each notice under this
Section 6.17 shall describe with particularity any and all clauses or provisions
of this Agreement or other Loan Documents that have been breached or violated.
ARTICLE VII
-----------
NEGATIVE COVENANTS
Borrower further covenants that so long as Lenders remain
committed to extend credit to Borrower pursuant to the terms hereof or any
liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Lenders or Agent under any of the Loan Documents remain outstanding,
and until payment in full of all obligations of Borrower subject hereto,
Borrower will not, and will not permit any Subsidiary to, without the prior
written consent of Majority Lenders:
SECTION 7.1 USE OF FUNDS. Use any of the proceeds of any Credit
extended hereunder except for the following purposes:
(a) The purposes stated in Article II hereof;
(b) Payment of outstanding debt owed to U.S. Bank as of the
Closing Date, including U.S. Bank's existing line of credit in the amount of
$15,000,000.00 and U.S. Bank's existing bridge loan to Borrower; and
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(c) Payment of the Loan Costs.
SECTION 7.2 OTHER INDEBTEDNESS. Create, incur, assume or permit
to exist any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, which in the aggregate exceed $500,000, except
(a) the liabilities of Borrower to Lenders, or (b) Permitted Indebtedness.
SECTION 7.3 MERGER, CONSOLIDATION, ORGANIZATIONAL STRUCTURE,
TRANSFER OF ASSETS. Merge into or consolidate with any other entity; make
substantial change in the nature of Borrower's business as conducted as of the
date hereof; acquire all or substantially all of the assets of any other entity;
sell, lease, transfer or otherwise dispose of all or a substantial or material
portion of Borrower's assets except in the ordinary course of its business; nor
change the day to day control and management of Borrower (which shall include
the resignation or termination of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ from his current position but
shall not include the changing of officers or employees in the ordinary course
of Borrower's business), Borrower's name, identity or organizational structure;
provided, however, that the consent of Majority Lenders will not be required for
any of the foregoing that does not result in an expenditure or gain to Borrower
of $1,000,000 or less; provided further, however, that Majority Lenders shall
not unreasonably withhold their consent in the case of a corporate restructure
of Borrower in which Borrower is the surviving entity and ownership and control
of Borrower remain substantially unchanged.
SECTION 7.4 GUARANTIES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments for deposit
or collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Lenders and except as any such liability constitutes
Permitted Indebtedness.
SECTION 7.5 LOANS, ADVANCES, INVESTMENTS. Except for Permitted
Investments, make any loans or advances to or investments in any person or
entity in excess of $1,000,000 in the aggregate in any fiscal year.
SECTION 7.6 DIVIDENDS AND DISTRIBUTIONS. Pay any dividend or
distribution in any fiscal year, either in cash, stock or any other property, on
Borrower's stock now or hereafter outstanding in an aggregate amount that
exceeds ten (10%) of Borrower's after-tax net income for such fiscal year, nor
redeem, retire, repurchase or otherwise acquire any shares of any class of
Borrower's stock now or hereafter outstanding in an aggregate amount that
exceeds $1,000,000 in any fiscal year.
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SECTION 7.7 PLEDGE OF ASSETS. Mortgage, pledge, grant or permit
to exist a security interest in, or lien upon, all or any portion of Borrower's
assets now owned or hereafter acquired, except any of the foregoing (a) in favor
of Agent, or (b) Permitted Liens.
ARTICLE VIII
------------
EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT. The occurrence of any of the
following shall constitute an "Event of Default" under this Agreement:
(a) Loan Document Payments. Borrower fails to pay when due any
principal, interest, fees or other amounts payable under any of the Loan
Documents.
(b) Other Required Payments. Borrower fails to pay when due any
required payment under the Indenture.
(c) Misrepresentation. Any financial statement or certificate
furnished to Agent in connection with, or any representation or warranty made by
Borrower, or any Guarantor shall prove to be incorrect, false or misleading in
any material respect when furnished or made or when deemed made.
(d) Other Covenants. Borrower or any Guarantor fails to perform,
observe or comply with any obligation, agreement or other provision on its part
to be performed under this Agreement or any other Loan Document (other than
those referred to in subsections (a), (b) and (c) above), and with respect to
any such failure which by its nature can be cured, such failure shall continue
for a period of thirty (30) days from its occurrence.
(e) Other Defaults. Any event of default by Borrower or any
Guarantor in the payment or performance of any obligation under the terms of any
contract or instrument (other than any of the Loan Documents) pursuant to which
Borrower or any such Guarantor has incurred any debt or other liability in
excess of $500,000 to any person or entity (including any Lender or Agent),
which default is not cured within any cure period applicable thereto. The Event
of Default under this Section 8.1(e) caused by the occurrence of an event of
default under another agreement described in this Section 8.1(e) shall be
automatically cured for purposes of this Agreement upon the cure or waiver of
the event of default under the other agreement.
(f) Judgment Liens or Levies. The filing of a notice of judgment
lien against Borrower or any Guarantor; or the recording of any abstract of
judgment
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against Borrower or any Guarantor in any county in which Borrower or such
Guarantor has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution or other like process, against the
assets of Borrower or any Guarantor; or the entry of a judgment against Borrower
or any Guarantor, and any of the foregoing shall relate to a claim or judgment
of $500,000 or more and shall continue unstayed for a period of forty-five (45)
days from its occurrence.
(g) Insolvency. Borrower or any Guarantor shall suffer or consent
to or apply for the appointment of a receiver, trustee, custodian or liquidator
of itself or any of its property, or shall generally fail to pay its debts as
they become due, or shall make a general assignment for the benefit of
creditors; or Borrower or any Guarantor shall file a voluntary petition in
bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Code, or
under any state or Federal law granting relief to debtors, whether now or
hereafter in effect; or any involuntary petition or proceeding pursuant to the
Bankruptcy Code or any other applicable state or Federal law relating to
bankruptcy, reorganization or other relief for debtors is filed or commenced
against Borrower or any Guarantor, and such case or proceeding shall continue
undismissed for a period of forty-five (45) days from commencement of such
proceeding or case; or Borrower or any Guarantor shall file an answer admitting
the jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or any Guarantor shall be adjudicated a bankrupt, or an
order for relief shall be entered by any court of competent jurisdiction under
the Bankruptcy Code or any other applicable state or Federal law relating to
bankruptcy, reorganization or other relief for debtors.
(h) ERISA Event. A Reportable Event (as defined in ERISA), or any
violation of any provision of any Plan maintained or contributed to by Borrower
or any Subsidiary, involving an amount in excess of $500,000 occurs and is not
cured within forty-five (45) days.
(i) Invalidity. Any material provision of this Agreement, any
other Loan Document or any Related Document shall at any time for any reason
cease to be in full force and effect or valid and binding on Borrower or any
Guarantor, or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by Borrower or any Guarantor, or
Borrower or any Guarantor shall deny that it has any further liability or
obligation under this Agreement, any other Loan Document or any Related
Document, and such event shall have or be likely to have, in the reasonable
judgment of Agent and Majority Lenders, a Material Adverse Effect.
(j) Material Adverse Change. A material adverse change, as
reasonably determined by Agent and Majority Lenders in the good faith exercise
of their discretion, shall occur in the financial condition of Borrower taken as
a whole.
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(k) Death or Incapacity. The death or incapacity of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, provided that Agent and Majority Banks reasonably determine, in the good
faith exercise of their discretion, that such death or incapacity shall have or
be likely to have, in their reasonable judgment, a Material Adverse Effect.
(l) Dissolution or Liquidation. The dissolution or liquidation of
Borrower or any corporate or limited liability company Guarantor; or Borrower or
any such entity Guarantor or their respective directors, stockholders or members
shall take action seeking to effect the dissolution or liquidation of Borrower
or such entity Guarantor.
(m) Change in Ownership. Any change in ownership during the term
of this Agreement which would lead to a change in the management of Borrower;
provided, however, that no Event of Default shall be deemed to have occurred
under this Section 8.1(m) as a result of a change in the Borrower's management
or employees in the ordinary course of business.
(n) Real Property Transfers. The sale, transfer, hypothecation,
assignment or other encumbrance, other than Permitted Liens, whether voluntary,
involuntary or by operation of law, without Agent's prior written consent, of
all or any part of or interest in any of the Real Property Collateral.
(o) Cross-Default. A defined event of default under any of the
Security Documents, subject to the applicable cure period, if any, provided in
such Security Document. The Event of Default under this Section 8.1(o) shall be
automatically cured for purposes of this Agreement upon the cure or waiver of
the event of default under the Security Documents.
SECTION 8.2 REMEDIES. During the continuation of any Event of
Default (other than an Event of Default referred to in Section 8.1(g) hereof),
Agent may, with the consent of the Majority Lenders, or shall, upon written
instructions from the Majority Lenders, by written notice to Borrower, (a)
terminate the obligations of the Lenders to extend any further credit under any
of the Loan Documents, and/or (b) declare all indebtedness of Borrower under the
Loan Documents to be immediately due and payable without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower. Upon the occurrence or existence of any Event of Default
described in Section 8.1(g) hereof, immediately and without notice, (i) the
obligations, if any, of Lenders to extend any further credit under any of the
Loan Documents shall automatically cease and terminate, and (ii) all
indebtedness of Borrower under the Loan Documents shall automatically become
immediately due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by Borrower. In
addition to the foregoing remedies, during the continuance of any Event of
Default, Agent may (i) exercise all of its rights and remedies under any Related
Document (to which Agent
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is a party or is a third party beneficiary) or applicable law; (ii) require the
Trustee to declare a default under the Indenture and accelerate the maturity of
the Bonds; (iii) require Borrower to deliver and pledge to Agent, as security
for Borrower's obligations to Agent and Lenders under this Agreement, cash
collateral in the amount of any outstanding but undrawn amounts under the Letter
or Credit; (iv) exercise any other right, power or remedy granted to it or the
Lenders under any Loan Document or permitted to it or the Lenders by law, either
by suit in equity or by action at law, or both; or (v) exercise all or any
combination of the remedies provided for in this Section 8.2. Immediately after
taking any action under this Section 8.2, Agent shall notify each Lender of such
action.
ARTICLE IX
----------
THE AGENT
SECTION 9.1 AUTHORIZATION AND ACTION. Each Lender hereby
irrevocably appoints U.S. Bank as Agent, and authorizes Agent to act as its
agent under the Loan Documents and to take such actions on such Lender's behalf
and to exercise such powers and perform such duties under the Loan Documents as
are expressly delegated to Agent by the terms thereof, together with such other
powers as are reasonably incidental thereto. Agent shall have no duties or
responsibilities except those expressly set forth in the Loan Documents, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into any Loan Document or otherwise exist against
Agent. Notwithstanding anything to the contrary contained herein, Agent shall
not be required to take any action which is contrary to any Loan Document or
applicable law. Neither Agent nor any Lender shall be responsible to any other
Lender for any recitals, statements, representations or warranties made by
Borrower contained in any Loan Document, for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Loan Document or the
Collateral or for any failure by Borrower to perform its respective obligations
hereunder or thereunder. Agent may employ agents and attorneys-in-fact and shall
not be responsible to any Lender for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable care. Neither Agent
nor any of its directors, officers, employees or agents shall be responsible to
any Lender for any action taken or omitted to be taken by it or them under any
Loan Document or in connection therewith, except for its or their own gross
negligence or willful misconduct. Except as otherwise provided under this
Agreement, Agent shall take such action with respect to the Loan Documents as
shall be directed by the Majority Lenders. Notwithstanding the foregoing, Agent
shall have the right, after consultation with Borrower, which consultation shall
not be unreasonably withheld or delayed, to change the terms, structure, pricing
and/or any amount of any of the Credits, including the right to reallocate the
relative principal
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loan amounts among any of the Term Loans and the Line of Credit, and/or to
establish additional Term Loan tranches in the event a syndication of the
Credits has not been successfully completed; provided however, that agent shall
not have the right to change the aggregate amount of the Credits unless Agent
determines in its sole discretion that such change is necessary to ensure a
successful syndicate of the Credits.
SECTION 9.2 RELIANCE BY AGENT. Agent shall be entitled to rely
upon any certificate, notice or other document (including any cable, telegram,
telecopy, or telex) or conversation believed by it in good faith 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 to Borrower), independent accountants and other experts selected by
Agent with reasonable care. As to any matters not expressly provided for by this
Agreement, Agent shall not be required to take any action or exercise any
discretion, but shall be required to act or to refrain from acting upon
instructions of the Majority Lenders and shall in all cases be fully protected
by the Lenders in acting, or in refraining from acting, hereunder or under any
other Loan Document in accordance with the instructions of the Majority Lenders,
and such instructions of the Majority Lenders and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders.
SECTION 9.3 DEFAULTS. Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default unless Agent has received a notice from
a Lender or Borrower referring to this Agreement, describing such Default and
expressly stating that such notice is a "notice of default". If Agent receives
such notice of the occurrence of a Default, Agent shall promptly give notice
thereof to the Lenders. Agent thereupon shall take such action with respect to
such Default as shall be reasonably directed by the Majority Lenders; provided
however, that unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 9.4 INDEMNIFICATION. Without limiting the obligations of
Borrower hereunder, each Lender agrees to indemnify Agent, ratably in accordance
with its Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time (including at any time
following payment of such obligations) be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of this Agreement or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof or of any such other documents or any action taken or omitted by Agent
under or in connection herewith or
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therewith; provided however, that no Lender shall be liable for any of the
foregoing to the extent they arise from Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly on demand for its ratable share of any amounts payable but not
paid by Borrower under Section 10.2 hereof. Agent shall be fully justified in
refusing to take or to continue to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by Agent by reason of taking or
continuing to take any such action. The agreements in this Section 9.4 shall
survive the payment of Borrower's obligations hereunder.
SECTION 9.5 NON-RELIANCE ON AGENT. Each Lender represents that it
has, independently and without reliance on Agent or any other Lender, and based
on such documents and information as such Lender has deemed appropriate, made
its own appraisal of and investigation into the financial condition and affairs
of Borrower and decision to enter into this Agreement. Each Lender agrees that
such Lender will, independently and without reliance upon 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 appraisals and decisions in taking or not
taking action under this Agreement. Each Lender acknowledges that Agent has not
made any representation or warranty to it with respect to the financial
condition or affairs of Borrower, any Loan Document or any Collateral, and that
no act by Agent hereafter, including any review of any of such matters, shall be
deemed to constitute any such representation or warranty by Agent to any Lender.
Neither Agent nor any Lender shall be required to keep informed as to the
performance or observance by Borrower of the obligations under this Agreement or
any other document referred to or provided for herein or to make inquiry of, or
to inspect the properties or books of Borrower. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by Agent hereunder, neither Agent nor any Lender shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning Borrower, which may come into the possession of Agent or such Lender,
or any of its or their affiliates.
SECTION 9.6 SUCCESSOR AGENT. Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving thirty (30) days' written notice thereof to the Lenders, and Agent may
be removed at any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been appointed by
the Majority Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a bank having a
combined capital, surplus and retained earnings of not less than U.S.
$500,000,000. Upon the acceptance of any
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appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, 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 or removal hereunder as Agent, the provisions of this Article IX
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 9.7 EXECUTION OF LOAN DOCUMENTS. Agent is hereby
authorized by the Lenders to execute, deliver and perform each of the Loan
Documents to which Agent is or is intended to be a party and each Lender agrees
to be bound by all of the agreements of Agent contained in the Loan Documents.
SECTION 9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Agent and its
affiliates may make loans to, accept deposits from, own securities of and
generally engage in any kind of business with Borrower, as though Agent were not
Agent hereunder, without any duty to give notice thereof or account therefor to
any Lender. U.S. Bank as a Lender shall have the same rights and powers under
this Agreement and the other Loan Documents as any other Lender and may exercise
the same as though it were not Agent, and the terms "Lender" or "Lenders" shall
include U.S. Bank in each such capacity.
ARTICLE X
---------
MISCELLANEOUS
SECTION 10.1 NOTICES. Except as specified otherwise herein, all
notices, requests and demands which any party is required or may desire to give
to any other party under this Agreement must be in writing, addressed to Agent
and each Lender at its address or telecopy number set forth as the "Address for
Notices" for Agent or such Lender in Schedule I hereto, and addressed to
Borrower at the following address or telecopy number:
Borrower: ▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Chief Financial Officer/Secretary
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ 9301
Attn: ▇▇▇▇▇ ▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or telecopy number as any party may designate by
written notice to all other parties. Each such notice, request and demand shall
be deemed given or made as follows: (a) if sent by hand delivery, upon delivery;
(b) if sent by mail, upon the earlier of the date of receipt or three (3) days
after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent
by telecopy, upon receipt.
SECTION 10.2 COSTS, EXPENSES ATTORNEYS' FEES.
Except as otherwise set forth herein, Borrower shall pay
immediately upon demand: (a) all reasonable costs, fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Agent in connection with
the preparation, review, execution and delivery of, and the exercise of its
duties under, this Agreement and the other Loan Documents, and the preparation
of amendments and waivers hereunder and thereunder; (b) all reasonable costs,
fees and expenses, including reasonable attorneys' fees and expenses, incurred
by Agent and/or Lenders in connection with the enforcement, preservation or
protection (or attempted enforcement, preservation or protection) of any rights
or remedies of Agent and/or Lenders under this Agreement or any other Loan
Document (including in connection with any "workout" or restructuring relating
to this Agreement, any Credit, or any bankruptcy or insolvency case involving
Borrower; and (c) all reasonable costs, fees and expenses incurred by Agent for
appraisals, audits, environmental inspections and reviews, searches and filings
in connection with any of the foregoing. As used herein, the term "reasonable
attorneys' fees and expenses" shall include, without limitation, allocable costs
and expenses of Agent's (or any Lender's, if applicable) in-house legal counsel
and staff, and "reasonable costs, fees and expenses" shall include, without
limitation, allocable costs, fees and expenses of Agent's (or any Lender's, if
applicable) internal appraisal, audit, environmental and other similar services.
SECTION 10.3 INDEMNIFICATION. To the fullest extent permitted by
law, Borrower hereby agrees to protect, indemnify, defend and hold harmless each
of the Lenders, Agent, their respective affiliates and each of their respective
past and present officers, directors, shareholders, employees, agents, attorneys
and affiliates, together with their respective heirs, beneficiaries, executors,
administrators, trustees, predecessors, successors and assigns (collectively,
"Indemnitees") from and against any liabilities, losses, damages or expenses of
any kind or nature and from any suits, claims or demands (including in respect
of or for reasonable attorneys' fees and other expenses, including the allocated
costs and
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expenses of internal counsel) arising on account of or in connection with any
matter or thing or action or failure to act by Indemnitees, or any of them,
arising out of or relating to this Agreement or any other Loan Document,
including any use by Borrower of any proceeds of any Credit, except to the
extent such liability arises from the Indemnitee's own willful misconduct or
gross negligence. Upon receiving knowledge of any suit, claim or demand asserted
by a third party that Agent or any Lender believes is covered by this indemnity,
Agent or such Lender shall give Borrower notice of the matter and an opportunity
to defend it, at Borrower's sole cost and expense, with legal counsel reasonably
satisfactory to Agent or such Lender, as the case may be. Agent or such Lender
may also require Borrower to defend the matter. Any failure or delay of Agent or
any Lender to notify Borrower of any such suit, claim or demand shall not
relieve Borrower of its obligations under this Section 10.3 but shall reduce
such obligations to the extent of any increase in those obligations caused
solely by an unreasonable failure or delay in providing such notice. If Bank
does not require Borrower to defend such action, or if Borrower fails or refuses
to defend such action, Bank shall have the right to employ counsel to defend
such action and to participate in the defense thereof, and the fees and expenses
of such counsel shall be at the expense of Borrower. In addition, Bank shall
have the right to employ separate counsel and to participate in the defense of
any such action if Bank has been advised by counsel of recognized standing in
matters of banking or securities laws that a single lawyer cannot ethically
represent both Bank or any other Indemnitee and Borrower. The obligations of
Borrower under this Section 10.3 shall survive the payment in full and
performance of all Borrower's obligations to Lenders and Agent.
SECTION 10.4 WAIVERS, AMENDMENTS. Any term, covenant, agreement
or condition of this Agreement or any other Loan Document may be amended or
waived if such amendment or waiver is in writing and is signed and the Majority
Lenders (or by Agent with written consent of the Majority Lenders), Borrower and
any other party thereto; provided however, that any amendment, waiver or consent
which affects the rights or duties of Agent must be in writing and be signed
also by Agent; and provided further, that any amendment, waiver or consent which
effects any of the following changes must be in writing and signed by all
Lenders (or by Agent with the written consent of all Lenders):
(a) increases the maximum principal amount available under any
Credit or the Borrowing Base;
(b) extends the maturity date of any Credit;
(c) reduces the principal of, or interest (including default rate
interest) on, any Credit or any fees or other amounts payable for the account of
the Lenders hereunder;
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(d) postpones or conditions any date fixed for any payment of the
principal of, or interest on, any Credit or any fees or other amounts payable
for the account of the Lenders hereunder;
(e) waives or amends this Section 10.4;
(f) amends the definition of Majority Lenders or any provision of
this Agreement requiring approval of the Majority Lenders or some other
specified number or proportion of Lenders;
(g) changes the voting percentages of the Lenders;
(h) results in a release of any material part of the Collateral;
or
(i) increases or decreases the Proportionate Share of any Lender
in the Total Commitments (other than through an assignment under Section 10.5
hereof).
Unless otherwise specified in such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 10.5 SUCCESSORS AND ASSIGNS.
(a) Binding Effect. The Loan Documents shall be binding upon and
inure to the benefit of Borrower, the Lenders, Agent, all future holders of the
Notes and their respective successors and permitted assigns, except that
Borrower may not assign or transfer any of its rights or obligations under any
Loan Document without the prior written consent of Agent and each Lender unless
in accordance with Section 7.3. All references in this Agreement to any person
or entity shall be deemed to include all successors and assigns of such person
or entity.
(b) Participations. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks or other financial institutions ("Participants") participating interests
in any Credit owing to such Lender, any Note held by such Lender, or any other
interest of such Lender under this Agreement and the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, (i) such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible for the performance thereof, (iii) such Lender shall remain
the holder of any such Note for all purposes under this Agreement, and (iv)
Borrower and Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Participants shall have no rights under this Agreement or any other Loan
Document except as provided below. No Lender shall sell any participating
interest under which the Participant shall have any rights to vote on any
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amendment or waiver of this Agreement or any other Loan Document; provided
however, that a Lender may sell a participating interest under which the
Participant shall have the right to vote on any amendment or waiver of this
Agreement or any Loan Document requiring the unanimous consent of all Lenders
pursuant to Section 10.4 hereof; provided further, however, that any agreement
pursuant to which any Lender sells a participating interest to a Participant may
require the selling Lender to obtain the consent of such Participant in order
for such Lender to agree in writing to any amendment of a type specified in
Section 10.4 hereof not requiring the unanimous consent of all Lenders. No
agreement pursuant to which any Lender sells a participating interest to a
Participant other than a Lender may permit the participant to transfer, pledge,
assign, sell participations in or otherwise encumber its participating interest.
Borrower agrees that if amounts outstanding under this Agreement and the other
Loan Documents are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the fullest extent permitted by law, be deemed to have the
rights of payment (but not including any right of setoff) in respect of its
participating interest in amounts owing under this Agreement and any other
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any other Documents;
provided however, that such rights of payment shall be subject to the obligation
of such Participant to share with the Lenders, and the Lenders agree to share
with such Participant, as provided in Section 2.10(b) hereof. Borrower also
agrees that any Lender which has transferred all or part of its interests in the
Credits to one or more Participants shall, notwithstanding any such transfer, be
entitled to the full benefits accorded such Lender under Sections 2.11 and 2.13
hereof, as if such Lender had not made such transfer.
(c) Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time, sell and assign to
any Lender, any affiliate of a Lender or any other bank or financial institution
(individually, an "Assignee") all or any portion of its rights and obligations
under this Agreement and the other Loan Documents (such a sale and assignment to
be referred to herein as an "Assignment") pursuant to an Assignment and
Assumption Agreement in the form of Exhibit G attached hereto (an "Assignment
Agreement"), executed by each Assignee and such assignor Lender (an "Assignor")
and delivered to Agent for its acceptance and recording in the Register;
provided however, that:
(i) each Assignment shall be in a minimum amount of
$5,000,000; and
(ii) without the written consents of Borrower and Agent,
which consents shall not be unreasonably withheld, no Lender may
make any Assignment to any Assignee which is not, immediately
prior to such Assignment, a Lender hereunder or an affiliate
thereof.
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Upon the execution, delivery, acceptance and recording of each Assignment
Agreement, from and after the effective date set forth therein, (A) each
Assignee thereunder shall be a Lender hereunder with a Proportionate Share as
set forth in Section 1 of such Assignment Agreement and shall have the rights,
duties and obligations of such a Lender under this Agreement and the other Loan
Documents, and (B) the Assignor thereunder shall be a Lender with a
Proportionate Share as set forth in Section 1 of such Assignment Agreement, or,
if the Proportionate Share of the Assignor has been reduced to 0%, the Assignor
shall cease to be a Lender; provided however, that each Assignor shall
nevertheless be entitled to the indemnification rights contained in Section 10.3
hereof for any events, acts or omissions occurring before the effective date of
its Assignment. Each Assignment Agreement shall be deemed to amend Schedule 1
hereto to the extent necessary to reflect the addition of each Assignee and the
resulting adjustment of Proportionate Shares arising from the purchase by each
Assignee of all or a portion of the rights and obligations of an Assignor under
this Agreement and the other Loan Documents.
(d) Register. Agent shall maintain at Agent's Office a copy of
each Assignment Agreement delivered to and accepted by Agent and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Proportionate Shares of each Lender from time to time. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Agent and the Lenders may treat each entity whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Registration. Upon its receipt of an Assignment Agreement
executed by an Assignor and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate of a Lender, by Borrower and Agent) together
with payment by such Assignee to Agent of a registration and processing fee of
$3,500.00, Agent shall (i) promptly accept such Assignment Agreement, and (ii)
on the effective date of such Assignment record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and Borrower. Agent may, from time to time at its election, prepare
and deliver to the Lenders and Borrower a revised Schedule 1 reflecting the
names, addresses and respective Proportionate Shares of all Lenders then parties
hereto.
(f) Confidentiality. Without limitation, Agent and the Lenders
may disclose the Loan Documents, and any financial or other information relating
to Borrower, to each other or to any potential Participant or Assignee;
provided, however, that such potential Participant or Assignee shall have agreed
in writing to be bound by Section 10.16 hereof prior to such disclosure.
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SECTION 10.6 SETOFF. In addition to any rights and remedies of
the Lenders provided by law, each Lender shall have the right, but only with the
prior consent of Agent, which consent may be granted or withheld by Agent in its
sole and absolute discretion, but without prior notice to Borrower, any such
notice being expressly waived by Borrower to the extent permitted by applicable
law, upon the occurrence and during the continuance of a Default or Event of
Default, to set-off and apply against any indebtedness, whether matured or
unmatured, of Borrower to such Lender, any amount owing from such Lender to
Borrower, at or at any time after, the happening of any of the above mentioned
events, and as security for such indebtedness, Borrower hereby grants to each
Lender a continuing security interest in any and all deposits, accounts or
moneys of Borrower then or thereafter maintained with such Lender, subject in
each case to Section 2.10(b) hereof. The aforesaid right of set-off may be
exercised by such Lender against Borrower or against any trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of Borrower or against anyone else
claiming through or against Borrower or such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the occurrence of
a Default or Event of Default. Each Lender agrees promptly to notify Borrower
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
SECTION 10.7 NO WAIVER; CUMULATIVE REMEDIES. No failure on the
part of Agent or any Lender to exercise, and no delay in exercising, any right,
power, privilege or remedy under any Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power,
privilege or remedy preclude any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. The rights and remedies
under the Loan Documents are cumulative and not exclusive of any rights, powers,
privileges or remedies that may otherwise be available to the Agent or any
Lender.
SECTION 10.8 ENTIRE AGREEMENT, AMENDMENT. This Agreement and the
other Loan Documents constitute the entire agreement among Borrower, Agent and
Lenders with respect to the Credits and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in a writing signed by
each party hereto.
SECTION 10.9 NO THIRD PARTY BENEFICIARIES. This Agreement is made
and entered into for the sole protection and benefit of the parties hereto and
their respective permitted successors and assigns, and no other person or entity
(other than an Indemnitee) shall be a third party beneficiary of, or have any
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direct or indirect cause of action or claim in connection with, this Agreement
or any other of the Loan Documents to which it is not a party.
SECTION 10.10 TIME. Time is of the essence of each and every
provision of this Agreement and each other of the Loan Documents.
SECTION 10.11 SEVERABILITY OF PROVISIONS. If any provision of
this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or any remaining
provisions of this Agreement.
SECTION 10.12 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California (without
regard to the conflicts of law rules of such jurisdiction).
SECTION 10.13 SUBMISSION TO JURISDICTION. EACH OF BORROWER, AGENT
AND LENDERS HEREBY: (A) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF CALIFORNIA AND THE FEDERAL COURTS OF THE UNITED STATES SITTING IN
THE STATE OF CALIFORNIA FOR THE PURPOSE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY OF THE LOAN DOCUMENTS; (B) AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
COURTS; (C) IRREVOCABLY WAIVES (TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW)
ANY OBJECTION WHICH IT NOW OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY OF THE FOREGOING COURTS, AND ANY
OBJECTION ON THE GROUND THAT ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM; AND (D) AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 10.14 ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute shall
be resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, this Agreement or any
of the Related Documents, or any past, present or future extensions of credit
and other activities, transactions or obligations of any kind
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related directly or indirectly to this Agreement or any of the Related
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to this Agreement or any of the Related Documents. Any party may by
summary proceedings bring an action in court to compel arbitration of a Dispute.
Any party who fails or refuses to submit to arbitration following a lawful
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or such other
administrator as the parties shall mutually agree upon in accordance with the
AAA Commercial Arbitration Rules. All Disputes submitted to arbitration shall be
resolved in accordance with the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in this
Agreement or any of the Related Documents; provided, however, that
notwithstanding the foregoing or anything to the contrary herein, it is
specifically contemplated and agreed by Borrower, Agent and Lenders (and any
Participants and Assignees) that the provisions of Section 1283.05 of the
California Code of Civil Procedure, as presently in force, be incorporated into
and made a part of, and be applicable to, the arbitration agreement set forth in
this Section 10.14. The arbitration shall be conducted at a location in
California selected by the AAA or other administrator. If there is any
inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation applicable
to any Dispute shall apply to any arbitration proceeding. All discovery
activities shall be expressly limited to matters directly relevant to the
Dispute being arbitrated. Judgment upon any award rendered in an arbitration may
be entered in any court having jurisdiction; provided however, that nothing
contained herein shall be deemed to be a waiver by any party that is a bank of
the protections afforded to it under 12 U.S.C. Section 91 or any similar
applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure.
No provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators
must be active members of the California State Bar or retired judges of the
state or federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators
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(i) shall resolve all Disputes in accordance with the substantive law of the
state of California, (ii) may grant any remedy or relief that a court of the
state of California could order or grant within the scope hereof and such
ancillary relief as is necessary to make effective any award, and (iii) shall
have the power to award recovery of all costs and fees, to impose sanctions and
to take such other actions as they deem necessary to the same extent a judge
could pursuant to the Federal Rules of Civil Procedure, the California Rules of
Civil Procedure or other applicable law. Any Dispute in which the amount in
controversy is $5,000,000 or less shall be decided by a single arbitrator who
shall not render an award of greater than $5,000,000 (including damages, costs,
fees and expenses). By submission to a single arbitrator, each party expressly
waives any right or claim to recover more than $5,000,000. Any Dispute in which
the amount in controversy exceeds $5,000,000 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators
must actively participate in all hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000 the arbitrators shall be required to make specific, written findings
of fact and conclusions of law. In such arbitrations (A) the arbitrators shall
not have the power to make any award which is not supported by substantial
evidence or which is based on legal error, (B) an award shall not be binding
upon the parties unless the findings of fact are supported by substantial
evidence and the conclusions of law are not erroneous under the substantive law
of the state of California, and (C) the parties shall have in addition to the
grounds referred to in the Federal Arbitration Act for vacating, modifying or
correcting an award the right to judicial review of (1) whether the findings of
fact rendered by the arbitrators are supported by substantial evidence, and (2)
whether the conclusions of law are erroneous under the substantive law of the
state of California. Judgment confirming an award in such a proceeding may be
entered only if a court determines the award is supported by substantial
evidence and not based on legal error under the substantive law of the state of
California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance
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with said Section 638. A referee with the qualifications required herein for
arbitrators shall be selected pursuant to the AAA's selection procedures.
Judgment upon the decision rendered by a referee shall be entered in the court
in which such proceeding was commenced in accordance with California Code of
Civil Procedure Sections 644 and 645.
(g) Miscellaneous. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to this Agreement or the subject matter of the Dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of this Agreement any of the Related Documents or any relationship
between the parties.
SECTION 10.15 COUNTERPARTS. This Agreement may be executed in any
number of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
SECTION 10.16 CONFIDENTIALITY. No Lender shall disclose to any
Person any information with respect to Borrower which is furnished pursuant to
this Agreement and the other Loan Documents, except that Agent and Lenders may
disclose any such information (a) to their own directors, officers, employees,
auditors, counsel and other professional advisors and to their respective
affiliates if Agent and Lenders reasonably determine that any such party should
have access to the information; (b) if such information is generally available
to the public; (c) if required in any report, statement or testimony submitted
to any governmental authority having jurisdiction over any Lender; (d) if
required in response to any summons or subpoena or in connection with any
litigation, to the extent permitted or deemed advisable by counsel (provided,
however, that written notice of such disclosure be given to Borrower at least
five (5) Business Days prior to such event to allow Borrower to seek a
protective order); (e) to comply with any requirement or law applicable to
Lenders; (f) to the extent necessary in connection with the exercise of any
right or remedy under any Loan Document; (g) to any Participant or Assignee or
prospective Participant or Assignee, provided that such Participant or Assignee
or such prospective Participant or Assignee agrees in writing to be bound by
this Section 10.16 prior to disclosure; or (h) otherwise with the prior written
consent of Borrower; provided, however, that any
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disclosure made in violation of this Agreement shall not affect the obligation
of Borrower under this Agreement or the other Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first written above.
"BORROWER" "AGENT"
▇▇▇, INC., a Delaware corporation U.S. BANK NATIONAL ASSOCIATION
By: /s/ [Signature Illegible] By: /s/ [Signature Illegible]
------------------------------- -----------------------------------
Title: CFO, Secretary Title: Vice President
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SCHEDULE 1
LENDERS AND PROPORTIONATE SHARES
PROPORTIONATE SHARES:
LENDERS: ---------------------------------------
Line of Term Term Term
Credit Loan A Loan B Loan C
--------------------------------------------------------------------------------------------
1. U.S. BANK NATIONAL ASSOCIATION 100% 100% 100% 100%
Applicable Lending Office:
U.S. Bank National Association
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
U.S. Bank
National Association
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Telephone: ( )
Telecopier: ( )
Wiring Instructions:
U.S. Bank
National Association
Walnut Creek, California
ABA No.:
Beneficiary:
Account:
Customer Name: ▇▇▇, Inc.
Obligation No.:
Mid-Valley RCBO Note No.:
--------------------------------------------------------------------------------------------
Schedule 1 -- Page 1
76
SCHEDULE 2.1(d)
BORROWER LETTER OF CREDIT AGREEMENT
To be attached
Schedule 2.1(d) -- Page 1
77
SCHEDULE 2.3(a)
AMORTIZATION SCHEDULE FOR
THE LETTER OF CREDIT FACILITY
------------------------------------------------------
YEAR MONTHLY ANNUAL
PAYMENT REDEMPTION
AMOUNT
------------------------------------------------------
2000 $55,833.33 $670,000.00
2001 $55,416.67 $665,000.00
2002 $55,833.33 $670,000.00
2003 $55,833.33 $670,000.00
2004 $37,916.67 $455,000.00
2005 $34,583.33 $415,000.00
2006 $34,166.67 $410,000.00
2007 $34,583.33 $415,000.00
2008 $40,416.67 $485,000.00
------------------------------------------------------
Schedule 2.3(a) -- Page 1
78
SCHEDULE 2.13(b)
PREPAYMENT INDEMNITY
As used herein, the following terms have the meanings assigned to them:
"AVERAGE MATURITY PERIOD" means, as of any prepayment date, the weighted average
time period computed by multiplying the dollar amount of each installment or
payment of principal prepaid by the number of days from such prepayment date
until the earlier of the scheduled maturity of that installment or payment or
the next Interest Change Date (if any), adding together the resulting products
and dividing the resulting sum by the total dollar amount of principal being
prepaid.
"INTEREST CHANGE DATE" means the date of any regularly scheduled adjustment in
the interest rate on the Note, if any.
"INTEREST DIFFERENTIAL" means as of any prepayment date, (i) the Note Rate minus
(ii) the Treasury Rate.
"NOTE RATE" means the per annum rate of interest payable on the Credit bearing
interest at the Treasury Rate as in effect on the date of prepayment.
Any voluntary prepayment of a Credit which bears interest at the Treasury Rate
shall be either in the full amount of the outstanding Credit bearing interest at
the Treasury Rate or, if a partial prepayment, in the amount of [$100,000] or an
integral multiple thereof, and partial prepayments shall be applied to
installments or payments due of the Credit bearing interest at the Treasury Rate
in inverse order of their maturities. If, at the time of any prepayment (whether
voluntary, mandatory or upon acceleration of the principal of the Credit bearing
interest at the Treasury Rate), the Interest Differential shall exceed zero,
such prepayment shall be accompanied, to the extent permitted by applicable law,
by payment of a prepayment indemnity. The amount of the prepayment indemnity
shall equal the present value (determined by the Bank using the Treasury Rate as
of the date of prepayment minus the Issuance Spread as the discount factor) on
the prepayment date of a stream of equal monthly payments in number equal to the
number of whole months (using a thirty-day month) in the Average Maturity
Period. The amount of each such monthly payment shall equal the quotient
obtained by dividing (a) the product of the amount prepaid, times the Interest
Differential, times a fraction, the numerator of which is the number of days in
the Average Maturity period and the denominator of which is 360, by (b) the
number of whole months (using a thirty-day month) in the Average Maturity
Period.
Schedule 2.13(b) -- Page 1
79
SCHEDULE 4
Borrower Disclosure Schedule
to
Credit Agreement
By and Among
▇▇▇, Inc.,
U.S. Bank National Association,
and
the Lenders from time to time who are parties to the Credit Agreement
This Borrower Disclosure Schedule (the "Schedule") contains exceptions to the
Representations and Warranties of ▇▇▇, Inc., a Delaware corporation (the
"Borrower") set forth in Article 4 of that certain Credit Agreement dated as of
August 28, 2000 (the "Credit Agreement"), by and among the Borrower, U.S. Bank
National Association (the "Agent") and the lenders from time to time which are
parties thereto (the "Lenders") and are an integral part of the Credit
Agreement. Any capitalized term that is used in this Schedule and is not defined
herein shall have the meaning ascribed to such term in the Credit Agreement. The
section numbers of each exception noted in this Schedule correspond to the
section numbers appearing in the Credit Agreement. All information disclosed
herein as an exception to any section shall be deemed disclosed under and
incorporated into any other section of the Credit Agreement to which it is
cross-referenced. Notwithstanding any materiality qualification in any
Representation and Warranty in the Credit Agreement, for administrative ease,
certain items have been included herein which are not considered by the Borrower
to be material to the business, assets, results of operations, prospects or
affairs of the Borrower, taken as a whole. The inclusion of any item herein
shall not be deemed to be an admission by the Borrower that such item is
material to the business, assets, results of operations, prospects or affairs of
the Borrower, taken as a whole, nor shall it be deemed an admission of any
obligation or liability to any third party.
SECTION 4.1 - LEGAL STATUS
Lyte Optronics, Inc., a Guarantor, is a Nevada corporation, is qualified to do
business in California and is in good standing in the state of California. The
following wholly-owned subsidiaries which are Guarantors under the Credit
Agreement are not qualified to do business in California or in any other
jurisdiction in the United States: Advanced Semiconductor (Xiamen); American
Xtal Technology (Hong Kong); ▇▇▇ - Japan; Beijing Tongmei Xtal Technology Co.,
Ltd.; Bestal Substrate Foreign Sales Corp; and Lyte Optronics Ltd. (UK).
American Xtal Technology (Hong Kong) and Lyte
Schedule 4 -- Page 1
80
Optronics Ltd. (UK) are in the process of winding down their respective business
operations.
SECTION 4.5 - LITIGATION
The Borrower is cooperating with Cal-OSHA in an investigation regarding
impermissible levels of potentially hazardous materials in certain areas of the
Borrower's manufacturing facility in Fremont, California. In May, 2000, Cal-OSHA
levied a fine against the Borrower in the amount of $313,655 for alleged health
and safety violations. Although the Borrower is appealing the citations, and
have put in place engineering, administrative and personnel protective equipment
programs to address the issues, the Borrower may have to pay the fine and
further penalties, including criminal penalties, could be levied against the
Borrower or its management.
The Borrower entered into a settlement of a patent infringement lawsuit in
approximately June, 2000. As a result of this settlement, the Borrower will make
a payment in the approximate amount of $1,340,000 in early 2001.
SECTION 4.6 - CORRECTNESS OF FINANCIAL STATEMENT
The Borrower filed an amended Form 10-Q for each of the quarters ended June 30,
1999 and September 30, 1999, however, the amendment reflected financial data
that was reported in the Borrowers Form 10-K filed with respect to the year
ended December 31, 1999.
As of June 30, 2000, the Borrower carried an intercompany receivable in the
approximate amount of $25,109,450 owed by Lyte Optronics, Inc.
As of June 30, 2000, the Borrower carried an intercompany receivable in the
approximate amount of $269,076 owed by Beijing Tongmei Xtal Technology Co., Ltd.
SECTION 4.14 - ENVIRONMENTAL MATTERS
The disclosures set forth in Section 4.5 above are incorporated into this
Section by this reference.
Schedule 4 -- Page 2
81
SECTION 4.15 - REAL PROPERTY COLLATERAL
There are several tax liens appearing on the title reports relating to the
Monterey Park Property and the El Monte Property (the "Properties"), however,
the Borrower believes that these taxes have been paid that that the liens appear
against the Properties in error. In addition, these title reports reflect a deed
of trust under which Pacific Mezzanine Fund, L.P., a California limited
partnership ("PMF") is the beneficiary. The obligations owed to PMF have been
satisfied and the Borrower believes that these liens appear against the
Properties in error.
SECTION 4.16 - SUBSIDIARIES
The following entities are wholly-owned subsidiaries of the Borrower:
Advanced Semiconductor (Xiamen)
American Xtal Technology (Hong Kong)
▇▇▇ - Japan
Beijing Tongmei Xtal Technology Co., Ltd.
Bestal Substrate Foreign Sales Corp.
Lyte Optronics, Inc.
Lyte Optronics Ltd. (UK)
The Borrower holds an equity interest in the following entities:
Ge Mining
Ga Mining - Beijing JIYA Semiconductor
In August 2000, the Borrower entered into a business transfer and acquisition
agreement with Demeter Technology, a Delaware corporation founded by ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, the president of the Borrower's fiber optic division and a former member
of the Borrower's board of directors, and ▇▇▇▇▇▇ ▇▇▇▇, the chief technology
officer of the Borrower's visible emitter division. Under this agreement, the
Borrower agreed to transfer certain non-core rights to Demeter relating to its
research and development activities relating to products and services in the
field of fiber optics. The Borrower leased to Demeter a portion of its owned
facility in El Monte, California, subleased a portion of its rented facility in
El Monte, California, leased certain equipment, including an MOCVD machine and
sold certain inventory relating to fiber optics. In exchange, Demeter has
granted to Borrower a warrant to purchase up to 4.5 million shares of its Series
A convertible preferred stock at a price of $0.5714 per share.
The Borrower has also provided certain wafer inventory to Intelligent Epitaxy
("Intelligent"), located in Texas. In exchange, Intelligent has granted Borrower
Schedule 4 - Page 3
82
warrants to purchase shares of its capital stock with a value up to
approximately $100,000.
Schedule 4 -- Page 4
83
SCHEDULE 5
CONTRACT COLLATERAL DESCRIPTION
- Standard Industrial/Commercial Multi-Tenant Lease, dated as of July, 2000,
by and between American Xtal Technology, Inc., now known as ▇▇▇, Inc., and
Demeter Technologies, Inc.
- Standard Office Lease - Net, dated as of December 23, 1996, by and between
Alpha Photonics, Inc. and ABC Management Company (Alpha Photonics is a
division of Lyte Optronics, Inc.)
- Standard Industrial/Commercial Multi-Tenant Lease - Gross, dated as of
January 31, 1998, by and between Lyte Optronics, Inc. and ▇▇▇▇ and ▇▇▇ ▇▇▇▇▇
Family Trust; Addendum to Standard Industrial/Commercial Multi-Tenant Lease
- Gross, dated as of March, 1998, by and between Lyte Optronics, Inc. and
▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ Family Trust
- Standard Industrial/Commercial Multi-Tenant Lease - Net, dated as of April
20, 2000, by and between American Xtal Technology, Inc., now known as ▇▇▇,
Inc., and Chois Company and Addendum thereto of even date
- Standard Industrial/Commercial Multi-Tenant Lease - Net, dated as of April
11, 2000, by and between American Xtal Technology, Inc., now known as ▇▇▇,
Inc., and ▇▇▇ Pacific Trading Corp., Inc.
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics, Inc.)
and Standard Form of Agreement Between Owner and Contractor dated March 21,
2000
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated May 18, 2000, regarding services to be provided by Allied
Pacific Builders
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated March 28, 2000, regarding services to be provided by ▇.▇. ▇▇▇▇
Plumbing, Inc.
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated May 18, 2000, regarding services to be provided by ▇.▇. ▇▇▇▇
Plumbing, Inc.
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated April 28, 2000, regarding services to be provided by ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Associates
Schedule 5 -- Page 1
84
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated December 14, 1999, regarding services to be provided by
Facilities Support Services
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated March 28, 2000, regarding services to be provided by K&S Air
Conditioning, Inc.
- Purchase Requisition by Alpha Photonics (a division of Lyte Optronics,
Inc.), dated May 18, 2000, regarding services to be provided by K&S Air
Conditioning, Inc.
Schedule 5 -- Page 2
85
SCHEDULE 7.4
EXISTING INDEBTEDNESS
[See Schedule 7.7]
Schedule 7.4 -- Page 1
86
SCHEDULE 7.5
EXISTING GUARANTIES
Schedule 7.5 -- Page 1
87
SCHEDULE 7.7
EXISTING LOANS; ADVANCES; INVESTMENTS
EXISTING INDEBTEDNESS
The Borrower's existing indebtedness is as follows:
- That indebtedness set forth in the Borrower's consolidated financial
statements dated June 30, 2000, a copy of which has been delivered to
Lender.
- As of June 30, 2000, the Borrower carried an intercompany receivable in the
approximate amount of $25,109,450 owed by Lyte Optronics, Inc.
- As of June 30, 2000, the Borrower carried an intercompany receivable in the
approximate amount of $269,076 owed by Beijing Tongmei Xtal Technology Co.,
Ltd.
- Indebtedness secured by the existing liens set forth below
EXISTING INVESTMENTS
The following entities are wholly-owned subsidiaries of the Borrower:
Advanced Semiconductor (Xiamen)
American Xtal Technology (Hong Kong)
▇▇▇ - Japan
Beijing Tongmei Xtal Technology Co., Ltd.
Bestal Substrate Foreign Sales Corp.
Lyte Optronics, Inc.
Lyte Optronics Ltd. (UK)
The Borrower holds an equity interest in the following entities:
Ge Mining
Ga Mining - Beijing JIYA Semiconductor
In August 2000, the Borrower entered into a business transfer and acquisition
agreement with Demeter Technology, a Delaware corporation founded by ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, the president of the Borrower's fiber optic division and a former member
of the Borrower's board of directors, and ▇▇▇▇▇▇ ▇▇▇▇, the chief technology
officer of the Borrower's visible emitter division. Under this agreement, the
Borrower agreed to
Schedule 7.7 -- Page 1
88
transfer certain non-core rights to Demeter relating to its research and
development activities relating to products and services in the field of fiber
optics. The Borrower leased to Demeter a portion of its owned facility in El
Monte, California, subleased a portion of its rented facility in El Monte,
California, leased certain equipment, including an MOCVD machine and sold
certain inventory relating to fiber optics. In exchange, Demeter has granted to
Borrower a warrant to purchase up to 4.5 million shares of its Series A
convertible preferred stock at a price of $0.5714 per share.
The Borrower has also provided certain wafer inventory to Intelligent Epitaxy
("Intelligent"), located in Texas. In exchange, Intelligent has granted Borrower
warrants to purchase shares of its capital stock with a value up to
approximately $100,000.
EXISTING LIENS
- Bay Area Bank - Financing Statement No. ▇▇▇▇▇▇▇▇▇▇ filed on January 24, 1996
evidencing a security interest in all equipment and other property now or
hereafter covered by that certain Equipment Financing Agreement (#95092922)
between Bay Area Bank and Borrower, including all accessions and additions
thereto, modifications thereof and replacements and substitutions therefor
and replacements and substitutions therefor, in whole or in part, including
items of the following type: Wafer Manufacturing Equipment.
- Saratoga National Bank - Financing Statement No. 9602560578 filed on January
24, 1996 evidencing a security interest in all equipment and other property
now or hereafter covered by that certain Equipment Financing Agreement
(#95092923) between Saratoga National Bank and Borrower, including all
accessions and additions thereto, modifications thereof and replacements and
substitutions therefor and replacements and substitutions therefor, in whole
or in part, including items of the following type: Wafer Manufacturing
Equipment.
- ValliWide Bank - Financing Statement No. 9607860728 filed on March 14, 1996
evidencing a security interest in all equipment and other property now or
hereafter covered by that certain Equipment Financing Agreement (#95092924)
between ValliWide Bank and Borrower, including all accessions and additions
thereto, modifications thereof and replacements and substitutions therefor,
in whole or in part, including items of the following type: Wafer
Manufacturing Equipment
- Comerica Bank, Successor by Merger to University Bank - Financing Statement
No. 9607860778 filed on March 14, 1996 evidencing a security interest in all
equipment and other property now or hereafter covered by that certain
Equipment Financing Agreement (#95092921) between University Bank and
Borrower, including all accessions and additions thereto, modifications
thereof and
Schedule 7.7 -- Page 2
89
replacements and substitutions therefor, in whole or in part, including
items of the following type: Wafer Manufacturing Equipment
- U.S. Small Business Administration, assignee of Bay Area Employment
Development Company - Financing Statement No. 9612360295 filed on May 1,
1996 evidencing a security interest in specific machinery and equipment
purchased with the proceeds of the loan and all accessions, additions,
replacements and substitutions, all records of any kind relating to any of
the foregoing and all proceeds of such machinery and equipment including
insurance, general intangible and accounts proceeds.
- Exchange Bank - Financing Statement No. 9714060100 filed on May 15, 1997
evidencing a security interest in all equipment and other property now or
hereafter covered by that certain Equipment Financing Agreement (#95092921)
between Exchange Bank and Borrower, including all accessions and additions
thereto, modifications thereof and replacements and substitutions therefor,
in whole or in part, including items of the following type: production test,
office and computer equipment
- ValliWide Bank - Financing Statement No. 9716161297 filed on June 6, 1997
evidencing a security interest in all equipment and other property now or
hereafter covered by that certain Equipment Financing Agreement (#95092922)
between ValliWide Bank and Borrower, including all accessions and additions
thereto, modifications thereof and replacements and substitutions therefor,
in whole or in part, including items of the following type: production test,
office and computer equipment.
- General Electric Capital Corporation - Financing Statement No. 9800260574
filed on December 30, 1997 evidencing a security interest in specific
equipment set forth on Collateral Schedule No. 01 to that certain Master
Security Agreement dated as of December 11, 1997 between Borrower and
General Electric Capital Corporation
- General Electric Capital Corporation - Financing Statement No. 9817660252
filed on June 24, 1998 evidencing a security interest in specific equipment
set forth on Collateral Schedule No. 02 to that certain Master Security
Agreement dated as of December 11, 1997 between Borrower and General
Electric Capital Corporation
- NationsBanc Leasing Corporation - Financing Statement No. 9901360408 filed
on January 8, 1999 evidencing a security interest in specific equipment
Schedule 7.7 -- Page 3
90
- NationsBanc Leasing Corporation - Financing Statement No. 9919660999 filed
on July 9, 1999 evidencing a security interest in specific equipment
- Banc One Leasing Corporation, assignee of Third Street Services, Inc. -
Financing Statement No. 9934860649 filed on December 2, 1999 evidencing a
security interest in specific equipment
- LaSalle National Leasing Corporation, assignee of Third Street Services,
Inc. - Financing Statement No. 0002860375 filed on January 27, 2000
evidencing a security interest in specific equipment
- Banc One Leasing Corporation, assignee of Third Street Services, Inc. -
Financing Statement No. 0004660124 filed on February 10, 2000 evidencing a
security interest in specific equipment
- Banc One Leasing Corporation, assignee of Third Street Services, Inc. -
Financing Statement No. 0004660325 filed on February 10, 2000 evidencing a
security interest in specific equipment
- Banc One Leasing Corporation, assignee of Third Street Services, Inc. -
Financing Statement No. 0005361100 filed on February 17, 2000 evidencing a
security interest in specific equipment
- Safeco Credit Company, Inc., assignee of Third Street Services, Inc. -
Financing Statement No. 0008160175 filed on March 15, 2000 evidencing a
security interest in specific equipment
The following Financing Statements have been filed by U.S. Bank National
Association:
- Financing Statement No. 9529260048 filed on October 16, 1995 (assigned from
Commercial Bank of Fremont)
- Financing Statement No. 9715760787 filed on June 3, 1997
- Financing Statement No. ▇▇▇▇▇▇▇▇▇▇ filed on June 4, 1997
- Financing Statement No. 9833760671 filed on December 3, 1998
- Financing Statement No. 0018860892 filed on June 29, 2000
Schedule 7.7 -- Page 4
91
SCHEDULE 7.8
EXISTING LIENS; PLEDGES OF ASSETS
[See Schedule 7.7]
Schedule 7.8 -- Page 1
92
EXHIBIT A
LETTER OF CREDIT
To be attached
Exhibit A -- Page 1
93
EXHIBIT B
FORM OF LINE OF CREDIT NOTE
$20,000,000.00 _______________, 2000
FOR VALUE RECEIVED, the undersigned, ▇▇▇, INC., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of U.S. BANK
NATIONAL ASSOCIATION ("Lender") on the Line Maturity Date the principal sum of
Twenty Million Dollars ($20,000,000.00), or such lesser amount as shall equal
the aggregate outstanding principal balance of all advances hereunder made by
Lender to Borrower pursuant to the Credit Agreement referred to below.
This promissory note is one of the Line of Credit Notes referred
to in, and is subject to the terms of, that certain Credit Agreement among
Borrower, Lender and the other financial institutions from time to time parties
thereto (collectively, the "Lenders"), and U.S. Bank National Association, as
agent for the Lenders (in such capacity, "Agent"), dated as of ________, 2000
(as amended, modified or supplemented from time to time, the "Credit
Agreement"). Capitalized terms used herein and not defined shall have the
respective meanings assigned to them in the Credit Agreement.
Borrower further promises to pay interest on the outstanding
principal balance hereof at the interest rates, and payable on the dates, set
forth in the Credit Agreement. All payments of principal and interest hereunder
shall be made to Agent at Agent's Office, for the account of Lender, in lawful
money of the United States and in same day or immediately available funds.
Lender is authorized but not required to record the date and
amount of each advance made hereunder, each conversion to a different interest
rate and the length of each Fixed Rate Term, the date and amount of each payment
of principal and interest hereunder, and the resulting unpaid principal balance
hereof, in Lender's internal records, and any such recordation shall be prima
facie evidence of the accuracy of the information so recorded so long as
Borrower is provided with a record thereof for review; provided however, that
Lender's failure to so record shall not limit or otherwise affect the
obligations of Borrower hereunder and under the Credit Agreement to repay the
principal hereof and interest hereon.
The Credit Agreement provides, among other things, for
acceleration (which in certain cases shall be automatic) of the maturity hereof
upon the occurrence of certain stated events, in each case without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower.
Exhibit B -- Page 1
94
This promissory note is secured by certain collateral more
specifically described in the Credit Agreement and the other Loan Documents.
Borrower may prepay this promissory note in whole or in part in accordance with
the terms of the Credit Agreement.
This promissory note shall be governed by and construed in
accordance with the laws of the State of California.
▇▇▇, INC., a Delaware corporation
By:
--------------------------------
--------------------------------
[Printed Name and Title]
Exhibit B -- Page 2
95
EXHIBIT C
FORM OF TERM NOTE
$______________
________________, 2000
FOR VALUE RECEIVED, the undersigned, ▇▇▇, INC., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of U.S. BANK
NATIONAL ASSOCIATION ("Lender"), the principal sum of _______________ Dollars
($_________), or such lesser amount as may be advanced hereunder, on the dates
and in the amounts set forth in that certain Credit Agreement among Borrower,
Lender and the other financial institutions from time to time parties thereto
(collectively, the "Lenders"), and U.S. Bank National Association, as agent for
the Lenders (in such capacity, "Agent"), dated as of _______, 2000 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), with a
final installment consisting of all remaining unpaid principal due and payable
in full on May 31, 2003.
This promissory note is one of the Term Notes referred to in, and
is subject to the terms of, the Credit Agreement. Capitalized terms used herein
and not defined shall have the respective meanings assigned to them in the
Credit Agreement.
Borrower further promises to pay interest on the outstanding
principal balance hereof at the interest rates, and payable on the dates, set
forth in the Credit Agreement. All payments of principal and interest hereunder
shall be made to Agent at Agent's Office, for the account of Lender, in lawful
money of the United States and in same day or immediately available funds.
Lender is authorized but not required to record the date and
amount of each advance made hereunder, each conversion to a different interest
rate and the length of each Fixed Rate Term, the date and amount of each payment
of principal and interest hereunder, and the resulting unpaid principal balance
hereof, in Lender's internal records, and any such recordation shall be prima
facie evidence of the accuracy of the information so recorded so long as
Borrower is provided that with a record thereof for review; provided however,
that Lender's failure to so record shall not limit or otherwise affect the
obligations of Borrower hereunder and under the Credit Agreement to repay the
principal hereof and interest hereon.
The Credit Agreement provides, among other things, for
acceleration (which in certain cases shall be automatic) of the maturity hereof
upon the occurrence of certain stated events, in each case without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower.
Exhibit C -- Page 1
96
This promissory note is secured by certain collateral more
specifically described in the Credit Agreement and the other Loan Documents.
Borrower may prepay this promissory note in whole or in part in accordance with
the terms of the Credit Agreement.
This promissory note shall be governed by and construed in
accordance with the laws of the State of California.
▇▇▇, INC., a Delaware corporation
By:
--------------------------------
--------------------------------
[Printed Name and Title]
Exhibit C -- Page 2
97
EXHIBIT D
NOTICE OF BORROWING
U.S. Bank National Association
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ______________________
Reference is made to that certain Credit Agreement dated as of
_________________, 2000 (as amended, modified or supplemented from time to time,
the "Credit Agreement") among ▇▇▇, Inc., a Delaware corporation ("Borrower"),
the financial institutions from time to time parties thereto (collectively, the
"Lenders"), and U.S. Bank National Association, as agent for the Lenders (in
such capacity, "Agent"). Capitalized terms used herein shall have the respective
meanings assigned to them in the Credit Agreement.
1. Pursuant to Section 2.4 of the Credit Agreement, Borrower
hereby requests an advance under the [Line of Credit] [Term Loan A] [Term Loan
B] [Term Loan C] upon the following terms:
(a) The principal amount of the requested advance is
$___________.
(b) The date of the requested advance is to be
_____________.
(c) The aggregate amount of said advance for which a
Reference Rate interest selection is made is $_____________.
(d) The aggregate amount of said advance for which a
LIBOR Rate interest selection is made, and each requested Fixed Rate Term, are:
Amount Fixed Rate Term
$____________ _____ months
$____________ _____ months
(e) The aggregate amount of said advance for which a
Treasury Rate interest selection is made is $_____________.
2. Borrower hereby certifies to Agent and the Lenders that,
on the date of this Notice of Borrowing and after giving effect to the requested
advance (including the use of the proceeds thereof):
Exhibit D -- Page 1
98
(a) the representations and warranties set forth in the
Credit Agreement are true and correct as if made on such date;
(b) no Default has occurred and is continuing; and
(c) each of the Loan Documents remains in full force
and effect.
The party signing below on behalf of Borrower is an Authorized
Representative of Borrower and has caused this Notice of Borrowing to be duly
executed on behalf of Borrower as of __________________.
▇▇▇, INC., a Delaware corporation
By: ________________________________
________________________________
[Printed Name and Title]
Exhibit D -- Page 2
99
EXHIBIT E
NOTICE OF CONVERSION OR CONTINUATION
U.S. Bank National Bank Association
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ______________________
Reference is made to that certain Credit Agreement dated as of
________________, 2000 (as amended, modified or supplemented from time to time,
the "Credit Agreement") among ▇▇▇, Inc., a Delaware corporation ("Borrower"),
the financial institutions from time to time parties thereto (collectively, the
"Lenders"), and U.S. Bank National Association, as agent for the Lenders (in
such capacity, "Agent"). Capitalized terms used herein shall have the respective
meanings assigned to them in the Credit Agreement.
1. Pursuant to Section 2.6 of the Credit Agreement, Borrower
hereby requests [the continuation of all or part of its outstanding LIBOR
borrowings with Fixed Rate Terms ending on ___________] [the conversion of all
or part of its outstanding Reference Rate borrowings], as follows:
(a) The Credit to which this Notice applies is the [Line of
Credit] [Term Loan A] [Term Loan B] [Term Loan C].
(b) The effective date of continuation and/or conversion is
to be _______________.
(c) The aggregate amount of [said outstanding LIBOR
borrowings to be continued as] [said outstanding Reference Rate borrowings to be
converted to] LIBOR borrowings, and each requested Fixed Rate Term, are:
Amount Fixed Rate Term
$_____________ _____ months
$_____________ _____ months
(d) The aggregate amount of said outstanding LIBOR
borrowings to be continued as Reference Rate borrowings is $_______________.
Exhibit E -- Page 1
100
3. Borrower hereby certifies to Agent and the Lenders that, on
the date of this Notice of Conversion or Continuation, no Default has occurred
and is continuing.
The party signing below on behalf of Borrower is an Authorized
Representative of Borrower and has caused this Notice of Conversion or
Continuation to be duly executed on behalf of Borrower as of __________________.
▇▇▇, INC., a Delaware corporation
By: ________________________________
________________________________
[Printed Name and Title]
Exhibit E -- Page 2
101
EXHIBIT F
NOTICE OF
AUTHORIZED REPRESENTATIVES
U.S. Bank National Association
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: _________________
Reference is made to that certain Credit Agreement dated as of
_______________________, 2000 (as amended, modified or supplemented from time to
time, the "Credit Agreement") among ▇▇▇, Inc., a Delaware corporation
("Borrower"), the financial institutions from time to time parties thereto
(collectively, the "Lenders"), and U.S. Bank National Association, as agent for
the Lenders (in such capacity, "Agent"). Borrower hereby represents to Agent and
Lenders that the following named officers and employees are the Authorized
Representatives of Borrower, as defined in the Credit Agreement, and that the
signatures opposite their names are their true signatures:
Name Signature
------------------------------ ---------------------------------
------------------------------ ---------------------------------
------------------------------ ---------------------------------
Borrower further represents to Agent and Lenders that Agent is
authorized to rely on this Notice of Authorized Representatives until such time,
if any, as Borrower has delivered to Agent, and Agent has received, a duly
executed Notice of Authorized Representatives in substitution hereof. This
Notice of Authorized Representatives cancels and supersedes any Notice of
Authorized Representatives at any time prior to the date hereof delivered by
Borrower to Agent.
Exhibit F -- Page 1
102
IN WITNESS WHEREOF, Borrower hereby confirms that it has caused
this Notice of Authorized Representatives to be duly executed as of
______________, 2000.
▇▇▇, INC., a Delaware corporation
By: ________________________________
________________________________
[Printed Name and Title]
Exhibit F -- Page 2
103
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is
entered into as of _____________, between ___________________
______________________ ("Assignor") and ________________________ ("Assignee").
WHEREAS, Assignor is a Lender under that certain Credit Agreement
dated as of __________, 2000 (as amended, modified, supplemented or restated
from time to time, the "Credit Agreement") among ▇▇▇, Inc., a California
corporation ("Borrower"), the Lenders from time to time parties thereto, and
U.S. Bank National Association, as Agent. Capitalized terms used but not defined
in this Agreement shall have the meanings set forth in the Credit Agreement. The
Credit Agreement and all other agreements, documents and instruments referred to
therein or delivered pursuant thereto are collectively called the "Loan
Documents".
WHEREAS, it is the intention of Assignor and Assignee that (a)
Assignor assign to Assignee a portion of Assignor's rights and obligations under
the Credit Agreement, (b) Assignee assume all such obligations of Assignor, and
(c) Assignor be released from such assigned obligations.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Assignment. Effective on the Assignment Effective Date (as
defined in Section 3 hereof), Assignor, without recourse and without
representation or warranty (except as expressly provided in Section 6 hereof),
hereby assigns to Assignee the Assigned Rights and Obligations (as defined
below).
2. The "Assigned Rights and Obligations" means: (a) [a
$__________ portion] [_________%] of Assignor's $__________ Proportionate Share
of [the Line of Credit] [Term Loan A] [Term Loan B] [Term Loan C] Total
Commitment on the Assignment Effective Date; (b) the portion of [the Line of
Credit] [Term Loan A] [Term Loan B] [Term Loan C] outstanding on the Assignment
Effective Date that is attributable to the above portion of Assignor's
Proportionate Share of [the Line of Credit] [Term Loan A] [Term Loan B] [Term
Loan C] Total Commitment; and (c) all of Assignor's other rights and obligations
under the Credit Agreement that are attributable to the above portion of
Assignor's Proportionate Share.
Exhibit G -- Page 1
104
3. Assumption. Effective on the Assignment Effective Date,
Assignee hereby accepts the foregoing assignment of, and hereby assumes from
Assignor all of, the Assigned Rights and Obligations.
4. Effectiveness. This Agreement shall become effective on such
date as shall be selected by Assignor (the "Assignment Effective Date"), which
date shall be on or as soon as practicable after the execution and delivery of
counterparts of this Agreement by Assignor, Assignee, Agent and Borrower.
Assignor shall promptly notify Assignee, Agent and Borrower in writing of the
Assignment Effective Date.
5. Payments on Assignment Effective Date. In consideration of the
assignment by Assignor to, and the assumption by Assignee of, the Assigned
Rights and Obligations, on the Assignment Effective Date: (a) Assignee shall pay
to Assignor the principal amount of [the Line of Credit] [Term Loan A] [Term
Loan B] [Term Loan C] made by Assignor pursuant to the Credit Agreement that are
attributable to the Assigned Rights and Obligations and outstanding on the
Assignment Effective Date; [and] (b) each of Assignor and Assignee shall pay to
the other such amounts (if any) as are specified in any written agreement or
exchange of letters between them[; and (c) Assignee shall pay to Agent an
assignment processing and recordation fee of $________].
6. Allocation and Payment of Interest and Fees.
(a) Agent shall pay to Assignee all interest, commitment fees
and other amounts not constituting principal that are paid by or on behalf of
Borrower pursuant to the Loan Documents and are attributable to the Assigned
Rights and Obligations ("Borrower Amounts") which accrue on and after the
Assignment Effective Date. If Assignor receives or collects any such Borrower
Amounts, Assignor shall promptly pay them to Assignee.
(b) Agent shall pay to Assignor all Borrower Amounts that
accrue before the Assignment Effective Date. If Assignee receives or collects
any such Borrower Amounts, Assignee shall promptly pay them to Assignor.
7. Representations and Warranties.
(a) Each of Assignor and Assignee represents and warrants to
the other party as follows:
(i) Such party has full power and authority, and has taken
all action necessary, to execute and deliver this Agreement and to fulfill its
obligations under, and to consummate the transactions contemplated by, this
Agreement.
Exhibit G -- Page 2
105
(ii) The making and performance of this Agreement and all
documents required to be executed and delivered by such party pursuant hereto do
not and will not violate any law or regulation applicable to such party.
(iii) This Agreement has been duly executed and delivered
by, and constitutes a legal, valid and binding obligation of, such party,
enforceable in accordance with its terms.
(iv) All approvals, authorizations or other actions by, or
filings with, any governmental authority necessary for the validity or
enforceability of such party's obligations under this Agreement have been made
or obtained.
(b) Assignor represents and warrants to Assignee that Assignor
owns the Assigned Rights and Obligations, free and clear of all liens or other
encumbrances.
(c) Assignee represents and warrants to Assignor as follows:
(i) Assignee has made and shall continue to make its own
independent investigation of the financial condition, affairs and
creditworthiness of Borrower and any other person or entity obligated under the
Loan Documents (collectively, the "Credit Parties"), and the value of any
collateral now or hereafter securing any of the obligations, indebtedness,
liabilities or undertakings under the Loan Documents (the "Collateral"), in
connection with Assignee's assumption of the Assigned Rights and Obligations.
(ii) Assignee has received a copy of the Loan Documents
and such other documents, financial statements and information as Assignee deems
appropriate to make its own credit analysis and decision to enter into this
Agreement.
8. No Assignor Responsibility. Assignor makes no representation
or warranty and assumes no responsibility to Assignee for:
(a) the execution by any party other than Assignor,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of the Loan Documents, or for any representations, warranties,
recitals or statements made in the Loan Documents or in any financial or other
written or oral statement, instrument, report, certificate or any other document
made or furnished or made available by Assignor to Assignee or by or on behalf
of any Credit Party to Assignor or Assignee in connection with the Loan
Documents and the transactions contemplated thereby;
(b) the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Exhibit G -- Page 3
106
Documents or the existence or possible existence of any default or event of
default under the Loan Documents; or
(c) the accuracy or completeness of any information provided
to Assignee, whether by Assignor or by or on behalf of any Credit Party.
Assignor shall have no initial or continuing duty or
responsibility to make any investigation of the financial condition, affairs or
creditworthiness of any of the Credit Parties, or the value of any Collateral,
in connection with the assignment of the Assigned Rights and Obligations
hereunder, or to provide Assignee with any credit or other information with
respect thereto, whether coming into Assignor's possession before the date
hereof or at any time or times thereafter.
9. Assignee Bound By Credit Agreement. Effective on the
Assignment Effective Date, Assignee: (a) shall be deemed to be a party to the
Credit Agreement; (b) agrees to be bound by the Credit Agreement as it would
have been if it had been an original Lender party thereto; and (c) agrees to
perform in accordance with their respective terms all obligations which are
required under the Loan Documents to be performed by it as a Lender. Assignee
appoints and authorizes Agent to take such actions as agent on Assignee's behalf
and to exercise such powers under the Loan Documents as are delegated to Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto.
10. Assignor Released From Credit Agreement. Effective on the
Assignment Effective Date, Assignor shall be released from the Assigned Rights
and Obligations; provided, however, that Assignor shall retain all of its rights
to indemnification under Sections 2.14 and 10.3 of the Credit Agreement and the
other Loan Documents for any events, acts or omissions occurring before the
Assignment Effective Date.
11. Foreign Withholding.(*)
(a) Assignee represents and warrants to Agent, Borrower and
Assignor that, under applicable law and treaties, Assignee is entitled to
receive all payments under the Credit Agreement, the Loan Documents and this
Agreement payable to it as provided herein, without deduction or withholding of
any taxes imposed by the United States or any political subdivision thereof.
(b) On or before the Assignment Effective Date, Assignee
shall deliver to each of Borrower and Agent two executed copies of valid and
properly completed: (i) United States Internal Revenue Service Form 1001 or 4224
certifying
--------
* Include Section 11 only if Assignee is a foreign institution.
Exhibit G -- Page 4
107
that Assignee is entitled to receive payments under the Credit Agreement and the
Loan Documents payable to it, without deduction or withholding of any United
States federal income taxes; and (ii) Internal Revenue Service Form W-8 or W-9
establishing an exemption from United States backup withholding tax. If any such
form is found to be incomplete or incorrect, or must be replaced (on the same or
a successor form) in order to maintain its effectiveness, Assignee shall execute
and deliver to each of Borrower and Agent two executed copies of a valid,
complete and correct replacement form.
12. General.
(a) This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
and current understandings and agreements, whether written or oral (other than
with respect to any fees payable as provided in Section 4 hereof).
(b) No term or provision of this Agreement may be amended,
waived or terminated orally, but only by an instrument signed by the parties
hereto.
(c) This Agreement may be executed in one or more
counterparts. Each set of executed counterparts shall be an original. Executed
counterparts may be delivered by facsimile transmission.
(d) Assignor may at any time and from time to time grant to
others pursuant to the Loan Documents assignments of or participations in all or
part of Assignor's Proportionate Share of [the Line of Credit] [Term Loan A]
[Term Loan B] [Term Loan C] Total Commitments, but not with respect to the
Assigned Rights and Obligations.
(e) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and assigns. Neither Assignor nor Assignee may assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the other. The preceding sentence shall not limit the right of
Assignee to grant to others assignments of or participations in all or part of
the Assigned Rights and Obligations to the extent permitted by the terms of the
Loan Documents.
(f) All payments to Assignor or Assignee hereunder shall,
unless otherwise specified by the party entitled thereto, be made in United
States Dollars, in immediately available funds, and to the address or account
specified on the signature pages of this Agreement. The address of Assignee for
notice purposes under the Credit Agreement shall be as specified on the
signature pages of this Agreement.
Exhibit G -- Page 5
108
(g) If any provision of this Agreement is held invalid,
illegal or unenforceable, the remaining provisions hereof will not be affected
or impaired in any way.
(h) Each party shall bear its own expenses in connection with
the preparation and execution of this Agreement.
(i) This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
ASSIGNOR:
___________________________________
By: ______________________________
Name: ____________________________
Title: ___________________________
Assignor's Notice Instructions:
___________________________________
___________________________________
___________________________________
Attn: ____________________________
Ref: _____________________________
Telephone: (______) ______________
Facsimile: (______) ______________
Assignor's Payment Instructions:
___________________________________
___________________________________
___________________________________
ABA No.: _________________________
Account No.: _____________________
Attn: ____________________________
Ref: _____________________________
Exhibit G -- Page 6
109
ASSIGNEE:
___________________________________
By: ______________________________
Name: ____________________________
Title: ___________________________
Assignee's Notice Instructions:
___________________________________
___________________________________
___________________________________
Attn: ____________________________
Ref: _____________________________
Telephone: (______) ______________
Facsimile: (______) ______________
Assignee's Payment Instructions:
___________________________________
___________________________________
___________________________________
ABA No.: _________________________
Account No.: _____________________
Attn: ____________________________
Ref: _____________________________
Exhibit G -- Page 7
110
ACKNOWLEDGED AND AGREED:
BORROWER:
▇▇▇, INC., a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
AGENT:
U.S. BANK NATIONAL ASSOCIATION,
as Agent
By: ______________________________
Name: ____________________________
Title: ___________________________
Exhibit G -- Page 8
111
EXHIBIT H
FORM OF BORROWING BASE CERTIFICATE
Exhibit H -- Page 1