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EXHIBIT 10.49
SENIOR SECURED CREDIT AGREEMENT
among
ADFLEX SOLUTIONS, INC.,
THE BANKS LISTED HEREIN
and
BANKBOSTON, N.A.
as Agent
June __, 1997
$20,000,000 Revolving Facility
$25,000,000 Term Facility
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND RELATED MATTERS..................................................................... 1
Section 1.1. Definitions. ................................................................... 1
Section 1.2. Related Matters. ............................................................... 16
1.2.1. Construction. ........................................................... 16
1.2.2. Determinations. ......................................................... 16
1.2.3. Accounting Terms and Determinations. .................................... 16
1.2.4. Independence of Covenants. .............................................. 17
ARTICLE 2. AMOUNTS AND TERMS OF THE CREDIT FACILITIES.......................................................... 17
Section 2.1. Loans. ......................................................................... 17
2.1.1. Term Loans. ............................................................. 17
2.1.5. Revolving Loans. ........................................................ 17
2.1.6. Type of Loans and Minimum Amounts. ...................................... 17
2.1.7. Notice of Borrowing. .................................................... 17
2.1.9. Funding. ................................................................ 18
Section 2.2. Letters of Credit. ............................................................. 19
2.2.1. In General. ............................................................. 19
2.2.2. Notices of Issuance, Etc. ............................................... 19
2.2.3. Participations in Letters of Credit. .................................... 19
2.2.4. Reimbursement for Drawings, Etc. ........................................ 20
Section 2.3. Use of Proceeds. ............................................................... 22
Section 2.4. Interest; Interest Periods; Conversion/Continuation. ........................... 22
2.4.1. Interest Rate and Payment. .............................................. 22
2.4.2. Interest Periods & Minimum Amounts. ..................................... 22
2.4.3. Conversion or Continuation. ............................................. 22
2.4.4. Computations. ........................................................... 23
2.4.5. Maximum Lawful Rate of Interest. ........................................ 24
Section 2.5. Notes, Etc. .................................................................... 24
2.5.1. Loans Evidenced by Notes. ............................................... 24
2.5.2. Notation of Amounts and Maturities, Etc. ................................ 24
2.5.3. Loan Account. ........................................................... 24
Section 2.6. Fees. .......................................................................... 24
2.6.1. Commitment Fee. ......................................................... 24
2.6.2. Letter of Credit Fee. ................................................... 24
2.6.3. Other Fees. ............................................................. 25
2.6.4. Fees Non-Refundable. .................................................... 25
Section 2.7. Termination, Reduction and Extension of Revolving Commitments. ................. 25
2.7.1. .......................................................................... 25
2.7.2. .......................................................................... 25
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Section 2.8. Repayments and Prepayments. .................................................... 25
2.8.1. Repayment. .............................................................. 25
2.8.2. Mandatory Prepayment. ................................................... 26
2.8.3. Optional Prepayments. ................................................... 26
2.8.4. Payments Set Aside. ..................................................... 27
Section 2.9. Manner of Payment. ............................................................. 27
2.9.1. .......................................................................... 27
2.9.2. .......................................................................... 27
Section 2.10. Pro Rata Treatment. ........................................................... 28
2.10.1. ......................................................................... 28
2.10.2. ......................................................................... 28
2.10.3. ......................................................................... 28
2.10.4. .......................................................................... 28
Section 2.11. Mandatory Suspension and Conversion of LIBOR Rate Loans. ...................... 28
2.11.1. ......................................................................... 28
2.11.2. ......................................................................... 28
Section 2.12. Regulatory Changes. ........................................................... 28
2.12.1. Increased Costs. ....................................................... 29
2.12.2. Capital Costs. ......................................................... 29
Section 2.13. Taxes. ........................................................................ 29
2.13.1. ......................................................................... 29
2.13.2. ......................................................................... 30
2.13.3. ......................................................................... 30
Section 2.14. Compensation for Funding Losses. .............................................. 31
Section 2.15. Certificates Regarding Yield Protection, Etc. ................................. 31
2.15.1. ......................................................................... 31
2.15.2. ......................................................................... 31
Section 2.16. Applicable Lending Office; Discretion of Lenders as to Manner of Funding. ..... 31
ARTICLE 3. CONDITIONS TO LOANS AND LETTERS OF CREDIT........................................................... 32
Section 3.1. Closing Conditions. ............................................................ 32
3.1.1. Closing Date. ........................................................... 32
3.1.2. Certain Documents. ...................................................... 32
3.1.3. Fees and Expenses Paid. ................................................. 32
3.1.4. Satisfaction of Certain Conditions. ..................................... 32
3.1.5. Absence of Litigation Events. ........................................... 32
3.1.6. General. ................................................................ 32
3.1.7. No Material Adverse Change. ............................................. 33
3.1.8. Satisfaction of Subordinated Debt. ...................................... 33
Section 3.2. Conditions Precedent to Loans and Letters of Credit. ........................... 33
3.2.1. Occurrence of Closing Date. ............................................. 33
3.2.2. Notice of Borrowing or Issuance. ........................................ 33
3.2.3. Representations and Warranties. ......................................... 33
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3.2.4. No Default. ............................................................. 34
3.2.5. No Material Adverse Change. ............................................. 34
3.2.6. Satisfaction of Conditions. ............................................. 34
3.2.7. No Violation of Applicable Law. ......................................... 34
ARTICLE 4. REPRESENTATIONS AND WARRANTIES...................................................................... 34
Section 4.1. Organization, Powers and Good Standing. ........................................ 34
Section 4.2. Authorization, Binding Effect, No Conflict, Etc. ............................... 34
4.2.1. Authorization, Binding Effect, Etc........................................ 34
4.2.2. No Conflict............................................................... 34
4.2.3. Governmental Approvals. ................................................. 35
Section 4.3. Subsidiaries; Investments. ..................................................... 35
4.3.1. Subsidiaries. ........................................................... 35
4.3.3. Borrower Capital Stock. ................................................. 35
Section 4.4. Financial Information............................................................ 35
4.4.1. .......................................................................... 35
4.4.2. .......................................................................... 36
4.4.3. .......................................................................... 36
Section 4.5. No Material Adverse Changes; Solvency. ......................................... 36
Section 4.6. Litigation. .................................................................... 36
Section 4.7. Agreements; Applicable Law. .................................................... 36
Section 4.8. Governmental Regulation. ....................................................... 37
Section 4.9. Margin Regulations. ............................................................ 37
Section 4.10. Employee Benefit Plans. ....................................................... 37
4.10.1. ......................................................................... 37
4.10.2. ......................................................................... 37
Section 4.11. Title to Property. ............................................................ 37
Section 4.12. Intellectual Property, Etc. ................................................... 37
Section 4.13. Environmental Condition. ...................................................... 38
4.13.1. ......................................................................... 38
Section 4.14. Absence of Certain Restrictions. .............................................. 38
Section 4.15. Labor Matters. ................................................................ 38
Section 4.16. Disclosure. ................................................................... 38
ARTICLE 5. AFFIRMATIVE COVENANTS OF THE BORROWER............................................................... 39
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Section 5.1. Financial Statements and Other Reports. ........................................ 39
5.1.1. .......................................................................... 39
5.1.2. .......................................................................... 39
5.1.3. .......................................................................... 40
5.1.4. .......................................................................... 40
5.1.5. .......................................................................... 40
5.1.6. .......................................................................... 40
5.1.7. .......................................................................... 40
5.1.8. .......................................................................... 40
5.1.9. .......................................................................... 40
5.1.10. ......................................................................... 41
5.1.11. ......................................................................... 41
5.1.12. ......................................................................... 41
5.1.13. ......................................................................... 41
Section 5.2. Records and Inspection. ........................................................ 41
Section 5.3. Audits of the Collateral. ...................................................... 41
5.3.1. .......................................................................... 41
5.3.2. .......................................................................... 41
Section 5.4. Corporate Existence, Etc. ...................................................... 42
Section 5.5. Payment of Taxes. .............................................................. 42
Section 5.6. Maintenance of Properties. ..................................................... 42
Section 5.7. Maintenance of Insurance. ...................................................... 42
5.7.1. .......................................................................... 42
5.7.2. .......................................................................... 42
5.7.3. .......................................................................... 43
Section 5.8. Conduct of Business. ........................................................... 43
Section 5.9. Future Information. ............................................................ 43
Section 5.10. Additional Guaranties and Collateral. .......................................... 43
5.10.1. ......................................................................... 43
Section 5.11. Subordination of Intercompany Debt. ........................................... 44
Section 5.12. Environmental Compliance. ..................................................... 44
ARTICLE 6. NEGATIVE COVENANTS OF THE BORROWER................................................................. 44
Section 6.1. Liens. ......................................................................... 44
6.1.1. .......................................................................... 44
6.1.2. .......................................................................... 44
6.1.3. .......................................................................... 44
6.1.4. .......................................................................... 45
6.1.5. .......................................................................... 45
6.1.6. .......................................................................... 45
6.1.7. .......................................................................... 45
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Section 6.2. Debt. .......................................................................... 45
6.2.1. .......................................................................... 45
6.2.2. .......................................................................... 45
6.2.3. .......................................................................... 46
6.2.4. .......................................................................... 46
6.2.5. .......................................................................... 46
6.2.6. .......................................................................... 46
6.2.7. .......................................................................... 46
6.2.8. .......................................................................... 46
Section 6.3. Restricted Payments. ........................................................... 46
Section 6.4. Investments. ................................................................... 46
6.4.1. .......................................................................... 46
6.4.2. .......................................................................... 47
6.4.3. .......................................................................... 47
6.4.4. .......................................................................... 47
6.4.5. .......................................................................... 47
Section 6.5. Financial Covenants.............................................................. 47
6.5.1. Leverage Ratio. ......................................................... 47
6.5.2. Minimum Consolidated Tangible Net Worth. ................................ 47
6.5.3. Interest Coverage Ratio ................................................. 47
6.5.4. Debt Service Coverage Ratio. ............................................ 47
6.5.5. Operating Income and Net Income. ........................................ 47
Section 6.6. Restriction on Fundamental Changes. ............................................ 47
Section 6.7. Asset Dispositions; Sales of Receivables. ...................................... 48
6.7.1. .......................................................................... 48
6.7.2. .......................................................................... 48
6.7.3. .......................................................................... 48
Section 6.8. Transactions with Affiliates. .................................................. 48
Section 6.9. Prepayment of Debt. ............................................................ 49
6.9.1. .......................................................................... 49
6.9.2. .......................................................................... 49
6.9.3. .......................................................................... 49
Section 6.10. Employee Benefit Plans. ....................................................... 49
Section 6.11. Amendments of Charter Documents. .............................................. 49
Section 6.12. Restrictive Agreements. ....................................................... 49
Section 6.13. Negative Pledges, Etc. ........................................................ 50
6.13.1. .......................................................................... 50
6.13.2. .......................................................................... 50
ARTICLE 7. EVENTS OF DEFAULT.................................................................................. 50
Section 7.1. Events of Default. ............................................................. 50
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7.1.1. Failure to Make Payments. ............................................... 50
7.1.2. Default in Other Debt. .................................................. 50
7.1.3. Breach of Certain Covenants. ............................................ 50
7.1.4. Other Defaults Under Loan Documents. .................................... 50
7.1.5. Breach of Warranty. ..................................................... 51
7.1.6. Involuntary Bankruptcy; Appointment of Receiver, Etc. ................... 51
7.1.7. Voluntary Bankruptcy; Appointment of Receiver, Etc. ..................... 51
7.1.8. Change of Control. ...................................................... 51
7.1.9. Termination of Loan Documents, Etc. ..................................... 51
7.1.10. Material Adverse Change. ............................................... 51
7.1.11. Judgments and Attachments. ............................................. 52
Section 7.2. Remedies. ...................................................................... 52
7.2.1. .......................................................................... 52
7.2.2. .......................................................................... 52
7.2.3. .......................................................................... 52
ARTICLE 8. THE AGENT AND THE BANKS............................................................................ 52
Section 8.1. Authorization and Action. ...................................................... 52
8.1.1. .......................................................................... 53
8.1.2. .......................................................................... 53
8.1.3. .......................................................................... 53
8.1.4. .......................................................................... 53
Section 8.2. Exculpation; Agent's Reliance; Etc. ............................................ 54
Section 8.3. Agent and Affiliates. .......................................................... 54
Section 8.4. Lender Credit Decision. ........................................................ 54
Section 8.5. Indemnification. ............................................................... 55
Section 8.6. Successor Agent. ............................................................... 55
Section 8.7. Excess Payments. ............................................................... 55
Section 8.8. Lender Parties. ................................................................ 56
Section 8.9. Collateral and Guaranty Matters. ............................................... 56
8.9.1. .......................................................................... 56
8.9.2. .......................................................................... 56
8.9.3. .......................................................................... 56
8.9.4. .......................................................................... 57
8.9.5. .......................................................................... 57
Section 8.10. Payments; Availability of Funds; Certain Notices................................ 57
8.10.1. ......................................................................... 57
8.10.2. ......................................................................... 57
8.10.3. ......................................................................... 57
Section 8.11. Obligations of Lender Parties Several; Enforcement by the Agent. .............. 58
8.11.1. ......................................................................... 58
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8.11.2. ......................................................................... 58
ARTICLE 9. MISCELLANEOUS....................................................................................... 58
Section 9.1. Expenses. ...................................................................... 58
9.1.1. .......................................................................... 58
9.1.2. .......................................................................... 58
Section 9.2. Indemnity. ..................................................................... 58
9.2.1. .......................................................................... 58
9.2.2. .......................................................................... 59
9.2.3. .......................................................................... 59
Section 9.3. Waivers; Amendments in Writing. ................................................ 60
9.3.1. .......................................................................... 60
Section 9.4. Cumulative Remedies; Failure or Delay. ......................................... 60
Section 9.5. Notices, Etc. .................................................................. 61
Section 9.6. Successors and Assigns. ........................................................ 61
9.6.1. .......................................................................... 61
9.6.2. .......................................................................... 61
9.6.3. .......................................................................... 62
9.6.4. .......................................................................... 62
9.6.5. .......................................................................... 62
9.6.6. .......................................................................... 62
Section 9.7. Confidentiality. ............................................................... 62
Section 9.8. Governing Law. ................................................................. 63
Section 9.9. Choice of Forum. ............................................................... 63
9.9.1. .......................................................................... 63
9.9.2. .......................................................................... 63
9.9.3. .......................................................................... 63
Section 9.10. Set Off. ...................................................................... 64
Section 9.11. Changes in Accounting Principles. ............................................. 64
Section 9.12. Headings. ..................................................................... 64
Section 9.13. Severability. ................................................................. 64
Section 9.14. Survival of Agreements, Representations and Warranties. ....................... 64
Section 9.15. Execution in Counterparts. .................................................... 64
Section 9.16. Complete Agreement. ........................................................... 65
Section 9.17. Limitation of Liability. ...................................................... 65
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EXHIBITS
Exhibit A-1 Form of Revolving Loan Note
Exhibit A-2 Form of Term Loan Note
Exhibit C-1 Form of Security Agreement
Exhibit C-2 Form of Pledge Agreement
Exhibit E-1 Form of Notice of Borrowing
Exhibit E-2 Form of Notice of Issuance
Exhibit E-3 Form of Notice of Conversion/Continuation
Exhibit E-7 Form of Notice of Responsible Officers
Exhibit F-1 Form of Secretary's Certificate
Exhibit F-3 Form of Closing Officer's Certificate
Exhibit F-5 Form of Borrowing Base Certificate
Exhibit F-6 Form of Compliance Certificate
Exhibit G-1 Form of Borrower's Counsel Opinion
Exhibit H Form of Assignment and Acceptance
SCHEDULES
Schedule 1.1A Commitments
Schedule 1.1B Lender Information
Schedule 1.1C Existing Debt
Schedule 1.1D Existing Liens
Schedule 1.1E Applicable Margin & Fee Rate
Schedule 3.1.2. Closing Documents
Schedule 4.1. Organization of Borrower and Subsidiaries
Schedule 4.3. Subsidiaries and other Investments
Schedule 4.6. Material Litigation
Schedule 4.13. Environmental Condition
Schedule 4.14. Certain Restrictions
Schedule 4.15. Labor Matters
Schedule 6.8. Existing Contractual Obligations
Schedule 9.5. Borrower Information
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SENIOR SECURED CREDIT AGREEMENT
SENIOR SECURED CREDIT AGREEMENT, dated as of June __, 1997 (as amended
from time to time, the "Agreement"), by and among ADFlex Solutions, Inc., a
Delaware corporation (the "Borrower"), and the banks and other financial
institutions that either now or in the future are parties hereto (collectively
the "Lenders" and each individually a "Lender"), BankBoston, N.A. in its
capacity as the L/C Issuer (in such capacity, together with any successors
thereto in such capacity, the "L/C Issuer"), and BankBoston N.A., as agent and
representative for the Lenders (in such capacity BankBoston N.A. or any
successor in such capacity is referred to herein as the "Agent"). The Lenders,
the L/C Issuer and the Agent are collectively referred to herein as the "Lender
Parties" and each individually as a "Lender Party".
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
SECTION 1.1. DEFINITIONS. The following terms with initial capital
letters have the following meanings:
"ADJUSTED LIBOR RATE" means, with respect to any day during any
Interest Period, a rate per annum (rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to (i) the applicable London Interbank Offered Rate
for such Interest Period, divided by (ii) 1.00 minus the LIBOR Reserve
Requirement for such day (expressed as a decimal).
"ACCOUNTS" means, as of any measurement date, all "accounts," as such
term is defined in Section 9106 of the California UCC, then owned by Borrower,
including, without limitation, all accounts receivable, book debts and other
forms of obligations (other than forms of obligations evidenced by chattel
paper, documents or instruments) now owned by or belonging or owing to Borrower
(including, without limitation, under any trade name, style or division thereof)
arising out of goods sold or services rendered by Borrower, and all monies due
or to become due to Borrower under all purchase orders and contracts for the
sale of goods or the performance of services or both by Borrower.
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person. The term
"control" means the possession, directly or indirectly, of the power, whether or
not exercised, (i) to vote ten percent (10%) or more of the securities having
voting power for the election of directors (or Persons performing similar
functions) of such Person or (ii) to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlled" and "common
control" have correlative meanings. Unless otherwise indicated, "Affiliate"
refers to an Affiliate of the Borrower. Notwithstanding the foregoing, in no
event shall any Lender Party or any Affiliate of any Lender Party be deemed to
be an Affiliate of the Borrower.
Credit Agreement
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"AGENT" is defined in the Preamble and, where the context so requires,
includes BankBoston, N.A. in its individual capacity.
"AGENT'S ACCOUNT" means the account of the Agent identified as such on
Schedule 1.1.B, or such other account as the Agent may hereafter designate by
notice to the Borrower and each Lender Party.
"AGENT'S OFFICE" means the office of the Agent identified as such on
Schedule 1.1.B, or such other office as the Agent may hereafter designate by
notice to the Borrower and each Lender Party.
"AGREEMENT" is defined in the Preamble and includes all Schedules and
Exhibits.
"APPLICABLE LAW" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals, and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority.
"APPLICABLE LENDING OFFICE" means, with respect to any Lender, (i) in
the case of any payment with respect to LIBOR Rate Loans, the Lender's LIBOR
Lending Office, and (ii) in the case of any payment with respect to Base Rate
Loans or any other payment under the Loan Documents, the Lender's Domestic
Lending Office.
"APPLICABLE MARGIN" is defined on Schedule 1.1.E.
"ASSESSMENT RATE" means, for any day, the average, determined by the
Agent, of the net annual assessment rates (rounded upwards, if necessary, to the
next higher 1/100 of 1%) actually incurred by the Agent to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's insuring Dollar
time deposits of the Agent at its office in the United States during the most
recent period for which such rate has been determined prior to such day.
"ASSET DISPOSITION" means any sale or other disposition of any assets
by the Borrower or any Subsidiary (including sales of any receivables but
excluding sales of inventory and dispositions of obsolete or worn-out equipment
in the ordinary course of business).
"ASSIGNMENT" and "ASSIGNMENT AND ACCEPTANCE" are defined in Section
9.6.2.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time.
"BASE RATE" means the greater of (i) the rate of interest announced
from time to time by BankBoston, N.A. as its head office as its "Base Rate," and
(ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards,
if necessary, to the next 1/8 of 1%).
"BASE RATE LOAN" means a Loan, or portion thereof, that bears interest
by reference to the Base Rate.
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"BORROWER" is defined in the Preamble, and includes any successor.
"BORROWER ACCOUNT" means the account of the Borrower identified as such
on Schedule 9.5., or such other account as the Borrower may hereafter designate
by notice to the Agent.
"BORROWER PARTY" means any of the Borrower and each other Person that
is a party to a Loan Document.
"BORROWING" means a contemporaneous borrowing of Loans of the same Type
or the issuance of a Letter of Credit, as applicable.
"BORROWING BASE" means, at any time, an amount equal to the sum of (a)
eighty percent (80%) of Eligible Domestic Receivables and (b) seventy percent
(70%) of Eligible Foreign Receivables.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which banks in Boston, Massachusetts are authorized or obligated to
close.
"CAPITAL EXPENDITURES" means, for any period, the expenditures (whether
paid in cash or accrued and including Capitalized Leases entered into during the
period) of the Borrower and the Subsidiaries thereof during such period with
respect to property, plant and equipment (other than repairs) that are required
to be capitalized on the consolidated balance sheet of the Borrower.
"CAPITAL STOCK" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (howsoever designated) of capital
stock and other equity interests of such Person and (ii) rights (other than debt
securities convertible into capital stock or other equity interests), warrants
or options to acquire any such capital stock or other equity interests.
"CAPITALIZED LEASES" means all leases of the Borrower and the
Consolidated Subsidiaries of real or personal property that are required to be
capitalized on the consolidated balance sheet of the Borrower. The amount of any
Capitalized Lease shall be the capitalized amount thereof.
"CASH COLLATERAL COVER" is defined in Section 7.2.3.
"CHANGE OF CONTROL" means the acquisition, directly or indirectly, by
any person (as defined in Section 13(d)(3) of the Exchange Act), of 50% or more
of the total voting power in the aggregate of all classes of common stock or
other equity securities of the Borrower, then outstanding or the power, directly
or indirectly, to direct or cause the direction of the management and policies
of the Borrower, whether through the ownership of voting securities, by
contract, or otherwise.
"CLOSING DATE" means the date of this Agreement or such later date on
which all conditions set forth in Section 3.1. have been satisfied or waived.
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"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means the collateral under the Collateral Documents,
however defined.
"COLLATERAL DOCUMENTS" means the Security Agreement, financing
statements and all other documents executed or delivered from time to time in
connection therewith or otherwise to secure the Borrower's obligations under the
Loan Documents, in each case as amended from time to time.
"COMMITMENTS" means, collectively, with respect to each Lender, the
Term Commitment and the Revolving Commitment.
"COMPLIANCE CERTIFICATE" is defined in Section 5.1.4.
"CONSOLIDATED SUBSIDIARY" means, at any time, any Subsidiary the
accounts of which would be consolidated with those of the Borrower in the
consolidated financial statements of the Borrower at such time.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date as of which the
amount thereof shall be determined, the consolidated stockholders' equity of
Borrower and its Subsidiaries minus (to the extent reflected in determining such
consolidated stockholders' equity) the sum of any amounts attributable to their
(i) goodwill and (ii) intangible assets such as unamortized debt discount and
expense, patents, trade and service marks and names, copyrights and research and
licenses.
"CONTINGENT OBLIGATION" means, as to any Person, any obligation, direct
or indirect, contingent or otherwise, of such Person (i) with respect to any
Debt or other obligation of another Person, including any direct or indirect
guarantee of such Debt (other than any endorsement for collection in the
ordinary course of business) or any other direct or indirect obligation, by
agreement or otherwise, to purchase or repurchase any such Debt or obligation or
any security therefor, or to provide funds for the payment or discharge of any
such Debt or obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), (ii) to provide funds to
maintain the financial condition of any other Person, or (iii) otherwise to
assure or hold harmless the holders of Debt or other obligations of another
Person against loss in respect thereof. The amount of any Contingent Obligation
under clause (i) or (ii) shall be the lesser of (a) the amount of the Debt or
obligation guarantied or otherwise supported thereby, and (b) the maximum amount
guarantied or supported by the Contingent Obligation.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any provision
of any security issued by that Person or of any agreement or other instrument to
which that Person is a party or by which it or any of the properties owned or
leased by it is bound or otherwise subject.
"CONTROLLED GROUP" means all domestic and foreign members of a
controlled group of corporations under Section 1563(a) of the Code (determined
without regard to Section 1563(b)(2)(C) of the Code) and all trades or
businesses (irrespective of whether
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incorporated) that are under common control with the Borrower or the
Subsidiaries. With regard to all Plans and Multiemployer Plans, "Controlled
Group" includes all ERISA Affiliates.
"DEBT" means, with respect to any Person, without duplication: (i) all
obligations for borrowed money; (ii) all obligations evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business that are not overdue by more than 60
days; (iv) all Capitalized Leases; (v) all obligations of others secured by a
Lien on any asset owned by such Person or Persons whether or not such obligation
or liability is assumed; (vi) all obligations of such Person or Persons,
contingent or otherwise, in respect of any letters of credit or bankers'
acceptances; (vii) all Contingent Obligations; and (viii) all obligations under
facilities for the discount or sale of receivables.
"DEBT SERVICE COVERAGE RATIO" means, at the end of any Fiscal Quarter,
the ratio of (i) (a) EBITDA for the two consecutive Fiscal Quarters then ended
minus (b) Capital Expenditures for such period, to (ii) (a) Interest Expense for
such period, plus (b) scheduled payments of principal in respect of Debt of the
Borrower or any Consolidated Subsidiary for such period.
"DEFAULT" means any condition or event that, with the giving of notice
or lapse of time or both, would, unless cured or waived, become an Event of
Default.
"DEFINED BENEFIT PLAN" means any plan subject to Title IV of ERISA that
is not a Multiemployer Plan.
"DOLLARS" AND "$" means lawful money of the United States of America.
"DOMESTIC LENDING OFFICE" means the office, branch or Affiliate of any
Lender identified on Schedule 1.1.B as its Domestic Lending Office or such other
office, branch or Affiliate as the Lender may hereafter designate as its
Domestic Lending Office for one or more Types of Loans by notice to the Borrower
and the Agent.
"EBIT" means, for any period, (i) Net Income, plus (ii) Interest
Expense deducted in the determination of Net Income, plus (iii) the amount of
Taxes, based on or measured by income, deducted in the determination of Net
Income, plus (iv) the amount of any extraordinary losses included in the
determination of Net Income, minus (v) the amount of any extraordinary gains
included in the determination of Net Income, in each case for such period.
"EBITDA" means, for any period, an amount equal to EBIT, plus the
amount of depreciation and amortization expense deducted in determining Net
Income, in each case for such period.
"ELIGIBLE DOMESTIC RECEIVABLES" means at any time, the aggregate of the
Borrower's and its Subsidiaries' Accounts due from account debtors whose
principal place of business is in the United States of America, excluding,
however (a) all Accounts in respect of which full payment has not been received
within sixty (60) days of the due date; (b) all Accounts as to which the goods,
merchandise or other personal property or the rendition of services has not been
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5
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fully and completely delivered or performed; (c) all Accounts against which the
account debtor or any other person obligated to make payment thereon asserts any
defense, offset, counterclaim or other right to avoid or reduce the liability
represented by such Accounts, but only to the extent there exists a colorable
claim for such in the reasonable determination of Required Lenders and then only
to the extent of such defense, offset, counterclaim or other right; (d) all
Accounts as to which the account debtor or other person obligated to make
payment thereon is insolvent, subject to bankruptcy or receivership proceedings
or has made an assignment for the benefit of creditors or whose credit standing
is unacceptable to Agent and Agent has so notified Borrower; (e) all Accounts in
which Borrower or an affiliate of Borrower is the account debtor; (f) in the
event thirty percent (30%) or more of the Accounts of any account debtor shall
be deemed ineligible under clause (a) above, all accounts of such account
debtor; and (g) any Account not previously included as an Eligible Domestic
Account which Agent in its reasonable discretion shall deem not to qualify as an
Eligible Domestic Account and for which Agent has provided an explanation, in
reasonable detail, for such failure to qualify. For purposes of calculating the
Borrowing Base, otherwise Eligible Foreign Receivables that are backed by a
letter of credit shall be deemed to be Eligible Domestic Receivables.
"ELIGIBLE FOREIGN RECEIVABLES" means at any time, the aggregate of the
Borrower's and its Subsidiaries' Accounts due from account debtors whose
principal place of business is located in any country other than the United
States of America and in which none of the Lenders is prohibited from doing
business, excluding, however (a) all accounts in respect of which full payment
has not been received within sixty (60) days of the due date; (b) all Accounts
as to which the goods, merchandise or other personal property or the rendition
of services has not been fully and completely delivered or performed; (c) all
Accounts against which the account debtor or any other person obligated to make
payment thereon asserts any defense, offset, counterclaim or other right to
avoid or reduce the liability represented by such Accounts, but only to the
extent there exists a colorable claim in the reasonable determination of
Required Lenders and then only to the extent of such defense, offset,
counterclaim or other right; (d) all Accounts as to which the account debtor or
other person obligated to make payment thereon is insolvent, subject to
bankruptcy or receivership proceedings or has made an assignment for the benefit
of creditors or whose credit standing is unacceptable to Agent and Agent has so
notified Borrower; (e) all Accounts in which Borrower or an affiliate of
Borrower is the account debtor; (f) in the event thirty percent (30%) or more of
the Accounts of any account debtor shall be deemed ineligible under clause (a)
above, all accounts of such account debtor; and (g) any Account not previously
included as an Eligible Foreign Receivable which Agent in its reasonable
discretion shall deem not to qualify as an Eligible Foreign Receivable and for
which Agent has provided an explanation, in reasonable detail, for such failure
to qualify.
"ENVIRONMENTAL DAMAGES" means all claims, judgments, damages, losses,
penalties, liabilities (including strict liability), costs and expenses,
including costs of investigation, remediation, defense, settlement and
reasonable attorneys' fees and consultants' fees, that are incurred at any time
as a result of the existence of Hazardous Material upon, about or beneath any
Real Property or migrating or threatening to migrate to or from any Real
Property, or arising in any manner whatsoever out of any violation of
Environmental Requirements.
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"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for Environmental Damages.
"ENVIRONMENTAL REQUIREMENTS" means all Applicable Laws relating to
Hazardous Materials or the protection of human health or the environment,
including all requirements pertaining to reporting, permitting, investigation
and remediation of releases or threatened releases of Hazardous Materials into
the environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any Person (including for this purpose any
trade or business) that is or was a member of the controlled group of
corporations or trades or businesses (as defined in Subsection (b), (c), (m) or
(o) of Section 414 of the Code) of which the Borrower or any Subsidiary is or
was a member at any time within the last six years.
"EVENT OF DEFAULT" is defined in Section 7.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED TAXES" is defined in Section 2.13.1.
"EXISTING DEBT" means the Debt described on Schedule 1.1.C.
"EXISTING LIENS" means the Liens described on Schedule 1.1.D.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day), by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
Agent from three Federal funds brokers of recognized standing selected by the
Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"FEE LETTER" means that certain letter dated April 16, 1997 between the
Borrower and the Agent.
"FEE RATE" is defined in Schedule 1.1.E.
"FEES" means, collectively, the fees described or referenced in Section
2.6.
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"FISCAL YEAR" means the fiscal year of the Borrower, which shall be the
12 month-period ending on December 31 in each year or such other period as the
Borrower may designate and the Agent may approve in writing. "Fiscal Quarter" or
"fiscal quarter" means any quarter of a Fiscal Year.
"FUNDING DATE" means any date on which a Loan is (or is requested to
be) made or a Letter of Credit is (or is requested to be) issued.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America (i) for purposes of Section 6.5 hereof, as of
December 31, 1996, and (ii) for all other purposes of this Agreement, from time
to time.
"GOVERNMENTAL APPROVAL" means an authorization, consent, approval,
permit or license issued by, or a registration or filing with, any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means any nation and any state or political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
tribunal or arbitrator of competent jurisdiction.
"HAZARDOUS MATERIALS" means any substance (i) the presence of which
requires investigation or remediation under any Applicable Law; (ii) that is or
becomes defined as a "hazardous waste" or "hazardous substance" under any
Applicable Law, including the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 et seq.) or the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.); (iii) that is toxic,
explosive, corrosive, inflammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and is or becomes regulated by any
Governmental Authority; (iv) the presence of which on any Real Property causes
or threatens to cause a nuisance upon the Real Property or to adjacent
properties or poses or threatens to pose a hazard to any Real Property or to the
health or safety of Persons on or about any Real Property; or (v) without
limitation, that contains gasoline or other petroleum hydrocarbons,
polychlorinated biphenyls or asbestos.
"HONOR DATE" is defined in Section 2.2.4.1.
"INDEMNIFIED LIABILITIES" is defined in Section 9.2.1.
"INDEMNITEE" is defined in Section 9.2.1.
"INTELLECTUAL PROPERTY RIGHT" means (i) any patent, copyright,
trademark, service ▇▇▇▇, trade name, trade secret or other intellectual property
right, (ii) all registrations and applications to register any such patent,
copyright, trademark, service ▇▇▇▇, trade name or other intellectual property
right with any Governmental Authority and all renewals and extensions thereof,
and (iii) the goodwill of the business associated with or relating to any such
trademark, service ▇▇▇▇, trade name or other intellectual property right.
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"INTERCOMPANY DEBT" means any Debt of the Borrower or any Subsidiary
that is owed to any Subsidiary, the Borrower or any Affiliate.
"INTEREST COVERAGE RATIO" means, at the end of any Fiscal Quarter, the
ratio of (i) EBIT for the two consecutive Fiscal Quarters then ended to (ii)
Interest Expense for such period.
"INTEREST EXPENSE" means, for any period, total consolidated interest
expense of the Borrower, including Fees, charges in respect of Letters of Credit
and the portion of any Capitalized Lease obligations allocable to interest
expense, but excluding amortization or write-off of debt discount and expense.
"INTEREST PAYMENT DATE" means the last day of March, June, September
and December in each year.
"INTEREST PERIOD" means, subject to the next sentence, (i) with respect
to each LIBOR Rate Loan, the period commencing on the date specified in the
related Notice of Borrowing or Notice of Conversion/Continuation (or telephonic
notice in lieu thereof) and ending (A) with respect to any LIBOR Rate Loan that
is a Revolving Loan, one, two, three or six months thereafter, and (B) with
respect to a LIBOR Rate loan that is a Term Loan three or six months thereafter,
as the Borrower may elect pursuant to Section 2.1. or 2.4.3. as applicable;
Notwithstanding the foregoing: (a) if a LIBOR Rate Loan is continued,
the Interest Period applicable to the continued or converted Loan shall commence
on the day on which the Interest Period applicable to such LIBOR Rate Loan ends;
(b) any Interest Period applicable to a LIBOR Rate Loan (1) that would otherwise
end on a day that is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day, unless such succeeding LIBOR Business Day falls
in another calendar month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day or (2) that begins on the last LIBOR Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of the calendar month; (d) no Interest
Period for any Revolving Loan shall end after the Stated Termination Date; (e)
no Interest Period for any Term Loan may commence before and end after any Term
Loan Payment Date unless, after giving effect thereto, the aggregate principal
amount of the Term Loans having Interest Periods that end after such Term Loan
Payment Date are equal to or less than the aggregate principal amount of the
Term Loans permitted to be outstanding immediately after such Term Loan Payment
Date.
"INVESTMENT" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of stock or securities, or
any beneficial interest in stock or other securities, of any other Person, any
partnership (whether general or limited) or limited liability company interest
in any other Person, or all or any substantial part of the business or assets of
any other Person, (ii) any direct or indirect loan, advance or capital
contribution by that Person to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment plus
the
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cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"L/C ISSUER" is defined in the Preamble.
"LENDER" is defined in the Preamble. For purposes of the Sections
referred to in (and subject to) the last sentence of Section 9.6.4., "Lender"
includes a holder of a Participation.
"LENDER PARTY" is defined in the Preamble. For purposes of the Sections
referred to in (and subject to) the last sentence of Section 9.6.4., "Lender"
includes a holder of a Participation.
"LETTER OF CREDIT" is defined in Section 2.2.1.
"LETTER OF CREDIT APPLICATION" is defined in Section 2.2.2.
"LETTER OF CREDIT FEE" is defined in Section 2.6.2.
"LETTER OF CREDIT LIABILITY" means, at any time, all liabilities of the
Borrower to the Lenders and the L/C Issuer in respect of Letters of Credit at
such time, whether or not such liability is contingent, and shall consist of the
sum of (i) the aggregate Stated Amount of all Letters of Credit then
outstanding, and (ii) all amounts that then have been paid by the L/C Issuer if
and to the extent reimbursement has not been received therefor.
"LEVERAGE RATIO" means, at any time, the ratio of (i) the aggregate
Total Liabilities of the Borrower and its Consolidated Subsidiaries to (ii)
Consolidated Tangible Net Worth, at such time.
"LIBOR BUSINESS DAY" means any Business Day on which commercial banks
are open for international business (including dealings in interbank Dollar
deposits) in London, England.
"LIBOR LENDING OFFICE" means the office, branch or Affiliate of any
Lender identified on Schedule 1.1.B as its LIBOR Lending Office or such other
office, branch or Affiliate as the Lender may hereafter designate as its LIBOR
Lending Office by notice to the Borrower and the Agent.
"LIBOR RATE LOAN" means a Loan, or portion thereof, that bears interest
at a rate determined by reference to an Adjusted LIBOR Rate (and as to which a
single Interest Period is applicable).
"LIEN" means any lien, mortgage, pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any lien, mortgage, pledge, security interest, charge, or
other encumbrance of any kind.
"LOAN" means a Loan made or to be made pursuant to Article 2.
"LOAN ACCOUNT" is defined in Section 2.5.3.
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"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Letters of Credit, the Collateral Documents and any other agreement, instrument
or other writing executed or delivered by the Borrower or any Subsidiary in
connection herewith, and all amendments, exhibits and schedules to any of the
foregoing.
"LONDON INTERBANK OFFERED RATE" means, with respect to any Interest
Period, a rate of interest per annum, selected by the Agent acting in good
faith, at which deposits in dollars are offered to the Agent in the London
interbank market at approximately 11:00 A.M. (London time) two LIBOR Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the LIBOR Rate Loan to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"MARGIN REGULATIONS" means Regulations G, T, U and X of the Federal
Reserve Board, as amended from time to time.
"MARGIN STOCK" means "margin stock" as defined in the Margin
Regulations.
"MATERIAL," "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE"
means a condition or event material to, a material adverse effect on or a
material adverse change in, as the case may be, any one or more of the
following: (i) the operations, business, properties, or condition (financial or
otherwise) of Borrower or Borrower and its Subsidiaries taken as a whole; (ii)
the Borrower's ability to perform its obligations under any Loan Document and
avoid any Event of Default; or (iii) the legality, validity, binding effect or
enforceability of any Loan Document. "Materially" has a correlative meaning.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
3(37) and Section 4001(a)(3)(A) of ERISA to which the Borrower or any of the
ERISA Affiliates is making or accruing an obligation to make contributions or to
which any such Person has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a "single employer plan," as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one person other than the Borrower
and the ERISA Affiliates or (ii) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA if such plan has been or were to be terminated.
"NET INCOME" means, for any period, consolidated net income (or loss)
after taxes, determined in accordance with GAAP, of the Borrower for such period
taken as a single accounting period, provided that there shall be excluded
therefrom (i) the income (or loss) of any Person (other than a Consolidated
Subsidiary) in which the Borrower or a Consolidated Subsidiary has an equity
interest, except to the extent of dividends or other distributions actually paid
to the Borrower or any Consolidated Subsidiary by such Person during such
period, (ii) except to the extent provided in clause (i), the income (or loss)
of any Person accrued prior to the date it becomes a Consolidated Subsidiary or
is merged with the Borrower or any Consolidated Subsidiary or such Person's
assets are acquired by the Borrower or any Consolidated Subsidiary and (iii) the
undistributed income of any Consolidated Subsidiary to the
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extent that the declaration or payment of dividends or other distributions by
such Subsidiary is not at the time permitted by the terms of its charter or
Contractual Obligations or Applicable Law binding on such Subsidiary.
"NOTE" means a Revolving Loan Note or a Term Loan Note.
"NOTICE OF BORROWING" is defined in Section 2.1.4.
"NOTICE OF CONVERSION/CONTINUATION" is defined in Section 2.4.3.2.
"NOTICE OF ISSUANCE" is defined in Section 2.2.2.
"NOTICE OF RESPONSIBLE OFFICER" is defined in Section 2.1.4.3.
"OBLIGATIONS" means all present and future obligations and liabilities
of the Borrower of every type and description arising under or in connection
with the Loan Documents due or to become due to the Lender Parties or any Person
entitled to indemnification, or any of their respective successors, transferees
or assigns, whether for principal, interest, letter of credit or other
reimbursement obligations, cash collateral cover, Fees, expenses, indemnities or
other amounts (including attorneys' fees and expenses) and whether due or not
due, direct or indirect, joint and/or several, absolute or contingent, voluntary
or involuntary, liquidated or unliquidated, determined or undetermined, and
whether now or hereafter existing, renewed or restructured.
"OPERATING LEASE" means, as applied to any Person, any lease of any
property (whether real, personal, or mixed) under which such Person is the
lessee and that is not capitalized on the balance sheet of such Person.
"PARTICIPATION" is defined in Section 9.6.4.
"PBGC" means the Pension Benefit Guaranty Corporation, as defined in
Title IV of ERISA, or any successor.
"PERMITTED LIENS" means, with respect to any asset, the Liens (if any)
permitted to exist on such asset under Section 6.1.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a government or any agency or political subdivision
thereof.
"PLAN" means any pension, retirement, disability, defined benefit,
defined contribution, profit sharing, deferred compensation, employee stock
ownership, employee stock purchase, health, life insurance, or other employee
benefit plan or arrangement, other than a Multiemployer Plan, irrespective of
whether any of the foregoing is funded, in which any personnel of the Borrower
or ERISA Affiliate participates or from which any such personnel may derive a
benefit.
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"PLEDGE AGREEMENT" means the Pledge Agreement between the Borrower and
the Agent in substantially the form of Exhibit C-2, as amended from time to
time.
"POST-DEFAULT RATE" means, at any time, a rate per annum equal to the
rate of interest otherwise in effect at such time pursuant to the terms hereof
plus 2%; provided that with respect to any amount not paid when due (whether
principal, interest, reimbursement obligation, or otherwise), the Post-Default
Rate means the Base Rate in effect at such time plus the Applicable Margin plus
2%.
"PROHIBITED TRANSACTION" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 or 407 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA.
"REAL PROPERTY" means each of those parcels (or portions thereof) of
real property, improvements and fixtures thereon and appurtenances thereto now
or hereafter owned or leased by the Borrower or any Subsidiary.
"REGULATION D" means Regulation D of the Federal Reserve Board, as
amended from time to time.
"REGULATORY CHANGE" means (i) the adoption or becoming effective after
the date hereof of any treaty, law, rule or regulation, (ii) any change in any
such treaty, law, rule or regulation (including Regulation D), or any change in
the administration or enforcement thereof, by any Governmental Authority,
central bank or other monetary authority charged with the interpretation or
administration thereof, in each case after the date hereof, or (iii) compliance
after the date hereof by any Lender Party (or its Applicable Lending Office or,
in the case of capital adequacy requirements, any holding company of any Lender
Party) with, any interpretation, directive, request, order or decree (whether or
not having the force of law) of any such Governmental Authority, central bank or
other monetary authority.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, except any such event (other than the
failure to meet minimum funding standards of Section 412 of the Code or Section
302 of ERISA) as to which the provision for 30 days' notice to the PBGC is
waived under applicable regulations.
"REQUIRED LENDERS" means Lenders (i) holding at least 66-2/3% of the
aggregate unpaid principal amount of the Term Loans, and (ii) having at least
66-2/3% of the aggregate amount of the Revolving Commitments or, if the
Revolving Commitments have terminated, Lenders holding at least 66-2/3% of the
sum of (a) the aggregate unpaid principal amount of the Revolving Loans plus (b)
the aggregate amount of all Letter of Credit Liability.
"RESERVE REQUIREMENT" means, with respect to any LIBOR Rate Loan and
for any day, the maximum rate at which reserves (including any marginal,
supplemental, special or emergency reserve) are required to be maintained on
such day under Regulation D by member banks of the Federal Reserve System in New
York City with deposits exceeding $5 billion against "Euro-Currency
Liabilities," as that term is used in Regulation D (or in respect of any
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other category of liabilities that includes deposits by reference to which the
interest rate on LIBOR Rate Loans is determined or any category of extensions of
credit or other assets that includes loans by a non-United States office of any
bank to United States residents).
"RESPONSIBLE OFFICER" is defined in Section 2.1.4.3.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of the Borrower or any
Subsidiary now or hereafter outstanding, except (a) a dividend or other
distribution payable solely in shares or equivalents of the same class of
Capital Stock and (b) the issuance of equity interests upon the exercise of
outstanding warrants, options or other rights, or (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any Capital Stock of the Borrower or any
Subsidiary now or hereafter outstanding.
"REVOLVING COMMITMENT" means, with respect to each Lender, the amount
set forth for such Lender as its "Revolving Commitment" on Schedule 1.1.A, as
reduced or terminated from time to time pursuant to the terms hereof.
"REVOLVING COMMITMENT USAGE" means, at any time, (i) with respect to
any Lender, the sum of (A) the aggregate unpaid principal amount of all
Revolving Loans made by such Lender, and (B) the Lender's pro rata share of all
Letter of Credit Liability, and (ii) with respect to all Lenders, the sum of (A)
the aggregate unpaid principal amount of all Revolving Loans, and (B) all Letter
of Credit Liability in each case giving effect to Borrowings then requested.
"REVOLVING LOAN NOTE" means a Revolving Loan Note made by the Borrower
payable to the order of any Lender, in the amount of the lesser of (i) such
Lender's Revolving Commitment and (ii) the aggregate principal amount of
Revolving Loans made by such Lender, which note is in substantially the form of
Exhibit A-1, as amended from time to time.
"REVOLVING LOANS" is defined in Section 2.1.2.
"SEC" means the United States Securities and Exchange Commission, and
any successor.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY AGREEMENT" means a Security Agreement between the Borrower
and the Agent in substantially the form of Exhibit C-1, as amended from time to
time.
"SENIOR OFFICER" means the Chairman of the Board of Directors, the
President, the Chief Executive Officer, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer or any Vice President in charge of a principal
business unit or division of the Borrower.
"SINGLE EMPLOYER PLAN" means a Plan other than a Multiemployer Plan.
"SOLVENT" means, with respect to any Person, that: (i) the total
present fair salable value of such Person's assets on a going concern basis is
in excess of the total amount of such Person's
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liabilities, including contingent liabilities; (ii) such Person is able to pay
its liabilities and contingent liabilities as they become due; and (iii) such
Person does not have unreasonably small capital to carry on such Person's
business as theretofore operated and as proposed to be operated.
"STATED AMOUNT" means, with respect to a Letter of Credit, the maximum
amount available to be drawn thereunder, without regard to whether any
conditions to drawing could be met.
"STATED TERMINATION DATE" is defined in Section 2.7.
"SUBSIDIARY" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of the Capital Stock entitled to
vote in the election of the board of directors (or other Persons performing
similar functions) are at the time directly or indirectly owned by such first
Person. Unless otherwise indicated, "Subsidiary" refers to a Subsidiary of the
Borrower.
"TAXES" means any present or future income, stamp and other taxes,
charges, fees, levies, duties, imposts, withholdings or other assessments,
together with any interest and penalties, additions to tax and additional
amounts imposed by any federal, state, local or foreign taxing authority upon
any Person.
"TERM LOAN" is defined in Section 2.1.
"TERM LOAN MATURITY DATE" means June __, 2002.
"TERM LOAN PAYMENT DATE" is defined in Section 2.8.1.1.
"TERM LOAN NOTE" means a Term Loan Note made by the Borrower payable to
the order of any Lender, in the amount of the lesser of (i) such Lender's Term
Commitment and (ii) the aggregate principal amount of Term Loans made by such
Lender, which note is in substantially the form of Exhibit A-2, as amended from
time to time.
"TERMINATION DATE" is defined in Section 2.7.1.
"TERMINATION EVENT" means: (i) a Reportable Event or an event described
in Section 4068(f) of ERISA; (ii) the withdrawal of the Borrower or any of its
ERISA Affiliates from a Multiple Employer Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations at a facility in the circumstances described in Section
4068(f) of ERISA; (iii) the filing of a notice of intent to terminate a Defined
Benefit Plan (including any such notice with respect to a Defined Benefit Plan
amendment referred to in Section 4041(e) of ERISA) or the termination of a
Defined Benefit Plan excluding, for purposes of this clause (iii), any standard
termination under Section 4041(b) of ERISA; (iv) the institution of proceedings
to terminate a Defined Benefit Plan by the PBGC; or (v) the appointment of a
trustee to administer any Defined Benefit Plan under Section 4042 of ERISA; or
(vi) any other event or condition that might reasonably constitute
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grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Defined Benefit Plan.
"TOTAL LIABILITIES" means, with respect to any Person, without
duplication, the sum of such Person's (i) Debt, (ii) financial obligations of
the kind customarily appearing as "liabilities" on a balance sheet prepared in
accordance with GAAP, and (iii) exposure to financial liability of any type,
kind or nature, regardless of how incurred and regardless of whether the amount
of any such exposure would be required to be disclosed in any financial
reporting of such Person. For purposes of this definition, the amount of any
exposure of the kind referred to in clause (iii) above that is not liquidated
shall be assumed to be the maximum amount of such exposure.
"WHOLLY-OWNED" means, with respect to any Subsidiary, that all the
Capital Stock (except for directors' qualifying shares) of such Subsidiary is
directly or indirectly owned by the Borrower.
SECTION 1.2. RELATED MATTERS.
1.2.1. CONSTRUCTION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular, the
singular includes the plural, the part includes the whole, "including" is not
limiting, and "or" has the inclusive meaning represented by the phrase "and/or."
The words "hereof," "herein," "hereby," "hereunder" and similar terms in this
Agreement refer to this Agreement as a whole (including the Preamble, the
Recitals, the Schedules and the Exhibits) and not to any particular provision of
this Agreement. Article, section, subsection, exhibit, schedule, recital and
preamble references in this Agreement are to this Agreement unless otherwise
specified. References in this Agreement to any agreement, other document or law
"as amended" or "as amended from time to time," or to amendments of any document
or law, shall include any amendments, supplements, replacements, renewals,
waivers or other modifications not prohibited by the Loan Documents. References
in this Agreement to any law (or any part thereof) include any rules and
regulations promulgated thereunder (or with respect to such part) by the
relevant Governmental Authority, as amended from time to time.
1.2.2. DETERMINATIONS. Any determination or calculation
contemplated by this Agreement that is made by any Lender Party shall be final
and conclusive and binding upon the Borrower, and, in the case of determinations
by the Agent, also the other Lender Parties, in the absence of manifest error.
References in this Agreement to any "determination" by any Lender Party include
good faith estimates by such Lender Party (in the case of quantitative
determinations), and good faith beliefs by such Lender Party (in the case of
qualitative determinations). All references herein to "discretion" of any Lender
Party (or terms of similar import) shall mean "absolute and sole discretion."
All consents and other actions of any Lender Party contemplated by this
Agreement may be given, taken, withheld or not taken in such Lender Party's
discretion (whether or not so expressed), except as otherwise expressly provided
herein.
1.2.3. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations
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hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with GAAP, applied on a basis
consistent with the audited financial statements referred to in Section 4.4.
1.2.4. INDEPENDENCE OF COVENANTS. All covenants under this
Agreement shall each be given independent effect so that if a particular action
or condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant, by an exception thereto, or be otherwise within
the limitations thereof, shall not avoid the occurrence of a Default or an Event
of Default if such action is taken or condition exists.
ARTICLE 2.
AMOUNTS AND TERMS OF THE CREDIT FACILITIES
SECTION 2.1. LOANS.
2.1.1. TERM LOANS. Each Lender severally agrees, upon the
terms and subject to the conditions set forth in this Agreement, to make a term
loan (a "Term Loan") to the Borrower in a single borrowing on the Closing Date,
in a principal amount not to exceed such Lender's Term Commitment.
2.1.2. REVOLVING LOANS.
2.1.2.1. Each Lender severally agrees, upon the terms and
subject to the conditions set forth in this Agreement, at any time from
and after the Closing Date until the Business Day next preceding the
Termination Date, to make revolving loans (each a "Revolving Loan") to
the Borrower, provided that (a) the Revolving Commitment Usage of any
Lender shall not exceed, at any time, the Revolving Commitment of such
Lender, and (b) the Revolving Commitment Usage of all Lenders at any
time, in the aggregate, shall not exceed the lesser of (i) the
aggregate Revolving Commitments of all Lenders, and (ii) the Borrowing
Base then in effect.
2.1.2.2. Revolving Loans may be voluntarily prepaid pursuant
to Section 2.8.3. and, subject to the provisions of this Agreement, any
amounts so prepaid may be re-borrowed, up to the amount available under
this Section 2.1. at the time of such re-borrowing.
2.1.3. TYPE OF LOANS AND MINIMUM AMOUNTS.
2.1.3.1. Loans made under this Section 2.1. may be Base Rate
Loan, or LIBOR Rate Loans (each a "Type" of Loan), subject, however, to
Section 2.4.2. and 2.11.
2.1.3.2. Each Borrowing of Revolving Loans shall be in a
minimum aggregate amount of $500,000 and integral multiples of
$100,000, in the case of a Borrowing of
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Base Rate Loans, or a minimum aggregate amount of $1,000,000, and
integral multiples of $1,000,000, in the case of a Borrowing of LIBOR
Rate Loans.
2.1.4. NOTICE OF BORROWING.
2.1.4.1. When the Borrower desires to borrow Loans pursuant to
Section 2.1., it shall deliver to the Agent a Notice of Borrowing
substantially in the form of Exhibit E-1, duly completed and executed
by a Responsible Officer (a "Notice of Borrowing"), no later than 2:00
p.m.(Boston time) (a) at least one Business Day before the proposed
Funding Date, in the case of a Borrowing of Base Rate Loans, or (b) at
least three LIBOR Business Days before the proposed Funding Date, in
the case of a Borrowing of LIBOR Rate Loans.
2.1.4.2. In lieu of delivering a Notice of Borrowing, the
Borrower, through a Responsible Officer, may give the Agent telephonic
notice of any proposed Borrowing by the time a Notice of Borrowing
would be required to be delivered and containing all information
required for a Notice of Borrowing; provided, however, that such notice
shall be confirmed in writing by delivery of a Notice of Borrowing to
the Agent on or before the proposed Funding Date (or, in case of Base
Rate Borrowing, one Business Day after the Funding Date). The Lender
Parties shall incur no liability to the Borrower or the other Lender
Parties in acting upon any telephonic notice that the Agent believes to
have been given by a Responsible Officer or for otherwise acting in
good faith under this Section 2.1. and in making any Loan in accordance
with this Agreement pursuant to any telephonic notice.
2.1.4.3. The Borrower shall notify the Agent of the names of
its officers and employees authorized to request and take other actions
with respect to Loans on behalf of the Borrower (each a "Responsible
Officer") by providing the Agent with a Notice of Responsible Officers
substantially in the form of Exhibit E-7, duly completed and executed
by a Senior Officer (a "Notice of Responsible Officer"). The Agent
shall be entitled to rely conclusively on a Responsible Officer's
authority to request and take other actions with respect to Loans on
behalf of the Borrower until the Agent receives a new Notice of
Responsible Officer that no longer designates such Person as a
Responsible Officer. The Agent shall have no duty to verify the
authenticity of the signature appearing on any Notice of Borrowing,
Notice of Responsible Officer or any other notice given under the Loan
Documents.
2.1.4.4. Any Notice of Borrowing (or telephone notice in lieu
thereof) delivered pursuant to this Section 2.1.4.4. shall be
irrevocable and the Borrower shall be bound to make a borrowing in
accordance therewith.
2.1.4.5. The Agent shall promptly notify each Lender of the
contents of any Notice of Borrowing (or telephonic notice in lieu
thereof) received by it and such Lender's pro rata portion of the
Borrowing requested. Not later than 1:00 p.m. (Boston time) on the date
specified in such notice as the Funding Date (or, in the case of Base
Rate Loans, 12:00 noon on such date), each Lender, subject to the terms
and conditions
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hereof, shall make its pro rata portion of the Borrowing available, in
immediately available funds, to the Agent at the Agent's Account.
2.1.5. FUNDING. Not later than 2:00 p.m. (Boston time) or such
later time as may be agreed to by the Borrower and the Agent, and subject to and
upon satisfaction of the applicable conditions set forth in Article 3. as
determined by the Agent, the Agent shall arrange for a wire transfer of
immediately available funds in the amount of the requested Loans to the account
designated by the Borrower pursuant to wire instructions set forth in the Notice
of Borrowing.
SECTION 2.2. LETTERS OF CREDIT.
2.2.1. IN GENERAL. The L/C Issuer hereby agrees, upon the
terms and subject to the conditions set forth in this Agreement, at any time
from and after the Closing Date until the Business Day preceding the Termination
Date, to issue for the account of the Borrower one or more letters of credit
(each a "Letter of Credit"), provided that (a) the aggregate Stated Amount of
all outstanding Letters of Credit shall not exceed $3,000,000, (b) the Revolving
Commitment Usage of all Lenders, in the aggregate, shall not exceed at any time
the lesser of (i) the aggregate Revolving Commitments of all Lenders, and (ii)
the Borrowing Base then in effect and (c) no order, judgment or decree of, or
any request or directive (whether or not having the force of law) from, any
Governmental Authority, or any other Applicable Law, shall purport by its terms
to enjoin, restrain, prohibit or otherwise prevent the L/C Issuer from issuing
letters of credit generally or the Letter of Credit or shall impose upon the L/C
Issuer with respect to that Letter of Credit any restriction, unreimbursed
reserve requirement or unreimbursed cost or expense that was not applicable, in
effect or known to the L/C Issuer on the Closing Date and that the L/C Issuer in
good ▇▇▇▇▇ ▇▇▇▇▇ materially adverse to it. Letters of Credit shall (i) have
expiry dates not later than twelve (12) months from the date of issuance and in
any event not later than 10 Business Days prior to the Stated Termination Date
and (ii) either (A) constitute a payment mechanism for the purchase of inventory
by the Borrower or any Subsidiary or (B) support performance, payment, deposit
or surety obligations of the Borrower or any Subsidiary in each case under
circumstances where provision of a letter of credit is required by Applicable
Law, in accordance with the custom or practice in the industry of the Borrower
and its Subsidiaries or requested by a customer or client of or vendor to the
Borrower or any Subsidiary in the ordinary course of business. The provisions of
this Section 2.2. and Section 3.2. shall apply to any extension, renewal or
increase of a Letter of Credit as if it were a new Letter of Credit.
2.2.2. NOTICES OF ISSUANCE, ETC. When the Borrower desires the
issuance of a Letter of Credit, the Borrower shall deliver to the L/C Issuer and
the Agent at least three Business Days before the Funding Date, (a) a Notice of
Issuance substantially in the form of Exhibit E-2, duly completed and executed
by a Responsible Officer (the "Notice of Issuance"), and (b) a letter of credit
application, a letter of credit reimbursement agreement and such other documents
and materials as may be required by the L/C Issuer, each in form and substance
satisfactory to the L/C Issuer (collectively, a "Letter of Credit Application").
In the event of a conflict between the terms of any Letter of Credit Application
and this Agreement, the terms of this Agreement shall govern. Upon receipt by
the Agent of a Notice of Issuance, the Agent shall
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promptly notify each Lender of the contents thereof and such Lender's pro rata
share of such Letter of Credit.
2.2.3. PARTICIPATIONS IN LETTERS OF CREDIT. Immediately upon
the issuance of a Letter of Credit, each Lender shall be deemed to have
irrevocably purchased from the L/C Issuer a participation in such Letter of
Credit and any drawing thereunder in an amount equal to such Lender's pro rata
share of the Stated Amount of such Letter of Credit. An amount equal to the
Letter of Credit Liability for each Letter of Credit shall be reserved under the
Revolving Commitment and shall not be available for borrowing for any purpose
other than reimbursement of amounts drawn under the Letters of Credit pursuant
to the terms of this Section 2.2.
2.2.4. REIMBURSEMENT FOR DRAWINGS, ETC. Notwithstanding any
provisions to the contrary in any Letter of Credit Application:
2.2.4.1. In case of a drawing under any Letter of Credit, the
L/C Issuer will notify the Borrower and the Agent (which notification
may be verbal). The Borrower shall reimburse the L/C Issuer for any and
all amounts that the L/C Issuer pays under any Letter of Credit no
later than the date of payment by the L/C Issuer (the "Honor Date"),
whether or not the notice referred to in the preceding sentence is
given.
2.2.4.2. If the L/C Issuer shall not be reimbursed for any
drawing under any Letter of Credit issued by it as provided in Section
2.2.4.1., the L/C Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender of the unreimbursed amount of such
drawing and of such Lender's respective participation therein. Each
Lender shall make available to the L/C Issuer an amount equal to its
respective participation in immediately available funds, at the office
of such L/C Issuer specified in such notice, not later than the
Business Day after the date on which the Agent gives such notice. Each
Lender's obligations under this Section 2.2.4.2. (a) shall not be
subject to any set-off, counterclaim or defense to payment that the
Lender may have against the Borrower or against the L/C Issuer and (b)
shall be absolute, unconditional and irrevocable, and as a primary
obligor, not as a surety, notwithstanding any circumstance or event
whatsoever, including (i) the occurrence of an Event of Default or
Default, (ii) the failure of any other Lender to fund its participation
as required hereby, (iii) the financial condition of the Borrower or
any Lender Party or any set-off, counterclaim or defense to payment
that the Borrower may have, or (iv) the termination or cancellation of
the Revolving Commitments. If any Lender fails to make available to the
L/C Issuer the amount of such Lender's participation in the Letter of
Credit as provided in this Section 2.2.4.2., such amount shall bear
interest at the Federal Funds Effective Rate (or, commencing with the
third day, the Base Rate) from the day on which the Agent's notice
referred to above is given until paid. The L/C Issuer shall pay to the
Agent, and the Agent shall distribute to each Lender that has paid all
amounts payable by it under this Section 2.2.4.2., such Lender's pro
rata share of all payments received by the L/C Issuer from the Borrower
in reimbursement of drawings honored by the L/C Issuer under a Letter
of Credit, as and when such payments are received.
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2.2.4.3. The obligation of the Borrower to reimburse the L/C
Issuer for drawings honored under a Letter of Credit in accordance with
the terms of this Agreement shall be absolute, unconditional and
irrevocable, notwithstanding any circumstance or event whatsoever,
including the following:
(a) any lack of validity or enforceability of such
Letter of Credit, any instrument transferring or assigning
such Letter of Credit or of any other Loan Document or the
rights or benefits thereunder;
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations or any other amendments of or relating to such
Letter of Credit or any other Loan Document;
(c) the existence of any claim, setoff, defense or
other right that the Borrower or any of its Affiliates may
have at any time against any Lender Party or any transferee of
such Letter of Credit (or any persons or entities for whom
such Lender Party or transferee may be acting), the L/C Issuer
or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction
between the Borrower or one of its Subsidiaries and the L/C
Issuer);
(d) any draft, demand, certificate or any other
document presented under any such Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(e) honor under any Letter of Credit upon
presentation of a demand, draft or certificate or other
document that does not comply on its face with the terms of
such Letter of Credit;
(f) any exchange, release or non-perfection of any
Collateral for the Letter of Credit Liability;
(g) any loss or delay in the transmission or
otherwise of any documents required in order to make a drawing
under such Letter of Credit or of the proceeds thereof;
(h) any misapplication of the proceeds of such Letter
of Credit;
(i) the fact that a Default or and Event of Default
shall have occurred and be continuing; or
(j) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
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As between the Borrower and the Lender Parties, the Borrower assumes
all risks of the acts and omissions of, or misuse of Letters of Credit by, the
respective beneficiaries and the Lender Parties in respect of the Letters of
Credit and all risks of any loss, errors, omissions or delays in the
transmission of any document required in order to make a drawing under any
Letter of Credit. Nothing in this Section 2.2.4.3. shall impair any claim the
Borrower or any Lender may otherwise have against the L/C Issuer for any direct,
but not consequential, damages suffered by the Borrower or such Lender that the
Borrower or such Lender proves were caused by (i) the L/C Issuer's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the term of the Letter of Credit, or (ii) the
L/C Issuer's willful failure to make lawful payment under a Letter of Credit
after the presentation of documents strictly complying with the terms and
conditions of the Letter of Credit.
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SECTION 2.3. USE OF PROCEEDS. The proceeds of the Loans shall be used
by the Borrower only for general corporate purposes (including repayment of
existing indebtedness). No part of the proceeds of the Loans or Letters of
Credit shall be used directly or indirectly for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any Margin Stock or
maintaining or extending credit to others for such purpose or for any other
purpose that otherwise violates the Margin Regulations.
SECTION 2.4. INTEREST; INTEREST PERIODS; CONVERSION/CONTINUATION.
2.4.1. INTEREST RATE AND PAYMENT.
2.4.1.1. Each Loan shall bear interest on the unpaid principal
amount thereof, from and including the date of the making of such Loan
to and excluding the due date or the date of any repayment thereof, at
the following rates per annum: (a) for so long as and to the extent
that such Loan is a Base Rate Loan, at the Base Rate (as in effect from
time to time); (b) for so long as and to the extent that such Loan is a
LIBOR Rate Loan, at the LIBOR Rate for each day during each Interest
Period applicable thereto plus the Applicable Margin;
2.4.1.2. Notwithstanding the foregoing provisions of this
Section 2.4.1., any principal, interest or other amount payable under
this Agreement and the other Loan Documents that is not paid when due
shall bear interest at a rate per annum equal to the Post-Default Rate,
without notice or demand of any kind.
2.4.1.3. Accrued interest shall be payable in arrears (a) in
the case of a Base Rate Loan, on each Interest Payment Date; (b) in the
case of a LIBOR Rate Loan, on each Interest Payment Date that occurs
during such Interest Period applicable thereto; provided that if the
Interest Period applicable to a LIBOR Rate Loan is longer than three
months, interest also shall be payable on the last day of the third
month of such Interest Period; (c) in the case of any interest accrued
at the Post-Default Rate, on demand, and (d) in the case of any Loan,
when the Loan shall become due (whether at maturity, by reason of
prepayment, acceleration or otherwise).
2.4.2. INTEREST PERIODS & MINIMUM AMOUNTS. Notwithstanding
anything herein to the contrary, (a) all Interest Periods applicable to LIBOR
Rate Loans shall comply with the definition of "Interest Period," (b) there may
be no more than five different Interest Periods for all LIBOR Rate Loans
outstanding at the same time, and (c) LIBOR Rate Loans of each Type and with the
same Interest Period outstanding at any time shall be in an aggregate amount at
least equal to $1,000,000 and in an integral multiple of $1,000,000. For
purposes of the foregoing clause (b), Interest Periods applicable to Loans of
different Types shall constitute different Interest Periods even if they are
coterminous.
2.4.3. CONVERSION OR CONTINUATION.
2.4.3.1. Subject to this Section 2.4.3. and Sections 2.4.2.
and 2.11., the Borrower shall have the option (a) at any time, to
convert all or any part of its outstanding Base
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Rate Loans to LIBOR Rate Loans, (b) on the last day of the Interest
Period applicable thereto, to (i) convert all or any part of its
outstanding LIBOR Rate Loans to Base Rate Loans, (ii) to continue all
or any part of its LIBOR Rate Loans as Loans of the same Type, or (iii)
to convert all or any part of its outstanding LIBOR Rate Loans to LIBOR
Rate Loans of another Type; provided that, in the case of clause (a),
(b) (ii) or (b)(iii), there does not exist a Default or an Event of
Default at such time. If a Default or an Event of Default shall exist
upon the expiration of the Interest Period applicable to any LIBOR Rate
Loan, such Loan automatically shall be converted into a Base Rate Loan.
2.4.3.2. If the Borrower elects to convert or continue a Loan
under this Section 2.4.3., it shall deliver to the Agent a Notice of
Continuation/Conversion substantially in the form of Exhibit E-3, duly
completed and executed by a Responsible Officer (a "Notice of
Continuation/Conversion"), (a) not later than 2:00 p.m. (Boston time)
at least three LIBOR Business Days before the proposed conversion or
continuation date, if the Borrower proposes to convert into, or to
continue, a LIBOR Rate Loan, and (b) otherwise not later than 2:00 p.m.
(Boston time) on the Business Day next preceding the proposed
conversion or continuation date.
2.4.3.3. In lieu of delivering a Notice of
Continuation/Conversion, the Borrower, through a Responsible Officer,
may give the Agent telephonic notice of any proposed continuation or
conversion by the time a Notice of Continuation/Conversion would be
required to be delivered and containing all information required
therefor; provided, however, that such notice shall be confirmed in
writing by delivery of a Notice of Continuation/Conversion to the Agent
on or before the proposed continuation or conversion date. The Lender
Parties shall incur no liability to the Borrower or the other Lender
Parties in acting upon any telephonic notice that the Agent believes to
have been given by a Responsible Officer or for otherwise acting in
good faith under this Section 2.4.3. and in converting or continuing
any Loan (or a part thereof) pursuant to any telephonic notice.
2.4.3.4. Any Notice of Conversion/Continuation (or telephonic
notice in lieu thereof) shall be irrevocable and the Borrower shall be
bound to convert or continue in accordance therewith. If any request
for the conversion or continuation of a Loan is not made in accordance
with this Section 2.4.3., or if no notice is so given with respect to a
LIBOR Rate Loan as to which the Interest Period expires, then such Loan
automatically shall be converted into a Base Rate Loan.
2.4.4. COMPUTATIONS. Interest on each LIBOR Rate Loan and all
Fees and other amounts payable hereunder or the other Loan Documents shall be
computed on the basis of a 360-day year, and interest on Base Rate Loans shall
be computed on the basis of a 365 or 366-day year, and the actual number of days
elapsed (including the first and excluding the last day of the period). Any
change in the interest rate on any Loan or other amount resulting from a change
in the rate applicable thereto (or any component thereof) pursuant to the terms
hereof shall become effective as of the opening of business on the day on which
such change in the applicable rate (or component) shall become effective.
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2.4.5. MAXIMUM LAWFUL RATE OF INTEREST. The rate of interest
payable on any Loan or other amount shall in no event exceed the maximum rate
permissible under Applicable Law. If the rate of interest payable on any Loan or
other amount is ever reduced as a result of this Section and at any time
thereafter the maximum rate permitted by Applicable Law shall exceed the rate of
interest provided for in this Agreement, then the rate provided for in this
Agreement shall be increased to the maximum rate provided by Applicable Law for
such period as is required so that the total amount of interest received by the
Lenders is that which would have been received by the Lenders but for the
operation of the first sentence of this Section.
SECTION 2.5. NOTES, ETC.
2.5.1. LOANS EVIDENCED BY NOTES. The Revolving Loans made by
each Lender Party to each Borrower shall be evidenced by a single Revolving Loan
Note, and the Term Loans made by Each Lender Party to each Borrower shall be
evidenced by a single Term Loan Note.
2.5.2. NOTATION OF AMOUNTS AND MATURITIES, ETC. Each Lender is
hereby irrevocably authorized to record on the schedule attached to its
Revolving Loan/Term Loan Notes (or a continuation thereof) the information
contemplated by such schedule. The failure to record, or any error in recording,
any such information shall not, however, affect the obligations of the Borrower
hereunder or under any Revolving Loan or Term Loan Notes to repay the principal
amount of the Loans evidenced thereby, together with all interest accrued
thereon. All such notations shall constitute conclusive evidence of the accuracy
of the information so recorded, in the absence of manifest error.
2.5.3. LOAN ACCOUNT. The Agent shall maintain a loan account
(the "Loan Account") on its books in which shall be recorded (a) all Loans made
by the Lenders to the Borrower pursuant to this Agreement, (b) all other
appropriate debits and credits as and when due in accordance with this
Agreement, including all Fees, charges, expenses and interest, and (c) all
payments made by the Borrower on the Obligations. All entries in the Loan
Account shall be made in accordance with the customary accounting practices of
the Agent as in effect from time to time. The balance in the Loan Account shall
be rebuttable presumptive evidence of the amounts due and owing the Lenders by
the Borrower.
SECTION 2.6. FEES.
2.6.1. COMMITMENT FEE. The Borrower shall pay to the Agent,
for the pro rata benefit of the Lenders, a commitment fee for each day from and
after the Closing Date until the Stated Termination Date, upon the excess, if
any, of (a) the aggregate Revolving Commitments of the Lenders over (b) the
Revolving Commitment Usage of all, in each case for such day. Such Fee shall be
payable in arrears on each Interest Payment Date and the Termination Date. The
commitment fee shall accrue at a rate of (i) at any time when the Applicable
Margin is less than 2.00, 0.20% per annum; (ii) at any time when the Applicable
Margin is 2.00, 0.25% per annum; and (iii) at any time when the Applicable
Margin is 2.25, 0.30% per annum.
2.6.2. LETTER OF CREDIT FEE. The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders, a letter of credit fee for each
Letter of Credit issued in an amount
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equal to (i) the Applicable Margin multiplied by (ii) the average Stated Amount
of the Letter of Credit for the period from the date of issuance of such Letter
of Credit until its expiry. Such Fee shall be payable in arrears on each
Interest Payment Date and the Termination Date. In addition, the Borrower shall
pay to the L/C Issuer (a) on the date of issuance of such letter of credit, a
letter of credit fronting fee equal to 1/8% per annum of the Stated Amount of
such Letter of Credit, and (b) the L/C Issuer's standard administration
(including drawing, cancellation, and transfer), amendment and handling charges,
which charges shall be payable at such times and in such amounts as may be set
forth in the standard schedule of the L/C Issuer for such charges.
2.6.3. OTHER FEES. On the Closing Date and from time to time
thereafter as specified in the Fee Letter, the Borrower shall pay to the Agent
the fees specified in the Fee Letter.
2.6.4. FEES NON-REFUNDABLE. All Fees shall be fully earned
when payable hereunder and shall be non-refundable.
SECTION 2.7. TERMINATION AND REDUCTION OF REVOLVING COMMITMENTS.
2.7.1. Each Lender's Revolving Commitment shall terminate
without further action on the part of such Lender on the earlier to occur of (a)
June __, 2000 (or if that date is not a Business Day, the next preceding LIBOR
Business Day) (the "Stated Termination Date"), and (b) the date of termination
of the Revolving Commitment pursuant to Section 2.7.2. or 7.2. (such earlier
date being referred to herein as the "Termination Date").
2.7.2. The Borrower shall have the right, at any time or from
time to time after the Closing Date, to terminate in whole or permanently reduce
in part, without premium or penalty, the Revolving Commitments of the Lenders on
a pro rata basis to an amount not less than the Revolving Commitment Usage of
all Lenders and all Letter of Credit Liability, by giving the Agent not less
than seven Business Days' prior written notice of such termination or reduction
and the amount of any partial reduction. Any such termination or partial
reduction shall be effective on the date specified in the Borrower's notice and
shall be in a minimum amount of $10,000,000 and integral multiples of
$5,000,000.
SECTION 2.8. REPAYMENTS AND PREPAYMENTS.
2.8.1. REPAYMENT.
2.8.1.1. The Borrower shall make a principal payment in the
amount of $1,785,714.28 on the last Business Day of each calendar
quarter beginning with December 31, 1998 and ending on March 31, 2002
(each a "Term Loan Payment Date"). The Term Loans in any event shall be
paid in full on the Term Loan Maturity Date. The principal amount of
the Term Loans prepaid or repaid by the Borrower may not be reborrowed.
2.8.1.2. The unpaid principal amount of all Revolving Loans
shall be paid in full on the Termination Date.
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2.8.2. MANDATORY PREPAYMENT.
2.8.2.1. EXCESS REVOLVING LOANS. If at any time the aggregate
Revolving Commitment Usage of all Lenders exceeds the aggregate amount
of the Revolving Commitments or the Borrowing Base then in effect, the
Borrower shall, on the Business Day on which the Borrower learns or is
notified of the excess, make mandatory prepayments of the Revolving
Loans (and thereafter in respect of any Letters of Credit as provided
in Section 2.8.2.3.) as may be necessary so that, after such prepayment
and provision, such excess is eliminated.
2.8.2.2. All proceeds of Collateral and other amounts received
by the Agent pursuant to the provisions of the Security Agreement shall
be credited to Borrower's Loan Account and applied to the repayment of
the Obligations one Business Day after the Agent's receipt thereof
(conditional upon the Agent's receipt of immediately available funds at
the end of such one-Business Day period).
2.8.2.3. NOTICE AND APPLICATION OF MANDATORY PREPAYMENTS;
INTEREST. The Borrower shall give the Agent not less than one Business
Day's prior written notice of the date on which a Mandatory Prepayment
will be made. Each Mandatory Prepayment shall be applied (a) first, to
the unpaid principal amount of the Term Loans; provided that each
Mandatory Prepayment shall be applied first to reduce the Base Rate
Loan constituting a portion of the respective Loan and then to the
LIBOR Rate Loans constituting a portion thereof, in the inverse order
of termination of Interest Periods applicable thereto. Any amount so
applied to the unpaid principal amount of the Term Loans shall reduce
the installments of principal of the Term Loans payable on each Term
Loan Payment Date in inverse order of maturity thereof. Each Mandatory
Prepayment shall be made together with accrued interest on the amount
prepaid to the date of prepayment. If no Loans are outstanding when all
or any portion of a Mandatory Prepayment is required to be made, the
balance of the Mandatory Prepayment shall be applied to reduce any
outstanding Letter of Credit Liability, first to pay any amounts then
due and payable and then to provide Cash Collateral Cover for any
outstanding Letters of Credit.
2.8.3. OPTIONAL PREPAYMENTS
2.8.3.1. Subject to this Section 2.8.3., the Borrower may, at
its option, at any time or from time to time, prepay the Loans in whole
or in part, without premium or penalty except that with respect to the
Term Loans (a) any prepayment shall be in an aggregate principal amount
of at least $1,000,000 and in integral multiples of $500,000 (or,
alternatively, the whole amount of Loans then outstanding) and (b) any
prepayment of a LIBOR Rate Loan, if made on a day other than the last
day of the Interest Period applicable thereto, shall be made with
amounts payable pursuant to Section 2.14.
2.8.3.2. If the Borrower elects to prepay a Loan under this
Section 2.8.3.2., it shall deliver to the Agent a notice of optional
prepayment (i) not later than 2:00 p.m. (Boston time) at least three
LIBOR Business Days before the proposed prepayment, if the Borrower
proposes to prepay a LIBOR Rate Loan, and (c) otherwise not later than
2:00
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p.m. (Boston time) on the Business Day next preceding the proposed
prepayment date. Any notice of optional prepayment shall be
irrevocable, and the payment amount specified in such notice shall be
due and payable on the date specified in such notice, together with
interest accrued thereon to such date.
2.8.3.3. For the period from the Closing Date through November
30, 1998, any prepayment of the Term Loans shall be in the amount of
101% of the principal amount being prepaid, plus interest thereon and
any fees due hereunder.
2.8.4. PAYMENTS SET ASIDE. To the extent the Agent or any
Lender receives payment of any amount under the Loan Documents, whether by way
of payment by the Borrower, set-off, as proceeds of Collateral or otherwise,
which payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, other law or equitable cause, in whole or
in part, then, to the extent of such payment received, the Obligations or part
thereof intended to be satisfied thereby shall be revived and continue in full
force and effect, together with all Collateral security therefor, as if such
payment had not been received by the Agent or Lender. If prior to any such
invalidation, declaration, setting aside or requirement, this Agreement shall
have been canceled or surrendered, this Agreement shall be reinstated in full
force and effect, and such prior cancellation or surrender shall not diminish,
discharge or otherwise affect the obligations of the Borrower in respect of the
amount of the affected payment.
SECTION 2.9. MANNER OF PAYMENT.
2.9.1. Except as otherwise expressly provided, the Borrower
shall make each payment under the Loan Documents to the Agent in Dollars and in
immediately available funds, without any deduction whatsoever, including any
deduction for any set-off, recoupment, counterclaim or Taxes (other than
Excluded Taxes), at the Agent's Office, for the account of the Applicable
Lending Offices of the Lender Party entitled to such payment, by depositing such
payment in the Agent's Account not later than 2:00 p.m. (Boston time) on the due
date thereof. Any payments received after 2:00 p.m. (Boston time) on any
Business Day shall be deemed received on the next succeeding Business Day. Not
later than 1:00 p.m. (Boston time) on the day such payment is made, the Agent
shall deliver to each Lender, for the account of the Lender's Applicable Lending
Office, in Dollars and in immediately available funds, such Lender's share of
the payment so made, determined pursuant to Section 2.15. Delivery shall be made
in accordance with the written instructions satisfactory to the Agent from time
to time given to the Agent by each Lender. Without limiting the rights of the
Lender Parties under Section 9.10., each Lender Party shall have the right, at
any time, to charge any account of the Borrower maintained with the Lender Party
for the amount of any payment due by the Borrower under the Loan Documents or to
deduct the amount of any such payment from any remittance due to the Borrower
hereunder.
2.9.2. Whenever any payment to be made hereunder shall be due
on a day that is not a Business Day (or, in the case of any payment with respect
to any LIBOR Rate Loan, not a
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LIBOR Business Day), such payment shall instead be made on the next succeeding
Business Day (or, in the case of any such payment with respect to any LIBOR Rate
Loan, the next succeeding LIBOR Business Day), together with interest accrued
during the period of such extension.
SECTION 2.10. PRO RATA TREATMENT. Except to the extent otherwise
expressly provided herein,
2.10.1. Revolving Loans shall be requested from the Lenders,
pro rata according to their respective Revolving Commitments, and Term Loans
shall be requested from the Lenders, pro rata according to their respective
shares of the Term Commitment.
2.10.2. Each reduction of the Revolving Commitments of the
Lenders shall be applied to the respective Revolving Commitments of the Lenders
pro rata according to their respective Revolving Commitments before such
reduction.
2.10.3. Each payment or prepayment by the Borrower of
principal of the Revolving Loans or Term Loans shall be made for the account of
the Lenders pro rata according to the respective unpaid principal amount of the
Revolving Loans or Term Loans, as the case may be, owed to the Lenders, and each
payment by the Borrower of interest on the Revolving Loans or Term Loans shall
be made for the account of the Lenders pro rata according to the respective
accrued but unpaid interest on the Revolving Loans or Term Loans owed to such
Lenders. Each payment by the Borrower of Fees payable to the Lenders pursuant to
Section 2.6.1. or 2.6.2. shall be made for the account of the Lenders pro rata
according to the respective amounts of their Revolving Commitments.
2.10.4. Participations in Letters of Credit shall be allocated
to the Lenders pro rata in accordance with their respective Revolving
Commitments.
SECTION 2.11. MANDATORY SUSPENSION AND CONVERSION OF LIBOR RATE LOANS.
Each Lender's obligation to make, continue or convert Loans into LIBOR Rate
Loans shall be suspended, all outstanding LIBOR Rate Loans shall be converted
into Base Rate Loans on the last day of the respective Interest Periods
applicable thereto (or, if earlier, in the case of clause 2.11.2. below, on the
last day that such Lender can lawfully continue to maintain LIBOR Rate Loans)
and all pending requests for the making or continuation of, or conversion into,
Dollar Rate Loans shall be disregarded, if:
2.11.1. on or prior to the determination of the interest rate
for a LIBOR Rate Loan for any Interest Period, the Agent determines that for any
reason appropriate quotations are not available to the Agent in the relevant
interbank market for purposes of determining the Adjusted LIBOR Rate or that
such rate would not accurately reflect the cost to the Lenders of making,
continuing, or converting a Loan into, a LIBOR Rate Loan for such Interest
Period; or
2.11.2. after the date hereof a Lender notifies the Agent
(which shall thereupon notify the Borrower and the other Lenders) of its
determination that any Regulatory Change makes it unlawful or impossible for
such Lender or its LIBOR Lending Office to make or maintain any LIBOR Rate Loan,
to obtain in the interbank eurodollar market through its LIBOR
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Lending Office the funds with which to make any LIBOR Rate Loan or to comply
with its obligations hereunder in respect thereof.
SECTION 2.12. REGULATORY CHANGES.
2.12.1. INCREASED COSTS. If, on or after the date hereof, any
Regulatory Change shall impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance or similar requirement (other than any such
requirement with respect to any LIBOR Rate Loan to the extent included in the
LIBOR Reserve Requirement), against, or any fees or charges in respect of,
assets held by, deposits with or other liabilities for the account of,
commitments of, advances or Loans by, Letters of Credit (or participations
therein) or other credit extended by, any Lender Party (or its Applicable
Lending Office) or shall impose on any Lender Party (or its Applicable Lending
Office) or on the relevant interbank market any other condition affecting any
LIBOR Rate Loan, or any Letter of Credit (or participations therein) or any
obligation to make LIBOR Rate Loans or in respect of Letter of Credit
participations, and the effect of the foregoing is (i) to increase the cost to
such Lender Party (or its Applicable Lending Office) of making, issuing,
renewing or maintaining any LIBOR Rate Loan or its Revolving Commitment or Term
Commitment in respect thereof or any Letter of Credit (or participations
therein) or (ii) to reduce the amount of any sum received or receivable by such
Lender Party (or its Applicable Lending Office) hereunder or under any other
Loan Document with respect thereto, then, subject to Section 2.15.1. , the
Borrower shall from time to time pay to such Lender Party, within 10 days after
request by such Lender Party, such additional amounts as may be specified by
such Lender Party as sufficient to compensate such Lender Party for such
increased cost or reduction.
2.12.2. CAPITAL COSTS. If a Regulatory Change regarding
capital adequacy (including the adoption or becoming effective of any treaty,
law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards") has or would have the effect of reducing the rate of return on the
capital of or maintained by any Lender Party or any company controlling such
Lender Party as a consequence of such Lender Party's Loans, Letters of Credit,
Commitments or obligations hereunder and other commitments of this type to a
level below that which such Lender Party or company could have achieved but for
such Regulatory Change (taking into account such Lender Party's or company's
policies with respect to capital adequacy), then, subject to Section 2.15.1. ,
the Borrower shall from time to time pay to such Lender Party, within 10 days
after request by such Lender Party, such additional amounts as may be specified
by such Lender Party as sufficient to compensate such Lender Party or company
for such reduction in return, to the extent such Lender Party or such company
determines such reduction to be attributable to the existence, issuance or
maintenance of such Loans, Letters of Credit or obligations for the account of
the Borrower.
SECTION 2.13. TAXES.
2.13.1. If the Borrower is required by Applicable Law to make
any deduction or withholding in respect of any Taxes (other than Excluded Taxes)
from any amount payable under
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any Loan Document to or for the account of any Lender Party, the Borrower shall
pay to or for the account of such Lender Party, on the date such amount is
payable, such additional amounts as such Lender Party reasonably determines may
be necessary so that the net amounts received by it or for its account, in the
aggregate, after all applicable deductions or withholdings, shall equal the
amount that such Lender Party would have been entitled to receive if no
deductions or withholdings were made. "Excluded Taxes" means, with respect to
any payment to any Lender Party, (a) any taxes imposed on or measured by the
overall net income (including a franchise tax based on net income) of such
Lender Party or its Agent's Office or Applicable Lending Office by the
jurisdiction in which it is incorporated, maintains its principal executive
office or in which such Agent's Office or Applicable Lending Office is located,
and (b) "Excluded Taxes" arising under Section 2.13.3. If the Borrower shall
deduct or withhold any Taxes from any payments under the Loan Documents, it
shall provide to the relevant Lender Party (i) a statement setting forth the
amount and type of Taxes so deducted or withheld, the applicable rate and any
other information or documentation that such Lender Party may reasonably request
and (ii) as promptly as possible after payment is made to the relevant
Governmental Authority, a certified copy of any original official receipt
received by the Borrower showing payment.
2.13.2. If any Lender Party is required by law to make any
payment on account of Taxes (other than Excluded Taxes) on or in relation to any
sum received or receivable by it under any Loan Document, or any liability for
Taxes (other than Excluded Taxes) in respect of any such payment is imposed,
levied or assessed against such Lender Party, then the Borrower shall pay when
due such additional amounts as such Lender Party reasonably determines to be
necessary so that the amount received by it, less any such Taxes paid, imposed,
levied or assessed, including any Taxes (other than Excluded Taxes) imposed on
such additional amounts, shall equal the amount that such Lender Party would
have been entitled to retain in the absence of the payment, imposition, levy or
assessment of such Taxes.
2.13.3. If any Lender Party is not organized and existing
under the laws of the United States of America or any political subdivision
thereof or therein (a "Foreign Lender Party"), to the extent entitled to do so
under Applicable Law, such Lender Party shall furnish to the Borrower, on the
Closing Date (or on the date on which such Foreign Lender Party first becomes a
Lender Party pursuant to Section 9.3.) a duly executed certificate to the effect
that such Foreign Lender Party is entitled to receive all amounts payable under
the Loan Documents without deduction or withholding (or at a reduced rate of
deduction or withholding) on account of Taxes imposed by the United States (A)
pursuant to the terms of an applicable tax treaty in effect with the United
States of America (in which case such certificate shall be accompanied by two
executed copies of IRS Form 1001), or (B) under Code Section 1441(c) (in which
case such certificate shall be accompanied by two executed copies of IRS Form
4224) (such forms being the "Prescribed Forms"). If requested by the Borrower
from time to time after the Closing Date (upon the obsolescence of any
previously delivered form or otherwise), a Foreign Lender Party shall, to the
extent entitled thereto under Applicable Law, provide to the Borrower new
Prescribed Forms, in each case duly executed and completed by such Foreign
Lender Party. If a Foreign Lender Party does not furnish Prescribed Forms
establishing a complete exemption from deduction and withholding on account of
Taxes imposed by the United States of America, any deductions or withholdings
required to be made by the Borrower under Applicable Law on
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account of Taxes imposed by the United States of America (including deductions
or withholdings on account of such Taxes at the rate shown in such Prescribed
Forms), and any payments required to be made by, and any liability imposed,
levied or assessed against, such Lender Party on account of such Taxes, shall
constitute "Excluded Taxes," provided that any such deductions, withholdings,
payments or liabilities shall not constitute "Excluded Taxes" to the extent they
are attributable to a Regulatory Change occurring after the date hereof (or, in
the case of any Person who becomes a Lender Party after the date hereof pursuant
to Section 9.3., the date on which such Person becomes a Lender Party) if such
Lender Party has furnished to the Borrower all Prescribed Forms required to be
furnished by this Section 2.13.3.
SECTION 2.14. COMPENSATION FOR FUNDING LOSSES. The Borrower shall pay
to any Lender, upon demand by such Lender, such amount or amounts as such Lender
determines is or are necessary to compensate it for any loss, cost, expense or
liabilities incurred (including any loss, cost, expense or liability incurred by
reason of the liquidation or redeployment of deposits but excluding loss of
future margin) by it as a result of (a) any payment, prepayment or conversion of
any LIBOR Rate Loan for any reason (including by reason of a Mandatory
Prepayment, an acceleration pursuant to Section 7.2. or by operation of Section
2.11.) on a date other than the last day of an Interest Period applicable to
such LIBOR Rate Loan, or (b) any LIBOR Rate Loan for any reason not being made
(other than a wrongful failure to fund by such Lender), converted or continued,
or any payment of principal of or interest thereon not being made, on the date
therefor determined in accordance with the applicable provisions of this
Agreement.
2.15. CERTIFICATES REGARDING YIELD PROTECTION, ETC.
2.15.1. Any request by any Lender for payment of additional
amounts pursuant to Sections 2.12., 2.13. and 2.14. shall be submitted through
the Agent and shall be accompanied by a certificate of such Lender Party setting
forth the basis and amount of such request, including a description or
explanation in reasonable detail of how such amount was determined. In
determining the amount of such payment, such Lender Party may use such
reasonable attribution or averaging methods as it deems appropriate and
practical.
2.15.2. Before any Lender Party requests compensation under
Section 2.12. or 2.13., such Lender Party shall designate a different Applicable
Lending Office if such designation (a) will avoid the need for such request or
reduce the amount payable under such Section and (b) will not cause the
imposition on such Lender Party of any additional costs or legal, regulatory or
administrative burdens deemed by such Lender Party to be material or otherwise
be deemed by such Lender Party in its discretion to be disadvantageous to it.
SECTION 2.16. APPLICABLE LENDING OFFICE; DISCRETION OF LENDERS AS TO
MANNER OF FUNDING. Each Lender may make, carry or transfer LIBOR Rate Loans at,
to, or for the account of an Affiliate of the Lender, provided that such Lender
shall not be entitled to receive any greater amount under Section 2.12. or 2.13.
as a result of the transfer of any such Loan than such Lender would be entitled
to immediately prior thereto unless (a) such transfer occurred at a time when
circumstances giving rise to the claim for such greater amount did not exist or
(b) such
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claim would have arisen even if such transfer had not occurred. Notwithstanding
any other provision of this Agreement, each Lender Party shall be entitled to
fund and maintain its funding of all or any part of its LIBOR Rate Loans in any
manner it sees fit, it being understood, however, that for purposes of this
Agreement all determinations hereunder shall be made as if Each Lender Party had
actually funded and maintained each LIBOR Rate Loan through the purchase of
deposits in the relevant interbank market having a maturity corresponding to
such Loan's Interest Period and bearing interest at the applicable rate.
ARTICLE 3.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
SECTION 3.1. CLOSING CONDITIONS. The occurrence of the Closing Date
shall be subject to satisfaction of the following conditions:
3.1.1. CLOSING DATE. The Closing Date shall occur on or before
June 15, 1997.
3.1.2. CERTAIN DOCUMENTS. The Agent shall have received the
documents listed on Schedule 3.1.2., all of which shall be duly executed and in
form and substance satisfactory to the Agent.
3.1.3. FEES AND EXPENSES PAID. The Borrower shall have paid
(a) all Fees due on or before the Closing Date and (b) all expenses for which
the Borrower shall have been billed on or before the Closing Date.
3.1.4. SATISFACTION OF CERTAIN CONDITIONS. The conditions set
forth in Sections 3.2.3., 3.2.3., 3.2.4. and 3.2.5. shall be satisfied on and as
of the Closing Date as if such date were a Funding Date.
3.1.5. ABSENCE OF LITIGATION EVENTS.
There has not been issued any injunction, order or decree that
prohibits or limits any of the transactions contemplated by the Loan Documents
and there shall not be any action, suit, proceeding or investigation pending or,
to the best knowledge of the Borrower, currently threatened against the Borrower
or any Lender Party that (i) draws into question the validity, legality or
enforceability of any Loan Document or to consummate the transactions
contemplated thereby or (ii) might result, either individually or in the
aggregate, in any Material Adverse Change, except as set forth in Schedule 4.6.
3.1.6. GENERAL.
All other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered or
executed or recorded in form and substance satisfactory to the Agent and the
Agent shall have received all such counterpart originals or certified copies
thereof as Agent may request.
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3.1.7. NO MATERIAL ADVERSE CHANGE. No Material Adverse Change
shall have occurred since December 31, 1996.
3.1.8. SATISFACTION OF SUBORDINATED DEBT. Borrower's
obligations in respect of its subordinated indebtedness, in the original
principal amount of $10,000,000, incurred pursuant to that certain Subordinated
Debenture dated January 7, 1996, shall have been paid in full (provided that
such payment may be made from the proceeds of the Term Loan).
SECTION 3.2. CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT. The
obligation of the Lenders to make any Loan or of the L/C Issuer to issue any
Letter of Credit on any Funding Date shall be subject to the following
conditions precedent:
3.2.1. OCCURRENCE OF CLOSING DATE.
The conditions precedent set forth in Section 3.1. shall have
been satisfied or waived in writing by the Agent.
3.2.2. NOTICE OF BORROWING OR ISSUANCE.
The Borrower shall have delivered to the Agent, after the time
the conditions set forth in Section 3.1. shall have been satisfied or waived and
otherwise in accordance with the applicable provisions of this Agreement, a
Notice of Borrowing (or telephonic notice in lieu thereof), in the case of a
Loan, or a Notice of Issuance and Letter of Credit Application, in the case of a
Letter of Credit.
3.2.3. REPRESENTATIONS AND WARRANTIES.
All of the representations and warranties of the Borrower contained in
the Loan Documents shall be true and correct in all material respects on and as
of the Funding Date as though made on and as of that date (except to the extent
that such representations and warranties expressly were made only as of a
specific date).
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3.2.4. NO DEFAULT. No Default or Event of Default shall exist
or result from the making of the Loan or the issuance of the Letter of Credit.
3.2.5. NO MATERIAL ADVERSE CHANGE. No Material Adverse Change
shall have occurred since the date of the financial statements referred to in
Section 4.4.1.
3.2.6. SATISFACTION OF CONDITIONS. Each borrowing of a Loan
and Letter of Credit issuance shall constitute a representation and warranty by
the Borrower as of the Funding Date that the conditions contained in Sections
3.2.3. through 3.2.5. have been satisfied.
3.2.7. NO VIOLATION OF APPLICABLE LAW. No Lender shall be
prohibited by any Applicable Law from extending the credit requested in such
Notice of Borrowing or Notice of Issuance.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender Parties as follows:
SECTION 4.1. ORGANIZATION, POWERS AND GOOD STANDING. The Borrower and
each of its Subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, as shown as
of the date hereof on Schedule 4.1., and has all requisite corporate power and
authority and the legal right to own and operate its properties, to carry on its
business as heretofore conducted and as proposed to be conducted, to enter into
the Loan Documents to which it is a party and to carry out the transactions
contemplated thereby. The Borrower and each of its Subsidiaries possesses all
Governmental Approvals, in full force and effect, free from burdensome
restrictions, that are necessary for the ownership, maintenance and operation of
its properties and conduct of its business as now conducted and proposed to be
conducted, and is not in Material violation thereof. The Borrower and each of
its Subsidiaries is duly qualified to do business and in good standing in each
jurisdiction where any failure to be so qualified, individually or in the
aggregate, could have a Material Adverse Effect.
SECTION 4.2. AUTHORIZATION, BINDING EFFECT, NO CONFLICT, ETC.
4.2.1. AUTHORIZATION, BINDING EFFECT, ETC. The execution,
delivery and performance by the Borrower of each Loan Document and each other
Transaction Document have been duly authorized by all necessary corporate or
other action on the part of the Borrower. Each such Loan Document has been duly
executed and delivered by the Borrower and is the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with its terms,
except as enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally.
4.2.2. NO CONFLICT. The execution, delivery and performance by
the Borrower of each Loan Document and the consummation of the transactions
contemplated thereby, do not and
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will not (a) violate any provision of the charter or other organizational
documents of the Borrower, (b) except for consents that have been obtained and
are in full force and effect, conflict with, result in a breach of, or
constitute (or, with the giving of notice or lapse of time or both, would
constitute) a default under, or require the approval or consent of any Person
pursuant to, any Contractual Obligation of the Borrower, or violate any
Applicable Law binding on the Borrower, except where such violation, conflict,
breach, or default would not, individually or in the aggregate, have a Material
Adverse Effect and would not subject any Lender Party to any liability, or (c)
result in the creation or imposition of any Lien upon any asset of the Borrower,
except for Liens in favor of the Agent under the Collateral Documents.
4.2.3. GOVERNMENTAL APPROVALS. Except for filings and
recordings in connection with the perfection of Liens created by the Collateral
Documents listed on Schedule 3.1.2., no Governmental Approval is or will be
required in connection with the execution, delivery and performance by the
Borrower of any Loan Document to which it is party or the transactions
contemplated thereby or to ensure the legality, validity or enforceability
thereof, except where the failure to obtain such Governmental Approval would
not, individually and in the aggregate, have a Material Adverse Effect and would
not subject any Lender Party to any liability.
SECTION 4.3. SUBSIDIARIES; INVESTMENTS .
4.3.1. SUBSIDIARIES. Each Subsidiary of the Borrower, the
authorized and issued Capital Stock of each such Subsidiary and the record and
beneficial owner of such Capital Stock are identified in Schedule 4.3., as
amended from time to time. All of the outstanding shares of Capital Stock of
each of the Subsidiaries of the Borrower have been duly authorized and validly
issued and are fully paid and nonassessable. Except as disclosed on Schedule
4.3., as amended from time to time, there are not outstanding any securities
convertible into or exchangeable for shares of Capital Stock of any of the
Subsidiaries of the Borrower, or any options, warrants or other rights to
purchase any such Capital Stock, or any commitments of any kind for the issuance
of additional shares of such Capital Stock or any such convertible or
exchangeable securities or options, warrants or rights to purchase such Capital
Stock. Except for directors qualifying shares or similar arrangements or as
disclosed on Schedule 4.3., neither the Borrower nor any Subsidiary thereof is a
party to any agreement with respect to the issuance, voting or sale of issued or
unissued shares of Capital Stock of any Subsidiary of the Borrower.
4.3.2. BORROWER CAPITAL STOCK. The authorized and outstanding
Capital Stock of the Borrower is as set forth on Schedule 4.3. All outstanding
shares of such Capital Stock are duly authorized and validly issued and are
fully paid and nonassessable, and Borrower's ownership interest in its
Subsidiaries is free and clear of all Liens except for Liens in favor of the
Agent.
SECTION 4.4. FINANCIAL INFORMATION.
4.4.1. The consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of December 31, 1996 and the consolidated
statements of income, stockholders' equity and cash flow of the Borrower and its
Consolidated Subsidiaries for the Fiscal Years then
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ended, certified by the Borrower's independent certified public accountants,
copies of which have been delivered to the Lender Parties, were prepared in
accordance with GAAP consistently applied and fairly present the consolidated
financial position of the Borrower and its Consolidated Subsidiaries, as of the
respective dates thereof and the results of operations and cash flow of the
Borrower and its Consolidated Subsidiaries for the periods then ended. Neither
the Borrower nor any Consolidated Subsidiary on such dates had any material
Contingent Obligations, liabilities for Taxes or long-term leases, forward or
long-term commitments or unrealized losses from any unfavorable commitments that
are not reflected in the foregoing statements or in the notes thereto and that,
individually or in the aggregate, are Material.
4.4.2. The unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of March 31, 1997 and the related
consolidated statements of income, stockholders' equity and cash flow for the
periods then ended, certified by the Chief Financial Officer of the Borrower,
copies of which have been delivered to the Lender Parties, were prepared in
accordance with GAAP consistently applied (except to the extent noted therein)
and fairly present the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and the results of operations and cash
flow for the periods covered thereby, subject to the absence of footnotes and
normal year-end audit adjustments. Neither the Borrower nor any Consolidated
Subsidiary on such date had any material Contingent Obligations, liabilities for
Taxes or long-term leases, forward or long-term commitments or unrealized losses
from any unfavorable commitments that are not reflected in the foregoing
statements or in the notes thereto and that, individually or in the aggregate,
are Material.
4.4.3. The projected consolidated statements of income and
cash flow of the Borrower and its Consolidated Subsidiaries for the period from
January 1, 1997 to and including December 31, 1999, and the projected annual
consolidated balance sheets of the Borrower and its Consolidated Subsidiaries as
of the end of each Fiscal Year through 1999, copies of which have been furnished
to the Lender Parties, were prepared by or under the supervision of the Chief
Executive Officer and the interim Chief Financial Officer of the Borrower, are
complete and have been prepared on the basis of reasonable assumptions and in
good faith utilizing historical financial information that was prepared in
accordance with GAAP.
SECTION 4.5. NO MATERIAL ADVERSE CHANGES; SOLVENCY. Since the date of
the Financial Statements referred to in Section 4.4.1., there has been no
Material Adverse Change. The Borrower is and will be Solvent giving effect to
any Loans then being requested.
SECTION 4.6. LITIGATION. Except as disclosed in Schedule 4.6., there
are no actions, suits or proceedings pending or, to the best knowledge of the
Borrower, threatened against or affecting the Borrower, any of its Subsidiaries
or any of its properties before any Governmental Authority (a) in which there is
a reasonable possibility of an adverse determination that could result in a
Material liability or have a Material Adverse Effect or (b) that in any manner
draws into question the validity, legality or enforceability of any Loan
Document or any transaction contemplated thereby.
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SECTION 4.7. AGREEMENTS; APPLICABLE LAW. Neither the Borrower nor any
of its Subsidiaries is in violation of any Applicable Law, or in default under
its charter or bylaws or any of its Contractual Obligations, except where such
violation or default could not individually or in the aggregate have a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries is a party to
or bound by any unduly burdensome Contractual Obligation that, individually or
in the aggregate, has a Material Adverse Effect.
SECTION 4.8. GOVERNMENTAL REGULATION. Neither the Borrower nor any of
its Subsidiaries is (a) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or a company
controlled by such a company, or (b) subject to regulation under any Federal or
state, statute or regulation limiting its ability to incur Debt for money
borrowed (other than the Margin Regulations).
SECTION 4.9. MARGIN REGULATIONS. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purposes of purchasing or carrying
Margin Stock. The value of all Margin Stock held by the Borrower and the
Subsidiaries constitutes less than 25% of the value, as determined in accordance
with the Margin Regulations, of all assets of the Borrower and the Subsidiaries.
SECTION 4.10. EMPLOYEE BENEFIT PLANS.
4.10.1. Neither the Borrower nor any ERISA Affiliate sponsors,
maintains or contributes to, or has an obligation to contribute to, or, within
the five years prior to the Closing Date, maintained, contributed to or was
required to contribute to, any "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA that is subject to Title IV of ERISA.
4.10.2. There exists no Multiemployer Plan. The Borrower and
the ERISA Affiliates is in compliance in all Material respects with all
Applicable Laws, including any applicable provisions of ERISA and the Code, with
respect to all Plans. There have been no Prohibited Transactions with respect to
any Plan that are reasonably likely to result in any Material liability of the
Borrower or any ERISA Affiliate. The Borrower and the ERISA Affiliates have not
had asserted and do not expect to have asserted against them any Material
penalty, interest or excise tax under Sections 4971, 4972, 4975, 4976, 4977,
4979, 4980 or 4980B of the Code or Sections 502(c)(1) or 502(i) of ERISA. Each
Plan covering employees of the Borrower or any of the ERISA Affiliates is able
to pay benefits thereunder when due. There is no claim pending or, to the best
knowledge of the Borrower, threatened, against or involving any Plan by any
Governmental Authority or other Plan, other than ordinary claims for benefits
pursuant to terms of any Plan and other claims that are not Material.
SECTION 4.11. TITLE TO PROPERTY. The Borrower and each of its
Subsidiaries has good title to or valid and subsisting leasehold interests in
all of its property reflected in its books and records as being owned or leased
by it. No such property is subject to any Lien, other than Permitted Liens.
SECTION 4.12. INTELLECTUAL PROPERTY, ETC. The Borrower and each of its
Subsidiaries owns or holds valid licenses in and to all Intellectual Property
Rights that are material to the
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conduct of its business as heretofore operated and as proposed to be conducted.
Neither the Borrower nor any of its Subsidiaries has infringed, or been charged
or, to the best knowledge of the Borrower, threatened to be charged with any
infringement of, any unexpired Intellectual Property Right of any Person, except
where the effect thereof would not, individually or in the aggregate, have a
Material Adverse Effect. The Borrower is not bound by or a party to any options,
licenses or agreements of any kind with respect to the Intellectual Property
Rights of any other Person except for arrangements that, if terminated, would
not be reasonably likely to result in a Material Adverse Effect. The Borrower is
not aware that any of its employees is obligated under any Contractual
Obligation (including licenses, covenants or commitments of any nature), or
subject to any judgment, decree (except as imposed by laws of general
application) or order (except as imposed by laws of general application) of any
Governmental Authority, that would interfere with the use of his or her best
efforts to promote the interests of the Borrower or that would conflict with its
business as proposed to be and as currently conducted. To the best knowledge of
the Borrower, there is no material violation by any Person of any right of the
Borrower with respect to any Intellectual Property Rights owned or used by it.
SECTION 4.13. ENVIRONMENTAL CONDITION. Except as set forth on Schedule
4.13.:
4.13.1. There exists no order, judgment or decree, and there
is not pending or, to the best knowledge of the Borrower, threatened, any
action, suit, proceeding or investigation relating to any actual or alleged
liability arising out of the presence or suspected presence of Hazardous
Material, any actual or alleged violation of Environmental Requirements or any
actual or alleged liability for Environmental Damages in connection with any
Real Property or the business or operations of the Borrower or any of its
Subsidiaries that has had or as to which there is a reasonable possibility of an
adverse determination that would have a Material Adverse Effect nor, to the best
knowledge of the Borrower, does there exist any basis for such action, suit,
proceeding or investigation being instituted or filed.
SECTION 4.14. ABSENCE OF CERTAIN RESTRICTIONS. Except as set forth in
Schedule 4.14., neither the Borrower nor any Subsidiary thereof is subject to
any Contractual Obligation that restricts or limits the ability of any
Subsidiary to (a) make Restricted Payments to the Borrower, (b) pay Debt owed
the Borrower or any Subsidiary thereof, (c) make any loans or advances to the
Borrower (except as provided in Section 5.11.) or (d) except as provided in
Contractual Obligations respecting the specific assets subject to Permitted
Liens, transfer any of its property to the Borrower.
SECTION 4.15. LABOR MATTERS. There are no material strikes or other
labor disputes or grievances pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Subsidiary thereof. Except as set forth
in Schedule 4.15., there are no collective bargaining agreements to which the
Borrower or any Subsidiary thereof is a party. The Borrower and each of its
Subsidiaries has complied in all material respects with the requirements of the
Worker Adjustment and Restraining Notification Act, 29 U.S.C. Section 2101 et
seq. (the "WARN Act"). No claim under the WARN Act is pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any Subsidiary
thereof nor is there any reasonable
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basis to anticipate any such claim, except where the effect thereof,
individually or in the aggregate, would not have a Material Adverse Effect.
SECTION 4.16. DISCLOSURE. The information in each document, certificate
or written statement (other than information referred to in Section 4.4.)
furnished to the Lender Parties by or on behalf of the Borrower or any
Subsidiary with respect to the business, assets, prospects, results of operation
or financial condition of the Borrower or any Subsidiary for use in connection
with the transactions contemplated by this Agreement at the time of delivery
thereof, was true and correct in all Material respects and did not omit, when
considered as a whole, any material fact necessary in order to make the
statements made not misleading, in light of the circumstances under which they
were made. There is no fact known to the Borrower (other than matters of a
general economic nature) that has had or could reasonably be expected to have a
Material Adverse Effect and that has not been disclosed herein or in such other
documents, certificates or statements.
ARTICLE 5.
AFFIRMATIVE COVENANTS OF THE BORROWER
So long as any portion of the Commitments is in effect or any
Obligations remain unpaid or have not been performed in full:
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SECTION 5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. The Borrower shall
deliver to the Lender Parties:
5.1.1. as soon as practicable and in any event within 90 days
after the end of each Fiscal Year, the consolidated (and consolidating) balance
sheet of the Borrower and the Consolidated Subsidiaries as of the end of such
year and the related consolidated (and, except as to statements of stockholders'
equity, consolidating) statements of income, stockholders' equity and cash flow
of the Borrower and the Consolidated Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the consolidated (and consolidating)
figures for the previous Fiscal Year, all in reasonable detail and (i) in the
case of such consolidated financial statements, accompanied by an unqualified
report thereon of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by the Borrower and
reasonably satisfactory to the Required Lenders, which report shall state that
such consolidated financial statements fairly present the consolidated financial
position of the Borrower and the Consolidated Subsidiaries as of the date
indicated and their results of operations and cash flows for the periods
indicated are in conformity with GAAP (except as otherwise stated therein) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards and (ii) in the case of such consolidating financial
statements, certified by the chief financial officer of the Borrower as being
fairly stated in all material respects when considered in relation to the
audited consolidated financial statements of the Borrower and the Consolidated
Subsidiaries;
5.1.2. as soon as practicable and in any event within 45 days
after the end of each Fiscal Quarter a consolidated balance sheet of the
Borrower and the Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of income, stockholders' equity and cash flow
for such quarter and the portion of the Fiscal Year ended at the end of such
quarter, setting forth in each case in comparative form the consolidated figures
for the corresponding periods of the prior Fiscal Year, all in reasonable detail
and certified by the Borrower's chief financial officer as fairly presenting the
consolidated financial condition of the Borrower and its Consolidated
Subsidiaries as of the dates indicated, and their consolidated results of
operations and cash flows for the periods indicated, in conformity with GAAP,
subject to normal year-end adjustments and the absence of footnotes;
5.1.3. as soon as practicable and in any event within fifteen
days after the end of each calendar month, a Borrowing Base Certificate, in
substantially the form of Exhibit F-5 (a "Borrowing Base Certificate", setting
forth Borrower's calculation of the Borrowing Base as of the end of such
calendar month;
5.1.4. together with each delivery of financial statements
pursuant to Sections 5.1.1. and 5.1.2. above, a certificate of the chief
financial officer and the chief executive officer of the Borrower substantially
in the form of Exhibit F-6 (a "Compliance Certificate"), duly completed and
setting forth the calculations required to establish compliance with Section
6.5. on the date of such financial statements;
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5.1.5. within three days after any Senior Officer of the
Borrower becomes aware of the occurrence of any Default or Event of Default, a
certificate of a Senior Officer of the Borrower setting forth the details
thereof and the action that the Borrower is taking or proposes to take with
respect thereto;
5.1.6. promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available by the Borrower to its security holders, all registration statements
(other than the exhibits thereto) and annual, quarterly or monthly reports, if
any, filed by the Borrower with the SEC and all press releases by the Borrower
or any Subsidiary thereof concerning material developments in the business of
the Borrower or any such Subsidiary;
5.1.7. within three days after the Borrower becomes aware of
the occurrence of (a) any Reportable Event in connection with any Plan, or (b)
any Prohibited Transaction in connection with any Plan (or any trust created
thereunder), notice providing reasonable details about such Reportable Event or
Prohibited Transaction;
5.1.8. within three days after the Borrower obtains knowledge
of the threat or commencement of litigation or proceedings affecting the
Borrower or any Subsidiary thereof, or of any material development in any
pending or future litigation, (a) that involves alleged liability in excess of
$1,000,000 (in the aggregate), (b) in which injunctive or similar relief is
sought that, if obtained, could have a Material Adverse Effect or (c) that
questions the validity or enforceability of any Loan Document, notice providing
reasonable details about the threat or commencement of such litigation or about
such material development;
5.1.9. within three days after receipt thereof, copies of all
final reports or letters submitted to the Borrower by its independent certified
public accountants in connection with each audit of the financial statements of
the Borrower or its Consolidated Subsidiaries made by such accountants,
including any management report, which reports the Borrower agrees to obtain in
connection with each of its annual audits;
5.1.10. within 60 days after the end of each Fiscal Year of
the Borrower, (a) a comprehensive business plan for the immediately succeeding
Fiscal Year approved by the board of directors of the Borrower, in such form and
addressing such matters as may be reasonably requested by the Agent, and (b) a
forecast for each of the next succeeding Fiscal Year of the consolidated balance
sheet and the consolidated results of operations and cash flow of the Borrower
and its Consolidated Subsidiaries, together with (i) an outline of the major
assumptions upon which the forecast is based, (ii) a calculation in reasonable
detail evidencing compliance with all covenants set forth herein on the basis
of, and after giving effect to, such forecast and (iii) an explanation of the
operating results for the immediately preceding Fiscal Year, including a
comparison of such results with the forecast previously delivered to the Lenders
pursuant to this Section or otherwise; and not more than 30 days after the end
of the second quarter of each such Fiscal Year, such business plan and forecast
shall be updated to reflect any material changes;
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5.1.11. within three days after the receipt thereof by any
Senior Officer of the Borrower, a copy of any notice, summons, citation or
written communication concerning any actual, alleged, suspected or threatened
violation of Environmental Requirements, or liability of the Borrower or any of
its Subsidiaries for Environmental Damages;
5.1.12. within five days after the availability thereof,
copies of all amendments to the charter, bylaws or other organizational
documents of the Borrower or any of its Subsidiaries; and
5.1.13. from time to time such additional information
regarding the Borrower or its Subsidiaries or its business, assets, liabilities,
prospects, results of operation or financial condition as any Lender Party may
reasonably request.
SECTION 5.2. RECORDS AND INSPECTION. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain adequate books, records and accounts
as may be required or necessary to permit the preparation of consolidated
financial statements in accordance with sound business practices and GAAP. The
Borrower shall, and shall cause each of its Subsidiaries to, permit such Persons
as the Agent may designate, at reasonable times and as often as may be
requested, under reasonable circumstances, to (a) visit and inspect any of its
properties, (b) inspect and copy its books and records, and (c) discuss with its
officers and employees, its investment bankers and its independent accountants,
its business, assets, liabilities, prospects, results of operation or financial
condition.
SECTION 5.3. AUDITS OF THE COLLATERAL.
5.3.1. The Borrower shall, upon the request of the Agent,
cause auditors selected and engaged by the Agent to perform an annual audit (or,
if an Event of Default then exists, additional audits) in form and substance
satisfactory to the Agent, of the Collateral.
5.3.2. The Borrower shall permit, and shall cause each of its
Subsidiaries to permit, the AGENT or its designee to perform such additional
audits of the Collateral as the Agent may request.
SECTION 5.4. CORPORATE EXISTENCE, ETC. The Borrower shall, and shall
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its corporate existence and all Material rights and franchises,
provided, however, that the corporate existence of any Subsidiary of the
Borrower may be terminated (a) as contemplated and permitted by Section 6.6. or
(b) if such termination is determined by the Board of Directors of the Borrower
to be in the best interest of the Borrower and is not disadvantageous in any
Material respect to the Lender Parties.
SECTION 5.5. PAYMENT OF TAXES. The Borrower shall, and shall cause each
of its Subsidiaries to, pay and discharge all Taxes imposed upon it or any of
its properties or in respect of any of its franchises, business, income or
property before any penalty shall be incurred with respect to such Taxes,
provided, however, that, unless and until foreclosure, distraint, levy, sale or
similar proceedings shall have commenced, the Borrower and the Subsidiaries need
not pay or
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discharge any such Tax so long as the validity or amount thereof is being
contested in good faith and by appropriate proceedings and so long as any
reserves or other appropriate provisions as may be required by GAAP shall have
been made therefor.
SECTION 5.6. MAINTENANCE OF PROPERTIES. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition (ordinary wear and tear excepted), all
properties and other assets useful or necessary to its business, and from time
to time the Borrower shall make or cause to be made all appropriate repairs,
renewals and replacements thereto.
SECTION 5.7. MAINTENANCE OF INSURANCE.
5.7.1. The Borrower shall, and shall cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance in at least such amounts, of such character and against at
least such risks as is usually maintained by companies of established repute
engaged in the same or a similar business in the same general area. The Borrower
shall cause all liability insurance policies to name the Agent as a loss payee.
Each insurance policy covering collateral shall include endorsements or
stipulations providing that coverages will not be canceled or diminished without
at least 10 days prior written notice to the Agent and further providing, if
available on commercially reasonable terms, that coverage in favor of the Agent
will not be impaired in any way by any act, omission or default of the Borrower
or any other Person. In connection with all policies of insurance covering
Collateral, the Borrower will provide the Agent with such loss payable or other
endorsements as the Agent may reasonably require.
5.7.2. In addition to any requirements under the Collateral
Documents, (a) all property loss or damage insurance policies with respect to
any assets of the Borrower or any Subsidiary shall contain lenders loss payable
endorsements in favor of the Agent in form and substance satisfactory to it,
which shall provide that all insurance proceeds (i) in excess of $500,000 or
(ii) payable after the insurer has received written notice from the Agent that
an Event of Default then exists (until a contrary notice is received), shall be
payable directly to the Agent, (b) all insurance policies shall (i) provide that
no cancellation, reduction in amount or material adverse change in coverage
thereof shall be effective until at least 30 days after receipt by the Agent of
written notice thereof, (ii) insure the interests of the Lender Parties
regardless of any breach of or violation by the Borrower or any other Person of
any warranties, declarations or conditions contained therein, (iii) provide that
the Lender Parties shall have no obligation or liability for premiums,
commissions, assessments or calls in connection with such insurance or in
connection with any representation or warranty made by the Borrower or any
Subsidiary thereof in connection with obtaining of such insurance, (c) all
business interruption and extra expense insurance shall name the Agent as a loss
payee, and (d) all applicable insurance policies shall contain such other
provisions as are required under the relevant Collateral Documents.
5.7.3. Thirty days prior to the expiration date of each
insurance policy maintained hereunder, the Borrower shall either (a) deliver to
the Agent either (i) if available, a copy of the renewal of such policy or (ii)
a copy of the binder for such renewal or (b) notify the Agent that
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such policy has not been renewed. If a copy of a binder is delivered pursuant to
clause (a)(i) hereof, then as soon as it is available, but in any event not more
than sixty (60) days after the effective date of renewal of the policy, the
Borrower shall deliver to the Agent a copy of such policy, certified to be true
and correct by the insurer named therein. If at any time after the Closing Date
the Borrower or any Subsidiary thereof obtains any new property loss or damage
insurance policy providing coverage in excess of $500,000, the Borrower shall,
within 30 days after such new policy is obtained, give notice to the Agent
describing the new insurance and provide to the Agent a copy of such policy,
including endorsements as required hereby, certified to be true and correct by
the insurer named therein.
SECTION 5.8. CONDUCT OF BUSINESS. The Borrower shall, and shall cause
each of its Subsidiaries to, engage only in the businesses in which the Borrower
or Subsidiary is engaged on the date hereof except for other businesses that are
ancillary, incidental or necessary to its ongoing business as presently
conducted. The Borrower shall, and shall cause each of its Subsidiaries to,
conduct its business in compliance in all material respects with all Applicable
Law and all its Contractual Obligations.
SECTION 5.9. FUTURE INFORMATION. All data, certificates, reports,
statements, documents and other information the Borrower required to be
furnished to the Lender Parties in connection with the Loan Documents shall, at
the time the information is furnished, not contain any untrue statement of a
material fact, shall be complete and correct in all material respects to the
extent necessary to give the Lender Parties sufficient and accurate knowledge of
the subject matter thereof, and shall not omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances under which such information is furnished.
SECTION 5.10. GUARANTIES AND ADDITIONAL COLLATERAL.
5.10.1. Upon the creation or acquisition after the date hereof
of any United States-based Subsidiary, the Borrower shall cause such Subsidiary
to execute and deliver a guaranty of Borrower's Obligations hereunder, in form
and substance satisfactory to the Agent, and the Borrower shall grant, or cause
to be granted, a first priority Lien on the maximum amount of the issued and
outstanding Capital Stock of such Subsidiary that can be pledged without
creating a deemed dividend, pursuant to a Pledge Agreement, in form and
substance satisfactory to the Agent. Upon the acquisition or lease by the
Borrower or any of its Subsidiaries of any Material personal property asset that
is not then subject to a first priority Lien in favor of the Agent, the Borrower
shall execute and deliver, or shall cause such Subsidiary to execute and
deliver, to the Agent a Collateral Document creating such a first priority Lien,
in each case in form and substance satisfactory to the Agent. The Borrower and
such Subsidiary, at their own expense, shall execute and deliver, or cause to be
executed and delivered, and thereafter cause to be registered, filed or recorded
with the appropriate Governmental Authority, any and all documents and
instruments deemed by the Agent to be necessary or desirable for the creation
and perfection of the foregoing Liens and shall pay all Taxes and fees related
to such registration, filing or recording.
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SECTION 5.11. SUBORDINATION OF INTERCOMPANY DEBT. The Borrower shall
cause all Intercompany Debt to be subordinated to the prior payment in full in
cash of the Obligations on terms of subordination satisfactory to the Required
Lenders; provided, however, that as long as no Event of Default then exists, the
Borrower and the Subsidiaries may pay such Intercompany Debt in the ordinary
course of business consistent with past practice.
SECTION 5.12. ENVIRONMENTAL COMPLIANCE. The Borrower shall comply, and
shall cause its Subsidiaries to comply, in all material respects with all
Environmental Requirements and shall not cause or permit to exist on any Real
Property any Hazardous Materials, unless the presence of such materials is
necessary for the conduct of the business of the Borrower or the Subsidiaries,
all necessary Governmental Approvals for such activity have been obtained and
there is no material risk that any Environmental Damages could result from such
activity.
ARTICLE 6.
NEGATIVE COVENANTS OF THE BORROWER
So long as any portion of the Commitments is in effect or any
Obligations remain unpaid or have not been performed in full:
SECTION 6.1. LIENS. The Borrower shall not, and shall not permit any of
the Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any asset of the Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, except, without
duplication:
6.1.1. Liens securing the Obligations;
6.1.2. Existing Liens;
6.1.3. (a) Liens for taxes, assessments or charges of any
Governmental Authority for claims that are not Material and are not yet due or
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with of GAAP; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, bankers and other Liens imposed by law and
created in the ordinary course of business for amounts that are not Material and
are not yet due or being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP; (c) Liens incurred and deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to secure
the performance (including by way of surety bonds or appeal bonds) of tenders,
bids, leases, contracts, statutory obligations or similar obligations or arising
as a result of progress payments under contracts, in each case in the ordinary
course of business and not relating to the repayment of Debt; (d) easements,
rights-of-way, covenants, consents, reservations, encroachments, variations and
other restrictions, charges or encumbrances (whether or not recorded) that do
not Materially interfere with the ordinary conduct of business, Materially
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detract from the value of the asset to which they attach or Materially impair
the use thereof; (e) building restrictions, zoning laws and other statutes,
laws, rules, regulations, ordinances and restrictions; and (f) leases or
subleases granted in the ordinary course of business to others not Materially
interfering with the business of, and consistent with past practices of, the
Borrower, provided that clauses (a), (b) and (c) shall not apply to
Environmental Liens, Liens that, under Applicable Law, would have priority over
the Lien of the Collateral Documents or Liens imposed under ERISA;
6.1.4. any attachment or judgment Lien not constituting an
Event of Default;
6.1.5. Liens on assets securing Debt permitted to be incurred
or assumed on a secured basis pursuant to Section 6.1.5., including any interest
or title of a lessor under any Capitalized Lease, provided that any such Lien
does not encumber any property other than assets acquired, constructed or
improved with the proceeds of such Debt;
6.1.6. Liens existing on assets of any Person at the time such
Person becomes a Subsidiary, provided (a) such Lien was not created in
contemplation of such Person becoming a Subsidiary, and (b) such Lien does not
encumber any assets other than the assets subject to such Lien at the time such
Person becomes a Subsidiary;
6.1.7. any Lien constituting a renewal, extension or
replacement of any Existing Lien or any Lien permitted by Section 6.1.5. or
6.1.6., provided (a) the principal amount of Debt or other obligation secured by
such renewal, extension or replacement Lien does not exceed the principal amount
of the Debt or other obligation renewed, extended or replaced unless such excess
is otherwise permitted hereby at the time of the extension, renewal or
replacement, (b) the average weighted maturity of such Debt or other obligation
is not shortened and (c) such Lien is limited to all or a part of the property
subject to the Lien extended, renewed or replaced.
SECTION 6.2. DEBT. The Borrower shall not, and shall not permit any of
the Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
or otherwise become or remain liable with respect to, any Debt, except:
6.2.1. the Obligations;
6.2.2. Existing Debt;
6.2.3. Intercompany Debt of a Subsidiary to the Borrower or to
a Wholly-Owned Subsidiary, to the extent otherwise permitted hereunder and in
compliance with Section 5.11.;
6.2.4. Contingent Obligations of the Borrower with respect to
letters of credit in an aggregate amount not to exceed $3,000,000 at any time
outstanding, provided that such Debt (i) is incurred in the ordinary course of
business, (ii) is unsecured and (iii) remains contingent;
6.2.5. Contingent Obligations of the Borrower or any
Subsidiary with respect to Debt of other Subsidiaries that is otherwise
permitted under this Section 6.2.;
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6.2.6. other unsecured Debt of the Borrower in an aggregate
amount not to exceed $2,000,000 incurred in any calendar year, provided that
unsecured Debt of the Borrower at any time outstanding shall not exceed an
amount equal to ten percent (10%) of Borrower's Consolidated Tangible Net Worth
at such time;
6.2.7. Debt incurred to refinance Debt described in Section
6.2.2.; provided that (a) the unpaid principal balance is not increased (except
to the extent the increase is then otherwise permitted hereunder), and (b) if
such refinanced Debt is repaid prior to its scheduled maturity, such refinancing
Debt shall comply with the provisions of Section 6.9.2.; and
6.2.8. Unsecured Debt of Borrower's non-U.S. Subsidiaries, in
an aggregate maximum amount not to exceed $3,000,000 at any time outstanding.
SECTION 6.3. RESTRICTED PAYMENTS. The Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, declare, pay or make, or agree
to declare, pay or make, any Restricted Payment.
SECTION 6.4. INVESTMENTS. The Borrower shall not, and shall not permit
any Subsidiary to, directly or indirectly, make or own any Investment, except:
6.4.1. (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and having, at the
time of acquisition, the highest rating obtainable from either Standard & Poor's
Rating Group or ▇▇▇▇▇'▇ Investors Service, Inc., (c) commercial paper having, at
the time of acquisition, the highest rating obtainable from either Standard &
Poor's Rating Group or ▇▇▇▇▇'▇ Investors Service, Inc., (d) demand deposits,
certificates of deposit, other time deposits, and bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
operating under the laws of the United States or any state thereof or the
District of Columbia that has combined capital and surplus of not less than
$500,000,000, or (e) institutional money market funds organized under the laws
of the United States of America or any state thereof that are described on
Schedule 1.1. or approved in writing by the Agent or, if not so described or
approved, substantially all of whose assets are securities of the types
described in the foregoing clauses (a), (b), (c), and (d);
6.4.2. (a) trade credit extended on usual and customary terms
in the ordinary course of business, and (b) advances to employees for moving,
relocation and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business;
6.4.3. any Investment identified on Schedule 4.3., limited to
the amount of such Investment on the date hereof;
6.4.4. the Borrower may make Investments in any Subsidiary
after the Closing Date if (i) in the case of any United States-based Subsidiary,
the Borrower has complied with
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Section 5.10. and (ii) in the case of any Subsidiary, the aggregate amount of
such Investments in all such Subsidiaries does not exceed an amount equal to ten
percent (10%) of Borrower's Tangible Net Worth as at the time such Investment is
made; and
6.4.5. Investments in Non-Cash Proceeds of permitted Asset
Dispositions.
SECTION 6.5. FINANCIAL COVENANTS.
6.5.1. LEVERAGE RATIO. The Leverage Ratio as of the last day
of any Fiscal Quarter shall not exceed 1.75 to 1.00 at any time.
6.5.2. MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Consolidated
Tangible Net Worth shall not be less than the sum of (a) $38,000,000; (b) on a
cumulative basis, seventy-five percent (75%) of Borrower's Net Income generated
beginning in the fiscal quarter ending September 30, 1997; and (c) one hundred
percent (100%) of the amount of any new equity investment in the Borrower.
6.5.3. INTEREST COVERAGE RATIO. As of the last day of each
Fiscal Quarter, Borrower's Interest Coverage Ratio for the two consecutive
Fiscal Quarters then ended shall not be less than 2.50 to 1.00.
6.5.4. DEBT SERVICE COVERAGE RATIO. As of the last day of any
Fiscal Quarter, the Debt Service Coverage Ratio for the two consecutive Fiscal
Quarters then ended shall not be less than 2.0 to 1.00.
6.5.5. OPERATING INCOME AND NET INCOME. As of the last day of
each Fiscal Quarter, Borrower's income from operations, determined in accordance
with GAAP, and Borrower's Net Income for the two consecutive Fiscal Quarters
then ended shall each be greater than zero.
SECTION 6.6. RESTRICTION ON FUNDAMENTAL CHANGES. The Borrower shall
not, and shall not permit any Subsidiary to, directly or indirectly, enter into
any merger, consolidation, reorganization or recapitalization, reclassify its
Capital Stock, liquidate, wind up or dissolve or sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, a
significant portion of its or their business or assets, whether now owned or
hereafter acquired, provided that (a) as long as no Default or Event of Default
shall exist after giving effect to such merger, consolidation or sale, any
Subsidiary may be merged or consolidated with or into the Borrower or any
Wholly-Owned Subsidiary or be liquidated, wound up or dissolved, or all or
substantially all of its business or assets may be sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to the
Borrower or any Wholly-Owned Subsidiary, and (b) Borrower may terminate the
manufacturing portion of its United Kingdom operation, in accordance with its
plan to do so as disclosed to the Agent prior to the Closing Date.
SECTION 6.7. ASSET DISPOSITIONS; SALES OF RECEIVABLES.
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6.7.1. The Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly, make or agree to make, any Asset
Disposition unless
6.7.1.1. the Board of Directors of the Borrower has reasonably
determined in good faith that the terms of such transaction are fair
and reasonable to the Borrower or such Subsidiary, as the case may be,
if the transaction involves assets having a Material fair market value;
and
6.7.1.2. the Asset Disposition is otherwise permissible under
the Collateral Documents and under Sections 6.6. and 6.8. and if the
transaction involves assets having a Material fair market value, the
terms of such transaction shall have been approved in advance by the
Required Lenders.
6.7.2. As promptly as practicable but in no event later than
10 days prior to any Asset Disposition, the Borrower shall deliver to the Agent
a certificate, duly executed by a Senior Officer of the Borrower, setting forth
in detail a description of such Asset Disposition, copies of any related
agreements, the date or scheduled date of such Asset Disposition, the
determination of the Net Cash Proceeds of such Asset Disposition, the
description of any Non-Cash Proceeds and the Collateral arrangements with
respect thereto and such other documents and information as is necessary to
demonstrate compliance with this Section 6.7.
6.7.3. The Borrower shall not, and shall not permit any
Subsidiary to, directly or indirectly, sell with or without recourse, discount
(except in the ordinary course of business consistent with past practice to
compromise disputes with customers) or otherwise sell for less than the face
value thereof or for consideration other than cash, any of its accounts and
other receivables.
SECTION 6.8. TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and
shall not permit any Subsidiary to, directly or indirectly, enter into any
transaction (including the transfer or lease of any property or the rendering of
any service) with any Affiliate of the Borrower, unless (a) such transaction is
in the ordinary course of business of the Borrower, and (b) such transaction is
on fair and reasonable terms no less favorable to the Borrower or its
Subsidiary, as the case may be, than those terms that might be obtained at the
time in a comparable arm's length transaction with a Person who is not an
Affiliate of the Borrower or, if such transaction is not one that by its nature
could be obtained from such other Person, is on fair and reasonable terms and
was negotiated in good faith, (c) if such transaction is Material, the Borrower
shall have delivered to the Agent a certified resolution of its Board of
Directors determining that the standards set forth in clause (b) above are
satisfied with respect to such transaction and (d) if such transaction is
Material, the Borrower shall deliver to the Agent an opinion of a recognized
appraisal or valuation firm that the transaction is fair to the Borrower from a
financial point of view, provided that this Section 6.8. shall not restrict (i)
dividends, distributions and other payments and transfers on account of the
Capital Stock of the Borrower or any Wholly-Owned Subsidiary, (ii) payments
pursuant to the terms of any Contractual Obligations in effect on the date
hereof listed on Schedule 6.8., or (iii) any transaction in the ordinary course
of business between the Borrower and any Wholly-Owned Subsidiary.
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SECTION 6.9. PREPAYMENT OF DEBT. The Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, make any payment or
distribution on account of, or voluntarily purchase, acquire, redeem or retire,
any Debt, prior to 30 days before its originally stated maturity (or its stated
maturity on the date hereof, in the case of Debt outstanding on the date
hereof), or in the case of interest, its stated due date, or directly or
indirectly become obligated to do any of the foregoing by amending the terms
thereof or otherwise, except for:
6.9.1. Prepayments of the Loans or of other amounts pursuant
to the Loan Documents;
6.9.2. Prepayments made with the proceeds of new Debt incurred
for the purpose of refinancing the Debt being prepaid, provided that (a) no
portion of such new Debt matures or is required to be prepaid, purchased or
otherwise retired earlier than the corresponding portion of the Debt being
prepaid, (b) such new Debt has the same priority vis-a-vis other Debt, and the
same provision for recourse, as the Debt being paid, (c) no Default or Event of
Default then exists or would result from such prepayment or refinancing; and
6.9.3. Prepayments by Subsidiaries of Debt owed to the
Borrower.
SECTION 6.10. EMPLOYEE BENEFIT PLANS. Except to the extent that
Borrower gives thirty (30) days' prior written notice to the Agent, the Borrower
will not sponsor or contribute to any new Plan, make any change to any existing
Plan that would increase the obligations of the Borrower in any Material respect
or incur any obligations in respect of any Multiemployer Plan.
SECTION 6.11. AMENDMENTS OF CHARTER DOCUMENTS. The Borrower shall not
amend its charter, bylaws or other charter documents in any respect that affects
the voting rights of Capital Stock included in the Collateral or holders
thereof, increases payment obligations of the Borrower, affects the validity or
enforceability of any Loan Document or Lien thereunder or that otherwise could
have Material Adverse Effect, without in each case obtaining the prior written
consent of the Required Lenders.
SECTION 6.12. RESTRICTIVE AGREEMENTS. The Borrower shall not, and shall
not permit any Subsidiary to, enter into any Contractual Obligation that,
directly or indirectly, restricts or limits the ability of such Subsidiary to
(a) pay dividends or make distributions on its Capital Stock, (b) pay Debt owed
to the Borrower or any Subsidiary, (c) make any loans or advances to the
Borrower (except as provided in Section 5.11.), or (d) except as provided in
Contractual Obligations respecting the specific assets subject to Permitted
Liens, transfer any of its property to the Borrower.
SECTION 6.13. NEGATIVE PLEDGES, ETC. The Borrower shall not, and shall
not permit any Subsidiary to, enter into or otherwise become subject to,
directly or indirectly, any agreement
6.13.1. prohibiting or restricting the Borrower or any
Subsidiary in any manner (including by way of covenant, representation or
default), from (a) incurring, creating or assuming any Debt or Lien upon any of
its assets, (b) selling or otherwise disposing of any of its assets, (c) making
any Investments or Capital Expenditures, (d) suffering any change of control,
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or (e) amending any Loan Document, except that clauses (a) and (b) shall not
apply to any Debt otherwise permissible under Section 6.2; or
6.13.2. providing that any default by the Borrower that is not
a party to such agreement with respect to any obligation not arising under such
agreement is a default under such agreement.
ARTICLE 7.
EVENTS OF DEFAULT
SECTION 7.1. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events, acts or occurrences shall constitute an event of default
(each an "Event of Default"):
7.1.1. FAILURE TO MAKE PAYMENTS. The Borrower (a) shall fail
to pay as and when due (whether at stated maturity, upon acceleration, upon
required prepayment or otherwise) any principal of any Loan or any reimbursement
for a drawing under any Letter of Credit, or (b) shall fail to pay any interest,
Fees or other amounts payable under the Loan Documents within three Business
Days of the date when due under the Loan Documents; or
7.1.2. DEFAULT IN OTHER DEBT. (a) The Borrower or any
Subsidiary shall default in the payment (whether at stated maturity, upon
acceleration, upon required prepayment or otherwise), beyond any period of grace
provided therefor, of any principal of or interest on any other Debt with a
principal amount in excess of $100,000 or (b) any other breach or default (or
other event or condition) shall occur under any agreement, indenture or
instrument relating to any such other Debt, if the effect of such breach or
default (or such other event or condition) is to cause, or to permit the holder
or holders of the other Debt (or a Person on behalf of such holder or holders)
to cause (upon the giving of notice, the lapse of time or both, or otherwise),
such other Debt to become or be declared due and payable, or required to be
prepaid, redeemed, purchased or defeased (or an offer of prepayment, redemption,
purchase or defeasance be made), prior to its stated maturity (other than by a
scheduled mandatory prepayment); or
7.1.3. BREACH OF CERTAIN COVENANTS. The Borrower shall fail to
perform, comply with or observe any agreement, covenant or obligation under
Section 2.3., Section 5.1.5., Section 5.4. (insofar as it requires the
preservation of the corporate existence of the Borrower), or any Section of
Article 6.; or
7.1.4. OTHER DEFAULTS UNDER LOAN DOCUMENTS. The Borrower shall
fail to perform, comply with or observe any agreement, covenant or obligation
under any provision of any Loan Document (other than those provisions referred
to in Sections 7.1.1. and 7.1.3.) and such failure shall not have been remedied
within 20 days after a Senior Officer of the Borrower becomes aware of such
failure; or
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7.1.5. BREACH OF WARRANTY. Any representation or warranty or
certification made or furnished by the Borrower under any Loan Document shall
prove to have been false or incorrect in any material respect when made (or
deemed made); or
7.1.6. INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
There shall be commenced against the Borrower, or any Subsidiary, an involuntary
case seeking the liquidation or reorganization of the Borrower or Subsidiary
under Chapter 7 or Chapter 11, respectively, of the Bankruptcy Code or any
similar proceeding under any other Applicable Law or an involuntary case or
proceeding seeking the appointment of a receiver, liquidator, sequestrator,
custodian, trustee or other officer having similar powers of the Borrower or
Subsidiary or to take possession of all or a substantial portion of its property
or to operate all or a substantial portion of its business, and any of the
following events occur: (a) the Borrower or Subsidiary consents to the
institution of the involuntary case or proceeding; (b) the petition commencing
the involuntary case or proceeding is not timely controverted; (c) the petition
commencing the involuntary case or proceeding remains undismissed and unstayed
for a period of 60 days; or (d) an order for relief shall have been issued or
entered therein; or
7.1.7. VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The
Borrower or any Subsidiary shall institute a voluntary case seeking liquidation
or reorganization under Chapter 7 or Chapter 11, respectively, of the Bankruptcy
Code or any similar proceeding under any other Applicable Law, or shall consent
thereto; or shall consent to the conversion of an involuntary case to a
voluntary case; or shall file a petition, answer a complaint or otherwise
institute any proceeding seeking, or shall consent to or acquiesce in the
appointment of, a receiver, liquidator, sequestrator, custodian, trustee or
other officer with similar powers of it or to take possession of all or a
substantial portion of its property or to operate all or a substantial portion
of its business; or shall make a general assignment for the benefit of
creditors; or shall generally not pay its debts as they become due; or the Board
of Directors of the Borrower or Subsidiary (or any committee thereof) adopts any
resolution or otherwise authorizes action to approve any of the foregoing; or
7.1.8. CHANGE OF CONTROL. A Change of Control shall occur at
any time; or
7.1.9. TERMINATION OF LOAN DOCUMENTS, ETC. Any Loan Document,
or any material provision thereof, shall cease to be in full force and effect
for any reason, or any Lien in favor of the Agent thereunder shall fail to have
the priority required thereunder, except upon a release or termination of such
Loan Document or Lien pursuant to the terms thereof; or the Borrower shall
contest or purport to repudiate or disavow any of its obligations under or the
validity of enforceability of any Loan Document or any material provision
thereof; or
7.1.10. MATERIAL ADVERSE CHANGE. A Material Adverse Change
shall have occurred since the Closing Date; or
7.1.11. JUDGMENTS AND ATTACHMENTS. (a) The Borrower or any
Subsidiary shall suffer any money judgments, fines, writs or warrants of
attachment or similar processes that, individually or in the aggregate, involve
an amount or value in excess of $200,000 (excluding therefrom money judgments to
the extent covered by insurance as to which the carrier has
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accepted liability) and such judgments, writs, warrants or other orders shall
continue unsatisfied and unstayed for a period of 30 days or, in any event,
within 10 days of the date of any proposed sale thereunder; or (b) a judgment
creditor shall obtain possession of any material portion of the assets of the
Borrower or Subsidiary by any means, including levy, distraint, replevin or
self-help.
SECTION 7.2. REMEDIES. Upon the occurrence of an Event of Default:
7.2.1. If an Event of Default occurs under Section 7.1.6. or
7.1.7., then the Commitments shall automatically and immediately terminate, and
the obligation of the Lender Parties to make any Loan or issue any Letter of
Credit hereunder shall cease, and the unpaid principal amount of the Loans and
all other Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, notice or other requirements of any kind,
all of which are hereby expressly waived by the Borrower.
7.2.2. If an Event of Default occurs, other than under Section
7.1.6. or 7.1.7., the Agent may, or upon written request of the Required Lenders
shall, by written notice to the Borrower, declare the Commitments terminated,
whereupon the obligation of the Lender Parties to make any Loan or issue any
Letter of Credit hereunder shall cease, and/or declare the unpaid principal
amount of the Loans and all other Obligations to be, and the same shall
thereupon become, due and payable, without presentment, demand, protest, any
additional notice or other requirements of any kind, all of which are hereby
expressly waived by the Borrower.
7.2.3. If an Event of Default occurs under Section 7.1.6. or
7.1.7. or if any other Event of Default occurs and the Agent declares the Loans
due and payable, the Borrower shall be immediately obligated, without
presentment, demand, protest, notice or other requirements of any kind, all of
which are hereby expressly waived by the Borrower, to pay immediately to the
Agent, an amount of cash equal to the Letter of Credit Liability. Any amounts so
received shall be deposited in an interest bearing account maintained by the
Agent as collateral (the "Cash Collateral Cover") for all Obligations of the
Borrower. At any time after any such Obligations shall become due and payable
(whether by drawing on a Letter of Credit or otherwise) the Cash Collateral
Cover may be applied in whole or in part by the Agent against or on account of
all or any part of the Obligations that have become so due and payable. Interest
earned on this account, to the extent such interest is not required for, or
applied to, the payment or repayment of the Obligations, shall be paid to the
Borrower.
ARTICLE 8.
THE AGENT AND THE BANKS
SECTION 8.1. AUTHORIZATION AND ACTION.
8.1.1. Each Lender and the L/C Issuer hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and under the
other Loan Documents (including as its collateral agent under the Collateral
Documents), to execute and deliver or accept, on its behalf,
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the other Loan Documents and any other documents, instruments and agreements
related thereto or hereto to take such action on its behalf under the provisions
hereof and thereof and to exercise such rights, remedies, powers and privileges
hereunder and thereunder as are delegated to the Agent by the terms hereof and
thereof, together with such rights, remedies, powers and privileges as are
reasonably incidental thereto.
8.1.2. Except for any matters expressly subject to the consent
or approval of the Agent under the Loan Documents, the Agent shall not, without
the prior approval of the Required Lenders (or, as provided in Section 9.3., all
of the Lenders), consent to any departure by the Borrower from the terms of,
waive any default or otherwise amend this Agreement or any other Loan Documents.
The Agent will, to the extent practicable under the circumstances, consult with
the other Lender Parties prior to taking action on their behalf under the Loan
Documents and in acting as their Agent thereunder. The Agent will not take any
action contrary to the written direction of Required Lenders, will take any
lawful action not contrary to the provisions of the Loan Documents prescribed in
written instructions of the Required Lenders (or, as provided in Section 9.3.,
all the Lenders) and, as to any matters not expressly provided for by the Loan
Documents (including enforcement or collection), may decline to take any action,
except upon the written instructions of the Required Lenders (or, as provided in
Section 9.3., all the Lenders). If such instructions are requested reasonably
promptly, the Agent shall be absolutely entitled to refrain from taking any
action and shall not have any liability to the Borrower or any Lender for
refraining from taking any action until it shall have received such
instructions; provided, however, that the Agent shall in no event be required to
take or refrain from taking any action that would, in the Agent's opinion, be
inconsistent with the Agent's practice in similar situations when acting solely
for its own account or be contrary to the provisions of any Loan Document or
Applicable Law.
8.1.3. The Agent shall not have any duties or responsibilities
except those expressly set forth in the Loan Documents. No duty to act, or
refrain from acting, and no other obligation whatsoever, shall be implied on the
basis of any right, power or authority granted to the Agent or shall become
effective in the event of any temporary or partial exercise of such rights,
power or authority. The Agent shall not be required to exercise any right,
power, remedy or privilege granted to it in any Loan Document, to ascertain or
inquire whether any Default or Event of Default has occurred and is continuing,
or to inspect the property (including the books and records) of the Borrower or
to take any other affirmative action, except as provided in Section 7.2., or
unless requested or directed to do so in accordance with the provisions of
Section 8.1.2.
8.1.4. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any other Lender Party. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lender Parties by the Agent hereunder, the Agent shall not have any duty
or responsibility to provide any Lender Party with any credit or other
information concerning the affairs, financial condition or business of the
Borrower that may come into the possession of the Agent or any of its
Affiliates.
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SECTION 8.2. EXCULPATION; AGENT'S RELIANCE; ETC. Neither the Agent nor
any of its directors, officers, agents, attorneys or employees shall be liable
to the Borrower or any other Lender Party for any action taken or omitted to be
taken by it or them under or in connection with any Loan Document (a) with the
consent or at the request of the Required Lenders (or, as provided in Section
9.3., all the Lenders), or (b) in any other circumstances, except for its or
their own gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction. The Agent makes no warranty or
representation to any other Lender Party and shall not be responsible to any
other Lender Party for any recitals, statements, warranties or representations
made in, or in connection with, any Loan Document or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of any Loan Document or any financial information, opinions of
counsel or other documents executed and delivered pursuant thereto, or for the
financial condition of the Borrower. The Agent shall not be responsible to any
Lender for the satisfaction of any condition specified in Article 3., except
receipt of items required to be delivered to the Agent, or for the value,
effectiveness, priority, genuineness, validity, of any Collateral or any Lien
thereon. The Agent may treat the payee of any Note as the holder thereof until
the Agent receives the related Assignment and Acceptance signed by such holder
and the assignee and in form satisfactory to the Agent. The Agent shall be
entitled to rely upon any notice, certificate or other writing believed by the
Agent to be genuine and correct and to have been signed or sent by the proper
Person or Persons. The Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by the Agent and to
act in reliance upon the advice of such counsel and other experts concerning its
actions and duties hereunder.
SECTION 8.3. AGENT AND AFFILIATES. The Agent and each other Lender that
is a party hereto as a Lender and in some other capacity, shall in its capacity
as a Lender, have the same rights, powers and obligations under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising the same as though it were not the Agent or such other Lender
Party, including the right to give or deny consent to any action requiring
consent or direction of the Required Lenders or all the Lenders. The Agent, each
such other Lender Party and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of
business with, the Borrower, any Subsidiary and any Affiliate of the Borrower,
all as if the Agent or such other Lender Party were not the Agent or such other
Lender Party and without any duty to account therefor to the Lenders. The Agent
or such other Lender Party shall be entitled to receive from the Borrower its
fees or portions thereof in connection with this transaction without any
liability to account therefor to any other Lender, except as the Agent or such
other Lender Party may have expressly agreed.
SECTION 8.4. LENDER CREDIT DECISION. Each Lender Party acknowledges
that it has, independently and without reliance upon the Agent or any other
Party Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents.
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SECTION 8.5. INDEMNIFICATION. The Agent shall in no event be required
to take any action under the Loan Documents or in relation thereto unless it
shall first be indemnified to its satisfaction by the other Lender Parties
against any and all liability and expense that it may incur by reason of taking
any such action. Each Lender agrees to indemnify and hold the Agent harmless (to
the extent not promptly paid or reimbursed by the Borrower), ratably according
to their respective Commitments, from and against any and all (a) costs,
expenses and other amounts incurred by the Agent otherwise payable by the
Borrower pursuant to Section 9.1. and (b) Indemnified Liabilities that may be
imposed on, incurred by, or asserted against the Agent, except to the extent
they are finally adjudged by a court of competent jurisdiction to have directly
resulted from the gross negligence or willful misconduct of the Agent. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, the Loan Documents, to
the extent that the Agent is not promptly reimbursed for such expenses by the
Borrower.
SECTION 8.6. SUCCESSOR AGENT. The Agent may resign at any time as Agent
under the Loan Documents by giving written notice thereof to the Lenders and the
Borrower and the Agent may be removed at any time with or without cause by
written action of all Lenders (other than the Agent) delivered to the Agent.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's notice of resignation or the removal of the
Agent, then the retiring or removed Agent may, on behalf of the other Lender
Parties, appoint a successor Agent, which shall be a financial institution
having a combined capital and surplus of at least $100,000,000, or a branch or
agency of such a financial institution, organized or licensed to do business
under the laws of the United States of America or any State thereof. Upon the
acceptance of any appointment as the Agent 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 of its duties and obligations under the Loan Documents. Upon any
retiring Agent's resignation or removal, the provisions of this Article 8. (as
well as other expense reimbursement, indemnification and exculpatory provisions
in the other Loan Documents) shall continue in effect for its benefit as to any
actions taken or omitted by it while it was Agent.
SECTION 8.7. EXCESS PAYMENTS. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Obligations in excess of its pro rata share of
payments and other recoveries on account of such Obligations obtained by all
Lenders, such Lender shall purchase from the other Lenders such participations
in such Obligations held by them as shall be necessary to cause such purchasing
Lender to share the excess payment or other recovery ratably with each of the
other Lenders; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and the purchase price restored to such Lender
to the extent of such recovery, but without interest. The
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Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 8.7. may, to the fullest extent permitted by
Applicable Law and by Section 9.10., exercise all of its rights of payment
(including setoff) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
SECTION 8.8. LENDER PARTIES. The provisions of this Article 8. are
solely for the benefit of the Agent and the other Lender Parties and the
Borrower shall not have any rights to rely on or enforce any of the provisions
hereof (except that (i) the provisions of Sections 8.6. and 8.9.5. are also for
the benefit of the Borrower and (ii) the Borrower is entitled to rely on any
release executed by the Agent as authorized by Section 8.9.). In performing its
functions and duties under the Loan Documents, the Agent shall act solely as
agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for the
Borrower.
SECTION 8.9. COLLATERAL AND GUARANTY MATTERS.
8.9.1. Except as specifically otherwise provided in any of the
Collateral Documents, the Agent is hereby authorized on behalf of all of the
Lenders, without assumption of any duty or obligation in respect of and without
the necessity of any notice to or further consent from any other Lender Party,
to take any action with respect to any Collateral or Collateral Documents that
may be necessary to perfect and maintain perfected the Agent's Liens upon the
Collateral.
8.9.2. The Lenders hereby irrevocably authorize the Agent, in
its discretion, to release any Lien held by the Agent upon any Collateral (a)
from and after the day of termination of any Collateral Document pursuant to the
terms thereof; (b) constituting property being sold or disposed of if the
Borrower certifies to the Agent that the sale or disposition is permitted under
the relevant Collateral Document (and the Agent may rely conclusively on any
such certificate, without further inquiry, unless notified to the contrary by
the Required Lenders); or (c) approved, authorized or ratified in writing by all
Lender Parties in accordance with Section 9.3.; provided, however, that (i) the
Agent shall not be required to execute any such documents on terms that create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
the Borrower in respect of) all assets retained by the Borrower, including the
proceeds of any Asset Disposition, all of which shall continue to constitute
part of the Collateral. Upon request by the Agent at any time, the other Lender
Parties will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 8.9.2.
8.9.3. The Agent shall have no obligation whatsoever to any
other Lender Party or other Person to assure that the Collateral exists or is
owned by the Borrower or (except as otherwise expressly required by the
Collateral Documents) is cared for, protected or insured, or that the Liens of
the Agent thereunder have been properly created, perfected, protected or
enforced or are entitled to any particular priority.
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8.9.4. Except as otherwise provided in the Loan Documents, the
Agent may act in any manner it may deem appropriate in respect of the
Collateral, in its discretion, given the Agent's own interest in the Collateral
as a Lender, and the Agent shall have no duty or liability whatsoever with
respect thereto to any other Lender Party.
8.9.5. Each Lender Party hereby approves the form of the other
Loan Documents attached as exhibits to this Agreement and hereby authorizes the
Agent on its behalf to accept from the Borrower and execute and deliver as
Agent, the other Loan Documents in substantially the form of such exhibits, with
such changes, additions or deletions as the Agent, in its discretion, may
approve as necessary or appropriate, such approval to be conclusively evidenced
by the Agent's acceptance or execution thereof. Each Lender Party also
authorizes the Agent to accept, or execute and deliver, such additional
documents (including financing statements, opinions, certificates and other
documents in form and substance satisfactory to the Agent, in its discretion) in
connection with the closing pursuant to Section 3.1. or any subsequent closing
for the pledge of any other Collateral or any additional guaranties as the
Agent, in its discretion, may approve, such approval to be conclusively
evidenced by the Agent's acceptance or execution thereof.
SECTION 8.10. PAYMENTS; AVAILABILITY OF FUNDS; CERTAIN NOTICES.
8.10.1. If the Agent shall fail to deliver to any other Lender
Party its share of any payment received from the Borrower as and when required
by Section 2.9., the Agent shall pay to such Lender its share of such payment
together with interest on such amount at the Federal Funds rate, for each day
from the date such amount was required to be paid to such Lender until the date
the Agent pays such amount to such Lender, calculated as set forth in Section
2.4.4.
8.10.2. Unless (a) the Agent shall have been notified by a
Lender prior to the date upon which a Loan is to be made or (b) the Agent shall
have been notified by the Borrower prior to the date on which the Borrower is
required to make any payment hereunder that such Lender or the Borrower, as the
case may be (the "Obligated Party"), does not intend to make available to the
Agent the Obligated Party's portion of such Loan or such payment, the Agent may
assume that the Obligated Party will make such amount available to the Agent on
such date and the Agent may, in reliance upon such assumption (but shall not be
required to), make available to the Borrower (in the case of a Loan) or the
Lenders (in the case of a payment by the Borrower) a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by the
Obligated Party, the Agent shall be entitled to recover such amount on demand
from the Obligated Party (or, in the case of a Loan, if the Lender that is the
Obligated Party fails to pay such amount forthwith upon such demand, from the
Borrower). Such amount shall be payable together with interest thereon from the
day on which such corresponding amount was made available by the Agent to the
Lender or the Borrower, as applicable, to the date of payment by the Obligated
Party (or the Borrower, as applicable), at a rate of interest equal to (i) in
the case of any payment by any other Lender Party, the Federal Funds Effective
Rate, and (ii) in the case of any payment by the Borrower, the interest rate
applicable to the Loan.
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8.10.3. The Agent shall promptly notify the Lenders by telex
or telecopy of each Interest Period chosen by the Borrower, the LIBOR Rate for
each Interest Period (and the relevant interest rate), the date of any expected
payment and all other material notices transmitted by the Borrower.
8.11. OBLIGATIONS OF LENDER PARTIES SEVERAL; ENFORCEMENT BY THE AGENT.
8.11.1. Each Lender Party's obligations hereunder are several,
and not joint or joint and several. The failure of any Lender Party to make any
Loan or otherwise to perform its obligations hereunder will not increase the
obligations of any other Lender Party. Notwithstanding the foregoing, any Lender
may assume, but shall have no obligation to any Person to assume, any
non-performing Lender's obligation to make a Loan. Nothing contained in this
Agreement and no action taken by the Agent or any other Lender Party pursuant to
this Agreement shall be deemed to constitute the Agent and any other Lender
Party to be a partnership, an association, a joint venture or any other kind of
entity.
8.11.2. Each Lender agrees that, except with the prior written
consent of the Agent or as provided in Section 9.10., no Lender Party shall have
any right individually to realize upon the Collateral or otherwise enforce any
Loan Document or any provision thereof, or make demand thereunder, it being
agreed that such rights and remedies may only be exercised by the Agent for the
ratable benefit of the Lenders upon the terms of this Agreement.
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1. EXPENSES. The Borrower shall pay within 10 days (or, in
the case of costs and expenses incurred prior to the Closing Date, within one
Business Day) after demand:
9.1.1. any and all reasonable attorneys' fees and
disbursements (including allocated costs of in-house counsel) and out-of-pocket
costs and expenses incurred by the Agent in connection with (a) the development,
drafting and negotiation of the Loan Documents and the syndication and closing
of the transactions contemplated thereby (including costs and expenses incurred
in connection with the appraisal, environmental assessment and audit referred to
on Schedule 3.1.2.) and (b) any amendments to or the administration of the Loan
Documents (including costs and expenses incurred in connection with any
appraisal, environmental assessment or audit contemplated by Section 5.3.); and
9.1.2. any and all costs and expenses (including fees and
disbursements of in-house and other attorneys, appraisers and consultants)
incurred by the Lender Parties in any workout, restructuring or similar
arrangements or, after a Default, in connection with the protection,
preservation, exercise or enforcement of any of the terms of the Loan Documents
or in connection with any foreclosure, collection or bankruptcy proceedings.
SECTION 9.2. INDEMNITY.
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9.2.1. The Borrower shall indemnify, defend and hold harmless
the each Lender Party and the officers, directors, employees, agents, attorneys,
affiliates, successors and assigns of each Lender Party (collectively, the
"Indemnitees") from and against (a) any and all transfer taxes, documentary
taxes, assessments or charges made by any Governmental Authority by reason of
the execution and delivery of the Loan Documents or the making of the Loans or
the issuance of any Letter of Credit, and (b) any and all liabilities, losses,
damages, penalties, judgments, claims, costs and expenses of any kind or nature
whatsoever (including reasonable attorneys' fees, including allocated costs of
in-house counsel, and disbursements in connection with any actual or threatened
investigative, administrative or judicial proceeding, whether or not such
Indemnitee shall be designated a party thereto) that may be imposed on, incurred
by or asserted against such Indemnitee, in any manner relating to or arising out
of the Loan Documents, the Loans, Letters of Credit, the use or intended use of
the proceeds of the Loans or Letters of Credit (including the failure of the L/C
Issuer to honor a drawing as a result of any act or omission, whether rightful
or wrongful, of any Governmental Authority) (the "Indemnified Liabilities");
provided that (i) no Indemnitee shall have the right to be indemnified or held
harmless hereunder for its own gross negligence or willful misconduct, as
determined by a final judgment of a court of competent jurisdiction, (ii)
Indemnified Liabilities shall include amounts attributable to the passive or
active negligence of any Lender Party, and (iii) the Borrower shall have no
obligation hereunder in respect of (A) legal proceedings between the Lender
Parties or between any Lender Party and any participant or (B) Indemnified
Liabilities arising from a breach of any Loan Document by the Indemnitee making
a claim hereunder.
9.2.2. Each Indemnitee will promptly notify the Borrower of
each event of which it has knowledge that may give rise to a claim under clause
(b) of Section 9.2.1., provided that the failure to so notify the Borrower shall
in no way impair the Borrower's obligations under this Section 9.2.2 (except to
the extent that such failure to so notify arises from the gross negligence or
willful misconduct of such Indemnitee and has an adverse effect on the
Borrower). If any investigative, judicial or administrative proceeding is
brought against any Indemnitee indemnified or intended to be indemnified
pursuant to this Section 9.2.2, the Borrower, to the extent and in the manner
directed by the Indemnitee, will resist and defend such proceeding with counsel
designated by the Borrower (which counsel shall be reasonably satisfactory to
the Indemnitee). Each Indemnitee will use its best efforts to cooperate in the
defense of any such action, writ, or proceeding. The Borrower shall keep such
Indemnitee advised of the status of such defense and consult with such
Indemnitee prior to taking any material position with respect thereto. Such
Indemnitee shall, however, be entitled to employ counsel separate from counsel
for the Borrower and from any other party in such proceeding if such Indemnitee
shall reasonably determine that a conflict of interest or other circumstance
exists that makes representation by counsel chosen by the Borrower not
advisable. The fees and disbursements of such separate counsel shall be paid by
the Borrower. Such Indemnitee shall not agree to the settlement of any such
claim without the consent of the Borrower, unless the Borrower shall have been
given notice of the commencement of an action and shall have failed to provide
the defense thereof as herein provided or an Event of Default shall have
occurred.
9.2.3. To the extent that the undertaking to indemnify and
hold harmless set forth in Section 9.2.1. may be unenforceable as violative of
any Applicable Law or public policy, the
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Borrower shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities that is permissible under Applicable Law.
All Indemnified Liabilities shall be payable on demand.
SECTION 9.3. WAIVERS; AMENDMENTS IN WRITING. 9.3.1. No amendment of any
provision of this Agreement or any other Loan Document (including a waiver
thereof or consent relating thereto) shall be effective unless the same shall be
in writing and signed by the Agent and the Required Lenders. Notwithstanding the
foregoing,
9.3.1.1. no amendment that has the effect of (a) reducing the
rate or amount, or extending the stated maturity or due date, of any
amount payable by the Borrower to any Lender Party under the Loan
Documents, (b) increasing the amount, or extending the stated
termination or reduction date, of any Lender's Revolving Commitment or
Term Commitment hereunder or subjecting any Lender Party to any
additional obligation to extend credit, (c) altering the rights and
obligations of the Borrower to prepay the Loans, (d) permitting the
creation of any Lien ranking prior to or on a parity with the Lien of
any Collateral Document, releasing any part of the Collateral (except
as permitted under the Loan Documents) or depriving any Lender Party of
the security afforded by the Lien of any Collateral Document, (e)
releasing any Borrower under any guaranty (except as permitted under
the Loan Documents), or (f) changing this Section 9.3. or the
definition of the term "Required Lenders," shall be effective unless
the same shall be signed by or on behalf of all of the Lenders;
9.3.1.2. no amendment that has the effect of (a) increasing
the duties or obligations of the Agent, (b) increasing the standard of
care or performance required on the part of the Agent, or (c) reducing
or eliminating the indemnities or immunities to which the Agent is
entitled (including any amendment of this Section 9.3.1.2.), shall be
effective unless the same shall be signed by or on behalf of the Agent;
and
9.3.1.3. no amendment that has the effect of (a) increasing
the duties or obligations of the L/C Issuer; (b) increasing the
standard of care or performance required on the part of the L/C Issuer;
or (c) reducing or eliminating the indemnities or immunities to which
the L/C Issuer is entitled (including any amendment of this Section
9.3.1.3. shall be effective unless the same shall be signed by or on
behalf of the L/C Issuer.
9.3.1.4. Notwithstanding anything to the contrary, Schedule
4.3. may be amended by written notice by the Borrower to the Agent, to
the extent necessary to reflect transactions occurring after the date
hereof that are otherwise permissible hereunder.
9.3.1.5. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No
notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment effected in accordance with this Section
9.3. shall be binding upon each present and future Lender Party and the
Borrower.
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SECTION 9.4. CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and
remedies provided for under this Agreement are cumulative and are not exclusive
of any rights and remedies that may be available to the Lender Parties under
Applicable Law or otherwise. No failure or delay on the part of any Lender Party
in the exercise of any power, right or remedy under the Loan Documents shall
impair such power, right or remedy or operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude other or
further exercise thereof or of any other power, right or remedy.
SECTION 9.5. NOTICES, ETC. All notices and other communications under
this Agreement shall be in writing and (except for financial statements, other
related informational documents and routine communications, which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by prepaid telex or telecopy, and shall be deemed given when received by the
intended recipient thereof. Unless otherwise specified in a notice sent or
delivered in accordance with this Section 9.5., all notices and other
communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated on
Schedule 1.1.B (in the case of the Lender Parties) or 9.5. (in the case of the
Borrower).
SECTION 9.6. SUCCESSORS AND ASSIGNS. 9.6.1. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. The Borrower may not assign or transfer any
interest hereunder without the prior written consent of each Lender Party.
9.6.2. Each Lender shall have the right at any time to assign
(an "Assignment") all or any portion of such Lender's Revolving Commitment or
Term Commitment, Loans and participation in Letters of Credit to one or more
banks or other institutions; provided, however, that (a) each Assignment shall
be of a portion of the Revolving Commitment or Term Commitment, as the case may
be, of at least equal to $5,000,000, (b) unless otherwise agreed by the Agent,
each Assignment shall be of a constant, and not a varying, percentage of all of
the assigning Lender's rights and obligations under this Agreement and the other
Loan Documents; (c) unless a Default or Event of Default then exists, no
Assignment (other than an Assignment to a Person that is then a Lender or an
Affiliate of a Lender) shall be effective without the consent of the Borrower
and the Agent, which consents shall not be unreasonably withheld or delayed; (d)
the parties to the Assignment shall execute and deliver to the Agent an
Assignment and Acceptance substantially in the form of Exhibit H (an "Assignment
and Acceptance"); (c) the assignee shall pay to the Agent a processing and
recording fee of $2,500; and no Assignment shall be effective for any purpose
unless and until the Agent accepts such Assignment and makes an appropriate
entry thereof in the Register (as defined below). Upon satisfaction of the
conditions in clauses (a) through (f) of the proviso to the immediately
preceding sentence with respect to any proposed Assignment, the Agent shall
accept the Assignment, make appropriate entries thereof in the Register and send
notice thereof to the Borrower and all other Lender Parties. From and after the
date on which the conditions in the foregoing clauses and the Assignment and
Acceptance have been satisfied, the assignee shall be a "Lender" hereunder and,
to the extent that rights and obligations hereunder have been assigned to it,
shall have the rights and obligations (including the obligation to participate
in Letters of Credit of the assigning
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Lender hereunder, and the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment covering all or the remaining portion of the assigning Lender's
rights and obligations under this Agreement, cease to be a party hereto).
9.6.3. The Agent shall maintain at the Agent's Office a copy
of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names of the Lender Parties and their
respective Commitments. The entries in the Register shall be conclusive as
against the Borrower and each Lender Party, in the absence of manifest error,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice.
9.6.4. Each Lender shall have the right at any time to grant
or sell participations (each a "Participation") in all or any portion of such
Lender's Revolving Commitment or Term Commitment, Loans and participation in
Letters of Credit to one or more banks or other institutions, subject to the
terms and conditions set forth in this Section 9.6.4. If any Lender sells or
grants a Participation, (a) such Lender shall make and receive all payments for
the account of its participant, (b) such Lender's obligations under this
Agreement shall remain unchanged, (c) such Lender shall continue to be the sole
holder of its Notes and other Loan Documents subject to the Participation and
shall have the sole right to enforce its rights and remedies under the Loan
Documents, (d) the Borrower and the other Lender Parties shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents, and (e) the Participation agreement shall
not restrict such Lender's ability to agree to any amendment of the terms of the
Loan Documents, or to exercise or refrain from exercising any powers or rights
that such Lender may have under or in respect of the Loan Documents or any
Collateral, except that the participant may be granted the right to consent to
any (A) reduction of the rate or amount, or any extension of the stated maturity
or due date, of any principal, interest or Fees payable by the Borrower and
subject to the Participation, (B) increase in the amount or extension of the
stated termination or any reduction date of the affected Revolving Commitment or
Term Commitment or (C) release of all or substantially all of the Collateral or
any Borrower under any guaranty, except to the extent otherwise provided in the
Loan Documents. A participant shall have the rights of the Lenders under
Sections 2.11.,2.13. and 9.10., subject to the obligations imposed by such
Sections; provided that amounts payable to any participant shall not exceed the
amounts that would have been payable under such Sections to the Lender granting
the Participation, had such Participation not been granted, unless the
Participation is made with the prior written consent of the Borrower.
9.6.5. Each Lender may at any time assign or pledge any
portion of its rights under the Loan Documents to a Federal Reserve Bank. No
such assignment or pledge shall be subject to the provisions of Sections 9.6.2.
or 9.6.4.
9.6.6. Subject to the provisions of Section 9.7., Each Lender
Party shall have the right at any time to furnish one or more potential
assignees or participants with any information concerning the Borrower and the
Subsidiaries that has been supplied by the Borrower to any Lender Party. The
Borrower shall to supply all reasonably requested information and execute
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and deliver all such instruments and take all such further action (including, in
the case of an Assignment, the execution and delivery of replacement Notes) as
the Agent may reasonably request in connection with any Assignment or
Participation arrangement.
SECTION 9.7. CONFIDENTIALITY. Each Lender will maintain any
confidential information that it may receive from the Borrower or one of its
Subsidiaries pursuant to this Agreement confidential and shall not disclose such
information to third parties without the prior consent of the Borrower, except
for disclosure: (a) to legal counsel, accountants and other professional
advisors to the Lender Party; (b) to regulatory officials having jurisdiction
over the Lender Party; (c) required by Applicable Law or in connection with any
legal proceeding; (d) to any other Lender Party;(e) to another Person in
connection with a potential Assignment or Participation, provided such Person
shall have agreed in writing to be subject to this Section 9.7.; (f) to
prospective purchasers of Collateral after an Event of Default; and (g) of
information that has been previously disclosed publicly without breach of this
provision.
SECTION 9.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA (OTHER THAN
CHOICE OF LAW RULES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION). THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, AS MOST
RECENTLY PUBLISHED BY THE INTERNATIONAL CHAMBER OF COMMERCE, SHALL IN ALL
RESPECTS BE INCORPORATED INTO SECTION 2.2. AND SHALL APPLY TO ALL LETTERS OF
CREDIT.
SECTION 9.9. CHOICE OF FORUM.
9.9.1. All actions or proceedings arising in connection with
this Agreement shall be tried and litigated in state or Federal courts located
in County of Suffolk, Commonwealth of Massachusetts, unless such actions or
proceedings are required to be brought in another court to obtain subject matter
jurisdiction over the matter in controversy. EACH OF THE BORROWER AND THE LENDER
PARTIES WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION.
9.9.2. IN ANY ACTION AGAINST THE BORROWER, SERVICE OF PROCESS
MAY BE MADE UPON THE BORROWER BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS INDICATED IN SCHEDULE 9.5., WHICH SERVICE SHALL BE
DEEMED SUFFICIENT FOR PERSONAL JURISDICTION AND SHALL BE DEEMED EFFECTIVE 10
DAYS AFTER MAILING.
9.9.3. Nothing contained in this Section shall preclude the
Lender Parties from bringing any action or proceeding arising out of or relating
to this Agreement in the courts of any place where the Borrower or any of its
assets may be found or located. TO THE EXTENT
Credit Agreement
65
75
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES,
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING, THE JURISDICTION OF ANY OTHER COURT
OR COURTS THAT NOW OR HEREAFTER, BY REASON OF SUCH PARTY'S PRESENT OR FUTURE
DOMICILE, OR OTHERWISE, MAY BE AVAILABLE TO IT.
SECTION 9.10. SET OFF. In addition to any rights now or hereafter
granted under Applicable Law, during the existence of any Event of Default, each
Lender Party is hereby irrevocably authorized by the Borrower, at any time or
from time to time, without notice to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including certificates of
deposit, whether matured or unmatured, but not including trust accounts) and any
other indebtedness, in each case whether direct or indirect or contingent or
matured or unmatured at any time held or owing by such Lender Party to or for
the credit or the account of the Borrower, against and on account of the
obligations of the Borrower to such Lender Party under the Loan Documents to
which the Borrower is a party, irrespective of whether or not such Lender Party
shall have made any demand for payment and although such obligations may be
contingent and unmatured.
SECTION 9.11. CHANGES IN ACCOUNTING PRINCIPLES. For the purposes of
making the calculations required to determine whether Borrower is in compliance
with the financial covenants set forth in Section 6.5 hereof, GAAP as in effect
on December 31, 1996 shall be used. If any changes in generally accepted
accounting principles after the date of this Agreement result from the
promulgation of rules, regulations, pronouncements, or opinions of, or the
imposition of requirements by, the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions), or there shall occur any change in the
Borrower's fiscal or tax years and, as a result of any such changes, there shall
result a change in the method of calculating any of the negative covenants,
standards or other terms or conditions found in this Agreement, then the parties
hereto agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after such
changes as if such changes had not been made.
SECTION 9.12. HEADINGS. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
SECTION 9.13. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such provision
in any other jurisdiction.
SECTION 9.14. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
All agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement, the closing and the extensions of
credit hereunder and shall continue until
Credit Agreement
66
76
payment and performance of any and all Obligations. Any investigation at any
time made by or on behalf of the Lender Parties shall not diminish the Lender
Parties' right to rely thereon. Without limitation, the agreements and
obligations of the Borrower contained in Sections 2.11., 2.12., 2.13.,2.1.4.,
9.1. and 9.1., and the obligations of the Lenders under Section 8.5. shall
survive the payment in full of all other Obligations.
SECTION 9.15. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto. Faxed signatures to this Agreement shall be binding for all
purposes.
SECTION 9.16. COMPLETE AGREEMENT. This Agreement, together with the
other Loan Documents, is intended by the parties as the final expression of
their agreement regarding the subject matter hereof and as a complete and
exclusive statement of the terms and conditions of such agreement.
SECTION 9.17. LIMITATION OF LIABILITY.
No claim shall be made by the Borrower against any Lender Party or the
Affiliates, directors, officers, employees or agents of any Lender Party for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or under any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and the Borrower waives, releases
and agrees not to ▇▇▇ upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
[Space intentionally left blank.]
Credit Agreement
67
77
SECTION 9.18. WAIVER OF TRIAL BY JURY. THE BORROWER AND THE LENDER
PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS AGREEMENT OR
ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF
WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
BORROWER:
ADFLEX SOLUTIONS, INC.,
A DELAWARE CORPORATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
AGENT:
BANKBOSTON, N.A.,
A NATIONAL BANKING ASSOCIATION,
as Agent and a Lender
By:_____________________________________
Name:___________________________________
Title:__________________________________
Credit Agreement
68
78
LENDERS:
BANK ONE - ARIZONA,
A ____________________
By:_____________________________________
Name:___________________________________
Title:__________________________________
IMPERIAL BANK - ARIZONA,
A ____________________
By:_____________________________________
Name:___________________________________
Title:__________________________________
BANKBOSTON, N.A.
A NATIONAL BANKING ASSOCIATION
By:_____________________________________
Name:___________________________________
Title:__________________________________
Credit Agreement
69
79
SCHEDULE 1.1.A
COMMITMENTS
================================================================================
LENDER REVOLVING COMMITMENT TERM COMMITMENT
--------------------------------------------------------------------------------
BANKBOSTON, N.A $ $
--------------------------------------------------------------------------------
BANK ONE - ARIZONA
--------------------------------------------------------------------------------
IMPERIAL BANK - ARIZONA
--------------------------------------------------------------------------------
TOTAL $20,000,000 $25,000,000
================================================================================
Credit Agreement
Schedule 1.1A
80
SCHEDULE 1.1.B
LENDER INFORMATION
AGENT'S OFFICE
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AGENT'S ACCOUNT (for funding of Loans by the Lenders and payments by the
Borrower):_____________________________
LENDERS:
======================================================================================
LENDER DOMESTIC LENDING OFFICE LIBOR LENDING OFFICE
--------------------------------------------------------------------------------------
BANK ONE - ARIZONA ▇▇▇ ▇. ▇▇▇▇▇▇▇
` 21st ▇▇▇▇▇,, ▇▇ ▇-▇▇▇▇ Fax:
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Telex:
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Phone:
Telex: Attention:
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------------
IMPERIAL BANK - ARIZONA ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Fax:
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Telex:
Telex: Phone:
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Attention:
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------------
======================================================================================
Credit Agreement
Schedule 1.1B
81
SCHEDULE 1.1.C
EXISTING DEBT
That certain Equipment Lease Agreement dated February 23, 1994, between
ADFlex Solutions, Inc. and Ally Capital Corporation.
That certain Subordinated Debenture dated January 7, 1996, between
ADFlex Solutions, Inc. and Havant International Holding Limited.
That certain Credit Agreement dated October 31, 1995, and amended on
December 29, 1995, June 18, 1996, and February 18, 1997, between ADFlex
Solutions, Inc. and the First National Bank of Boston, as Agent.
Credit Agreement
Schedule 1.1C
82
SCHEDULE 1.1.D
EXISTING LIENS
Those liens set forth on the attached UCC search.
Credit Agreement
Schedule 1.1D
83
SCHEDULE 1.1.E
APPLICABLE MARGIN & FEE RATE
The "APPLICABLE MARGIN" in respect of LIBOR Rate Loans and the "FEE
RATE" for any day are the respective rates per annum set forth below in the
applicable row under the column corresponding to the Pricing Level that applies
on such day:
===============================================================================================
PRICING LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV
PRICING PRICING PRICING PRICING
===============================================================================================
Applicable Margin (LIBOR Rate 1.50 1.75 2.00 2.25
Loans)
-----------------------------------------------------------------------------------------------
Fee Rate 0.20 0.20 0.25 0.30
===============================================================================================
For purposes of this Schedule, the following terms have the following
meanings:
"LEVEL I PRICING" applies during any Pricing Period if, at the end of
the Fiscal Quarter most recently ended prior to the first day of such Pricing
Period, the Interest Coverage Ratio for the two consecutive Fiscal Quarters then
ended was greater than 5.00 to 1.00.
"LEVEL II PRICING" applies during any Pricing Period if no higher
Pricing Level applies and, at the end of the Fiscal Quarter most recently ended
prior to the first day of such Pricing Period, the Interest Coverage Ratio for
the two consecutive Fiscal Quarters then ended was less than or equal to 5.00 to
1.00, but greater than 4.00 to 1.00.
"LEVEL III PRICING" applies during any Pricing Period if no higher
Pricing Level applies and, at the end of the Fiscal Quarter most recently ended
prior to the first day of such Pricing Period, the Interest Coverage Ratio for
the two consecutive Fiscal Quarters then ended was less than or equal to 4.00 to
1.00, but greater than 3.00 to 1.00.
"LEVEL IV PRICING" applies during (i) the period beginning on the
Closing Date and ending on the day on which the Compliance Certificate required
in respect of the Fiscal Quarter ending September 30, 1997, is delivered, and
(ii) any Pricing Period if (i) at the end of the Fiscal Quarter most recently
ended prior to the first day of such Pricing Period, the Interest Coverage Ratio
for the two consecutive Fiscal Quarters then ended was less than or equal to
3.00 to 1.00, or (ii) on the first day of such Pricing Period the financial
statements required by Section 5.1.2. of the Credit Agreement shall not have
been delivered with respect to such Fiscal Quarter.
"PRICING PERIOD" means a period beginning on (and including) the day on
which a Compliance Certificate required pursuant to Section 5.1.2. is delivered,
and ending on (and excluding) the day on which the next such Compliance
Certificate is delivered. The first Pricing Period shall begin on the day on
which the Compliance Certificate required in respect of the Fiscal Quarter
ending September 30, 1997 is delivered.
Credit Agreement
Schedule 1.1E
84
"PRICING LEVEL" refers to such of Level I Pricing, Level II Pricing,
Level III Pricing or Level IV Pricing as applies during any particular day. The
numbering of Pricing Levels is in ascending order (e.g., Level II Pricing is
referred to as a "higher" Pricing Level than Level I Pricing).
Credit Agreement
Schedule 1.1E
85
SCHEDULE 3.1.2.
CLOSING DOCUMENTS
Credit Agreement
Schedule 3.1.2
86
SCHEDULE 4.1.
ORGANIZATION OF BORROWER AND
SUBSIDIARIES
===================================================================================================
BORROWER/SUBSIDIARY FORM AND STATE OF ORGANIZATION FOREIGN QUALIFICATIONS
---------------------------------------------------------------------------------------------------
ADFLEX SOLUTIONS, INC. CORPORATION-DELAWARE ARIZONA
---------------------------------------------------------------------------------------------------
ADFLEX SOLUTIONS, LTD. CORPORATION-DELAWARE UNITED KINGDOM
---------------------------------------------------------------------------------------------------
ADFLEX CAYMAN LTD. CORPORATION-CAYMAN IS. CAYMAN ISLANDS
---------------------------------------------------------------------------------------------------
ADFLEX THAILAND LTD. PRIVATE LTD. COMPANY-THAILAND THAILAND
---------------------------------------------------------------------------------------------------
ADFLEX MEXICO S.A. DE C.V. CORPORATION-MEXICO MEXICO
---------------------------------------------------------------------------------------------------
ADFLEX SOLUTIONS FSC INC. CORPORATION-BARBADOS BARBADOS
===================================================================================================
Credit Agreement
Schedule 4.1
87
SCHEDULE 4.3.
SUBSIDIARIES AND OTHER INVESTMENTS
1. SUBSIDIARIES
================================================================================
SUBSIDIARY AUTHORIZED AND ISSUED RECORD AND BENEFICIAL
CAPITAL STOCK OWNER OF CAPITAL STOCK
--------------------------------------------------------------------------------
ADFLEX MEXICO S.A. DE C.V. 50,000 COMMON ADFLEX SOLUTIONS, INC.
(EXCEPT DIRECTOR'S
QUALIFYING SHARES
REQUIRED BY LAW
--------------------------------------------------------------------------------
ADFLEX SOLUTIONS LTD. 1,000 COMMON ADFLEX SOLUTIONS, INC.
--------------------------------------------------------------------------------
ADFLEX CAYMAN LTD. 201 COMMON ADFLEX SOLUTIONS, INC.
--------------------------------------------------------------------------------
ADFLEX SOLUTIONS FSC INC. 1000 COMMON ADFLEX SOLUTIONS, INC.
--------------------------------------------------------------------------------
ADFLEX THAILAND LTD. 7,500,000 SHARES ONE SHARE ISSUED TO
EACH DIRECTOR AS
REQUIRED BY LAW; 80% OF
OUTSTANDING CAPITAL
SHARES - ADFLEX CAYMAN
LTD. AND 20% TO HANA
MICROELECTRONICS
================================================================================
Credit Agreement
Schedule 4.3
88
2. CAPITAL STOCK OF SUBSIDIARIES
=======================================================================================================
SUBSIDIARY CONVERTIBLE, AGREEMENTS RE ISSUANCE, RECORD AND BENEFICIAL
EXCHANGEABLE CAPITAL VOTING OR SALE OF OWNER OF CAPITAL STOCK
STOCK, RIGHTS & CAPITAL STOCK
COMMITMENTS
-------------------------------------------------------------------------------------------------------
ADFLEX MEXICO S.A. DE C.V. NONE NONE ADFLEX SOLUTIONS, INC.
(EXCEPT DIRECTOR'S
QUALIFYING SHARES
REQUIRED BY LAW
-------------------------------------------------------------------------------------------------------
ADFLEX SOLUTIONS LTD. NONE NONE ADFLEX SOLUTIONS, INC.
-------------------------------------------------------------------------------------------------------
ADFLEX CAYMAN LTD. NONE NONE ADFLEX SOLUTIONS, INC.
-------------------------------------------------------------------------------------------------------
ADFLEX SOLUTIONS FSC INC. NONE NONE ADFLEX SOLUTIONS, INC.
-------------------------------------------------------------------------------------------------------
ADFLEX THAILAND LTD. NONE MASTER AGREEMENT WITH 80% OF OUTSTANDING
HANA MICROELECTRONICS CAPITAL SHARES - ADFLEX
INCLUDES VOTING CAYMAN LTD.
OBLIGATIONS FOR BOARD
OF DIRECTORS AND RIGHTS
OF ADFLEX TO BUY STOCK
OF HANA
=======================================================================================================
3. JOINT VENTURES AND OTHER INVESTMENTS (OTHER THAN SUBSIDIARIES)
================================================================================================
HOLDER OF INVESTMENT DESCRIPTION OF INVESTMENT (INCLUDING AMOUNT AS OF THE DATE HEREOF)
------------------------------------------------------------------------------------------------
NONE
------------------------------------------------------------------------------------------------
================================================================================================
Credit Agreement
Schedule 4.3
89
SCHEDULE 4.6.
MATERIAL LITIGATION
None
Credit Agreement
Schedule 4.6
90
SCHEDULE 4.13.
ENVIRONMENTAL CONDITION
The Company is subject to a variety of environmental laws relating to
the storage, discharge, handling, emission generation, manufacture, use and
disposal of chemicals, solid and hazardous waste, and other toxic and hazardous
materials used to manufacture the Company's products. The Company believes that
it has been operating its facilities in substantial compliance in all material
respects with existing environmental laws and regulations. However, the Company
cannot predict the nature, scope or effect of legislation or regulatory
requirements that could be imposed or how existing or future laws or regulations
will be administered or interpreted with respect to products or activities to
which they have not previously been applied. Compliance with more stringent laws
or regulations, or more vigorous enforcement policies of regulatory agencies,
could require substantial expenditures by the Company and could adversely affect
the results of operations of the Company.
The Company has conducted environmental studies of its facility in
Chandler, Arizona, which discovered a limited amount of soil contamination that
may require remediation. While the investigation of the extent of this
contamination has not been completed, the Company believes that the costs
associated with the investigation and remediation of this situation will not
have a material adverse effect on its operations or financial condition.
However, given the uncertainties associated with environmental contamination,
until a full investigation is completed there can be no assurance that such
costs will not have a material adverse impact on the Company. Pursuant to the
agreements governing the acquisition of the Company from ▇▇▇▇▇▇ Corporation,
▇▇▇▇▇▇ has retained all environmental liabilities existing prior to the date of
that transaction. While ▇▇▇▇▇▇ currently has sufficient assets to fulfill its
obligations under the acquisition agreements, if pre-closing environmental
liabilities requiring remediation are discovered and the Company were unable to
enforce the acquisition agreement against ▇▇▇▇▇▇, the Company could become
subject to costs and damages relating to such environmental liabilities. Any
such costs and damages imposed on the Company could materially adversely affect
the Company's business, financial condition and results of operations.
In mid-1995, the Company acquired a manufacturing facility located in
Agua Prieta, Mexico. In connection with that acquisition, the Company conducted
an environmental study of the facility which indicated there is contamination by
hazardous materials in the soil and groundwater. Pursuant to the purchase
agreement, the seller pursued and received verbal approval of a remediation plan
from the appropriate Mexican authorities whereby the seller's obligation for the
costs of remediation is limited to $2,500,000. The seller will commence
remediation activities once written approval is obtained from the Mexican
authorities. A total of $975,000 is being held in escrow pending the seller's
performance of its environmental obligations under the agreement.
At this time, the Company does not anticipate any material amount of
environmental-related capital expenditures for 1997 or 1998.
Credit Agreement
Schedule 4.13
91
SCHEDULE 4.14.
CERTAIN RESTRICTIONS
None
Credit Agreement
Schedule 4.14
92
SCHEDULE 4.15.
LABOR MATTERS
That certain agreement entered between ADFlex Mexico S.A. de C.V. and
Sindicato de Obreros y Obreras, Conexos y Similares del Municipio De Agua
Prieta, Sonora, Commencing December 15, 1995 and ending December 14, 1997.
Credit Agreement
Schedule 4.15
93
SCHEDULE 6.8.
EXISTING CONTRACTUAL OBLIGATIONS
That certain Subordinated Debenture dated January 7, 1996, between
ADFlex Solutions, Inc. and Havant International Holdings Limited.
That certain Registration Rights and Standstill Agreement dated January
7, 1996, between ADFlex Solutions Inc. and Havant International Holdings
Limited.
That certain Services Agreement dated January 3, 1996, between Polene
Limited and Havant International Limited.
That certain form of Lease dated January 2, 1996, between Polene
Limited and Havant International Limited.
That certain Administrative Agreement dated April 16, 1996, between
ADFlex Thailand Limited and Hana Microelectronics Public Co., Limited.
That certain Facilities Agreement dated April 16, 1996, between ADFlex
Thailand Limited and Hana Microelectronics Public Co., Limited.
Credit Agreement
Schedule 6.8
94
SCHEDULE 9.5.
BORROWER INFORMATION
ADDRESS FOR NOTICES: ADFlex Solutions, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
BORROWER ACCOUNT (for the funding of Loans): ADFlex Solutions, Inc.
512-79884
Credit Agreement
Schedule 9.5